EXHIBIT 1.2
OC FINANCIAL, INC.
(a Maryland Stock Corporation)
Up to 690,000 Shares of Common Stock
(Subject to Increase Up to 793,500 shares)
COMMON STOCK ($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
February __, 2005
Keefe, Bruyette & Woods
211 Bradenton Drive
Dublin, Ohio 43017-5034
Ladies and Gentlemen:
Ohio Central Savings, a federally chartered stock savings association
(the "Bank"), which is currently in the mutual holding company structure, in
which it is the wholly-owned subsidiary of TFS Financial Corporation ("TFS")
which is a wholly-owned subsidiary of Third Federal Savings and Loan Association
of Cleveland, MHC (the "MHC"), a mutual holding company, and OC Financial, Inc.
(the "Holding Company"), a Maryland stock corporation, (collectively, the "OC
Parties") hereby confirm, jointly and severally, their agreement with Keefe,
Bruyette & Woods, Inc. ("KBW" or the "Agent"), as follows:
SECTION 1. THE OFFERING. Pursuant to an agreement between the Bank,
TFS and the MHC, the Bank will be released from the mutual holding company
structure and become a mutual savings association. Thereafter, the Bank, in
accordance with the Plan of Conversion and Reorganization adopted December __,
2004, as amended (the "Plan"), intends to convert from mutual to stock form.
Also, pursuant to the Plan the Company will become the Bank's holding company.
Collectively, these transactions are referred to as the "Conversion." The
Conversion is being conducted in accordance with the laws of the United States
and the applicable regulations of the Office of Thrift Supervision ("OTS") (such
laws and the regulations of the OTS are referred to herein as the "Conversion
Regulations"). In connection with the Conversion, the Holding Company will offer
stock in a subscription offering (the "Subscription Offering") on a priority
basis to (i) Eligible Account Holders (depositors at the close of business on
September 30, 2003 with deposits of at least $50.00); (ii) the employee stock
ownership plan of the Holding Company; (iii) Supplemental Eligible Account
Holders (depositors at the close of business on December 31, 2004 with deposits
of at least $50.00); and (iv) Other Members (depositors at the close of business
on _______, 2005). Concurrently with, at any time during, or
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promptly after the Subscription Offering, and on a lowest priority basis, an
opportunity to subscribe may also be offered, if necessary, to the general
public in a Direct Community Offering and/or a Syndicated Community Offering or
a best efforts basis, as described in subsection 4(c) below, giving priority to
natural persons residing in the Ohio Counties of Franklin and Cuyahoga. All
capitalized terms used in this Agreement and not defined in this Agreement shall
have the meanings set forth in the Plan. Pursuant to the Plan, the Holding
Company is offering a minimum of 510,000 and an anticipated maximum of 690,000
shares (subject to an increase up to 793,500 shares) of common stock, par value
$.01 per share (the "Common Stock"), in the Subscription Offering, and, if
necessary, (i) the Community Offering and/or (ii) a Syndicated Community
Offering.
The Common Stock to be sold by the Holding Company in the Subscription
Offering, Community Offering, and/or Syndicated Community Offering (the
"Offering") is hereinafter called the "Shares." The Holding Company will sell
the Shares in the Offerings at $10.00 per share (the "Purchase Price"). If the
number of Shares is increased or decreased in accordance with the Plan, the term
"Shares" shall mean such greater or lesser number, where applicable. 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
Holding Company and the Bank may reject, in whole or in part, any orders
received in the Director Community Offering or Syndicated Community Offering.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (File No.
333-121411) in order to register the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Conversion, the Bank filed with the OTS an
application for conversion to a stock company (the "Conversion Application") and
amendments thereto as required by the OTS. The Holding Company has also filed
with the OTS its application on Form H-(e)1-S (the "Holding Company
Application") to become a unitary savings and loan holding company under the
Home Owners' Loan Act of 1933, as amended, and the regulations promulgated
thereunder (the "HOLA"). Collectively, the Conversion Application and the
Holding Company Application may also be termed the "Applications."
SECTION 2. RETENTION OF AGENT. Subject to the terms and conditions
herein set forth, the OC Parties hereby appoint the Agent as their financial
advisor and marketing agent to utilize
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its best efforts to solicit subscriptions for Shares and to advise and assist
the OC Parties with respect to the Holding Company's sale of the Shares in the
Offering.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the OC Parties as
to the matters set forth in the letter agreement, dated September 30, 2004,
between the Bank and KBW (a copy of which is attached hereto as EXHIBIT A). It
is acknowledged by the OC Parties that the Agent shall not be required to
purchase any Shares or be obligated to take any action that is inconsistent with
all applicable laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Holding
Company or upon termination of the Offering, but in no event later than 45 days
after the completion of the Subscription Offering (the "End Date"). All fees or
expenses due to the Agent but unpaid will be payable to the Agent in next day
funds at the earlier of the Closing Date (as hereinafter defined) or the End
Date. In the event the Offering is extended beyond the End Date, the OC Parties
and the Agent may agree to renew this Agreement under mutually acceptable terms
and subject to the approval of any governmental agency or regulatory authority
having jurisdiction over such matters.
In the event the Holding Company is unable to sell a minimum of 510,000
Shares by the End Date, this Agreement shall terminate and the Holding Company
shall refund to any persons who have subscribed for any of the Shares the full
amount that it may have received from them plus accrued interest, as set forth
in the Prospectus, and none of the parties to this Agreement shall have any
obligation to the other parties hereunder, except as set forth in this Section 2
and in Sections 9, 11 and 12 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to Section 4, subparagraphs (a) and (d),
below.
SECTION 3. SALE AND DELIVERY OF SHARES. 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 Holding
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 Holding Company by any means
authorized by the Plan; provided, however, that no funds shall be released to
the Holding Company until the conditions specified in Section 10 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 OC Parties and the Agent. Certificates for
shares shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Holding Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
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SECTION 4. COMPENSATION. The Agent shall receive the following
compensation for its services hereunder:
(a) A Management Fee of $25,000, payable in five consecutive monthly
installments of $5,000, commencing with the adoption of the Plan. Such fees
shall be deemed earned when due. Should the Plan 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. The Management Fee will be credited against the Success
Fee provided for in subsection 4(b).
(b) A Success Fee of 0.80% shall be charged based on the aggregate
purchase price of the Shares sold in the Subscription Offering and the Community
Offering excluding shares purchased by the Bank's officers, directors or
employees (or members of their immediate family) plus any ESOP or similar plan
created by the Bank for some or all of its directors or employees. In no event,
however, shall the Success Fee be less than $75,000. The Success Fee is payable
only upon the successful completion of the Offering.
(c) If any of the Shares remain available after the Subscription
Offering and Community Offerings, at the request of the Bank, KBW may seek to
form a syndicate of registered broker-dealers ("Selected Dealers") to assist in
the solicitation of orders of the common stock in a syndicated community
offering, on a best efforts basis, subject to the terms and conditions set forth
in the selected dealers agreement. KBW will endeavor to distribute the Shares
among the Selected Dealers in a fashion which best meets the distribution
objectives of the Bank and the Plan. KBW will be paid a fee not to exceed 5.5%
of the aggregate purchase price of the shares sold by the syndicated community
offering. From this fee, KBW will pass on to the Selected Dealers who assist in
such offering an amount competitive with gross underwriting discounts charged at
such time for comparable amounts of stock sold at a comparable price per share
in a similar market environment. Fees with respect to purchases affected with
the assistance of Selected Dealers other than KBW shall be transmitted by KBW to
such Selected Dealers. The decision to utilize Selected Dealers will be made by
the Bank upon consultation with KBW. In the event, with respect to any stock
purchases, fees are paid pursuant to this subparagraph 4(c), such fees shall be
in lieu of, and not in addition to, payment pursuant to subparagraph 4(b).
(d) The selection of KBW's counsel will be done by KBW, with the
approval of the Bank. The Bank will reimburse KBW for the fees of its counsel,
which shall not exceed $30,000 without the prior consent of the Bank. The Bank
will bear the expenses of the Offering customarily borne by issuers including,
without limitation, regulatory filing fees, Commission, "Blue Sky," and NASD
filing and registration fees; the fees of the Bank's accountants, attorneys,
appraiser, transfer agent and registrar, printing, mailing and marketing and
syndicate expenses associated with the Conversion; and the fees set forth under
this Section 4; and fees for "Blue Sky" legal work. The OC Parties will
reimburse KBW for such expenses incurred by KBW on their behalf.
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(e) KBW further agrees to provide financial advisory assistance to
the Holding Company and the Bank for a period of one year following completion
of the Conversion, including formation of a dividend policy and share repurchase
program, assistance with shareholder reporting and shareholder relations
matters, general advice on mergers and acquisitions, and other related financial
matters (e.g., evaluation of business strategies regarding the use of net
proceeds), without the payment by the Company and the Bank of any fees in
addition to those set forth in this Section 4. Nothing in this Agreement shall
require the Company and the Bank to obtain such services from KBW. Following
this initial one year term, if the Bank, Company and KBW wish to continue the
relationship, a fee will be negotiated and an agreement entered into at that
time.
Full payment of KBW's fees and expenses, as described above, shall be
made in next day funds on the earlier of the Closing Date or a determination by
the Bank to terminate or abandon the Plan.
