Exhibit 1.2
Shares
(subject to increase up to
shares
in the event of an increase in the pro forma
market
value of the Company’s Common
Stock)
Northeast Community Bancorp,
Inc.
(a federal stock holding company)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
May
, 2006
S ANDLER O’N EILL & P ARTNERS ,
L.P.
919 Third Avenue, 6 th Floor
New York, New York 10022
Ladies and Gentlemen:
Northeast Community Bancorp, Inc., a
federal stock holding company in formation (the
“Company”), Northeast Community Bancorp, MHC, a federal
mutual savings and loan holding company in formation (the
“MHC”), and Northeast Community Bank, a federal savings
bank (f/k/a Fourth Federal Savings Bank) (the “Bank”),
each chartered under the laws of the United States of America,
hereby confirm their agreement with Sandler
O’Neill & Partners, L.P. (“Sandler
O’Neill” or the “Agent”) with respect to
the offer and sale by the Company of up to
shares (subject to increase up to
shares in the event of an increase in the pro forma market value of
the Company’s common stock) of the Company’s common
stock, par value $.01 per share (the “Common Stock”).
The shares of Common Stock to be sold by the Company in the
Offerings (as defined below) are hereinafter called the
“Securities.”
The Securities are being offered for
sale in accordance with the Plan of Reorganization and Minority
Stock Issuance (the “Plan”) adopted by the Boards of
Directors of the Company, the MHC and the Bank pursuant to which
the Bank intends to reorganize from a federally chartered mutual
savings bank to a federally chartered stock savings Bank in federal
mutual holding company form of ownership and issue all of its stock
to the Company. The Plan also provides for a stock offering, in
compliance with regulations of the Office of Thrift Supervision
(the “OTS”), of up to 49.9% of the Common Stock of the
Company. As a result of the reorganization and the sale of stock
under the Plan, the Bank will become a wholly owned subsidiary of
the Company, and the Company will be 55% owned by the
MHC.
Pursuant to the Plan, the Company
will offer to certain depositors of the Bank and to the
Bank’s tax qualified employee benefit plans, including the
Bank’s employee stock ownership plan (the “ESOP”)
(collectively, the “Employee Plans”), rights to
subscribe for the Securities in a subscription offering (the
“Subscription Offering”). To the extent Securities are
not subscribed for in the Subscription Offering, such Securities
may be offered to borrowers of the Bank, to certain members of the
general public and to other persons in a community offering (the
“Community Offering”), with preference given first to
natural persons and trusts of natural persons residing in the New
York Counties of New York, Kings, Bronx and Westchester, and second
to other persons to whom the Company delivers a Prospectus (as
hereinafter defined). The Community Offering, which together with
the Subscription Offering, as each may be extended or reopened from
time to time, are herein referred to as the “Subscription and
Community Offering,” may be commenced concurrently with,
during or after, the Subscription Offering. It is currently
anticipated by the Bank and the Company that any Securities not
subscribed for in the Subscription and Community Offering will be
offered, subject to Section 2 hereof, in a syndicated
community offering (the “Syndicated Community
Offering”). The Subscription and Community Offering and the
Syndicated Community Offering are hereinafter referred to
collectively as the “Offerings,” and the reorganization
of the Bank from mutual to stock form, the formation of the Company
and the MHC, the acquisition of the capital stock of the Bank by
the Company, the acquisition of the majority of the Company’s
common stock by the MHC and the Offerings are hereinafter referred
to collectively as the “Reorganization.” The Securities
may be offered to the general public in a public offering (the
“Public Offering”) in lieu of or subsequent to the
Syndicated Community Offering. If there is a Public Offering, the
Public Offering will be governed by a separate definitive purchase
agreement as described in Section 2 hereof. It is acknowledged
that the number of Securities to be sold in the Offerings may be
increased or decreased as described in the Prospectus. If the
number of Securities is increased or decreased in accordance with
the Plan, the term “Securities” shall mean such greater
or lesser number, where applicable. In the event that a mid-tier
holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the Reorganization of the
Bank from the mutual to stock form of organization and the sale of
the Bank’s common stock.
