Exhibit 1.2
Form of Agency Agreement
Exhibit 1.2
COHOES BANCORP, INC.
8,050,000 Shares
COMMON STOCK
(Par Value $.01 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
, 1998
Keefe, Bruyette & Woods, Inc.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Ladies and Gentlemen:
Cohoes Bancorp, Inc., a Delaware corporation (the "Company") and Cohoes
Savings Bank., a New York state chartered mutual savings bank (the "Bank",
references to which include the Bank in the mutual or stock form, as indicated
by the context), with its deposit accounts insured by the Bank Insurance Fund
("BIF") administered by the Federal Deposit Insurance Corporation ("FDIC")),
hereby confirm their agreement with Keefe, Bruyette & Woods, Inc. ("KBW" or "the
Agent"), as follows:
Section 1. The Offering. The Bank, in accordance with its plan of
conversion adopted by its Board of Trustees (the "Plan"), intends to convert
from a New York State chartered mutual savings bank to a New York State
chartered stock savings bank, and will issue all of its issued and outstanding
capital stock to the Company. In addition, pursuant to the Plan, the Company
will offer and sell up to 8,050,000 shares of its common stock, par value, $.01
per share (the "Shares" or "Common Shares"), in a subscription offering (the
"Subscription Offering") to (1) depositors of the Bank with Qualifying Deposits
(as defined in the Bank's Plan) as of March 31, 1997 ("Eligible Account
Holders"), (2) the Tax-Qualified Employee Plans, as defined in the Plan
("Employee Plans"), and (3) depositors of the Bank with Qualifying Deposits as
of September 30, 1998 ("Supplemental Eligible Account Holders"). Subject to the
prior subscription rights of the above-listed parties, the Company may offer for
sale in a community offering (the "Community Offering" and when referred to
together with the Subscription Offering, the "Subscription and Community
Offering") conducted concurrently with or subsequent to the Subscription
Offering, the Shares not so subscribed for or ordered in the Subscription
Offering to members of the general public to whom a copy of the Prospectus (as
hereinafter defined) is delivered ("Other Subscribers"), with a preference given
to natural persons who reside in the Bank's local community which includes
Albany, Saratoga, Schenectady and Rensselaer Counties and a portion of Warren
County in New
York (all such offerees being referred to in the aggregate as "Eligible
Offerees"). It is anticipated that shares not subscribed for in the Subscription
and Community Offering will be offered to certain members of the general public
on a best efforts basis through a selected dealers arrangement (the "Syndicated
Community Offering") (the Subscription Offering, Community Offering and
Syndicated Community Offering are collectively referred to as the "Offering").
It is acknowledged that the purchase of Shares in the Offering is subject to the
maximum and minimum purchase limitations as described in the Plan and that the
Company and the Bank may reject, in whole or in part, any orders received in the
Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Conversion." The shares will be sold
in the Offering for a purchase price of $10.00 per Share (the "Purchase Price).
In connection with the Conversion and pursuant to the terms of the Plan
as described in the Prospectus (as defined below), immediately following the
consummation of the Conversion, subject to the approval of the depositors of the
Bank and compliance with certain conditions as may be imposed by regulatory
authorities, the Company will contribute to the Cohoes Savings Foundation, a
charitable foundation (the "Foundation") a number of shares equal to 3% of the
Shares sold in the Offering, or between 178,500 and 241,500 Shares (subject to
increase in certain circumstances to 277,725 Shares). Such Shares are
hereinafter referred to as the "Foundation Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-63539) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares and the Foundation Shares under the Securities
Act of 1933 (the "1933 Act"), and has filed such amendments thereof and such
amended prospectuses as may have been required to the date hereof. The term
"Registration Statement" shall include all exhibits thereto, as amended,
including post-effective amendments. The prospectus, as amended, on file with
the Commission at the time the Registration Statement initially became effective
is hereinafter called the "Prospectus," except that if any Prospectus is filed
by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") differing from
the prospectus on file at the time the Registration Statement initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission.
In accordance with Part 86 of the General Regulations of the Banking
Board of the State of New York (the "Banking Board") and the rules and
regulations of the Federal Deposit Insurance Corporation ("FDIC") governing the
conversion of New York State chartered mutual savings banks to New York State
chartered stock savings banks (the "Conversion Regulations"), the Bank has filed
with the Superintendent of Banks (the "Superintendent") of the New York State
Banking Department (the "Banking Department") an Application for Conversion on
Form 86-AC (the "Conversion Application"), including the Prospectus, the Bank's
Proxy Statement dated _____, 1998 for the solicitation of proxies from
depositors for the special meeting to approve the Plan ("Proxy Statement") and
the Conversion Valuation Appraisal Report prepared by RP Financial, LC (the
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"Appraisal") and has filed such amendments thereto as may have been required by
the Banking Department. The Conversion Application has been approved by the
Superintendent, including the Proxy Statement and Prospectus, and the waiver of
certain provisions of regulations specified in such approval with respect to the
establishment of and contribution of the Foundation Shares to the Foundation and
with respect to the differences between the Conversion Regulations and FDIC
policy. The FDIC has issued a letter of intent not to object to the Conversion
Application.
In addition, the Company has filed with the Office of Thrift
Supervision ("OTS") an application for approval of its acquisition of the Bank
on Form [H-(e)1-S] (the "Holding Company Application") to become a registered
savings and loan holding company under the Home Owners' Loan Act as amended
("HOLA") and the regulations promulgated thereunder, and such application has
been approved.
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint the Agent as their exclusive financial advisor and
marketing agent (i) to utilize its best efforts to solicit subscriptions for
Shares of the Company's Common Stock and to advise and assist the Company and
the Bank with respect to the Company's sale of the Shares in the Offering and
(ii) to participate in the Offering in the areas of market making, research
coverage and in syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated June 8, 1998 between the Bank and KBW (a copy of which is
attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that the Agent shall not be required to purchase any Shares or be obligated to
take any action which is inconsistent with all applicable laws, regulations,
decisions or orders.
The obligations of the Agent pursuant to this Agreement (other than
those set forth in Sections 8 and 9 hereof) shall terminate upon the completion
or termination or abandonment of the Plan by the Company or upon termination of
the Offering, but in no event later than the date (the "End Date") which is 45
days after the Closing Date (as hereinafter defined). All fees or expenses due
to the Agent but unpaid will be payable to the Agent in next day funds at the
earlier of the Closing Date (as hereinafter defined) or the End Date. In the
event the Offering is extended beyond the End Date, the Company, the Bank and
the Agent may agree to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 5,950,000
Shares (or such lesser amount approved by the Superintendent and the FDIC)
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set
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forth in the Prospectus; and none of the parties to this Agreement shall have
any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated, the Agent shall be reimbursed
for its actual accountable out-of-pocket expenses (including its counsel's fees)
due to the date of such termination pursuant to this section.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Company, the Bank and the Agent. Certificates for shares
shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Company shall release or deliver the Shares
sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $40,000 payable in four consecutive monthly
installments of $10,000 (previous receipt of which is hereby acknowledged).
Such fees shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the action or
inaction of the Agent, the Agent shall have earned and be entitled to be
paid fees accruing through the stage at which the termination occurred.
(b) A Success Fee of 1.20% of the aggregate Purchase Price of Common
Shares sold in the Offering (excluding shares purchased by the Bank's
officers, directors, or employees (or members of their immediate families)
plus any employee plans, tax-qualified or stock based compensation plans
(except IRA's) or similar plan created by the Bank for some or all of its
directors or employees. The management fee described in (a) above will be
applied against the Success Fee.
(c) If any of the Shares remain available after the Subscription
Offering, at the request of the Bank, KBW will seek to form a syndicate of
registered broker-dealers to assist in the sale of such Common Shares on a
best efforts basis, subject to the terms and conditions set forth in the
selected dealers agreement. KBW will endeavor to distribute the Common
Shares among dealers in a fashion which best meets the distribution
objectives of the Bank and the Plan. KBW will be paid a fee not to exceed
5.5% of the aggregate Purchase Price of the Shares sold in the Syndicated
Community Offering. KBW will pass onto selected broker-dealers, who assist
in the Syndicated Community offering, an amount competitive with gross
underwriting discounts charged at such time for comparable amounts of stock
sold at a comparable price per share in a similar market
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environment. Fees with respect to purchases effected with the assistance of
a broker/dealer other than KBW shall be transmitted by KBW to such
broker/dealer. The decision to utilize selected broker-dealers will be made
by the Bank upon consultation with KBW. In the event, with respect to any
purchases of Shares, fees are paid pursuant to this subparagraph 2(c), such
fees shall be in lieu of, and not in addition to, payment pursuant to
subparagraph 2(a) and 2(b).
(d) The Bank and the Company hereby agree to reimburse the Agent, from
time to time upon the Agent's request, for its reasonable out-of-pocket
expenses, which the Agent shall document, including, without limitation,
legal fees up to a maximum aggregate amount of $75,000. The Bank will bear
the expenses of the Offering customarily borne by issuers including,
without limitation, Banking Department, FDIC, SEC, OTS, "Blue Sky," and
NASD filings and registration fees; the fees of the Bank's accountants,
conversion agent, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing expenses associated with the Conversion;
and the fees set forth under this Section 2.
Full payment of Agent's actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the
Closing Date or a determination by the Bank to terminate or abandon the
Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover page
of the Prospectus.
Section 4. Representations and Warranties of the Company and the Bank.