SECTION 5. 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 OC Parties. At the closing, the OC Parties shall deliver to the
Agent in next day funds the commissions, fees and expenses due and owing to the
Agent as set forth in Sections 4 and 9 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 6. REPRESENTATIONS AND WARRANTIES OF THE OC PARTIES. The OC
Parties jointly and severally represent and warrant to the Agent that:
(a) Each of the OC Parties has all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, and, as of the Closing Date, each of the OC Parties will have all
such power, authority, authorizations, approvals and orders as may be required
to carry out the provisions and conditions hereof and to issue and sell the
Shares as provided herein and as described in the Prospectus. The consummation
of the Conversion, the execution, delivery and performance of this Agreement and
the Letter Agreement and the consummation of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action
on the part of each of the OC Parties. This Agreement has been validly executed
and delivered by each of the OC Parties, and is a valid, legal and binding
obligation of each of the OC Parties, in each case enforceable in accordance
with its terms, except as the legality, validity, binding nature and
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, and (iii) the extent, if any, that the
provisions of Sections 11 or 12 hereof may be unenforceable as against public
policy.
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(b) The Registration Statement which was prepared by the OC Parties
and filed with the Commission was declared effective by the Commission on
_______, 2004. No stop order has been issued with respect to the Prospectus. No
proceedings related to the Prospectus have been initiated or, to the knowledge
of the OC Parties, threatened by the Commission. At the time the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), became effective, the Registration Statement complied
and will comply as to form in all material respects with the requirements of the
1933 Act and the regulations promulgated thereunder. The Registration Statement,
including the Prospectus (and any amendment or supplement thereto), and any
information regarding the OC Parties contained in Sales Information authorized
by the OC Parties for use in connection with the offering, did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. At the time any Rule
424(b) or (c) Prospectus is filed with the Commission and at the Closing Date
referred to in Section 5, the Registration Statement, including the Prospectus
(including any amendment or supplement thereto) and, when taken together with
the Prospectus, any Blue Sky Application or Sales Information authorized for use
by any of the OC Parties 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 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 6(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the OC Parties by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus under the caption "The Conversion
Marketing and Distribution; Compensation" 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.
(c) The Conversion Application which was prepared by the OC Parties
has been approved by the OTS. The Conversion Application did, and will, as of
the Closing Date, comply as to form in all material respects with the Conversion
Regulations and any other applicable rules and regulations of the OTS.
(d) No order has been issued by the Commission preventing or
suspending the use of the Registration Statement or 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 OC Parties, pending or threatened.
(e) The Plan has been duly adopted by the Board of the Bank. 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 OC Parties by the OTS, the Commission, or any other regulatory authority and
in the manner described in the Prospectus. To the best knowledge of the OC
Parties, no person
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has, or at the Closing Date will have, sought to obtain review of the final
action of the OTS in approving the Conversion Application or the Holding Company
Application, pursuant to the Conversion Regulations, the HOLA or any other
statute or regulation.
(f) The Holding Company has filed the Holding Company Application
with the OTS. The Holding Company Application complies in all material respects
with the HOLA and Control Act Regulations. As of the Closing Date, the OTS will
have approved of the Holding Company's becoming a unitary savings and loan
holding company with respect to the Bank.
(g) RP Financial, LC., which prepared the appraisal of the aggregate
pro forma market value of the Common Stock on which the Offerings were based
(the "Appraisal"), has advised the OC Parties in writing that it is independent
with respect to each of the OC Parties within the meaning of the Conversion
Regulations and the OC Parties believe RP Financial, LC. to be an expert in
preparing appraisals of savings institutions.
(h) Crowe Chizek and Company LLC ("Crowe Chizek"), which certified
the financial statements filed as part of the Registration Statement and the
Conversion Application, has advised the OC Parties that it is an independent
certified public accountant within the meaning of the Code of Ethics of the
AICPA, and Crowe Chizek and Company LLC is, with respect to the OC Parties and
each subsidiary thereof, independent certified public accountants as required by
the 1933 Act and the regulations promulgated thereunder.
(i) The financial statements, schedules and the notes related
thereto which are included in the Registration Statement and which are a part of
the Prospectus present fairly in all material respects the consolidated
financial condition of the Bank as of the dates indicated and the results of
operations, changes in stockholders' equity and cash flows for the periods
specified. The financial statements comply in all material respects with the
applicable accounting requirements of Title 12 of the Code of Federal
Regulations, Regulation S-X of the Commission and generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods presented,
except as otherwise noted therein, and present fairly in all material respects
the information required to be stated therein. 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
any unaudited financial statements included in the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been consistently applied
on the basis described therein.
(j) Since the respective dates as of which information is given in
the Registration Statement, including the Prospectus: (i) there has not been any
material adverse change in the financial condition, results of operation,
earnings, capital, properties, business affairs or prospects or otherwise of the
OC Parties considered as one enterprise, 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
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any material decrease in equity capital or total assets of the Bank, nor have
the OC Parties 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 any of the OC Parties, other than
those in the ordinary course of business; (iv) there has not been any material
adverse change in the aggregate dollar amount of the Bank's deposits or its net
worth; (v) there has been no material change in the Bank's relationship with its
insurance carriers, including, without limitation, cancellation or other
termination of the Bank's, fidelity bond or any type of insurance coverage; (vi)
except as disclosed in the Prospectus, there has been no material change in
management of the OC Parties; (vii) the Bank has not sustained any material loss
or interference with its business or properties from fire, flood, windstorm,
earthquake, accident or other calamity, whether or not covered by insurance;
(viii) none of the OC Parties have defaulted in the payment of principal or
interest on any outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the OC Parties conform in all
material respects to the descriptions thereof contained in the Prospectus; and
(x) none of the OC Parties have any material liabilities of any kind, contingent
or otherwise, except as disclosed in the Registration Statement or the
Prospectus.
(k) As of the Closing Date, the Holding Company will be a stock
corporation duly organized and in good standing under the laws of the State of
Maryland, with corporate power and authority to own, lease and operate its
properties and to conduct the business currently conducted by the Bank, as
described in the Prospectus, and will be qualified to transact business and will
be in good standing in Ohio and in each jurisdiction in which the conduct of
business requires such qualification, unless the failure to qualify in one or
more of such jurisdictions would not have a material adverse effect on the
financial condition, results of operation, capital, properties, business affairs
or prospects of the OC Parties taken as a whole (a "Material Adverse Effect").
As of the Closing Date, the Holding Company will have obtained all licenses,
permits and other governmental authorizations required for the conduct of its
business, except those that individually or in the aggregate would not have a
Material Adverse Effect. As of the Closing Date, all such licenses, permits and
other governmental authorizations will be in full force and effect, and the
Holding Company will be in compliance therewith in all material respects.
(l) As of the date of this Agreement, the Holding Company does not
own any equity securities or any equity interest in any business enterprise.
(m) The Bank is a duly organized and validly existing
federally-chartered savings association, duly authorized to conduct its business
as described in the Prospectus; the activities of the Bank are permitted by the
applicable rules, regulations and practices of the OTS (or valid waivers granted
by the OTS from such rules, regulations and practices). The Bank has obtained
all licenses, permits and other governmental authorizations currently required
for the conduct of its business, except those that individually or in the
aggregate would not have a Material Adverse Effect; all such licenses, permits
and other governmental authorizations are in full force and effect and the Bank
is in good standing under the laws of the United States and the Bank is duly
qualified as a foreign corporation to transact business in each jurisdiction in
which the failure to so qualify would have a Material Adverse Effect. All of the
issued and outstanding capital stock
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of the Bank after the Conversion will be duly and validly issued and fully paid
and nonassessable; and the Holding Company will directly own all of the capital
stock of the Bank free and clear of any mortgage, pledge, lien, encumbrance,
claim or restriction of any kind. As of the date of this Agreement, the Bank
does not own equity securities or any equity interest in any other business
enterprise except for (i) marketable equity securities and (ii) other equity
interests as described in the Prospectus or as are immaterial in amount and are
not required to be described in the Prospectus.
(n) The Holding Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Maryland with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; the Company is qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect. The Company has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not have a Material
Adversely Effect; 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.
(o) The Bank is a member of the Federal Home Loan Bank of
Cincinnati. 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 is pending or, to the best knowledge of the OC Parties, threatened.
The Bank is a "qualified thrift lender" within the meaning of 12 U.S.C. ss.
1467a(m). Upon consummation of the Conversion, the Bank will establish a
liquidation account in accordance with the Plan and the requirements of
applicable Conversion Regulations.
(p) As of the Closing Date, the Bank will be a wholly owned
subsidiary of the Holding Company. The Bank has no subsidiaries except for
AutoArm, LLC.
(q) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Holding Company will be within the range set
forth in the Prospectus under the caption "Capitalization" and no shares of
Common Stock have been or will be issued and outstanding prior to the Closing
Date (except for the shares issued upon incorporation of the Holding Company);
the shares of Common Stock to be subscribed for in the Offerings have been duly
and validly authorized for issuance and, when issued and delivered by the
Holding Company pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will be duly and validly
issued, fully paid and nonassessable; the issuance of the Shares is not subject
to preemptive rights, except for the subscription rights granted pursuant to the
Plan; and the terms and provisions of the shares of Common Stock will conform in
all material respects to the description thereof contained in the Prospectus.