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (No. 333-132543), including a
related prospectus, for the registration of the Securities under
the Securities Act of 1933, as amended (the “Securities
Act”), has filed such amendments thereto, if any, and such
amended prospectuses as may have been required to the date hereof
by the Commission in order to declare such registration statement
effective, and will file such additional amendments thereto and
such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to
date, if applicable, and as from time to time amended or
supplemented hereafter) and the prospectuses constituting a part
thereof (including in each case all documents incorporated or
deemed to be incorporated by reference therein and the information,
if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from
time to time amended or supplemented pursuant to the Securities Act
or otherwise (the “Securities Act Regulations”)), are
hereinafter referred to as the “Registration Statement”
and the “Prospectus,” respectively, except that if any
revised prospectus shall be used by the Company in connection with
the Subscription and Community Offering or the
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Syndicated Community Offering which differs from
the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the Securities Act Regulations), the term
“Prospectus” shall refer to such revised prospectus
from and after the time it is first provided to the Agent for such
use.
Concurrently with the execution of
this Agreement, the Company is delivering to the Agent copies of
the Prospectus of the Company to be used in the Offerings. Such
Prospectus contains information with respect to the Bank, the
Company, the MHC and the Common Stock.
SECTION 1. R
EPRESENTATIONS
AND W ARRANTIES .
(a) The Company, the Bank and the
MHC jointly and severally represent and warrant to the Agent as of
the date hereof as follows:
(i) The Registration Statement has
been declared effective by the Commission, no stop order has been
issued with respect thereto and no proceedings therefor have been
initiated or, to the knowledge of the Company, the MHC and the
Bank, threatened by the Commission. At the time the Registration
Statement became effective and at the Closing Time referred to in
Section 2 hereof, the Registration Statement complied and will
comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus at the
date hereof does not and at the Closing Time referred to in
Section 2 hereof will not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided,
however , that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information with respect to the Agent furnished to
the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the “Agent
Information,” which the Company, the MHC and the Bank
acknowledge appears only in the second sentence under
“Summary—Market for Northeast Community Bancorp Common
Stock” and the third sentence under “Market for the
Common Stock.”
(ii) At the time of filing the
Registration Statement relating to the offering of the Securities
and at the date hereof, the Company was not, and is not, an
ineligible issuer, as defined in Rule 405 of the Securities Act
Regulations. At the time of the filing of the Registration
Statement and at the time of the use of any issuer free writing
prospectus, as defined in Rule 433(h) of the Securities Act
Regulations, the Company met the conditions required by Rules 164
and 433 of the Securities Act Regulations for the use of a free
writing prospectus. If required to be filed, the Company has filed
any issuer free writing prospectus related to the offered
Securities at the time it is required to be filed under Rule 433 of
the Securities Act Regulations and, if not required to be filed,
will retain such free writing prospectus in the Company’s
records pursuant to Rule 433(g) of the Securities Act Regulations
and if any issuer free writing prospectus is used after the date
hereof in connection with the offering of the Securities the
Company will file or retain such free writing prospectus as
required by Rule 433 of the Securities Act Regulations.
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(iii) As of the Applicable Time,
neither (i) the Issuer-Represented General Free Writing
Prospectus(es) issued at or prior to the Applicable Time and the
Statutory Prospectus, all considered together (collectively, the
“General Disclosure Package”), nor (ii) any
individual Issuer-Represented Limited-Use Free Writing Prospectus,
when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from any Prospectus included in the
Registration Statement relating to the offered Securities or any
Issuer-Represented Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the
Agent specifically for use therein. As used in this paragraph and
elsewhere in this Agreement:
1. “Applicable Time”
means each and every date when a potential purchaser submitted a
subscription or otherwise committed to purchase
Securities.
2. “Statutory
Prospectus”, as of any time, means the Prospectus relating to
the offered Securities that is included in the Registration
Statement relating to the offered Securities immediately prior to
that time, including any document incorporated by reference
therein.