The Company and the Bank jointly and severally represent and warrant to and
agree with the Agent as follows:
(a) The Registration Statement which was prepared by the Company and
the Bank and filed with the Commission was declared effective by the
Commission on November ___, 1998. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement), became effective, the Registration Statement contained all
statements that were required to be stated therein in accordance with the
1933 Act and the 1933 Act Regulations, complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any information
regarding the Company or the Bank contained in Sales Information (as such
term is defined in Section 8 hereof) authorized by the Company or the Bank
for use in connection with the Offering, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and at the
time any Rule 424(b) or (c) Prospectus was filed with the Commission and at
the Closing Date referred to in Section 2, the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), and any information regarding the Company or the Bank
contained in Sales Information (as such term is defined in Section 8
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hereof) authorized by the Company or the Bank for use in connection with
the Offering will contain all statements that are required to be stated
therein in accordance with the 1933 Act and the 1933 Act Regulations and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 4(a) shall
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company or the Bank by
the Agent or its counsel expressly regarding the Agent for use in the
Prospectus under the caption "The Offering - Marketing and Underwriting
Arrangements" or statements in or omissions from any Sales Information or
information filed pursuant to state securities or blue sky laws or
regulations regarding the Agent.
(b) The Conversion Application which was prepared by the Company and
the Bank and filed with the Banking Department and the FDIC and was
approved by the Superintendent on __________, 1998 and the related
Prospectus and Proxy Statement has been authorized for use by the
Superintendent. At the time of the approval of the Conversion Application,
including the Prospectus (including any amendment or supplement thereto),
by the Superintendent and at all times subsequent thereto until the Closing
Date, the Conversion Application, including the Prospectus (including any
amendment or supplement thereto), will comply in all material respects with
the Conversion Regulations, except to the extent waived in writing by the
Superintendent. The Conversion Application, including the Prospectus
(including any amendment or supplement thereto), does not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this Section
4(b) shall not apply to statements or omissions made in reliance upon and
in conformity with written information furnished to the Company or the Bank
by the Agent or its counsel expressly regarding the Agent for use in the
Prospectus contained in the Conversion Application under the caption "The
Offering-Marketing and Underwriting Arrangements". The FDIC has issued a
letter of intent not to object to the Conversion Application, and such
letter remains in full force and effect and no order has been issued by the
FDIC suspending or revoking such letter, and no proceedings therefor have
been initiated or, to the knowledge of the Company and the Bank, threatened
by the FDIC. At the date of such approval by the Superintendent and the
issuance of the letter of intent not to object by the FDIC, and at the
Closing Date, the Conversion Application complied and will comply in all
material respects with the Conversion Regulations.
(c) The Company has filed with the OTS the Holding Company
Application, and such application was approved by the OTS and remains in
full force and effect and no order has been issued by the OTS suspending or
revoking such approval, and no proceedings have been initiated or, to the
knowledge of the Company or the Bank, threatened by the OTS. As of the date
of such approval and the Closing Date, the Holding Company Application
complied and will comply in all material respects with the applicable
provisions of the HOLA and the regulations promulgated thereunder.
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(d) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the
applicable provisions of the Conversion Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) No order has been issued by the Superintendent or the FDIC
preventing or suspending the use of the Prospectus, and no action by or
before any such government entity to revoke any approval, authorization or
order of effectiveness related to the Conversion is, to the best knowledge
of the Company or the Bank, pending or threatened.
(f) At the Closing Date, the Plan will have been adopted by the Board
of Trustees and Directors, respectively, of the Bank and the Company and
approved by the depositors of the Bank, and the offer and sale of the
Shares will have been conducted in all material respects in accordance with
the Plan, the Conversion Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon the
Company or the Bank by the Superintendent, the Commission, the FDIC, the
OTS or any other regulatory authority and in the manner described in the
Prospectus. No person has sought to obtain review of the final action of
the Superintendent in approving the Plan and the Conversion Application or
the OTS in approving the Holding Company Application pursuant to the HOLA,
or any other statute or regulation.
(g) The Bank, as of the date hereof, has been organized and is a
validly existing New York State chartered savings bank in mutual form of
organization and upon the Conversion will become a duly organized and
validly existing New York chartered savings bank in capital stock form of
organization, in both instances duly authorized to conduct its business and
own its property as described in the Registration Statement and the
Prospectus and to enter into and perform its obligations under this
Agreement. The Bank has obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are in
full force and effect, and the Bank is in all material respects complying
with all laws, rules, regulations and orders applicable to the operation of
its business. The Bank does not own equity securities or any equity
interest in any other business enterprise except as described in the
Prospectus or as would not be material to the operations of the Bank. Upon
completion of the sale by the Company of the Shares contemplated by the
Prospectus, (i) the Bank will be converted pursuant to the Plan to a New
York chartered stock savings bank, (ii) all of the issued and outstanding
capital stock of the Bank will be owned by the Company, and (iii) the
Company will have no direct subsidiaries other than the Bank. The
Conversion will have been effected in all material respects in accordance
with all applicable statutes, regulations, decisions and orders; and,
except with respect to the filing of certain post-sale, post-Conversion
reports, and documents in compliance with the 1933 Act Regulations, the
Superintendent's resolutions or letters of approval and the FDIC's
resolutions or non-objection letters, all terms, conditions, requirements
and provisions with respect to the Conversion imposed by the Commission,
the Superintendent and
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the FDIC, if any, will have been complied with by the Company and the Bank
in all material respects or appropriate waivers will have been obtained and
all material notice and waiting periods will have been satisfied, waived or
elapsed.
(h) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and at the Closing Date the Company will be qualified to do
business as a foreign corporation in each jurisdiction in which the conduct
of its business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income of the
Company. The Company has obtained all material licenses, permits and other
governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are in
full force and effect, and the Company is in all material respects
complying with all laws, rules, regulations and orders applicable to the
operation of its business.
(i) Each direct and indirect subsidiary of the Bank has been
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdication of its incorporation, has full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and
Prospectus and is duly qualified as a foreign corporation in each
jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
assets or properties, business, results of operations, prospects or
conditions (financial or otherwise) of the Company, the Bank and their
subsidiaries, considered as a whole. The activities of each such subsidiary
are permitted to subsidiaries of a New York State chartered savings bank by
the Banking Law of the State of New York and the rules and regulations
promulgated thereunder (the "Banking Law") and by the rules, regulations,
resolutions and practices of the OTS and the FDIC. All of the issued and
outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the
Bank, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(j) The Bank is a member in good standing of the Federal Home Loan
Bank of New York ("FHLB-New York"). The deposit accounts of the Bank are
insured by the FDIC up to the applicable limits; and no proceedings for the
termination or revocation of such insurance are pending or, to the best
knowledge of the Company or the Bank, threatened. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account
Holders will be duly established in accordance with the requirements of the
Conversion Regulations.
(k) The Company and the Bank have good and marketable title to all
real property and good title to all other assets material to the business
of the Company and the Bank, taken as a whole, and to those properties and
assets described in the Registration Statement and Prospectus as owned by
them, free and clear of all liens, charges, encumbrances or restrictions,
except such as are
8
described in the Registration Statement and Prospectus, or are not material
to the business of the Company and the Bank, taken as a whole; and all of
the leases and subleases material to the business of the Company and the
Bank, taken as a whole, under which the Company or the Bank hold
properties, including those described in the Registration Statement and
Prospectus, are in full force and effect.
(l) The Company and the Bank have received an opinion of their special
counsel, Silver, Freedman & Taff ("Silver, Freedman") with respect to the
federal income tax consequences of the Conversion and an opinion of Arthur
Andersen LLP ("Arthur Andersen") with respect to New York income tax
consequences of the Conversion; all material aspects of the opinions of
Silver, Freedman and Arthur Andersen are accurately summarized in the
Registration Statement and are accurately summarized in the Prospectus; and
further represent and warrant that the facts upon which such opinions are
based are truthful, accurate and complete.
(m) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue
and sell the Shares to be sold by the Company and contribute the Foundation
Shares to the Foundation as provided herein and as described in the
Prospectus subject to the satisfaction of conditions imposed by the
Superintendent, the FDIC, and the OTS in connection with their respective
approvals of the Conversion Application and the Holding Company Application
as the case may be, and except as may be required under the securities or
"blue sky" laws of various jurisdictions, and, in the case of the Company,
as of the Closing Date, will have such approvals and orders to issue and
sell the Shares to be sold by the Company as provided herein, and, in the
case of the Bank, as of the Closing Date, will have such approvals and
orders to issue and sell the shares of its capital stock to be sold to the
Company as provided in the Plan, subject to the approval of the Bank's
restated organization certificate by the Superintendent. The consummation
of the Conversion, the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated have
been duly and validly authorized by all necessary corporate action on the
part of the Company and the Bank and this Agreement has been validly
executed and delivered by the Company and the Bank and is the valid, legal
and binding agreement of the Company and the Bank enforceable in accordance
with its terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of New York State savings institutions and savings and loan
holding companies, (ii) general equitable principles, (iii) laws relating
to the safety and soundness of insured depository institutions, and (iv)
applicable law or public policy with respect to the indemnification and/or
contribution provisions contained herein, and except that no representation
or warranty need be made as to the effect or availability of equitable
remedies or injunctive relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except to the extent if
any, that the provisions of Sections 8 and 9 hereof may be unenforceable as
against public policy.
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(n) None of the Company, the Bank or their subsidiaries are in
violation of any directive received from the Superintendent or the FDIC, or
any other agency to make any material change in the method of conducting
their businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the Superintendent and the
FDIC) and, except as may be set forth in the Registration Statement and the
Prospectus, there is no suit or proceeding, labor dispute or charge or
action before or by any court, regulatory authority or governmental agency
or body, pending or, to the best knowledge of the Company or the Bank,
threatened, which might materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement and
the Prospectus or which might result in any material adverse change in the
condition (financial or otherwise), earnings, capital or properties of the
Company, the Bank or their subsidiaries considered as a whole, or which
would materially affect their properties and assets.
(o) The financial statements, schedules and notes related thereto
which are included in the Prospectus fairly present the consolidated
balance sheet, income statement, statement of changes in equity and cash
flows of the Bank at the respective dates indicated and for the respective
periods covered thereby and comply as to form in all material respects with
the applicable accounting requirements of Title 12 of the Code of Federal
Regulations and generally accepted accounting principles (including those
requiring the recording of certain assets at their current market value).