Upon issuance of the Shares sold, good title to the Shares will be transferred
from the Holding Company to the purchasers of Shares against payment therefor in
the Offering as set forth in the
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Plan and the Prospectus, subject to such claims as may be asserted against the
purchasers thereof by third-party claimants.
(r) The OC Parties are not in violation of their respective
certificates of incorporation or charters or their respective bylaws, or in
material default in the performance or observance of any obligation, agreement,
covenant, or condition contained in any contract, lease, loan agreement,
indenture or other instrument to which they are a party or by which they, or any
of their respective properties, may be bound which would result in a Material
Adverse Effect. The consummation of the transactions contemplated herein and in
the Plan will not (i) conflict with or constitute a breach of, or default under,
or result in the creation of any material lien, charge or encumbrance upon any
assets of the OC Parties pursuant to the respective certificate of
incorporation, charter or bylaws of any of the OC Parties, or conflict with or
constitute a breach of, or default under, any contract, lease or other
instrument to which any of the OC Parties is a party which breach, default or
conflict would have a Material Adverse Effect, or any applicable law, rule,
regulation or order that is material to the financial condition of any of the OC
Parties; (ii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the OC Parties except for such
violations which would not have a Material Adverse Effect; or (iii) result in
the creation of any lien, charge or encumbrance upon any property of the OC
Parties, except for such liens, charges or encumbrances upon any property of the
OC Parties that would not individually or in the aggregate have a Material
Adverse Effect.
(s) All documents made available to or delivered or to be made
available to or delivered by the OC Parties or their representatives in
connection with the issuance and sale of the Shares, including records of
account holders, depositors and borrowers of the Bank, or in connection with the
Agent's exercise of due diligence, except for those documents which were
prepared by parties other than the OC Parties or their representatives, to the
best knowledge of the OC Parties, 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.
(t) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default on the part of any of the
OC Parties in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other instrument or agreement to which any of the OC Parties is
a party or by which any of their property is bound or affected in any respect
which, in any such case, would have a Material Adverse Effect on the OC Parties
taken as a whole, and such agreements are in full force and effect; and no other
party to any such agreements has instituted or, to the knowledge of any of the
OC Parties, threatened any action or proceeding wherein any of the OC Parties
would or might be alleged to be in default thereunder under circumstances where
such action or proceeding, if determined adversely to any of the OC Parties,
would have a Material Adverse Effect.
(u) The OC Parties have good and marketable title to all real
property and good title to all other assets which are material to the businesses
of the OC Parties, taken as a whole, and to those properties and assets
described in the Prospectus as owned by them, free and clear of all
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liens, charges, encumbrances, restrictions or other claims, except such as are
described in the Prospectus or which do not have a Material Adverse Effect,
taken as a whole; and all of the leases and subleases which are material to the
businesses of the OC Parties, including those described in the Registration
Statement or Prospectus, are in full force and effect.
(v) The OC Parties are not in violation of any material directive
from the OTS, the FDIC, or any other agency to make any material change in the
method of conducting their respective businesses; the OC Parties have conducted
and are conducting their respective businesses so as to comply in all respects
with all applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the OTS, the Commission and the
FDIC), except where the failure to so comply would not reasonably be expected to
result in a Material Adverse Effect, and there is no charge, investigation,
action, suit or proceeding before or by any court, regulatory authority or
governmental agency or body pending or, to the knowledge of any of the OC
Parties, threatened, which would reasonably be expected to materially and
adversely affect the Conversion, the performance of this Agreement, or the
consummation of the transactions contemplated in the Plan as described in the
Registration Statement, or which would reasonably be expected to result in a
Material Adverse Effect.
(w) Prior to the Closing Date, the OC Parties will have received an
opinion of their special counsel, Luse Gorman Pomerenk & Schick, P.C., with
respect to the federal income tax consequences of the Conversion, as described
in the Registration Statement and the Prospectus and an opinion of Crowe Chizek
with respect to the state tax consequences of the Conversion, as described in
the Registration Statement and the Prospectus; and the facts and representations
upon which such opinions will be based, will be truthful, accurate and complete,
and none of the OC Parties will take any action inconsistent therewith.
(x) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the OC Parties of this Agreement, or the issuance of
the Shares, except for the approval of the OTS, the Commission and the National
Association of Securities Dealers, Inc. ("NASD"), and any necessary
qualification, notification, registration or exemption under the securities or
blue sky laws of the various states in which the Shares are to be offered.
(y) None of the OC Parties has: (i) issued any securities within the
last 18 months (except for (a) notes to evidence bank loans and reverse
repurchase agreements or other liabilities in the ordinary course of business or
as described in the Prospectus, and (b) shares of Common Stock issued with
respect to the initial capitalization of the Holding Company; (ii) had any
material dealings with respect to sales of securities 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
Offerings and routine purchases and sales of United States government and agency
and other securities in the ordinary course of business; (iii) entered into a
financial or management consulting agreement except as contemplated hereunder;
or (iv) engaged any intermediary between the Agent and the OC Parties in
connection with the Offerings, and no person is being compensated in any manner
for such services.
11
(z) The OC Parties have not made any payment of funds of the OC
Parties as a loan to any entity for the purchase of the Shares, or has made any
other payment or loan of funds prohibited by law, and no funds have been set
aside to be used for any payment prohibited by law.
(aa) The OC Parties comply 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.
(bb) The OC Parties have not relied upon the Agent or its counsel for
any legal, tax or accounting advice in connection with the Conversion.
(cc) To the knowledge of the OC Parties, the records used by the OC
Parties to determine the identity of Eligible Account Holders and Supplemental
Eligible Account Holders and Other Members are accurate and complete in all
material respects.
(dd) The OC Parties comply with all laws, rules and regulations
relating to environmental protection, and none of them has been notified or is
otherwise aware that any of them is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any other Federal, state or local
environmental laws and regulations except to the extent that any non-compliance,
individually or in the aggregate, would not have a Material Adverse Effect. No
action, suit, demand, claim, notice, regulatory investigation or other
proceeding (including, without limitation, notices, demand letters or requests
for information from any environmental agency) is pending, or to the knowledge
of the OC Parties, threatened against the OC Parties relating to environmental
protection, nor do the OC Parties have any reason to believe any such
proceedings may be brought against any of them; and, to the knowledge of the OC
Parties, no disposal, release or discharge of hazardous or toxic substances,
pollutants or contaminants, including petroleum and gas products, as any of such
terms may be defined under federal, state or local law, has occurred on, in, at
or about any facilities or properties owned or leased by any of the OC Parties
or in which the Bank has a security interest, except to the extent such
disposal, release or discharge would not have a Material Adverse Effect.
(ee) All of the loans represented as assets in the Business of OC
Financial, Inc. and Ocean Central Savings Bank section or financial information
of the OC Parties included in the Prospectus meet or are exempt from all
requirements of federal, state and local law pertaining to lending, including,
without limitation, truth in lending (including the requirements of Regulation Z
and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws applicable to such
loans, except for violations which, if asserted, would not result in a Material
Adverse Effect.
(ff) None of the OC Parties are required to be registered as an
investment company under the Investment Company Act of 1940, as amended.
12
(gg) Any certificate signed by an officer of any of the OC Parties
and delivered to the Agent or its counsel that refers to this Agreement shall be
deemed to be a representation and warranty by the OC Parties to the Agent as to
the matters covered thereby with the same effect as if such representation and
warranty were set forth herein.
(hh) The OC Parties have taken all actions necessary to obtain at
Closing a Blue Sky Memorandum from Luse Gorman Pomerenk & Schick, P.C.
(ii) The Holding Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accounts or assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect thereto. The books,
records and accounts and systems of internal accounting control of the Holding
Company comply in all material respects with the requirements of Section
13(b)(2) of the 1934 Act. The Holding Company maintains "disclosure controls and
procedures" (as defined in Rule 13a-14(c) under the Exchange Act) that are
effective in ensuring the information it will be required to disclose in the
reports it files or submits under the Exchange Act is accumulated and
communicated to the Holding Company's management (including the Holding
Company's chief executive officer and chief financial officer) in a timely
manner and recorded, processed, summarized and reported within the periods
specified in the Commission's rules and forms.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE AGENT. The Agent
represents and warrants to the OC Parties that:
(a) The Agent is a duly organized New York corporation and is
validly existing and 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 OC
Parties hereunder.
(b) The execution, delivery and performance of this Agreement, the
Letter Agreement and the consummation of the transactions contemplated herein
and therein have been duly and validly authorized by all necessary corporate
action on the part of the Agent, and each of this Agreement and the Letter
Agreement is the legal, valid and binding agreement of the Agent, enforceable in
accordance with its terms, except as the legality, validity, binding nature and
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, and (ii) general
equity principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
13
(c) 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, and until the Offerings are consummated or terminated
shall maintain, all licenses, approvals and permits necessary to perform such
services and shall comply in all material respects with all applicable laws and
regulations in connection with the performance of such services.
(d) There is no action, suit, charge or proceeding before the
Commission, the NASD, any state securities commission or any court is pending,
or to the knowledge of the Agent threatened, against the Agent which, if
determined adversely to the Agent, would have a material adverse effect upon the
ability of the Agent to perform its obligations under this Agreement.
(e) Agent is registered as a broker/dealer pursuant to Section 15(b)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a
member in good standing of the NASD.