3. “Issuer-Represented Free
Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433(h) of the Securities
Act Regulations, relating to the offered Securities. The term does
not include any writing exempted from the definition of prospectus
pursuant to clause (a) of Section 2(a)(10) of the 1933
Act, without regard to Rule 172 or Rule 173 of the Securities Act
Regulations.
4. “Issuer-Represented General
Free Writing Prospectus” means any Issuer-Represented Free
Writing Prospectus that is intended for general distribution to
prospective investors.
5. “Issuer-Represented
Limited-Use Free Writing Prospectus” means any
Issuer-Represented Free Writing Prospectus that is not an
Issuer-Represented General Free Writing Prospectus. The term
Issuer-Represented Limited-Use Free Writing Prospectus also
includes any “bona fide electronic road show,” as
defined in Rule 433 of the Securities Act Regulations, that is
made available without restriction pursuant to
Rule 433(d)(8)(ii) of the Securities Act Regulations or
otherwise, even though not required to be filed with the
Commission.
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(iv) Each Issuer-Represented Free
Writing Prospectus, as of its date of first use and at all
subsequent times through the completion of the Offerings and sale
of the offered Securities or until any earlier date that the
Company notified or notifies the Agent (as described in the next
sentence), did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
contained in the Registration Statement relating to the offered
Securities, including any document incorporated by reference
therein that has not been superseded or modified. If at any time
following the date of first use of an Issuer-Represented Free
Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer-Represented Free Writing
Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the offered
Securities or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances prevailing at that subsequent time, not
misleading, the Company has notified or will notify promptly the
Agent so that any use of such Issuer-Represented Free-Writing
Prospectus may cease until it is amended or supplemented and the
Company has promptly amended or will promptly amend or supplement
such Issuer-Represented Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission. The foregoing
two sentences do not apply to statements in or omissions from any
Issuer-Represented Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the
Agent specifically for use therein
(v) The Company has filed with the
OTS the Company’s application for approval of its acquisition
of the Bank (the “Holding Company Application”) on Form
H-(e)1-S promulgated under the savings and loan holding company
provisions of the Home Owners’ Loan Act, as amended
(“HOLA”) and the regulations promulgated thereunder.
The Company has received written notice from the OTS of its
approval of the acquisition of the Bank, such approval remains in
full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor
have been initiated or threatened by the OTS. At the date of such
approval and at the Closing Time referred to in Section 2, the
Holding Company Application complied and will comply in all
material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder and the Holding Company
Application is truthful and accurate in all material
respects.
(vi) Pursuant to the rules and
regulations of the OTS, as from time to time amended or
supplemented (the “OTS Regulations”), the Company, the
Bank and the MHC have filed with the OTS a Notice of Mutual Holding
Company Reorganization (Form MHC-1) and an Application for Approval
of a Minority Stock Issuance by a Savings Bank Subsidiary of a
Mutual Holding Company (Form MHC-2), and have filed such amendments
thereto and supplementary materials as may have been required to
the date hereof (the Form MHC-1 and the Form MHC-2, as amended to
date, if applicable, and as from time to time amended or
supplemented hereafter, are hereinafter collectively referred to as
the “MHC Application”) including a proxy statement for
the special meeting of members called to approve the Plan (the
“Proxy Statement”); and the Prospectus and the MHC
Application are truthful and accurate in all material respects. The
Offerings and the Plan have been duly adopted by the Boards of
Directors of the Company, the Bank and the MHC and such
5
adoption has not since been
rescinded or revoked. The MHC Application has been approved by the
OTS. The Prospectus has been approved for use by the OTS, such
approval remains in full force and effect and no order has been
issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of
the Company, the MHC or the Bank, threatened by the OTS. At the
date of such approval and at the Closing Time referred to in
Section 2, the MHC Application complied and will comply in all
material respects with the applicable provisions of the OTS
Regulations.