Such financial statements, schedules and notes related thereto have been
prepared in accordance with generally accepted accounting principles
consistently applied through the periods involved, present fairly in all
material respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports
filed by the Bank with the Banking Department and FDIC. The other
financial, statistical and pro forma information and related notes included
in the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements of the Bank
included in the Prospectus, and as to the pro forma adjustments, the
adjustments described therein have been properly applied on the basis
described therein.
(p) Since the respective dates as of which information is given in the
Registration Statement including the Prospectus: (i) there has not been any
material adverse change, financial or otherwise, in the condition of the
Company or the Bank and its subsidiaries considered as one enterprise, or
in the earnings, capital or properties of the Company or the Bank, whether
or not arising in the ordinary course of business; (ii) there has not been
any material increase in the long-term debt of the Bank or in the principal
amount of the Bank's assets which are classified by the Bank as
substandard, doubtful or loss or in loans past due 90 days or more or real
estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in retained earnings or
total assets of the Bank nor has the Company or the Bank issued any
securities (other than in connection with the incorporation of the Company)
or incurred any liability or obligation for borrowing other than in the
ordinary course of business; (iii) there have not been any material
transactions entered into by the Company or the Bank; (iv) there has not
been any
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material adverse change in the aggregate dollar amount of the Bank's
deposits or its consolidated net worth; (v) there has been no material
adverse change in the Company's or the Bank's relationship with its
insurance carriers, including, without limitation, cancellation or other
termination of the Company's or the Bank's fidelity bond or any other type
of insurance coverage; (vi) except as disclosed in the Prospectus there has
been no material change in management of the Company or the Bank, neither
of which has any material undisclosed liability of any kind, contingent or
otherwise; (vii) the Company or the Bank has not sustained any material
loss or interference with its respective business or properties from fire,
flood, windstorm, earthquake, accident or other calamity, whether or not
covered by insurance; (viii) the Company or the Bank is not in default in
the payment of principal or interest on any outstanding debt obligations;
(ix) the capitalization, liabilities, assets, properties and business of
the Company and the Bank conform in all material respects to the
descriptions thereof contained in the Prospectus; and (x) neither the
Company, the Bank nor its wholly owned subsidiary has any material
contingent liabilities, except as set forth in the Prospectus. All
documents made available to or delivered or to be made available to or
delivered by the Bank or the Company or their representatives in connection
with the issuance and sale of the Shares, including records of account
holders, depositors and borrowers of the Bank, or in connection with the
Agent's exercise of due diligence, except for those documents which were
prepared by parties other than the Bank, the Company or their
representatives, to the best knowledge of the Bank and the Company, were on
the dates on which they were delivered, or will be on the dates on which
they are to be delivered, true, complete and correct in all material
respects.
(q) As of the date hereof and as of the Closing Date, neither the
Company nor the Bank is (i) in breach or violation of its certificate of
incorporation or organization certificate, respectively, or bylaws, (and
the Bank will not be in violation of its restated organization certificate
or bylaws in capital stock form upon consummation of the Conversion), or
(ii) in default in the performance or observance of any material
obligation, agreement, covenant, or condition contained in any material
contract, lease, loan agreement, indenture or other instrument to which it
is a party or by which it or any of its property may be bound. The
consummation of the transactions herein contemplated will not: (i) conflict
with or constitute a breach of, or default under, or result in the creation
of any material lien, charge or encumbrance (with the exception of the
liquidation account established in the Conversion) upon any of the assets
of the Company, the Bank or their subsidiaries pursuant to the certificate
of incorporation of the Company and the subsidiaries or the organization
certificate and bylaws of the Bank (in either mutual or capital stock
form), or any material contract, lease or other instrument to which the
Company or the Bank has a beneficial interest, or any applicable law, rule,
regulation or order; (ii) violate any authorization, approval, judgement,
decree, order, statute, rule or regulation applicable to the Company or the
Bank, except for such violations which would not have a material adverse
effect on the financial condition and results of operations of the Company
and the Bank on a consolidated basis; or (iii) with the exception of the
liquidation account established in the Conversion, result in the creation
of any material lien, charge or encumbrance upon any property of the
Company or the Bank.
(r) No default exists, and no event has occurred which with notice or
lapse of time, or
11
both, would constitute a default, on the part of the Company or the Bank in
the due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, note, bank loan or credit agreement
or any other instrument or agreement to which the Company or the Bank is a
party or by which any of them or any of their property is bound or
affected, except such defaults which would not have a material adverse
affect on the financial condition or results of operations of the Company
and the Bank on a consolidated basis; such agreements are in full force and
effect; and no other party to any such agreements has instituted or, to the
best knowledge of the Company and the Bank, threatened any action or
proceeding wherein the Company or the Bank would or might be alleged to be
in default thereunder.
(s) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set
forth in the Prospectus under the caption "Capitalization," and no Shares
have been or will be issued and outstanding prior to the Closing Date. The
issuance and sale of the Shares and the contribution of the Foundation
Shares to the Foundation will have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan
and in the Prospectus, the Shares and the Foundation Shares will be duly
and validly issued, fully paid and non-assessable. Except to the extent
that subscription rights and priorities pursuant thereto exist pursuant to
the Plan, no preemptive or similar rights exist with respect to the Shares
and the Foundation Shares; and the terms and provisions of the Shares and
the Foundation Shares will conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus. Upon the issuance of the Shares, good title to the Shares and
the Foundation Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such claims as may
be asserted against the purchasers thereof by third-party claimants. The
certificates representing the Shares and the Foundation Shares will conform
in all material respects with the requirements of all applicable laws and
regulations. The issuance and sale of the capital stock of the Bank to the
Company has been duly authorized by all necessary action of the Bank and
approved by the Superintendent and the FDIC (subject to the satisfaction of
various conditions imposed in connection with the Superintendent's approval
of, and the FDIC's non- objection to, the Conversion Application), and such
capital stock, when issued in accordance with the terms of the Plan, will
be fully paid, nonassessable and free of preemptive or similar rights and
will conform in all material respects to the description thereof contained
in the Prospectus. All such capital stock of the Bank will be owned
beneficially and of record by the Company free and clear of all claims,
encumbrances, security interests and liens against the Bank whatsoever.
Except as disclosed in the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue any share of capital stock of the
Company or the Bank or any security convertible into, or exercisable or
exchangeable, for such capital stock.
(t) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the approval of the
Commission, the Superintendent, the FDIC and any necessary qualification,
12
notification, registration or exemption under the securities or blue sky
laws of the various states in which the Shares are to be offered, and
except as may be required under the rules and regulations of the NASD
and/or The Nasdaq Stock Market ("Nasdaq").
(u) Arthur Andersen which has certified the consolidated audited
financial statements and schedules of the Bank included in the Prospectus,
has advised the Company and the Bank in writing that they are, with respect
to the Company and the Bank, independent public accountants within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and Title 12 of the Code of Federal
Regulations and Section 571.2(c)(3).
(v) RP Financial, LC, which has prepared the Bank's Conversion
Valuation Appraisal Report as of , 1998, as amended or supplemented, (the
"Appraisal"), has advised the Company in writing that it is independent of
the Company and the Bank within the meaning of the Conversion Regulations.
(w) The Company and the Bank have timely filed all required federal,
state and local tax returns; the Company and the Bank have paid all taxes
that have become due and payable in respect of such returns, except where
permitted to be extended, have made adequate reserves for similar future
tax liabilities and no deficiency has been asserted with respect thereto by
any taxing authority.
(x ) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect to the
Conversion imposed by the Commission, the Superintendent, the FDIC, the
OTS, the Conversion Regulations, the HOLA and regulations promulgated
thereunder, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations to be complied with prior to or subsequent to the
Closing Date and when the Prospectus is required to be delivered, the
Company and the Bank will comply, at their own expense, with all material
requirements imposed upon them by the Commission, the Superintendent, the
FDIC, the OTS, the Conversion Regulations, or the HOLA, and by the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations,
in each case as from time to time in force, so far as necessary to permit
the continuance of sales or dealing in shares of Common Stock during such
period in accordance with the provisions hereof and the Prospectus.
(y) The Foundation has been or will be prior to the Closing Date duly
incorporated and validly existing as a non-profit corporation in good
standing under the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus. The
Foundation will not be a bank holding company within the meaning of the
HOLA and 12 C.F.R. Part 225 as a result of the issuance of the Foundation
Shares to it in accordance with the terms of the Plan and in the amounts as
described in the Prospectus. All approvals required to establish the
Foundation and to contribute the Foundation Shares thereto have been
received and, except as specifically disclosed in the Prospectus and the
Proxy Statement, there are no agreements or understandings, written or
oral, between the Company or the Bank and the Foundation with respect to
the control, directly or
13
indirectly, over the voting and the acquisition or disposition of the
Foundation Shares to be contributed by the Company to the Foundation.
(z) The Bank is in compliance in all material respects with the
applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(aa) To the knowledge of the Company and the Bank, neither the
Company, the Bank nor any of their respective employees funds of the
Company or the Bank or otherwise extended credit or made any other payment
of funds prohibited by law, to any person to purchase the Shares, and no
funds have been set aside to be used for any payment prohibited by law.
(bb) Prior to the Conversion, neither the Company nor the Bank has:
(i) issued any securities within the last 18 months (except for notes to
evidence other bank loans and reverse repurchase agreements or other
liabilities in the ordinary course of business or as described in the
Prospectus, and except for any shares issued in connection with the
incorporation of the Company); (ii) had any material dealings within the 12
months prior to the date hereof with any member of the NASD, or any person
related to or associated with such member, other than discussions and
meetings relating to the proposed Offering and routine purchases and sales
of United States government and agency securities; (iii) entered into a
financial or management consulting agreement except as contemplated
hereunder; and (iv) engaged any intermediary between the Agent and the
Company and the Bank in connection with the offering of the Shares, and no
person is being compensated in any manner for such service. Appropriate
arrangements have been made for placing the funds received from
subscriptions for Shares in a special interest-bearing account with the
Bank until all Shares are sold and paid for as provided in the Plan, with
provision for refund to the purchasers in the event that the Conversion is
not completed for whatever reason or for delivery of the funds to the
Company if all Shares are sold.