(f) Any funds received in the Offerings by the Agent will be handled
by the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
(g) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated thereby and compliance with the
terms and provisions hereof will not conflict with, or result in the breach of,
any terms, provisions or conditions of, or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under,
the Articles of Incorporation or Bylaws of the Agent or any agreement, indenture
or other instrument to which the Agent is a party or by which it or its property
is bound.
(h) No approval of any regulator or supervisor or other public
authority is required in connection with the Agent's execution and delivery of
this Agreement, except as may have been received.
SECTION 8. COVENANTS OF THE OC PARTIES. The OC Parties hereby
jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or supplement
to the Registration Statement without providing the Agent and its counsel a
reasonable opportunity to review and comment on such amendment or supplement.
The Holding Company will furnish promptly to the Agent and its counsel copies of
all correspondence from the Commission with respect to the Registration
Statement and the Holding Company's responses thereto.
(b) The OC Parties will not, at any time after the date any
Application is approved, file any amendment or supplement to such Application
without providing the Agent and its counsel a reasonable opportunity to review
and comment on such amendment or supplement. The OC Parties will furnish
promptly to the Agent and its counsel copies of all correspondence from the OTS
with respect to the Applications and the OC Parties' responses thereto.
14
(c) The OC Parties will use their best efforts to cause the OTS to
approve the Holding Company's acquisition of the Bank, and will use their best
efforts to cause any post-effective amendment to the Registration Statement to
be declared effective by the Commission and any post-effective amendment to the
Conversion Application to be approved by the OTS, as applicable, and will
promptly, 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 received the
approval of the OTS; (iii) when the Holding Company Application, as amended, has
been approved by the OTS; (iv) of the receipt of any comments from the OTS or
any other governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (v) of any request by the Commission, the OTS,
or any other governmental entity for any amendment or supplement to the
Registration Statement or the Applications or for additional information; (vi)
of the issuance by the Commission or the OTS, or any other governmental agency
of any order or other action suspending the Offerings or the use of the
Registration Statement or the Prospectus or any other filing of the OC Parties
under the Conversion Regulations or other applicable law, or the threat of any
such action; (vii) of the issuance by the Commission or the OTS, or any other
state 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 (viii) of the occurrence of any event
mentioned in subsection (f) below. The OC Parties will make every reasonable
effort to prevent the issuance by the Commission, the OTS, or any other state
authority of any order referred to in (vi) and (vii) above and, if any such
order shall at any time be issued, to obtain the lifting thereof at the earliest
possible time.
(d) The OC Parties will deliver to the Agent and to its counsel two
conformed copies of each of the following documents, with all exhibits: the
Applications as originally filed and of each amendment or supplement thereto,
and the Registration Statement, as originally filed and each amendment thereto.
Further, the OC Parties will deliver such additional copies of the foregoing
documents to counsel to the Agent as may be required for any NASD filings. In
addition, the OC Parties will also deliver to the Agent such number of copies of
the Prospectus, as amended or supplemented, as the Agent may reasonably request.
(e) The OC Parties will comply in all material respects with any and
all terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the Commission,
the OTS, by applicable state law and regulations, and by the 1933 Act, the 1934
Act, and the rules and regulations of the Commission promulgated under such
Acts, to be complied with prior to the Closing Date; and when the Prospectus is
required to be delivered, the OC Parties will comply in all material respects,
at their own expense, with all requirements imposed upon them by the OTS, the
Conversion Regulations (except as modified or waived in writing by the OTS), the
Commission, by applicable state law and regulations and by the 1933 Act, the
1934 Act and the rules and regulations of the Commission promulgated under such
Acts, including, without limitation, Rule 10b-5 under the 1934 Act, in each case
as from time to time in force, so far as is necessary to permit the
15
continuance of sales or dealing in shares of Common Stock during such period in
accordance with the provisions hereof and the Prospectus.
(f) At any time during the period when the Prospectus is required to
be delivered, each of the OC Parties will inform the Agent of any event or
circumstance of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended, would
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. If it is
necessary, in the reasonable opinion of counsel for the OC Parties, to amend or
supplement the Registration Statement or the Prospectus in order to correct such
untrue statement of a material fact or to make the statements therein not
misleading in light of the circumstances existing at the time of their use, the
OC Parties will, at their expense, prepare, file with the Commission and the
OTS, and furnish to the Agent, a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration Statement and
the 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 and/or the 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, not misleading. For the purpose
of this subsection, each of the OC Parties will furnish such information with
respect to itself as the Agent may from time to time reasonably request.
(g) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to furnish to whomever
the Agent may direct such information as may be required to register or to
qualify the Shares for offering and sale or to exempt such Shares from
registration and to exempt the Holding Company and its officers, directors and
employees from registration as broker-dealers, under the applicable securities
laws of the jurisdictions in which the Offerings will be conducted; provided,
however, that the Holding Company shall not be obligated to file any general
consent to service of process, to qualify as a foreign corporation to do
business in any jurisdiction in which it is not so qualified, or to register its
directors or officers as brokers, dealers, salesmen or agents in any
jurisdiction. In each jurisdiction where any of the Shares shall have been
registered or qualified as above provided, the Holding Company will make and
file such statements and reports as are required by the applicable regulatory
authority in connection with such registration or qualification for a period of
not less than one year from the effective date of the Registration Statement.
(h) The Holding Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof, without the
Agent's prior written consent, any shares of Common Stock or securities
convertible into or exercisable for shares of Common Stock, other than in
connection with any plan or arrangement described in the Prospectus.
(i) For a period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent, as soon as practical after such
information is available (i) a copy of each report of the Holding Company
furnished to or filed with the Commission under the
16
1934 Act or any national securities exchange or system on which any class of
securities of the Holding Company is listed or quoted (including, but not
limited to, reports on Forms 10-K or 10-KSB, 10-Q or 10-QSB and 8-K and all
proxy statements and annual reports to stockholders), (ii) a copy of each report
of the Holding Company mailed to holders of Common Stock or filed with the
Commission, the OTS or any other supervisory or regulatory authority or any
national securities exchange or system on which any class of securities of the
Company is listed or quoted, (iii) each press release and material news item and
article released by the Holding Company and/or Bank, and (iv) from time to time,
such other publicly available information concerning the OC Parties as the Agent
may reasonably request.
(j) The OC Parties will use the net proceeds from the sale of the
Common Stock in the manner set forth in the Prospectus under the caption "How We
Intend to Use the Proceeds."
(k) The Holding Company and the Bank will distribute the Prospectus
or other offering materials in connection with the offering and sale of the
Common Stock only in accordance with the Conversion Regulations of the OTS, the
1933 Act and the 1934 Act and the rules and regulations promulgated under such
statutes, and the laws of any state in which the shares are qualified for sale.
(l) On the Closing Date, the Holding Company shall file the
appropriate form to register its Common Stock under Section 12(b) or 12(g) of
the 1934 Act, and will request that such registration statement shall be
effective no later than the completion of the Conversion. The Holding Company
shall maintain the effectiveness of such registration for not less than three
years from the time of effectiveness or such shorter period as may be required
by the OTS
(m) During the period during which the Common Shares are registered
under the 1934 Act or for three years from the date hereof, whichever period is
greater, the Holding Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year such reports and other information
as are required to be furnished to its stockholders under the 1934 Act
(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) The Holding Company will report the use of proceeds of the
Offering in accordance with Rule 463 under the 1933 Act.
(o) The OC Parties 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 Holding Company's obligation to
refund payments received from persons subscribing for or ordering Shares in the
Offerings, in accordance with the Plan as described in the Prospectus, or until
refunds of such funds have been made to the persons entitled thereto or
withdrawal authorizations canceled in accordance with
17
the Plan and as described in the Prospectus. The OC Parties will maintain such
records of all funds received to permit the funds of each subscriber to be
separately insured by the FDIC (to the maximum extent allowable) and to enable
the OC Parties to make the appropriate refunds of such funds in the event that
such refunds are required to be made in accordance with the Plan and as
described in the Prospectus.
(p) The Holding Company will promptly take all necessary action to
register as a unitary savings and loan holding company under the HOLA.
(q) The OC Parties will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with Rule 2790 of the National Association of Securities
Dealers, Inc. ("NASD").
(r) The OC Parties will conduct their businesses in compliance in
all material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders, including all decisions,
directives and orders of the Commission, the FDIC and the OTS.
(s) The OC Parties shall comply with any and all terms, conditions,
requirements and provisions with respect to the Conversion and the transactions
contemplated thereby imposed by the OTS, the Conversion Regulations, the
Commission, the 1933 Act and the 1934 Act and the regulations promulgated under
such Acts, to be complied with subsequent to the Closing Date. The Holding
Company will comply with all provisions of all undertakings contained in the
Registration Statement.
(t) The OC Parties will not amend the Plan without notifying the
Agent and the Agent's counsel prior thereto.
(u) The Holding Company shall provide the Agent with any information
necessary to allow the Agent to manage the allocation process in order to permit
the Holding Company to carry out the allocation of the Shares in the event of an
oversubscription, and such information shall be accurate and reliable in all
material respects.
(v) The Holding Company will not deliver the Shares until the OC
Parties have satisfied or caused to be satisfied each condition set forth in
Section 10 hereof, unless such condition is waived in writing by the Agent.