(vii) At the time of their use, the
Proxy Statement and any other proxy solicitation materials will
comply in all material respects with the applicable provisions of
the OTS Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company, the MHC
and the Bank have filed the Prospectus and any supplemental sales
literature with the Commission and the OTS. The Prospectus and all
supplemental sales literature, as of the date the Registration
Statement became effective and at the Closing Time referred to in
Section 2, complied and will comply in all material respects
with the applicable requirements of the OTS Regulations and the
Securities Act Regulations and, at or prior to the time of their
first use, will have received all required authorizations of the
OTS and Commission for use in final form.
(viii) None of the Commission, the
OTS or any “Blue Sky” authority has, by order or
otherwise, prevented or suspended the use of the Proxy Statement,
the Prospectus or any supplemental sales literature authorized by
the Company, the MHC or the Bank for use in connection with the
Offerings, and no proceedings for such purposes are pending or to
the knowledge of the Company, the MHC, or the Bank,
threatened.
(ix) The Offerings and other
transactions contemplated hereby do not and will not require any
material consent, approval, authorization or permit or filing with
any other governmental agency or regulatory authority, except as
disclosed in the Prospectus.
(x) At the Closing Time referred to
in Section 2, the Company, the Bank and the MHC will have
completed the conditions precedent to the Reorganization in
accordance with the Plan, the applicable OTS Regulations and all
other applicable laws, regulations, decisions and orders, including
all material terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon the Company, the Bank
or the MHC by the OTS or any other regulatory authority, other than
those which the regulatory authority permits to be completed after
the Reorganization.
(xi) RP Financial, LC., (the
“Appraiser”), which prepared the valuation of the Bank
as part of the Plan, has advised the Company, the MHC and the Bank
in writing that it satisfies all requirements for an appraiser set
forth in the OTS Regulations and any interpretations or guidelines
issued by the OTS or its staff with respect thereto.
(xii) The Company does not have any
direct or indirect subsidiaries, except for the Bank.
6
(xiii) Beard Miller Company LLP, the
accountants who audited and reported on the financial statements
and supporting schedules of the Bank included in the Registration
Statement, have advised the Company, the MHC and the Bank in
writing that they are independent public accountants within the
meaning of the Code of Ethics of the American Institute of
Certified Public Accountants (the “AICPA”), that they
are registered with the Public Company Accounting Oversight Board
(“PCAOB”) and such accountants are, with respect to the
Company, the MHC and the Bank, independent certified public
accountants as required by, and are not in violation of the auditor
independence requirements of, the Securities Act, the Securities
Act Regulations and OTS Regulations and such accountants are not in
violation of the auditors independence requirements of the
Sarbanes-Oxley Act of 2002.
(xiv) The financial statements and
the related schedules and notes thereto included in the
Registration Statement and the Prospectus present fairly the
financial position of the Bank at the dates indicated and the
results of operations, retained earnings, equity and cash flows for
the periods specified, and comply as to form with the applicable
accounting requirements of the Securities Act Regulations and the
OTS Regulations; except as otherwise stated in the Registration
Statement and Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting
schedules and tables included in the Registration Statement and
Prospectus present fairly 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 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.
(xv) Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein (A) there has
been no material adverse change in the financial condition, results
of operations, business affairs or prospects of the Company, the
MHC and the Bank, considered as one enterprise, whether or not
arising in the ordinary course of business, (B) except for
transactions specifically referred to or contemplated in the
Registration Statement and Prospectus, there have been no
transactions entered into by the Company, the MHC or the Bank,
other than those in the ordinary course of business consistent with
past practice, which are material with respect to the Company, the
MHC and the Bank, considered as one enterprise, (C) the
capitalization, liabilities, assets, properties and business of the
Company, the MHC and the Bank conform in all material respects to
the descriptions contained in the Prospectus and none of the
Company, the MHC or the Bank has any material liabilities of any
kind, contingent or otherwise, except as disclosed in the
Registration Statement or the Prospectus and (D) none of the
Company, the MHC or the Bank will have issued any securities or
incurred any liability or obligation, direct or contingent, or
borrowed money, except borrowings in the ordinary course of
business consistent with past practice from the same or similar
sources and in similar amounts as indicated in the
Prospectus.