(cc ) The Company and the Bank have not relied upon the Agent or its
legal counsel or other advisors for any legal, tax or accounting advice in
connection with the Conversion.
(dd) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(ee) Neither the Company, the Bank nor its subsidiaries, nor any
properties owned or operated by any of them is in violation of or liable
under any Environmental Law (as defined below), except for such violations
or liabilities that, individually or in the aggregate, would not have a
material adverse effect on the financial condition, results of operations
or business affairs of the Company, the Bank and the subsidiaries
considered as one enterprise. There are no actions, suits or proceedings,
or demands, claims, notices, demand letters or requests for information
from any environmental agency instituted or pending, or to the knowledge of
the Company or the Bank, threatened, relating to the liability of any
property owned or operated by the Company or the Bank,
14
or their respective subsidiaries, under any Environmental Law. For purposes
of this subsection, the term "Environmental Law" means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, order, judgment, decree,
injunction or agreement with any regulatory authority relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(ff) Any certificates signed by an officer of the Company or the Bank
pursuant to the conditions of this Agreement and delivered to the Agent or
their counsel that refers to this Agreement shall be deemed to be a
representation and warranty by the Company or the Bank to the Agent as to
the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
Section 5. Representations and Warranties of the Agent.
KBW represents and warrants to the Company and the Bank that:
(i) it is a corporation and is validly existing in good standing under
the laws of the State of New York with full power and authority to provide
the services to be furnished to the Bank and the Company hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Agent, and this
Agreement has been duly and validly executed and delivered by the Agent and
is a legal, valid and binding agreement of the Agent, enforceable in
accordance with its terms.
(iii) Each of the Agent and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly authorized
and empowered, and shall have all licenses, approvals and permits necessary
to perform such services.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with
the terms and provisions hereof will not conflict with, or result in a
breach of, any of the terms, provisions or conditions of, or constitute a
default (or an event which with notice or lapse of time or both would
constitute a default) under, the certificate of incorporation of the Agent
or any agreement, indenture or other instrument to which the Agent is a
party or by which it or its property is bound.
15
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and delivery
of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or, to the
knowledge of the Agent, pending or threatened, which might materially
adversely affect the Agent's performance under this Agreement.
Section 5.l Covenants of the Company and the Bank. The Company and the
Bank hereby jointly and severally covenant with KBW as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel shall
reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the Superintendent and not objected to by the FDIC, file any
amendment or supplement to such Conversion Application without providing
the Agent and its counsel an opportunity to review such amendment or
supplement or file any amendment or supplement to which amendment or
supplement the Agent or its counsel shall reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the OTS, file any amendment or supplement to
such Holding Company Application without providing the Agent and its
counsel an opportunity to review the nonconfidential portions of such
amendment or supplement or file any amendment or supplement to which
amendment or supplement the Agent or its counsel shall reasonably object.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the
Conversion Application to be approved by the the Superintendent and the
FDIC and will immediately upon receipt of any information concerning the
events listed below notify the Agent: (i) when the Registration Statement,
as amended, has become effective; (ii) when the Conversion Application, as
amended, has been approved by the Superintendent and the FDIC; (iii) of any
comments from the Commission, the Superintendent the FDIC or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (iv) of the request by the Commission, the
Superintendent, the FDIC, the OTS or any other governmental entity for any
amendment or supplement to the Registration Statement, the Conversion
Application or the Holding Company Application or for additional
information; (v) of the issuance by the Commission, the Superintendent, the
FDIC or any other governmental entity of
16
any order or other action suspending the Offering or the use of the
Registration Statement or the Prospectus or any other filing of the Company
or the Bank under the Conversion Regulations, or other applicable law, or
the threat of any such action; (vi) the issuance by the Commission, the
Superintendent, the FDIC or any authority of any stop order suspending the
effectiveness of the Registration Statement or of the initiation or threat
of initiation or threat of any proceedings for that purpose; or (vii) of
the occurrence of any event mentioned in paragraph (h) below. The Company
and the Bank will make every reasonable effort (i) to prevent the issuance
by the Commission, the Superintendent, the FDIC or any state authority of
any such order and, if any such order shall at any time be issued, (ii) to
obtain the lifting thereof at the earliest possible time.
(e) The Company and the Bank will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement, the Conversion
Application, and the Holding Company Application, as originally filed and
of each amendment or supplement thereto, including all exhibits. Further,
the Company and the Bank will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required for any NASD
and "blue sky" filings.
(f) The Company and the Bank will furnish to the Agent, from time to
time during the period when the Prospectus (or any later prospectus related
to this offering) is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
such Prospectus (as amended or supplemented) as the Agent may reasonably
request for the purposes contemplated by the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the rules and regulations promulgated under
the 1934 Act (the "1934 Act Regulations"). The Company authorizes the Agent
to use the Prospectus (as amended or supplemented, if amended or
supplemented) in any lawful manner contemplated by the Plan in connection
with the sale of the Shares by the Agent.
(g) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the
Commission, the Superintendent, the FDIC or the Conversion Regulations or
the HOLA and regulations promulgated thereunder, and by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when the
Prospectus is required to be delivered, and during such time period the
Company and the Bank will comply, at their own expense, with all material
requirements imposed upon them by the Commission, the Superintendent, the
FDIC or the OTS or the Conversion Regulations, the HOLA and by the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations,
including, without limitation, Rule 10b-5 under the 1934 Act, in each case
as from time to time in force, so far as necessary to permit the
continuance of sales or dealing in the Common Shares during such period in
accordance with the provisions hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus relating to
the Shares and the Foundation Shares is required to be delivered, any event
relating to or affecting the Company or the Bank shall occur, as a result
of which it is necessary or appropriate, in the opinion of counsel for the
Company and the Bank or in the reasonable opinion of the Agent's counsel,
to amend or supplement
17
the Registration Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, the
Company and the Bank will immediately so inform the Agent and prepare and
file, at their own expense, with the Commission, the Banking Department and
the FDIC and furnish to the Agent a reasonable number of copies of an
amendment or amendments of, or a supplement or supplements to, the
Registration Statement or Prospectus (in form and substance reasonably
satisfactory to the Agent and its counsel after a reasonable time for
review) which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading. For the purpose of this Agreement, the Company and the Bank
each will timely furnish to the Agent such information with respect to
itself as the Agent may from time to time reasonably request.
(i) The Company and the Bank will take all necessary actions, in
cooperating with the Agent, and furnish to whomever the Agent may direct,
such information as may be required to qualify or register the Shares for
offering and sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and its officers,
Trustees and employees as broker-dealers or agents under the applicable
securities or blue sky laws of such jurisdictions in which the Shares are
required under the Conversion Regulations to be sold or as the Agent and
the Company and the Bank may reasonably agree upon; provided, however, that
the Company shall not be obligated to file any general consent to service
of process, to qualify to do business in any jurisdiction in which it is
not so qualified, or to register its Trustees or officers as brokers,
dealers, salesmen or agents in any jurisdiction. In each jurisdiction where
any of the Shares shall have been qualified or registered as above
provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such
jurisdiction.
(j) The liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders will be duly established
and maintained in accordance with the requirements of the Banking
Department and FDIC, and such Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain their savings accounts in
the Bank will have an inchoate interest in their pro rata portion of the
liquidation account which shall have a priority superior to that of the
holders of the Common Shares in the event of a complete liquidation of the
Bank.
(k) The Company and the Bank will not sell or issue, contract to sell
or otherwise dispose of, for a period of ___ days after the Closing Date,
without the Agent's prior written consent, any Common Shares other than the
Shares or other than in connection with any plan or arrangement described
in the Prospectus, including existing stock benefit plans.
(l) The Company shall register its Common Stock under Section 12(g) of
the 1934 Act on or prior to the Closing Date pursuant to the Plan and shall
request that such registration be
18
effective prior to or upon completion of the Conversion. The Company shall
maintain the effectiveness of such registration for not less than three
years or such shorter period as may be required by the OTS and the Banking
Department.
(m) During the period during which the Company's Common Shares are
registered under the 1934 Act or for three (3) years from the date hereof,
whichever period is greater, the Company will furnish to its stockholders
as soon as practicable after the end of each fiscal year an annual report
of the Company (including a consolidated balance sheet and statements of
consolidated income, shareholders' equity and cash flows of the Company and
its subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under the
1933 Act and the 1934 Act).
(n) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the Company
furnished to or filed with the Commission under the 1934 Act or any
national securities exchange or system on which any class of securities of
the Company is listed or quoted (including, but not limited to, reports on
Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to
stockholders), (ii) a copy of each other non-confidential report of the
Company mailed to its stockholders or filed with the Commission, the
Banking Department any other supervisory or regulatory authority or any
national securities exchange or system on which any class of securities of
the Company is listed or quoted, each press release and material news items
and additional documents and information with respect to the Company or the
Bank as the Agent may reasonably request; and (iii) from time to time, such
other nonconfidential information concerning the Company or the Bank as the
Agent may reasonably request.
(o) The Company and the Bank will use the net proceeds from the sale
of the Shares in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(p) Other than as permitted by the Conversion Regulations, the HOLA,
the 1933 Act, the 1933 Act Regulations, and the laws of any state in which
the Shares are registered or qualified for sale or exempt from
registration, neither the Company nor the Bank will distribute any
prospectus, offering circular or other offering material in connection with
the offer and sale of the Shares.
(q) The Company will use its best efforts to (i) encourage and assist
a market maker to establish and maintain a market for the Shares and (ii)
list and maintain quotation of the Shares on a national or regional
securities exchange or on Nasdaq effective on or prior to the Closing Date.