(w) Immediately upon the Closing, (i) all of the issued and
outstanding shares of capital stock of the Bank shall be owned by the Holding
Company, (ii) the Holding Company shall have no direct subsidiaries other than
the Bank, and (iii) the Conversion shall have been effected in accordance with
all applicable statutes, regulations, decisions and orders; and all terms,
conditions, requirements and provisions with respect to the Conversion (except
those that are conditions subsequent) imposed by the Commission, the OTS or any
other governmental agency, if any, shall have been complied with by the OC
Parties in all material respects or
18
appropriate waivers shall have been obtained and all notice and waiting periods
shall have been satisfied, waived or elapsed.
(x) Prior to the Closing Date, the Plan shall have been approved by
the voting members of the Bank in accordance with the Plan and the Conversion
Regulations and the applicable provisions, if any, of the Bank's charter and
bylaws.
(y) On or before the Closing Date, the OC Parties will have used
their best efforts to obtain approval for quotation of shares of the Common
Stock on the Over-the-Counter Electronic Bulletin Board by the Closing Date and
will use their best efforts to maintain such quotation and will have completed
all conditions precedent to the Conversion specified in the Plan and the offer
and sale of the Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations (except as modified or
waived in writing by the OTS) and with all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed upon any of the OC Parties by the
OTS, the Commission or any other regulatory authority and in the manner
described in the Prospectus.
(z) The Holding Company shall notify the Agent when funds shall have
been received for the minimum number of Shares set forth in the Prospectus.
(aa) The OC Parties will use their reasonable best efforts to ensure
that the officers and directors of the OC Parties shall not sell or transfer any
shares of Common Stock of the Holding Company commencing on the date hereof and
continuing for a period of 90 days following the Closing Date (the "Restricted
Period"). The OC Parties shall not assist such officers or directors in
connection with the sale or transfer of shares of the Holding Company during the
Restricted Period.
(bb) 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, none of
the OC Parties will distribute any prospectus, offering circular or other
offering material in connection with the offer and sale of the Shares.
(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, none of the OC Parties 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 OC
Parties, taken as a whole.
(dd) Prior to the Closing Date, the OC Parties will inform the Agent
of any event or circumstances of which it is aware as a result of which the
Registration Statement and/or Prospectus, as then amended or supplemented, would
contain an untrue statement of a material
19
fact or omit to state a material fact necessary in order to make the statements
therein not misleading.
(ee) The facts and representations provided to Luse Gorman Pomerenk &
Schick, P.C. by the OC Parties and upon which Luse Gorman Pomerenk & Schick,
P.C. will base its opinion under Section 10(b)(1) are and will be truthful,
accurate and complete.
(ff) The Holding Company shall comply with all applicable provisions
of the Sarbanes-Oxley Act.
SECTION 9. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale and exchange of the Shares by the Holding Company is
consummated, the OC Parties will pay for all their expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Application and Registration Statement; (b) the preparation,
printing, filing, delivery and mailing of the Registration Statement, including
the Prospectus, and all documents related to the Offerings and proxy
solicitation; (c) all filing fees and expenses in connection with the
qualification or registration of the Shares for offer and sale by the Holding
Company or the Bank under the securities or "Blue Sky" laws, including without
limitation filing fees, reasonable legal fees and disbursements of counsel in
connection therewith, and in connection with the preparation of a blue sky law
survey; (d) the filing fees of the NASD related to the Agent's fairness filing
under NASD Rule 2710 and the application of the Holding Company to list its
shares; (e) fees and expenses related to the preparation of the independent
appraisal; (f) fees and expenses related to auditing and accounting services;
(g) expenses relating to advertising, temporary personnel, investor meetings and
stock information center; and (h) transfer agent fees and costs of preparation
and distribution of stock certificates.
The OC Parties also agree to reimburse the Agent for its counsel's legal
fees and reasonable out-of-pocket expenses, which fees shall not exceed $30,000,
incurred by the Agent in connection with the services hereunder; provided,
however, that in the event of a resolicitation, additional out-of-pocket
expenses shall be reasonable and fully discussed and agreed upon with the OC
Parties upon notification of a need to resolicit. The OC Parties will indemnify
the Agent against liabilities and expenses (including legal fees) incurred in
connection with certain claims or litigation arising out of or based upon untrue
statements or omissions contained in the offering material for the common stock,
including liabilities under the Securities Act of 1933, as amended.
In the event that the Agent incurs any expenses on behalf of the OC
Parties, the OC Parties will pay or reimburse the Agent for such expenses
regardless of whether the Conversion is successfully completed, and such
reimbursements will not be included in the expense limitations. The OC Parties
acknowledge, however, that such limitations may be increased by the mutual
consent of the Holding Company and Agent in the event of delay in the Offering
requiring the Agent to utilize a Syndicated Community Offering, a delay as a
result of circumstances requiring material additional work by the Agent or its
counsel or an update of the financial information in tabular form contained in
the Prospectus for a period later than
20
September 30, 2004. Not later than two days prior to the Closing Date, the Agent
will provide the Bank with a detailed accounting of all reimbursable expenses to
be paid at the Closing in next day funds. In the event the OC Parties determine
to abandon or terminate the Plan prior to Closing, payment of such expenses
shall be made in next day funds on the date such determination is made.
SECTION 10. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations
of the Agent hereunder and the occurrence of the Closing and the Conversion are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the OC Parties herein contained are, at
and as of the commencement of the Offerings and (except to the extent such
representations and warranties speak as of an earlier date) at and as of the
Closing Date, true and correct, the condition that the OC Parties shall have
performed, in all material respects, all of their obligations hereunder to be
performed on or before such dates and to the following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission, the Conversion Application and Holding Company Application shall
have been approved by the OTS and no stop order or other action suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or, to the knowledge of the OC
Parties, threatened by the Commission or any state authority and no order or
other action suspending the authorization for use of the Prospectus or the
consummation of the Conversion shall have been issued, or proceedings therefor
initiated or, to the knowledge of the OC Parties, threatened by the OTS, the
Commission, or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The opinion, dated as of the Closing Date, of Luse
Gorman Pomerenk & Schick, P.C., special counsel for the OC Parties,
and/or local counsel acceptable to the Agent, in form and substance
satisfactory to the Agent and counsel for the Agent to the effect that:
(i) The Holding Company is a corporation duly
incorporated and validly existing and in good standing under the
Maryland Business Corporation Law, with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus, and is in
good standing in each other jurisdiction in which the conduct of
its business requires such qualification, except where the
failure to qualify would not have a Material Adverse Effect.
(ii) On the date hereof, the Bank is a validly
existing federally-chartered stock savings association, and upon
consummation of the Conversion, the Bank will continue to be a
validly existing federally-chartered stock savings association,
with full corporate power and authority to own, lease and
operate its
21
properties and to conduct its business as described in the
Prospectus. The activities of the Bank as described in the
Prospectus are permitted by federal law and the rules,
regulations and practices of the FDIC and the OTS (or valid
waivers granted by the OTS from such rules, regulations and
practices); the issuance and sale of the capital stock of the
Bank to the Holding Company in the Conversion has been duly and
validly authorized by all necessary corporate action on the part
of the Holding Company and the Bank and, upon payment of the
purchase price therefor in accordance with the terms of the
Plan, will be validly issued, fully paid and nonassessable and
will be owned of record and beneficially by the Holding Company,
free and clear of any mortgage, pledge, lien, encumbrance, claim
or restriction.
(iii) To such counsel's actual knowledge, the Bank has
obtained all licenses, permits and other governmental
authorizations that are material for the conduct of its
business, and all such licenses, permits and other governmental
authorizations are in full force and effect.
(iv) The Bank is a member in good standing of the
Federal Home Loan Bank of New York. The Bank is an insured
depository institution under the provisions of the Federal
Deposit Insurance Act, as amended. To such counsel's knowledge,
no proceedings for the termination or revocation of the federal
deposit insurance of the Bank are pending or threatened.
(v) Upon consummation of the Conversion, (a) the
authorized, issued and outstanding capital stock of the Holding
Company will be within the range set forth in the Prospectus
under the caption "Capitalization," and no shares of Common
Stock have been or will be issued and outstanding prior to the
Closing Date (except for the shares issued upon incorporation of
the Holding Company); (b) the shares to be subscribed for in the
Offerings will have been duly and validly authorized for
issuance, and when issued and delivered by the Holding Company
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan, will be duly and validly
issued and fully paid and non-assessable, except for shares
purchased by the ESOP with funds borrowed from the Company to
the extent payment therefor in cash has not been received; and
(c) the issuance of the Shares is not subject to preemptive
rights under the certificate of incorporation or bylaws of the
Holding Company, or arising or outstanding by operation of law
or under any contract, indenture, agreement, instrument or other
document known to such counsel, except for the subscription
rights under the Plan. To such counsel's knowledge, upon
issuance of the shares of Common Stock, good title to the shares
will be transferred from the Holding Company to the purchasers
thereof against payment therefor, subject to such claims as may
be asserted against the purchasers thereof by third-party
claimants (such as any liens, charges or other claims).
22
(vi) The OC Parties have full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby and by the Plan. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the
OC Parties; and this Agreement constitutes a valid, legal and
binding obligation of each of the OC Parties, enforceable in
accordance with its terms, except as rights to indemnity and
contribution thereunder may be limited under applicable law,
subject to the qualification that enforceability thereof may be
limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar
laws (including the laws of fraudulent conveyance) or judicial
decisions affecting the enforceability of creditors' rights
generally, the rights of creditors of savings banks or financial
institutions, the accounts of which are insured by the FDIC,
(ii) general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and to the effect of certain laws and judicial decisions
upon the availability of injunctive relief and enforceability of
equitable remedies, including the remedies of specific
performance and self-help, (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 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).