(xvi) The Company, upon completion
of its formation, and in any event no later than the Closing Time,
will have been duly organized and will be validly existing as a
federal
7
stock holding company chartered
under the laws of the United States of America with full corporate
power and authority to own, lease and operate its properties, to
conduct its business as described in the Registration Statement and
the Prospectus, and to enter into and perform its obligations under
this Agreement and the transactions contemplated hereby; and the
Company will be duly qualified to transact business and be in good
standing under the laws of the United States of America, in the
State of New York and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on
the financial condition, results of operations or business affairs
of the Company and the MHC, considered as one enterprise (a
“Material Adverse Effect”). The Company, upon
completion of its formation, will conduct business exclusively in
New York.
(xvii) Upon completion of the
Offerings as described in the Prospectus, the issued and
outstanding capital stock of the Company will be within the range
as set forth in the Prospectus under “Capitalization”
(except for subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the
Prospectus). The authorized capital stock of the Company will
consist of 19,000,000 shares of Common Stock and 1,000,000 shares
of preferred stock, par value $.01 per share of which no shares are
issued and outstanding at the date hereof; at the date hereof and
at the Closing Time, the Securities will have been duly authorized
for issuance and, when issued and delivered by the Company pursuant
to the Plan against payment of the consideration calculated as set
forth in the Plan and stated on the cover page of the Prospectus,
will be duly and validly issued and fully paid and nonassessable;
the terms and provisions of the Common Stock and the other capital
stock of the Company conform to all statements relating thereto
contained in the Prospectus; the certificates representing the
shares of Common Stock will conform to the requirements of
applicable law and regulations; and the issuance of the Securities
is not subject to preemptive or other similar rights, except for
subscription rights granted pursuant to the Plan in accordance with
the OTS Regulations.
(xviii) The MHC, upon completion of
its formation, and in any event no later than the Closing Time,
will have been organized and will be validly existing as a federal
mutual savings and loan holding company chartered under the laws of
the United States of America with full corporate power and
authority to own, lease and operate its properties, to conduct its
business as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under
this Agreement and consummate the transactions contemplated hereby;
and at the Closing Time the MHC will be duly qualified to transact
business and in good standing under the laws of the United States
of America and in any other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect. The
MHC, upon completion of its formation, will conduct business
exclusively in New York.
(xix) The MHC has no capital stock.
All holders of the savings, demand or other authorized accounts of
the Bank will be members of the MHC immediately following the
Closing Time. As of the Closing Time referred to in Section 2,
the MHC will not own any equity securities or any equity interest
in any business enterprise except as described in the
Prospectus.
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(xx) The Bank has been duly
organized and is validly existing as a federal savings association
in mutual form chartered under the laws of the United States of
America and upon consummation of the Reorganization will be a
federal savings association in stock form, in both instances with
full corporate power and authority to own, lease and operate its
properties, to conduct its business as described in the
Registration Statement and the Prospectus, and to enter into and
perform its obligations under this Agreement and the transactions
contemplated hereby; and the Bank is duly qualified to transact
business and is in good standing under the laws of the United
States of America and in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect. The
Bank conducts all material business exclusively in New York and
Massachusetts.
(xxi) Upon consummation of the
Offerings described in the Prospectus, the authorized capital stock
of the Bank will be 4,000 shares of common stock, par value $1.00
per share (“Bank Common Stock”), and 1,000 shares of
serial preferred stock, par value $1.00 per share (“Bank
Preferred Stock”), and the issued and outstanding capital
stock of the Bank will be [100] shares of common stock and
no shares of Bank Preferred Stock. No shares of Bank Common Stock
and no shares of Bank Preferred Stock have been or will be issued
prior to the Closing Time referred to in Section 2 hereof. As
of the Closing Time referred to in Section 2 hereof, the
shares of Bank Common Stock to be issued to the Company will have
been duly authorized for issuance and, when issued and delivered by
the Bank pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and as described in the
Prospectus, will be duly and validly issued and fully paid and
nonassessable, and all such Bank Common Stock will be owned
beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; the terms and provisions of the Bank Common Stock
conform to all statements relating thereto contained in the
Prospectus, and the certificates representing the shares of the
Bank Common Stock will comply with the requirements of applicable
laws and regulations; and the issuance of the Bank Common Stock is
not subject to preemptive or similar rights; and there are no other
warrants, options or rights of any kind to acquire additional
shares of Bank Common Stock or any shares of Bank Preferred
Stock.