(r) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest-bearing basis at the rate described
in the Prospectus until the Closing Date and satisfaction of all conditions
precedent to the release of the Bank's obligation to refund payments
received from persons subscribing for or ordering Shares in the Offering in
accordance with the Plan and as
19
described in the Prospectus or until refunds of such funds have been made
to the persons entitled thereto or withdrawal authorizations canceled in
accordance with the Plan and as described in the Prospectus. The Bank will
maintain such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Bank to make the appropriate refunds of such
funds in the event that such refunds are required to be made in accordance
with the Plan and as described in the Prospectus.
(s) The Company will promptly take all necessary action to register as
a savings and loan holding company under the HOLA within 90 days of the
Closing Date.
(t) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the NASD's "Interpretation Relating to Free
Riding and Withholding."
(u) Neither the Company nor the Bank will amend the Plan of Conversion
without notifying the Agent prior thereto.
(v) If, at any time during the period when the Prospectus relating to
the Shares is required to be delivered, any event relating to or affecting
the Company, the Bank or a Subsidiary shall occur, as a result of which it
is necessary or appropriate, in the opinion of counsel for the Company and
the Bank to amend or supplement the Registration Statement or Prospectus in
order to make the Registration Statement or Prospectus not misleading in
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, the Company and the Bank, at their expense, shall prepare
and file with the Commission and the Banking Department, and furnish to KBW
a reasonable number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement and Prospectus (in
form and substance satisfactory to KBW and its counsel after a reasonable
time for review) which will amend or supplement the Registration Statement
and Prospectus so that as amended or supplemented it will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the Company
and the Bank each will timely furnish to KBW such information with respect
to itself as KBW may from time to time reasonably request.
(w) At the Closing Date referred to in Section 2, the Plan will have
been adopted by the Board of Directors of the Company and the Board of
Trustees of the Bank and the offer and sale of the Shares will have been
conducted in all material respects in accordance with the Plan, the
Conversion Regulations, and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed upon the Company or the Bank
by the Commission, the Superintendent, FDIC or any other regulatory
authority and in the manner described in the Prospectus.
(x) Upon completion of the sale by the Company of the Shares
contemplated by the
20
Prospectus, (i) the Bank will be converted pursuant to the Plan to a stock
chartered stock savings bank, (ii) all of the authorized and outstanding
capital stock of the Bank will be owned by the Company, and (iii) the
Company will have no direct subsidiaries other than the Bank. The
Conversion will have been effected in all material respects in accordance
with all applicable statutes, regulations, decisions and orders; and,
except with respect to the filing of certain post-sale, post- Conversion
reports, and documents in compliance with the 1933 Act Regulations, and all
terms, conditions, requirements and provisions with respect to the
Conversion (except those that are conditions subsequent) imposed by the
Commission and the Superintendent, and FDIC, if any, will have been
complied with by the Company and the Bank in all material respects or
appropriate waivers will have been obtained and all material notice and
waiting periods will have been satisfied, waived or elapsed.
(y) The Foundation is a duly incorporated and validly existing
non-profit corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus. The Foundation is not a bank holding company
within the meaning of the 12 U.S.C. Section 1467a (a)(1)(D) a result of the
issuance of the Foundation Shares to it in accordance with the terms of the
Plan and in the amounts as described in the Prospectus. All approvals
required to establish the Foundation and to contribute to the Foundation
Shares have been received and, except as specifically disclosed in the
Prospectus and the Proxy Statement, there are no agreements or
understandings, written or oral, between the Company or the Bank and the
Foundation with respect to the control, directly or indirectly, over the
voting and the acquisition or disposition of the Foundation Shares to be
contributed by the Company to the Foundation.
(z) The Company and the Bank will take all necessary actions, in
cooperation with KBW, and furnish to whomever KBW may direct, such
information as may be required to qualify or register the Shares for
offering and sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the applicable
securities or blue sky laws of such jurisdiction in which the Shares are to
be offered and sold as KBW and the Company and the Bank may reasonably
agree upon; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify to do business
in any jurisdiction in which it is not so qualified. In each jurisdiction
where any of the Shares shall have been qualified or registered as above
provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such
jurisdiction.
(aa) The Company shall assist the Agent, if necessary, in connection
with the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Company in allocating the Shares in such event and such information shall
be accurate and reliable in all material respects.
(bb) Prior to the Closing Date, the Company and the Bank will inform
the Agent of any
21
event or circumstances of which it is aware as a result of which the
Registration Statement and/or Prospectus, as then amended or supplemented,
would contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading.
(cc) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in an
amendment or supplement thereto, neither the Company nor the Bank will
have: (i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money, except borrowings from the same
or similar sources indicated in the Prospectus in the ordinary course of
its business, or (ii) entered into any transaction which is material in
light of the business and properties of the Company and the Bank, taken as
a whole.
(dd) The facts and representations provided to Silver Freedman & Taff,
L.L.P. by the Bank and the Company and upon which Serchuk & Zelermyer, LLP
will base its opinion under Section 7(c)(1) are and will be truthful,
accurate and complete.
Section 6. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse the Agent for: (a)
all filing fees in connection with all filings with the NASD related to the
Offering; (b) any stock issue or transfer taxes which may be payable with
respect to the sale of the Shares; (c) all reasonable expenses of the
Conversion, including but not limited to the Company's and the Bank's, and the
Agent's attorneys' fees and expenses, blue sky fees, transfer agent, registrar
and other agent charges, fees relating to auditing and accounting or other
advisors and costs of printing all documents necessary in connection with the
Conversion; and (d) all reasonable out-of-pocket expenses incurred by the Agent
(exclusive of legal fees not to exceed $75,000). Such out-of-pocket expenses
include, but are not limited to, travel, lodging, meals, communication and
postage. However, such out-of-pocket expenses do not include expenses incurred
with respect to the matters set forth in (a) or (b) above. In the event the
Company is unable to sell a minimum of 5,950,000 Shares or the Conversion is
terminated or otherwise abandoned, the Company and the Bank shall promptly
reimburse the Agent in accordance with Section 2 hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the Company and the Bank herein are, at
and as of the commencement of the Offering and at and as of the Closing Date,
true and correct in all material respects, the condition that the Company and
the Bank shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted
the Conversion in all material respects in accordance with the Plan, the
Conversion Regulations, and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
22
provisions precedent to the Conversion imposed upon them by the Banking
Department and FDIC.
(b) The Registration Statement shall have been declared effective by
the Commission and the Conversion Application approved by the
Superintendent and not objected to by the FDIC not later than 5:30 p.m. on
the date of this Agreement, or with the Agent's consent at a later time and
date; and at the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefore initiated or threatened by the Commission or any
state authority, and no order or other action suspending the authorization
of the Prospectus or the consummation of the Conversion shall have been
issued or proceedings therefore initiated or, to the Company's or the
Bank's knowledge, threatened by the Commission, the Banking Department, the
FDIC, or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Silver, Freedman &
Taff, L.L.P., special counsel for the Company and the Bank, in form
and substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the state of
Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
(iii) The Bank has been organized and is a validly existing
New York chartered savings bank in capital stock form of
organization, authorized to conduct its business and own its
property as described in the Registration Statement and the
Prospectus. All of the outstanding capital stock of the Bank upon
completion of the Conversion will be duly authorized and, upon
payment therefor, will be validly issued, fully paid and
non-assessable and will be owned by the Company, free and clear
of any liens, encumbrances, claims or other restrictions.
(iv) Each subsidiary of the Bank has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and is not required to be qualified as a foreign
corporation in any other jurisdiction, or the failure to so
qualify would not have a material adverse effect upon the
financial condition, results of operations or business of the
Bank and the subsidiary taken as a whole; the activities of the
subsidiaries are permitted to subsidiaries of a savings and loan
holding company and of a New York chartered savings bank by the
rules, regulations, resolutions and practices of the Banking
Department and Banking Board; all of the issued and outstanding
capital stock of each of the subsidiaries has been duly
authorized and validly issued, is fully paid and non-assessable
and is owned by the Company free and clear of any security,
interest, mortgage, pledge, lien, encumbrance, claim or equity.
23
(v) The Bank is a member in good standing of the FHLB-New
York. The deposit accounts of the Bank are insured by the FDIC up
to the maximum amount allowed under law and no proceedings for
the termination or revocation of such insurance are pending or,
to such counsel's Actual knowledge, threatened; the description
of the liquidation account as set forth in the Prospectus under
the captions "The Conversion - Liquidation Rights," to the extent
that such information constitutes matters of law and legal
conclusions, has been reviewed by such counsel and is accurately
described in all material respects.