(vii) Based on the minutes of the proceedings of the
Board of Directors, the Plan has been duly adopted by the Board
of Directors of the Bank in the manner required by the
Conversion Regulations and the Bank's charter and bylaws. The
Plan complies in all material respects with the Conversion
Regulations.
(viii) The Conversion Application and the Holding
Company Application have been approved by the OTS, and, to such
counsel's knowledge, no action has been taken and none is
pending or threatened to revoke such approval or to suspend the
offering or the use of the Prospectus. Subject to the
satisfaction of any conditions set forth in such approvals, no
further approval, registration, authorization, consent or other
order of any federal or state regulatory agency, public board or
body is required in connection with the execution and delivery
of this Agreement, the offer, sale and 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
as to which no opinion need be rendered.
23
(ix) The Registration Statement is effective under
the 1933 Act and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued, or proceedings for that purpose have been
instituted or threatened by the Commission.
(x) The terms and provisions of the shares of Common
Stock conform, in all material respects, to the description
thereof contained in the Registration Statement and the
Prospectus, and the form of certificates used to evidence the
shares of Common Stock are in due and proper form.
(xi) At the time the Conversion Application was
approved by the OTS, the Conversion Application (as amended or
supplemented), complied as to form in all material respects with
the requirements of the Conversion Regulations and all
applicable laws, rules and regulations and decisions and orders
of the OTS, except as modified or waived in writing by the OTS
(other than the financial statements, notes thereto, financial
tables and other financial and statistical data included therein
and the appraisal valuation and the business plan as to which
counsel need express no opinion). To such counsel's knowledge,
no person has sought to obtain regulatory or judicial review of
the final action of the OTS in approving the Applications.
(xii) At the time that the Registration Statement
became effective and as of the Closing Date, the Registration
Statement, including the Prospectus (as amended or supplemented)
(other than the financial statements, notes thereto, financial
tables or other financial and statistical data included therein
and the appraisal valuation and the business plan as to which
counsel need express no opinion), complied as to form in all
material respects with the requirements of the 1933 Act and the
rules and regulations promulgated thereunder.
(xiii) To such counsel's knowledge, there are no legal
or governmental proceedings pending, or threatened (i) asserting
the invalidity of this Agreement, (ii) seeking to prevent the
Conversion or the offer, sale or issuance of the Shares, or
(iii) which are required to be disclosed in the Registration
Statement and Prospectus, other than those disclosed therein.
(xiv) The information in the Prospectus under the
captions "Supervision and Regulation," "Taxation," "Restrictions
on Acquisition of OC Financial, Inc.," "Description of Capital
Stock," and "The Conversion and Reorganization," 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 accurate in all
material respects.
(xv) None of the OC Parties are required to be
registered as an investment company under the Investment Company
Act of 1940.
24
(xvi) To such counsel's knowledge, none of the OC
Parties is in violation of its Certificate of Incorporation or
its charter, as the case may be, or its bylaws or, to such
counsel's knowledge, 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, which
violation or default would have a Material Adverse Effect. In
addition, to such Counsel's knowledge, the execution and
delivery of and performance under this Agreement by the OC
Parties, the incurrence of the obligations set forth herein and
the consummation of the transactions contemplated herein will
not result in (i) any violation of the provisions of the
articles of incorporation or charter, as the case may be, or the
bylaws of any of the OC Parties, (ii) any violation of any
applicable law, act, regulation of the type which in counsel's
experience are applicable (except that no opinion with respect
to the securities and blue sky laws of various jurisdictions or
the rules and regulations of the NASD need be rendered), or to
such counsel's knowledge, order or court order, writ, injunction
or decree, and (iii) any violation of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument filed
as an exhibit to, or incorporated by reference in, the
Registration Statement, which violation would have a Material
Adverse Effect.
(xvii) To such counsel's knowledge, the OC Parties have
obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their
businesses as described in the Prospectus.
(xviii) The Holding Company's Articles of Incorporation
and Bylaws comply in all material respects with the Maryland
Business Corporation Law. The Bank's respective Charter and
Bylaws comply in all material respects with federal law.
(xix) To such counsel's knowledge, none of the OC
Parties is in violation of any directive from the OTS or the
FDIC to make any material change in the method of conducting its
respective business.
(xx) To such counsel's 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.
25
The Agent's counsel may rely on the opinion of Luse Gorman Pomerenk &
Schick, P.C., whose opinion shall expressly authorize such reliance. The opinion
may be limited to matters governed by the laws of the United States and the
corporate laws of the State of Maryland. In rendering such opinion, such counsel
may rely (A) as to matters involving the application of laws of any jurisdiction
other than the United States, to the extent such counsel deems proper and
specified in such opinion, upon the opinion of counsel reasonably acceptable to
the Agent, as long as such other opinion indicates that the Agent and the
Agent's counsel may rely on the opinion, and (B) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of the
OC Parties and public officials; provided copies of any such opinion(s) or
certificates of public officials are delivered to Agent together with the
opinion to be rendered hereunder by special counsel to the OC Parties. In
rendering such opinion, all statements contained therein "to our knowledge" or
"to our attention" or "known to us" mean the knowledge, following reasonable
investigation, of the attorneys who have worked on the transactions contemplated
herein. The opinion of such counsel for the OC Parties shall state that it has
no reason to believe that the Agent is not reasonably justified in relying
thereon.
(2) A letter of Luse Gorman Pomerenk & Schick, P.C. which
shall state that during the preparation of the Registration Statement
and the Prospectus, Luse Gorman Pomerenk & Schick, P.C. participated in
conferences with certain officers of and other representatives of the OC
Parties, counsel to the Agent, representatives of the independent public
accountants for the OC Parties and representatives of the Agent at which
the contents of the Registration Statement and the Prospectus and
related matters were discussed and has considered the matters required
to be stated therein and the statements contained therein and, although
(without limiting the opinions provided pursuant to Section 10(b)(1)),
Luse Gorman Pomerenk & Schick, P.C. has not independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, on the basis of the foregoing,
nothing has come to the attention of Luse Gorman Pomerenk & Schick, P.C.
that caused Luse Gorman Pomerenk & Schick, P.C. to believe that the
Registration Statement at the time it was declared effective by the
Commission and as of the date of such letter, contained or contains any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not
misleading (it being understood that counsel need express no comment or
opinion with respect to statements, notes to financial statements,
schedules and other financial and statistical data included, or
statistical or appraisal methodology employed, in the Registration
Statement or Prospectus, the appraisal valuation or the business plan).
(3) A Blue Sky Memorandum from Luse Gorman Pomerenk &
Schick, P.C. relating to the offering, including the Agent's
participation therein, and should be furnished to the Agent with a copy
thereof addressed to the Agent or upon which Luse Gorman Pomerenk &
Schick, P.C. shall state the Agent may rely. The Blue Sky Memorandum
will relate to the necessity of obtaining or confirming exemptions,
26
qualifications or the registration of the common stock under applicable
state securities law.
(c) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Crowe Chizek, dated the date hereof and addressed to
the Agent, such letter (i) confirming that Crowe Chizek is a firm of independent
public accountants within the meaning of the 1933 Act and the regulations
promulgated thereunder and within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public Accountants,
and stating in effect that in Crowe Chizek's opinion the consolidated financial
statements of the Bank included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1934 Act and the related rules and regulations of the Commission
thereunder; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit examination in accordance with generally accepted
auditing standards) consisting of a review (in accordance with Statement of
Auditing Standards No. 100) of the latest available unaudited consolidated
interim financial statements of the Bank prepared by the OC Parties, a reading
of the minutes of the meetings of the Board of Directors, Executive Committee
and stockholders and Audit Committee of the Bank 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) such unaudited
consolidated financial statements included in the Prospectus are not in
conformity with the 1933 Act, applicable accounting requirements of the OTS 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 material increase in
borrowings (defined as securities sold under agreements to repurchase and any
other form of debt other than deposits), or non-performing loans, special
mention loans or decrease in the deposits or loan allowance, total assets,
stockholders' equity or there was any change in common stock outstanding (other
than for stock option plans) at the date of such letter as compared with amounts
shown in the latest unaudited statement of condition; or (C) there was any
decrease in net income, non-interest income, provision for loan losses or net
income after provision or increase in non-interest expense of the Bank for the
period commencing immediately after the period covered by the latest unaudited
income statement and ended not more than three business days prior to the date
of the Prospectus as compared to the corresponding period in the preceding year;
and (iii) stating that, in addition to the audit examination referred to in its
opinion included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (c), they have compared with the
general accounting records of the Bank, which are subject to the internal
controls of the accounting system of the Bank and other data prepared by the OC
Parties from accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as the Agent may
reasonably request, and they have found such amounts and percentages to be in
agreement therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive a letter from Crowe
Chizek dated the Closing Date, addressed to the Agent, confirming the statements
made by its
27
letter delivered by it pursuant to subsection (c) of this Section 10, the
"specified date" referred to in clause (ii)(B) thereof to be a date specified in
such letter, which shall not be more than three business days prior to the
Closing Date.