(xxii) The Company, the MHC and the
Bank have each obtained all licenses, permits and other
governmental authorizations currently required for the conduct of
their respective businesses, except where the failure to obtain
such licenses, permits or other governmental authorizations would
not have a Material Adverse Effect; all such licenses, permits and
other governmental authorizations are in full force and effect and
the Company, the MHC and the Bank are in all material respects in
compliance therewith; none of the Company, the MHC or the Bank has
received notice of any proceeding or action relating to the
revocation or modification of any such license, permit or other
governmental authorization which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, might
have a Material Adverse Effect.
9
(xxiii) The Bank is a member in good
standing of the Federal Home Loan Bank of New York; the deposit
accounts of the Bank are insured by the FDIC up to the applicable
limits. The Bank is a “qualified thrift lender” within
the meaning of 12 U.S.C. Section 1467a(m).
(xxiv) The Company, the MHC and the
Bank have taken all corporate action necessary for them to execute,
deliver and perform this Agreement and the transactions
contemplated hereby, and this Agreement has been duly executed and
delivered by, and is the valid and binding agreement of, the
Company, the MHC and the Bank, enforceable against each of them in
accordance with its terms, except as may be limited by bankruptcy,
insolvency or similar laws and the availability of equitable
remedies.
(xxv) No approval of any regulatory
or supervisory or other public authority is required in connection
with the execution and delivery of this Agreement or the issuance
of the Securities that has not been obtained and a copy of which
has been delivered to the Agent, except as may be required under
the “Blue Sky” or securities laws of various
jurisdictions.
(xxvi) None of the Company, the MHC
or the Bank is in violation of their respective certificate of
incorporation, organization certificate, articles of incorporation
or charter, as the case may be, or bylaws or other written
corporate governance requirements or guidelines (and the Bank will
not be in violation of its charter or bylaws in stock form upon
consummation of the Reorganization); and none of the Company, the
MHC or the Bank is in default (nor has any event occurred which,
with notice or lapse of time or both, would constitute a default)
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Company, the MHC or the Bank is a party or by which it or any
of them may be bound, or to which any of the property or assets of
the Company, the MHC or the Bank is subject, except for such
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect; and there are no contracts or documents of
the Company, the MHC or the Bank which are required to be filed as
exhibits to the Registration Statement, the Holding Company
Application or the MHC Application which have not been so
filed.
(xxvii) The Reorganization, the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, have been
duly authorized by all necessary corporate action on the part of
the Company, the MHC, and the Bank, and do not and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, the MHC or
the Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company,
the MHC or the Bank is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company,
the MHC or the Bank is subject, except for such conflicts, breaches
or defaults that would not, individually or in the aggregate, have
a Material Adverse Effect, nor will such action result in any
violation of the provisions of the respective charter or bylaws of
the Company, the MHC or the Bank, or any applicable law,
administrative regulation or administrative or court
decree.
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(xxviii) No labor dispute with the
employees of the Company, the MHC or the Bank exists or, to the
knowledge of the Company, the MHC or the Bank, is imminent or
threatened; and the Company, the MHC and the Bank are not aware of
any existing or threatened labor disturbance by the employees of
any of its principal suppliers or contractors which might be
expected to have a Material Adverse Effect.