(vi) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be
within the range set forth in the Prospectus under the caption
"Capitalization," and no shares of Common Stock have been issued
prior to the Closing Date. The issuance and sale of the shares
and the contribution of the Foundation Shares to the Foundation
will have been duly and validly authorized for issuance, and when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan
and Prospectus, will be duly and validly issued and fully paid
and non-assessable. The issuance of the Shares is not subject to
preemptive rights and the terms and provisions of the Shares and
the Foundation Shares conform in all material respects to the
description thereof contained in the Registration Statement and
Prospectus. To such counsel's actual knowledge, upon the issuance
of the Shares and the Foundation Shares, good title to the Shares
and the Foundation Shares will be transferred from the Company to
the purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants. The certificates representing the Shares
and the Foundation Shares will conform in all material respects
with the requirements of all applicable laws and regulations. The
issuance and sale of the capital stock of the Bank to the Company
has been duly authorized by all necessary action of the Bank and
approved by the Superintendent and the FDIC (subject to the
satisfaction of various conditions imposed in connection with the
Superintendent's approval of, and the FDIC's non-objection to,
the Conversion Application), and such capital stock, when issued
in accordance with the terms of the Plan, will be fully paid,
nonassessable and free of preemptive or similar rights and will
conform in all material respects to the description thereof
contained in the Prospectus. All such capital stock of the Bank
will be owned beneficially and of record by the Company free and
clear of all claims, encumbrances, security interests and liens
against the Bank whatsoever. Except as disclosed in the
Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and there is no commitment,
plan or arrangement to issue any share of capital stock of the
Company or the Bank or any security convertible into, or
exercisable or exchangeable, for such capital stock.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part
of the Company and the Bank; and this Agreement is a valid and
binding obligation of the Company and the Bank, enforceable in
accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship,
24
receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings institutions, the
deposits of which are insured by the FDIC and their holding
companies, (ii) general equitable principles, (iii) laws relating
to the safety and soundness of insured depository institutions
and their holding companies, and (iv) applicable law or public
policy with respect to the indemnification and/or contribution
provisions contained herein, including without limitation the
provisions of Sections 23A and 23B of the Federal Reserve Act and
except that no opinion need be expressed as to the effect or
availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(ix) The Conversion Application has been approved by the
Superintendent and the FDIC has issued a letter of non-objection,
and the Prospectus has been authorized for use by the
Superintendent and the FDIC. The OTS has approved the Holding
Company Application and issued its order of approval under the
savings and loan holding company provisions of the HOLA, the
purchase by the Company of all of the issued and outstanding
capital stock of the Bank has been authorized by the
Superintendent and the FDIC. No action has been taken, and, to
such counsel's actual knowledge, none is pending or threatened,
to revoke any such authorization or approval.
(x) The Plan has been duly adopted by the required vote of
the trustees of the Bank and the directors of the Company, and
based upon the certificate of the inspector of election, by the
depositors of the Bank.
(xi) Subject to the satisfaction of the conditions to the
Superintendent's approval and the FDIC's non-objection of the
Conversion and the OTS's approval of the Holding Company
Application, no further approval, registration, authorization,
consent or other order of any federal or state agency is required
in connection with the execution and delivery of this Agreement,
the issuance of the Shares and the consummation of the
Conversion, except as may be required under the securities or
blue sky laws of various jurisdictions (as to which no opinion
need be rendered) and except as may be required under the rules
and regulations of the NASD and/or the Nasdaq National Market (as
to which no opinion need be rendered). To such counsel's actual
knowledge, the Conversion has been consummated in all material
respects in accordance with all applicable provisions of the HOLA
and the Conversion Regulations, except that no opinion is
rendered with respect to (a) the Conversion Application, the
Registration Statement or Prospectus, which are covered by other
clauses of this opinion, (b) the satisfaction of the
post-Conversion conditions in the Conversion Regulations or in
the Superintendent or FDIC approvals of the Conversion
Application and the OTS's approval of the Holding Company
Application, (c) the securities or "blue sky" laws of various
jurisdictions, and (d) the rules and regulations of the NASD
and/or Nasdaq National Market.
(xii) The Registration Statement is effective under the 1933
Act, and no stop order suspending the effectiveness has been
issued under the 1933 Act or proceedings therefor initiated or,
to such counsel's actual knowledge, threatened by the Commission.
25
(xiii) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the Banking
Department and the FDIC, the Conversion Application, including
the Prospectus contained therein, complied as to form in all
material respects with the requirements of the Conversion
Regulations, federal law and all applicable rules and regulations
promulgated thereunder (other than the financial statements, the
notes thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need be
rendered).
(xiv) The activities of the subsidiary as described in the
Prospectus are permitted to subsidiaries of a savings and loan
holding company and of a New York chartered savings bank by the
rules, regulations, resolutions and practices of the Banking
Department.
(xv) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented) (other than the financial statements, the notes
thereto, and other tabular, financial, statistical and appraisal
data included therein, as to which no opinion need be rendered),
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, and
(ii) the Prospectus (other than the financial statements, the
notes thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the
Conversion Regulations and federal law.
(xvi) The terms and provisions of the Shares of the Company
conform, in all material respects, to the description thereof
contained in the Registration Statement and Prospectus, and the
form of certificate used to evidence the Shares is in due and
proper form.
(xvii) There are no legal or governmental proceedings
pending or, to such counsel's actual knowledge, threatened which
are required to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and to such
counsel's actual knowledge, all pending legal and governmental
proceedings to which the Company or the Bank is a party or of
which any of their property is the subject, which are not
described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the Company's
or the Bank's business, are, considered in the aggregate, not
material.
(xviii) To such counsel's actual knowledge, there are no
material contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Conversion Application, the Registration
Statement or the Prospectus or required to be filed as exhibits
thereto other than those described or referred to therein or
filed as exhibits thereto in the Conversion Application, the
Registration Statement or the Prospectus. The description in the
Conversion Application, the Registration Statement and the
Prospectus of such documents and exhibits is accurate in all
material respects and fairly presents the information required to
be shown.
(xix) To such counsel's actual knowledge , the Company and
the Bank have conducted the
26
Conversion, in all material respects, in accordance with all
applicable requirements of the Plan and applicable federal and
New York law, except that no opinion is rendered with respect to
(a) the Conversion Application, the Registration Statement or
Prospectus, which are covered by other clauses of this opinion,
(b) the satisfaction of the post-Conversion conditions in the
Superintendent of the Banking Department and FDIC approvals of
the Conversion Application and the OTS approval of the Holding
Company Application, (c) the securities of "blue sky" laws of
various jurisdictions, and (d) the rules and regulations of the
NASD and/or Nasdaq National Market. The Plan complies in all
material respects with all applicable federal laws, rules,
regulations, decisions and orders including, but not limited to,
the Conversion Regulations; no order has been issued by the
Superintendent, the Commission, the FDIC, or any state authority
to suspend the Offering or the use of the Prospectus, and no
action for such purposes has been instituted or, to such
counsel's actual knowledge, threatened by the Banking Department,
the Commission, the FDIC, or any state authority and, to such
counsel's actual knowledge, no person has sought to obtain
regulatory or judicial review of the final action of the
Superintendent, the FDIC or the OTS approving the Plan, the
Conversion Application, the Holding Company Application or the
Prospectus.
(xx) To such counsel's actual knowledge, the Company and the
Bank have obtained all material licenses, permits and other
governmental authorizations currently required under federal
banking laws and Delaware corporate and banking law for the
conduct of their businesses and all such licenses, permits and
other governmental authorizations are in full force and effect,
and the Company and the Bank are in all material respects
complying therewith, except where the failure to have such
licenses, permits and other governmental authorizations or the
failure to be in compliance therewith would not have a material
adverse effect on the business or operations of the Bank and the
Company, taken as a whole.
(xxi) To such counsel's actual knowledge, neither the
Company, the Bank nor any of the subsidiaries is in violation of
its certificate of incorporation and bylaws or its Organization
Certificate and bylaws, as appropriate or, to such counsel's
actual knowledge, in default or violation of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its property
may be bound, except for such defaults or violations which would
not have a material adverse impact on the financial condition or
results of operations of the Company and the Bank on a
consolidated basis; to such counsel's actual knowledge, the
execution and delivery of this Agreement, the occurrence of the
obligations herein set forth and the consummation of the
transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Bank or any of the
subsidiaries pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or any of the subsidiaries is a party
or by which any of them may be bound, or to which any of the
property or assets of the Company, the Bank or any of the
subsidiaries are subject (other than the establishment of the
liquidation account); and, such action will not result in any
violation of the provisions of the certificate of incorporation
or bylaws of the Company or the Organization Certificate or
bylaws of
27
the Bank or, to such counsel's actual knowledge, result in any
violation of any applicable federal law, act, regulation (except
that no opinion with respect to the securities and blue sky laws
of various jurisdictions or the rules or regulations of the NASD
and/or the Nasdaq Stock Market need be rendered) or order or
court order, writ, injunction or decree.
(xxii) The Company's certificate of incorporation and bylaws
comply in all material respects with the General Corporation Law
("GCL") of the State of Delaware. The Bank's organization
certificate and restated organization certificate and bylaws
comply in all material respects with the rules and regulations of
the Banking Department.
(xxiii) To such counsel's actual knowledge, neither the
Company nor the Bank is in violation of any directive from the
Superintendent or the FDIC to make any material change in the
method of conducting its respective business.
(xxiv) The information in the Prospectus under the captions
"Regulation," "The Conversion," "Restrictions on Acquisition of
the Company and the Bank" and "Description of Capital Stock of
the Holding Company," to the extent that such information
constitutes matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been reviewed by such
counsel and is correct in all material respects. The description
of the Conversion process under the caption "The Conversion" in
the Prospectus has been reviewed by such counsel and fairly
describes such process in all material respects. The discussion
of statutes or regulations described or referred to in the
Prospectus are accurate summaries and fairly present the
information required to be shown. The information under the
caption "The Conversion - Tax Considerations" has been reviewed
by such counsel and fairly describes the opinions rendered by
Silver, Freedman & Taff, L.L.P. to the Company and the Bank with
respect to such matters.