(e) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as counsel for the Agent may
require for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
and warranties, or the fulfillment of any of the conditions herein contained.
All proceedings taken by the OC Parties in connection with the Conversion and
sale of the Common Stock as herein contemplated shall be satisfactory in form
and substance to the Agent and its counsel.
(f) At the Closing Date, the Agent shall receive a certificate of
the Chief Executive Officer and Chief Financial Officer of each of the OC
Parties, dated the Closing Date, to the effect that: (i) they have carefully
examined the Registration Statement and at the time the Registration Statement
became authorized for final use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) there has not been, since the respective dates
as of which information is given in the Registration Statement, any Material
Adverse Effect otherwise than as set forth or contemplated in the Registration
Statement; (iii) the representations and warranties contained in Section 6 of
this Agreement are true and correct with the same force and effect as though
made at and as of the Closing Date; (iv) the OC Parties have complied in all
material respects with all material agreements and satisfied all conditions on
its 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, including the conditions contained in this Section 10; (v)
no stop order has been issued or, to their knowledge, is threatened, by the
Commission or any other governmental body; (vi) no stop order suspending the
Offering, the Conversion, the acquisition of all of the shares of the Bank by
the Holding Company, the transactions required under the Plan to consummate the
Conversion or the effectiveness of the Prospectus has been issued and to their
knowledge, no proceedings for any such purpose have been initiated or threatened
by the OTS, the Commission, or any other federal or state authority; (vii) to
the knowledge of the OC Parties, no person has sought to obtain regulatory or
judicial review of the action of the OTS in approving the Plan or to enjoin the
Conversion; and (viii) the officers and directors of the OC Parties have agreed
to abide by the restrictions on the sale of Common Stock set forth in Section
8(aa).
(g) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC., dated as of the Closing Date, (i) confirming that said firm is
independent of the OC Parties and is experienced and expert in the area of
corporate appraisals within the meaning of Title 12 of the Code of Federal
Regulations, Section 563.200(b), (ii) stating in effect that the Appraisal
prepared by such firm complies in all material respects with the applicable
requirements of the Conversion Regulations, and (iii) further stating that its
opinion of the aggregate pro forma market value of
28
the OC Parties, as converted, expressed in the appraisal as most recently
updated, remains in effect.
(h) None of the OC Parties shall have sustained, since the date of
the latest financial statements included in the Registration Statement and
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth in the Registration Statement and the Prospectus, and since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any Material Adverse
Effect, that is in the Agent's reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable to proceed with the Offerings
or the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
(i) 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 financial
condition or in the earnings, business affairs or prospects of any of the OC
Parties independently, or the OC Parties taken as a whole, from and as of the
latest dates as of which such condition is set forth in the Prospectus, except
as referred to therein; (ii) the OC Parties shall not have received from the OTS
or any other agency 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 have a Material Adverse Effect; (iii) none of the OC Parties
shall have been in default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under any provision of any
agreement or instrument relating to any outstanding indebtedness; (iv) no
action, suit or proceeding, at law or in equity or before or by any federal or
state commission, board or other administrative agency, shall be pending or, to
the knowledge of the OC Parties, threatened against the OC Parties or affecting
any of their properties wherein an unfavorable condition, results of operations
or business taken as a whole; and (v) the Common Stock shall 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 be the OC Parties.
(j) At or prior to the Closing Date, the Agent shall receive the
following: (i) a copy of the Conversion Application and a copy of the letter
from the OTS approving the Conversion Application; (ii) a copy of the order from
the Commission declaring the Registration Statement effective; (iii) an executed
copy of the certificate of incorporation of the Holding Company; (iv) a copy of
the letter from the OTS approving the Holding Company Application; (v) a
certificate from the FDIC evidencing the Bank's insurance of accounts; and (vi)
any other documents that the Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading have been fixed, or
29
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 other than temporary trading halts or limitation (A) imposed as a
result of intraday changes in the Dow Jones Industrial Average, (B) lasting no
longer than until the regularly scheduled commencement of trading on the next
succeeding business-day and (C) which when combined with all other such halts
occurring during the previous five (5) business days, total less than two (2);
(ii) a general moratorium on the operations of federally-insured financial
institutions or a general moratorium on the withdrawal of deposits from
commercial banks or other federally-insured financial institutions declared by
either federal or state authorities; (iii) there shall not have occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis, including, without limitation, terrorist activities after the date
hereof, the effect of which, in the judgment of the Agent, is so material and
adverse as to make it impracticable to market the Shares or to enforce
contracts, including subscriptions or purchase orders, for the sale of the
Shares; or (iv) a material decline in the price of equity or debt securities if
the effect of such declaration or decline, in the Agent's reasonable judgment,
makes it impracticable or inadvisable to proceed with the Offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and Prospectus.
(l) All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Agent and to counsel for the Agent.
Any certificate signed by an officer of the Holding Company or the Bank and
delivered to the Agent or to counsel for the Agent shall be deemed a
representation and warranty by the Holding Company or the Bank, as the case may
be, to the Agent as to the statements made therein.
SECTION 11. INDEMNIFICATION.
(a) The OC Parties jointly and severally agree to indemnify and hold
harmless the Agent, its officers, directors, agents, attorneys and employees and
each person, if any, who controls the Agent within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage or expense whatsoever (including, but not limited to,
settlement expenses, subject to the limitation set forth in the last sentence of
subsection (c) below), joint or several, that the Agent or any of such officers,
directors, agents, attorneys, employees and controlling Persons (collectively,
the "Related Persons") may suffer or to which the Agent or the Related Persons
may become subject under all applicable federal and state laws or otherwise, and
to promptly reimburse the Agent and any Related Persons upon written demand for
any reasonable expenses (including reasonable fees and disbursements of counsel
and the Agent's time spent according to normal hourly rates) incurred by the
Agent or any Related Persons 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 Prospectus (or any amendment or supplement thereto),
the Applications,
30
or other instrument or document of the OC Parties or based upon written
information supplied by any of the OC Parties 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, directors and employees as broker-dealers or
agents, under the securities laws thereof (collectively, the "Blue Sky
Applications"), or any application or other document, advertisement, or
communication ("Sales Information") prepared, made or executed by or on behalf
of any of the OC Parties with its consent or based upon written or oral
information furnished by or on behalf of any of the OC Parties, 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; (iii) arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any amendment or
supplement thereto), the preliminary or final Prospectus (or any amendment or
supplement thereto), the Applications, any Blue Sky Applications or Sales
Information or other documentation distributed in connection with the Offerings;
or (iv) result from any claims made with respect to the accuracy, reliability
and completeness of the records identifying the Eligible Account Holders and
Supplemental Eligible Account Holders or Other Members; provided, however, that
no indemnification is required under this subsection (a) to the extent such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue material statements or alleged untrue material statements in, or
material omission or alleged material omission from, the Registration Statement
(or any amendment or supplement thereto) or the preliminary or final Prospectus
(or any amendment or supplement thereto), the Applications, the Blue Sky
Applications or Sales Information or other documentation distributed in
connection with the Conversion made in reliance upon and in conformity with
information furnished to the OC Parties by the Agent or its representatives
(including counsel) with respect to the Agent expressly for use in the
Registration Statement (or any amendment or supplement thereto) or Prospectus
(or any amendment or supplement thereto) under the caption "The Conversion" and
"The Stock Offering" except for information derived from the Prospectus.
Provided further, that the OC Parties will not be responsible for any loss,
liability, claim, damage or expense to the extent a court of competent
jurisdiction finds they result primarily from material oral misstatements by the
Agent to a purchaser or prospective purchaser of Shares which are not based upon
information in the Registration Statement or Prospectus, or from actions taken
or omitted to be taken by the Agent in bad faith or from the Agent's gross
negligence or willful misconduct and the Agent agrees to repay to the OC Parties
any amounts advanced to it by the OC Parties in connection with matters as to
which it is found by a court of competent jurisdiction not to be entitled to
indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the OC Parties,
their directors and officers, agents, attorneys, servants and employees and each
person, if any, who controls any of the OC Parties within the meaning of Section
15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
settlement expenses, subject to the limitation set forth in the last sentence of
subsection (c) below), joint or several, which they, or any of them, may suffer
or to which they, or any of
31
them, may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the OC Parties and any such persons upon
written demand for any reasonable expenses (including out-of-pocket expenses,
fees and disbursements of counsel) incurred by 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 Applications or any Blue
Sky Applications or Sales Information, (ii) are based upon the omission or
alleged omission to state in any of the foregoing documents a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
(iii) arise from any theory of liability whatsoever relating to or arising from
or based upon the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), or any Application or Sales Information or other documentation
distributed in connection with the Conversion; provided, however, that the
Agent's obligations under this Section 11(b) shall exist only if and only to the
extent that such untrue statement or alleged untrue statement was made in, or
such material fact or alleged material fact was omitted from, the Applications,
Registration Statement (or any amendment or supplement thereto) or the
preliminary or final Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with information furnished to the OC Parties by
the Agent or its representatives (including counsel) expressly for use under the
caption "The Conversion" and "The Stock Offering."