In addition, such counsel shall state that during the preparation of
the Conversion Application, the Registration Statement and the Prospectus, they
participated in conferences with certain officers of, the independent public and
internal accountants for, and other representatives of the Company and the Bank,
at which conferences the contents of the Conversion Application, the
Registration Statement and the Prospectus and related matters were discussed
and, while such counsel have not confirmed the accuracy or completeness of or
otherwise verified the information contained in the Conversion Application, the
Registration Statement or the Prospectus, and do not assume any responsibility
for such information, based upon such conferences and a review of documents
deemed relevant for the purpose of rendering their view (relying as to
materiality as to factual matters on certificates of officers and other factual
representations by the Company and the Bank), nothing has come to their
attention that would lead them to believe that the Conversion Application, the
Registration Statement, the Prospectus, or any amendment or supplement thereto
(other than the financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein as to which no view
need be rendered) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
28
In giving such opinion, such counsel may rely as to all matters of fact
on certificates of officers or directors or trustees of the Company and the
Bank, respectively, and certificates of public officials. Such counsel's opinion
shall be limited to matters governed by federal banking and securities laws and
by the New York Business Corporation Law and New York Banking Law. With respect
to matters involving the application of New York law, such counsel may rely, to
the extent it deems proper and as specified in its opinion, solely upon the
opinion of local counsel. The opinion of Silver, Freedman & Taff, L.L.P. shall
be governed by the Legal Opinion Accord ("Accord") of the American Bar Bank
Section of Business Law (1991). The term "actual knowledge" as used herein shall
have the meaning set forth in the Accord. For purposes of such opinion, no
proceedings shall be deemed to be pending, no order or stop order shall be
deemed to be issued, and no action shall be deemed to be instituted unless, in
each case, a director or executive officer of the Company or the Bank shall have
received a copy of such proceedings, order, stop order or action. In addition,
such opinion may be limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist; in rendering such opinion,
such counsel need assume no obligation to revise or supplement it should the
present laws be changed by legislative or regulatory action, judicial decision
or otherwise; and such counsel need express no view, opinion or belief with
respect to whether any proposed or pending legislation, if enacted, or any
proposed or pending regulations or policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation, would
affect the validity of the Conversion or any aspect thereof. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company or the Bank.
The favorable opinion, dated as of the Closing Date and addressed to
the Agent and for their benefit, of the Bank's local counsel, in form and
substance to the effect that, to the best of such counsel's knowledge, (i) the
Company and the Bank have good and marketable title to all properties and assets
which are material to the business of the Company and the Bank and to those
properties and assets described in the Registration Statement and Prospectus, as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration Statement and
Prospectus, or are not material in relation to the business of the Company and
the Bank considered as one enterprise; (ii) all of the leases and subleases
material to the business of the Company and the Bank under which the Company and
the Bank hold properties, as described in the Registration Statement and
Prospectus, are in full force and effect; and (iii) the Bank is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of property or the
conduct of its business requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have a material adverse
effect on the condition, financial or otherwise, or the business, operations or
income of the Bank.
(d) At the Closing Date, the Agent shall have received the favorable
opinion, dated as of the Closing Date, of Serchuk & Zelermyer, LLP, the
Agent's counsel, with respect to such matters as the Agent may reasonably
require. Such opinion may rely upon the opinions of counsel to the
29
Company and the Bank, and as to matters of fact, upon certificates of
officers and directors and trustees respectively, of the Company and the
Bank delivered pursuant hereto or as such counsel shall reasonably request.
(e) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company and
the Bank in form and substance reasonably satisfactory to the Agent's
Counsel, dated as of such Closing Date, to the effect that: (i) they have
carefully reviewed the Prospectus and, in their opinion, at the time the
Prospectus became authorized for final use, the Prospectus did not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) since the
date the Prospectus became authorized for final use, no event has occurred
which should have been set forth in an amendment or supplement to the
Prospectus which has not been so set forth, including specifically, but
without limitation, any material adverse change in the condition, financial
or otherwise, or in the earnings, capital, properties or business of the
Company or the Bank, and the conditions set forth in this Section 7 have
been satisfied; (iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, capital or properties of the Company or the Bank, independently,
or of the Company and the Bank, considered as one enterprise, whether or
not arising in the ordinary course of business; (iv) the representations
and warranties in Section 4 are true and correct with the same force and
effect as though expressly made at and as of the Closing Date; (v) the
Company and the Bank have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date and will comply in all material
respects with all obligations to be satisfied by them after the Conversion;
(vi) no stop order suspending the effectiveness of the Registration
Statement has been initiated or, to the best knowledge of the Company or
the Bank, threatened by the Commission or any state authority; (vii) no
order suspending the Offering, the Conversion, the acquisition of all of
the shares of the Bank by the Company or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose are pending
or, to the best knowledge of the Company or the Bank, threatened by the
Superintendent, the Commission, the FDIC, or any state authority; and
(viii) to the best knowledge of the Company or the Bank, no person has
sought to obtain review of the final action of the Superintendent approving
the Plan.
(f) Prior to and at the Closing Date: (i) in the reasonable opinion of
the Agent, there shall have been no material adverse change in the
condition, financial or otherwise, or in the earnings or business of the
Company or the Bank independently, or of the Company and the Bank,
considered as one enterprise, from that as of the latest dates as of which
such condition is set forth in the Prospectus other than transactions
referred to or contemplated therein; (iii) the Company or the Bank shall
not have received from the Superintendent or the FDIC or the OTS any
direction (oral or written) to make any material change in the method of
conducting their business with which it has not complied (which direction,
if any, shall have been disclosed to the Agent) or which materially and
adversely would affect the business, operations or financial condition or
income of the Company
30
and the Bank taken as a whole; (iv) the Company and the Bank or their
subsidiaries shall not have been in default (nor shall an event have
occurred which, with notice or lapse of time or both, would constitute a
default) under any provision of any agreement or instrument relating to any
outstanding indebtedness; (v) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the Company
or the Bank, threatened against the Company or the Bank or affecting any of
their properties wherein an unfavorable decision, ruling or finding would
materially and adversely affect the business, operations, financial
condition or income of the Company and the Bank taken as a whole; and (vi)
the Shares have been qualified or registered for offering and sale or
exempted therefrom under the securities or blue sky laws of the
jurisdictions as the Agent shall have reasonably requested and as agreed to
by the Company and the Bank.
(g) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Arthur Andersen as of the date of the Prospectus and
addressed to the Agent: (i) confirming that Arthur Andersen is a firm of
independent public accountants within the meaning of Rule 101 of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the Banking Board and stating in
effect that in its opinion the consolidated financial statements, schedules
and related notes of the Bank as of June 30, 1998 and 1997 and for each of
the two years in the period ended June 30, 1998, as are included in the
Prospectus and covered by their opinion included therein, comply as to form
in all material respects with the applicable accounting requirements and
related published rules and regulations of the Banking Board regulations
and the 1933 Act; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit in accordance with generally
accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of the Bank
prepared by the Bank, a reading of the minutes of the meetings of the Board
of Trustees of the Bank and the minutes of the meetings of the Board of
Directors of the Company since its inception and consultations with
officers of the Bank responsible for financial and accounting matters,
nothing came to their attention which caused them to believe that: (A) the
unaudited financial statements included in the Prospectus are not in
conformity with the 1933 Act, applicable accounting requirements of the
Banking Department and generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial
statements included in the Prospectus; or (B) during the period from the
date of the latest unaudited consolidated financial statements included in
the Prospectus to a specified date not more than three business days prior
to the date of the Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings, other than normal deposit
fluctuations, by the Bank or more than $10 million in the consolidated
long-term or short-term debt of the Bank and its subsidiaries; or (C) there
was any decrease in the consolidated net assets of the Bank, the allowance
for loan losses or net worth of the Bank and its subsidiaries or a decrease
of more than 2% in total deposits (exclusive of amounts withdrawn by
subscribers to purchase Shares in the Subscription Offering) at the date of
such letter as compared with amounts shown in the latest unaudited
consolidated statement of condition included in the Prospectus; or (D)
during the period of December 31, 1997 to a specific date not more than
five days prior to the date of this Agreement there were any decreases, as
compared with
31
the corresponding period in the preceding year, in total interest income,
net interest income and net interest income after provision for loan
losses, income before income tax expense or net income of the Bank and its
subsidiaries except in all instances for increases or decreases which the
Prospectus disclosed have occurred or may occur and (iii) stating that, in
addition to the audit referred to in their opinion included in the
Prospectus and the performance of the procedures referred to in clause (ii)
above, they have compared with the general accounting records of the Bank,
which are subject to the internal controls of the Bank, the accounting
system and other data prepared by the Bank, directly from such accounting
records, to the extent specified in such letter, such amounts and/or
percentages set forth in the Prospectus as the Agent may reasonably
request; and they have reported on the results of such comparisons.
(h) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements made by
Arthur Andersen in the letter delivered by it pursuant to subsection (g) of
this Section 7, the "specified date" referred to in clause (ii) of
subsection (f) thereof to be a date specified in such letter, which shall
not be more than three business days prior to the Closing Date.
(i) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC, dated the date thereof and addressed to counsel for the
Agent (i) confirming that said firm is independent of the Company and the
Bank and is experienced and expert in the area of corporate appraisals
within the meaning of Title 12 of the Code of Federal Regulations, Section
563b.7(f)(1)(i), (ii) stating in effect that the Appraisal prepared by such
firm complies in all material respects with the applicable requirements of
Title 12 of the Code of Federal Regulations, and (iii) further stating that
their opinion of the aggregate pro forma market value of the Company and
the Bank expressed in their Appraisal dated as of ___________, 1998, and
most recently updated, remains in effect.
(j) The Company and the Bank shall not have sustained since the date
of the latest financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Registration Statement and Prospectus and since the
respective dates as of which information is given in the Registration
Statement and Prospectus, there shall not have been any change in the
long-term debt of the Company or the Bank other than debt incurred in
relation to the purchase of Shares by the Bank's Eligible Plans, or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company or the Bank, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus, the
effect of which, in any such case described above, is in KBW's reasonable
judgment sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Subscription Offering or the delivery of
the Shares on the terms and in the manner contemplated in the Prospectus.
32
(k) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the letter from the Superintendent approving the Conversion
Application and the FDIC's letter non-objection of the same and authorizing
the use of the Prospectus and Proxy Statement; (ii) a copy of the order
from the Commission declaring the Registration Statement effective; (iii) a
certificate from the Banking Department evidencing the existence of the
Bank; (iv) certificate of good standing from the State of Delaware
evidencing the good standing of the Company; (v) a certificate from the
FDIC evidencing the Bank's insurance of accounts; (vi) a certificate of the
FHLB-New York evidencing the Bank's membership thereof; (vii) a copy of the
letter from the OTS approving the Company's Holding Company Application;
(viii) a copy of the Bank's Restated Organization Certificate and (ix)
certificate from the State of New York evidencing the status of the Company
as a foreign corporation.