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 11,
Section 12 or otherwise, unless the failure to give such notice promptly results
in material prejudice to the indemnifying party. 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 the defense of such action with counsel chosen by it reasonably
acceptable to 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
(unless an indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or in
addition to those of other indemnified parties) for all indemnified parties in
connection with any one action, proceeding or claim or separate but similar or
related actions, proceedings or claims in the same jurisdiction arising out of
the same general allegations or
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circumstances. No indemnifying party shall be liable for any settlement of any
action, proceeding or suit, which settlement is effected without its prior
written consent. Neither the OC Parties nor the Agent shall, without the written
consent of the other, settle or compromise any claim against them or it based
upon circumstances giving rise to an indemnification claim against the other
party hereunder unless such settlement or compromise provides that the
indemnified party shall be unconditionally and irrevocably released from all
liability in respect to such claim.
(d) The agreements contained in this Section 11 and in Section 12
hereof and the representations and warranties of the OC Parties set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Agent or its officers,
directors, controlling persons, agents, attorneys, servants or employees or by
or on behalf of any of the OC Parties or any officers, directors, controlling
persons, agents, attorneys, servants or employees of any of the OC Parties; (ii)
delivery of and payment hereunder for the Shares; or (iii) any termination of
this Agreement. Notwithstanding the prior sentence, Sections 11 and 12 hereof
are subject to and limited by Section 23A of the Federal Reserve Act, as
applicable.
SECTION 12. CONTRIBUTION.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 11 is due in
accordance with its terms but is found for any reason in a final judgment by a
court to be unavailable from the OC Parties or the Agent, the OC Parties and the
Agent shall contribute to the aggregate losses, claims, damages and liabilities
of the nature contemplated by such indemnification (including any investigation,
legal and other expenses incurred in connection therewith and any amount paid in
settlement of any action, suit, or proceeding of any claims asserted, but after
deducting any contribution received by the OC Parties or the Agent from persons
other than the other party thereto, who may also be liable for contribution) in
such proportion so that (i) the Agent is responsible for that portion
represented by the percentage that the fees paid to the Agent pursuant to
Section 4 of this Agreement (not including expenses) ("Agent's Fees"), less any
portion of Agent's Fees paid by Agent to Assisting Brokers, bear to the total
proceeds received by the OC Parties from the sale of the Shares in the Offering,
net of all expenses of the Offering, except Agent's fees and (ii) the OC Parties
shall be responsible for the balance. If, however, the allocation provided above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 11 above, then each indemnifying party shall
contribute to such amount paid or payable to such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the OC
Parties on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof), but also the
relative benefits received by the OC Parties on the one hand and the Agent on
the other from the Offering, as well as any other relevant equitable
considerations. The relative benefits received by the OC Parties on the one hand
and the Agent on the other hand shall be deemed to be in the same proportion as
the total proceeds from the Offering, except Agent's fees, net of all expenses
of the Offering, received by the OC Parties bear, with respect to the Agent, to
the total fees (not including expenses) received
33
by the Agent less the portion of such fees paid by the Agent to Assisting
Brokers. 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 OC Parties 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 OC Parties and
the Agent agree that it would not be just and equitable if contribution pursuant
to this Section 12 were determined by pro-rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 12. 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 12 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 less the
portion of such fees paid by the Agent to Assisting Brokers. It is understood
and agreed 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
with respect to any loss or liability arising from such misrepresentation from
any person who was not found guilty of such fraudulent misrepresentation. The
duties, obligations and liabilities of the OC Parties and the Agent under this
Section 12 and under Section 11 shall be in addition to any duties, obligations
and liabilities, which the OC Parties and the Agent may otherwise have. For
purposes of this Section 12, each of the Agent's and the OC Parties' officers,
directors and controlling persons within the meaning of the 1933 Act and the
1934 Act shall have the same rights to contribution as the OC Parties and the
Agent. 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 12, 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 12.
SECTION 13. SURVIVAL. All representations, warranties and
indemnities and other statements contained in this Agreement (and in the Letter
Agreement), or contained in certificates of officers of the OC Parties or the
Agent submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Agent or its controlling persons, or
by or on behalf of the OC Parties and shall survive the issuance of the Shares,
and any legal representative, successor or assign of the Agent, any of the OC
Parties, and any indemnified person shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations.
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SECTION 14. TERMINATION. The Agent may terminate this Agreement by
giving the notice indicated below in this Section at any time after this
Agreement becomes effective as follows:
(a) In the event (i) the Plan is abandoned or terminated by the
Holding Company; (ii) the Holding Company fails to consummate the sale of the
minimum number of Shares prior to September 26, 2005 in accordance with the
provisions of the Plan or as required by the Conversion Regulations and
applicable law; or (iii) immediately prior to commencement of the Offering, the
Agent terminates this relationship because in its opinion, which shall have been
formed in good faith after reasonable determination and consideration of all
relevant factors, there has been a failure to satisfactorily disclose all
relevant information in the Prospectus or the existence of market conditions
which might render the sale of the Shares inadvisable (including, but not
limited to, any domestic or international event or act or occurrence that has
materially disrupted the United States securities markets such as to make it, in
the Agent's opinion, impracticable to proceed with the Offering, or if trading
on the NYSE shall have been suspended (except that this shall not apply to the
imposition of NYSE trading collars imposed on program trading); or if the United
States shall have become involved in a war or major hostilities, or if a general
banking moratorium has been declared by a state or federal authority which has a
material effect on the Bank or Reorganization, or if a moratorium in foreign
exchange trading by major international banks or persons has been declared, or
if there shall have been a material adverse change in the financial condition,
results of operations or business of the Bank, or if the Bank shall have
sustained a material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act, whether or not
said loss shall have been insured, or if there shall have been a Material
Adverse Effect), this Agreement shall terminate and the OC Parties shall refund
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 in
accordance with Section 2 hereof and any such termination shall be without
liability of any party to any other party except as otherwise provided in
Sections 2, 4, 9, 11 and 12 hereof.
(b) If any of the conditions specified in Section 10 hereof shall
not have been fulfilled when and as required by this Agreement, or by September
26, 2005, or waived in writing by the Agent, this Agreement and all of the
Agent's obligations hereunder may be canceled by the Agent by notifying the Bank
of such cancellation in writing at any time at or prior to the Closing Date, and
any such cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 2, 4, 9, 11 and 12 hereof.
(c) If Agent elects to terminate this Agreement as provided in this
Section, the Holding Company and the Bank shall be notified by the Agent as
provided in Section 15 hereof.
(d) If this Agreement is terminated in accordance with the
provisions of this Agreement, the Agent shall retain the management fee paid to
it pursuant to Section 4 and the OC Parties shall reimburse the Agent for any of
its other actual, accountable, reasonable out-of-pocket expenses pursuant to
Section 9, including without limitation, legal fees and expenses.
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SECTION 15. NOTICES. All notices and other communications hereunder,
except as herein otherwise specifically provided, shall be in writing and shall
be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to Agent shall be directed to Keefe, Bruyette &
Woods, Inc., 211 Bradenton Avenue, Dublin, Ohio 43017, Attention: Mr. Douglas L.
Reidel; notices to the OC Parties shall be directed to OC Financial, Inc., 6033
Perimeter Drive, Dublin, Ohio 43017, Attention: Robert W. Hughes (with a copy to
Luse Gorman Pomerenk & Schick, P.C., 5335 Wisconsin Avenue, N.W., Washington,
D.C. 20015, Attention: Richard S. Garabedian).
SECTION 16. PARTIES. The OC Parties shall be entitled to act and
rely on any request, notice, consent, waiver or agreement purportedly given on
behalf of the Agent when the same shall have been given by the undersigned. The
Agent shall be entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the OC Parties, when the same shall
have been given by the undersigned or any other officer of the OC Parties. This
Agreement shall inure to the benefit of and be binding upon the Agent and the OC
Parties, and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 11
and 12 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provisions herein
contained. It is understood and agreed that this Agreement is the exclusive
agreement among the parties, supersedes any prior Agreement among the parties
and may not be varied except by a writing signed by all parties, except for the
Letter Agreement, which is not hereby superseded.
SECTION 17. PARTIAL INVALIDITY. In the event that any term,
provision or covenant herein or the application thereof to any circumstances or
situation shall be invalid or unenforceable, in whole or in part, the remainder
hereof and the application of said term, provision or covenant to any other
circumstance or situation shall not be affected thereby, and each term,
provision or covenant herein shall be valid and enforceable to the full extent
permitted by law.
SECTION 18. CONSTRUCTION AND WAIVER OF JURY TRIAL. This Agreement
shall be construed in accordance with the laws of the State of New York. EACH OF
THE OC PARTIES AND THE AGENT WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
RELATED TO OR ARISING OUT OF THIS AGREEMENT.
SECTION 19. 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 OC Parties. At the closing, the OC Parties shall deliver to the
Agent in next day funds the commissions, fees and expenses due and owing to the
Agent as set forth in Section 4 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.
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SECTION 20. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
SECTION 21. ENTIRE AGREEMENT. This Agreement, including schedules
and exhibits thereto, 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 understanding, 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 is signed by any party to be charged. No course
of conduct or dealing shall be construed to modify, amend or otherwise affect
any of the provisions hereof.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and us
in accordance with its terms.
Very truly yours,
OC Financial, Inc.
By:_____________________________________
Robert W. Hughes
President and Chief Executive Officer
Ohio Central Savings
By:_____________________________________
Robert W. Hughes
President and Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as
of the date first set forth above.
KEEFE, BRUYETTE & WOODS, INC.
By: _____________________________
Douglas L. Reidel
Managing Director
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