(l) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or in the over-the-counter market,
or quotations halted generally on the Nasdaq Stock Market, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required by either of such exchanges or the NASD
or by order of the Commission or any other governmental authority; (ii) a
general moratorium on the operations of commercial banks, New York savings
institutions or federal savings institutions or a general moratorium on the
withdrawal of deposits from commercial banks, New York savings institutions
or federal savings institutions declared by federal or state authorities;
(iii) the engagement by the United States in hostilities which have
resulted in the declaration, on or after the date hereof, of a national
emergency or war; or (iv) a material decline in the price of equity or debt
securities if the effect of such a declaration or decline, in the Agent's
reasonable judgement, makes it impracticable or inadvisable to proceed with
the Offering or the delivery of the shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
(m) At the Closing Date, KBW shall have received the Officers'
Certificates certifying as to the accuracy of the representations and
warranties contained in Section 4 hereof.
(n) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the sale of the
Shares as herein contemplated and related proceedings or in order to
evidence the occurrence or completeness of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company or the Bank in connection with the
Conversion and the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to KBW and its counsel.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless the Agent, its respective officers and Trustees,
employees and agents, and each person, if
33
any, who controls the Agent within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to
settlement expenses), joint or several, that the Agent or any of them may
suffer or to which the Agent and any such persons may become subject under
all applicable federal or state laws or otherwise, and to promptly
reimburse the Agent and any such persons upon written demand for any
expense (including reasonable fees and disbursements of counsel) incurred
by the Agent or any of them in connection with investigating, preparing or
defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or
actions: (i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment or supplement thereto), preliminary or final Prospectus
(or any amendment or supplement thereto), the Conversion Application (or
any amendment or supplement thereto), the Holding Company Application or
any instrument or document executed by the Company or the Bank or based
upon written information supplied by the Company or the Bank filed in any
state or jurisdiction to register or qualify any or all of the Shares or to
claim an exemption therefrom, or provided to any state or jurisdiction to
exempt the Company as a broker-dealer or its officers, Trustees and
employees as broker-dealers or agent, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any document, advertisement,
oral statement or communication ("Sales Information") prepared, made or
executed by or on behalf of the Company or the Bank with their consent or
based upon written or oral information furnished by or on behalf of the
Company or the Bank, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption therefrom under the
securities laws thereof; (ii) arise out of or are based upon the omission
or alleged omission to state in any of the foregoing documents or
information, a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; or (iii) arise from any theory of liability
whatsoever relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation distributed in
connection with the Conversion; provided, however, that no indemnification
is required under this paragraph (a) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
material statement or alleged untrue material statement in, or material
omission or alleged material omission from, the Registration Statement (or
any amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Conversion Application, any Blue
Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company or the Bank
by the Agent or its counsel regarding the Agent provided, that it is agreed
and understood that the only information furnished in writing to the
Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Offering-Marketing and Underwriting
Arrangements"; and, provided further, that such indemnification shall be to
the extent permitted by the Commissioner, the Superintendent, the FDIC and
the OTS. The indemnification provided for in this paragraph (a) shall not
be applicable with respect to any loss, liability, claim, damage, or
expense whatsoever if it is determined by final judgment of a court having
jurisdiction over the
34
matter that such loss, liability, claim, damage or expense was primarily a
result of the Agent's willful misconduct or gross negligence.
(b) The Agent agrees to indemnify and hold harmless the Company and
the Bank, their directors and trustees, respectively, and officers and each
person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and
all loss, liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses), joint or several, which they, or any of
them, may suffer or to which they, or any of them may become subject under
all applicable federal and state laws or otherwise, and to promptly
reimburse the Company, the Bank, and any such persons upon written demand
for any expenses (including reasonable fees and disbursements of counsel)
incurred by them, or any of them, in connection with investigating,
preparing or defending any actions, proceedings or claims (whether
commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information, (ii) are based upon the
omission or alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) arise from any theory of liability
whatsoever relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), or any Blue Sky
Application or Sales Information or other documentation distributed in
connection with the Conversion; provided, however, that the Agent's
obligations under this Section 8(b) shall exist only if and only to the
extent (i) that such untrue statement or alleged untrue statement was made
in, or such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement thereto),
the Conversion Application (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the Company or the Bank
by the Agent or its counsel regarding the Agent. Provided, that it is
agreed and understood that the only information furnished in writing to the
Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Offering-Marketing and Underwriting
Arrangements". The indemnification provided for in this paragraph (b) shall
not be applicable with respect to any loss, liability, claim, damage, or
expense whatsoever if it is determined by final judgment of a court having
jurisdiction over the matter that such loss, liability, claim, damage or
expense was primarily a result of the Company's or the Bank's willful
misconduct or gross negligence.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party
35
shall not relieve it from any liability which it may have on account of
this Section 8 or otherwise. An indemnifying party may participate at its
own expense in the defense of such action. In addition, if it so elects
within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice,
may assume defense of such action with counsel chosen by it and approved by
the indemnified parties that are defendants in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that are different from or in
addition to those available to such indemnifying party. If an indemnifying
party assumes the defense of such action, the indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, proceeding or
claim, other than reasonable costs of investigation. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
separate firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings
or claims in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof
and the representations and warranties of the Company and the Bank set
forth in this Agreement shall remain operative and in full force and effect
regardless of: (i) any investigation made by or on behalf of agent or their
officers, trustees, directors or controlling persons, agent or employees or
by or on behalf of the Company or the Bank or any officers, trustees,
directors or controlling persons, agent or employees of the Company or the
Bank; (ii) delivery of and payment hereunder for the Shares; or (iii) any
termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, the Company,
the Bank and the Agent shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or the Agent from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that the
Agent is responsible for that portion represented by the percentage that the
fees paid to the Agent pursuant to Section 2 of this Agreement (not including
expenses) bears to the gross proceeds received by the Company from the sale of
the Shares in the Offering, and the Company and the Bank shall be responsible
for the balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the Bank
on the one hand and the Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereto), but also the relative
benefits received by the Company and the Bank on the one
36
hand and the Agent on the other from the Offering (before deducting expenses).
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and/or the Bank on the one hand or the Agent on the
other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions, proceedings or claims in respect thereof)
referred to above in this Section 9 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. It is expressly
agreed that the Agent shall not be liable for any loss, liability, claim, damage
or expense or be required to contribute any amount which in the aggregate
exceeds the amount paid (excluding reimbursable expenses) to the Agent under
this Agreement. It is understood that the above stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation. The obligations of the Company and the Bank under this
Section 9 and under Section 8 shall be in addition to any liability which the
Company and the Bank may otherwise have. For purposes of this Section 9, each of
the Agent's, the Company's or the Bank's officers and trustees and each person,
if any, who controls the Agent or the Company or the Bank within the meaning of
the 1933 Act and the 1934 Act shall have the same rights to contribution as the
Agent, the Company or the Bank. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 9, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company, the Bank and
the Agent set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Bank or any controlling person referred to in Section 8 hereof, and shall
survive the issuance of the Shares, and any successor or assign of the Agent,
the Company, the Bank, and any such controlling person shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
37
Section 11. Termination. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum number
of the Shares by , 1998, and in accordance with the provisions of the Plan
or as required by the Conversion Regulations, and applicable law, this
Agreement shall terminate upon refund by the Company to each person who has
subscribed for or ordered any of the Shares the full amount which it may
have received from such person, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation to the
other hereunder, except for payment by the Company and/or the Bank as set
forth in Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement unless waived in
writing, or by the Closing Date, this Agreement and all of the Agent's
obligations hereunder may be cancelled by the Agent by notifying the
Company and the Bank of such cancellation in writing or by telegram at any
time at or prior to the Closing Date, and any such cancellation shall be
without liability of any party to any other party except as otherwise
provided in Sections 2(a), 6, 8 and 9 hereof.
(c) If the Agent elects to terminate this Agreement as provided in
this Section, the Company and the Bank shall be notified promptly by
telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement in the event the
Agent is in material breach of the representations and warranties or covenants
contained in Section 5 and such breach has not been cured after the Company and
the Bank have provided KBW with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Keefe, Bruyette
& Woods, Inc., 211 Bradenton Avenue, Dublin, Ohio 43017-5034, Attention:
Patricia A. McJoynt (with a copy to Serchuk & Zelermyer, L.L.P, Attention:
Clifford S. Weber, Esq. and, if sent to the Company and the Bank, shall be
mailed, delivered or telegraphed and confirmed to the Company and the Bank at
Cohoes Bancorp, Inc., 75 Remsen Street, Cohoes, New York 12047-2892, Attention:
Harry L. Robinson, President (with a copy to Silver, Freedman & Taff, L.L.P.,
Attention: Martin L. Meyrowitz, P.C.).
Section 13. Parties. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of the Agent when the same shall have been given by the undersigned.
The Agent shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the Bank, when
the same shall have been given by the undersigned or any other officer of the
Company
38
or the Bank. This Agreement shall inure solely to the benefit of, and shall be
binding upon, the Agent, the Company, the Bank, and their respective successors
and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. It is understood and agreed that
this Agreement is the exclusive agreement among the parties hereto, and
supersedes any prior agreement among the parties and may not be varied except in
writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in next day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the laws of the State of New York.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and the Agent, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
39
Section 18. Entire Agreement. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
Very truly yours,
COHOES BANCORP, INC. COHOES SAVINGS BANK
By Its Authorized By Its Authorized
Representative: Representative:
___________________________ ___________________________
Harry L. Robinson Harry L. Robinson
President President
Accepted as of the date first above written
Keefe, Bruyette & Woods, Inc.
By Its Authorized
Representative:
____________________________
Patricia A. McJoynt
Executive Vice President
40