(xxix) Each of the Company, the MHC
and the Bank has good and marketable title to all of its properties
and assets for which ownership is material to the business of the
Company, the MHC or the Bank and to those properties and assets
described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to the
business of the Company, the MHC or the Bank, considered as one
enterprise; and all of the leases and subleases material to the
business of the Company, the MHC or the Bank under which the
Company, the MHC or the Bank hold properties, including those
described in the Prospectus, are valid and binding agreements of
the Company, the MHC or the Bank, in full force and effect,
enforceable in accordance with their terms except as may be limited
by bankruptcy, insolvency or other laws affecting the
enforceability of the rights of creditors generally and judicial
limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may
be limited by applicable securities laws.
(xxx) None of the Company, the MHC
or the Bank is in violation of any order or directive from the OTS,
the Commission or any regulatory authority to make any material
change in the method of conducting its respective businesses; the
Company, the MHC and the Bank have conducted and are conducting
their respective businesses so as to comply with all applicable
statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions,
directives and orders of the OTS, the FDIC and the Commission).
Neither the Company, the MHC nor the Bank is subject or is party
to, or has received any notice or advice that any of them may
become subject or party to, any investigation with respect to any
cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or
order with or by, or is a party to any commitment letter or similar
undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board
resolutions at the request of, any Regulatory Agency (as defined
below) that currently restrict the conduct of their business or
that in any manner relates to their capital adequacy, their credit
policies, their management or their business (each, a
“Regulatory Agreement”), nor has the Company, the MHC
or the Bank been advised by any Regulatory Agency that it is
considering issuing or requesting the issuance of any such
Regulatory Agreement; and there is no unresolved violation,
criticism or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations of the Company,
the MHC or the Bank which is expected to have a Material adverse
Effect, or which might materially and adversely affect the
properties or assets thereof or which might adversely affect the
consummation of the Offerings or the performance of this Agreement.
As used herein, the term “Regulatory
11
Agency” means any federal or
state agency charged with the supervision or regulation of
depositary institutions or holding companies of depositary
institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or
other governmental agency, authority or instrumentality having
supervisory or regulatory authority with respect to the Company,
the MHC or the Bank.
(xxxi) There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, the MHC, or the Bank, threatened, against or affecting the
Company, the MHC or the Bank which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or
which might result in any material adverse change in the financial
condition, results of operations, business affairs or prospects of
the Company, the MHC and the Bank, considered as one enterprise, or
which might materially and adversely affect the properties or
assets thereof, or which might adversely affect the consummation of
the Offerings, or the performance of this Agreement; all pending
legal or governmental proceedings to which the Company, the MHC or
the Bank is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to
their business, are in the aggregate not material.
(xxxii) The Company, MHC and the
Bank have obtained (i) an opinion of its counsel, Muldoon
Murphy & Aguggia LLP with respect to the legality of the
Securities to be issued and certain federal income tax consequences
of the Offerings and the Plan, and (ii) the opinion of Beard
Miller Company LLP with respect to the certain state and local
income tax consequences of the Offerings and the Plan, copies of
which (except for the opinion of Beard Miller Company LLP) are
filed as exhibits to the Registration Statement; all material
aspects of the aforesaid opinions are accurately summarized in the
Prospectus under “The Reorganization and Stock Offering -
Material Income Tax Consequences,” the facts and
representations upon which such opinions are based are truthful,
accurate and complete in all material respects, and neither the
Company, the MHC, nor the Bank has taken or will take any action
inconsistent therewith.
(xxxiii) The Company is not and,
upon completion of the Reorganization and sale of the Securities
and the application of the net proceeds therefrom, will not be,
required to be registered as an “investment company” as
that term is defined under the Investment Company Act of 1940, as
amended.
(xxxiv) All of the loans represented
as assets on the most recent financial statements or selected
financial information of the Bank included in the Prospectus meet
or are exempt from all requirements of federal, state or local law
pertaining to lending, including without limitation truth in
lending (including the requirements of Regulations Z and 12 C.F.R.
Part 226 and Section 563.99), real estate settlement
procedures, consumer credit protection, equal credit opportunity
and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a Material
Adverse Effect.
(xxxv) To the knowledge of the
Company, the MHC and the Bank, with the exception of the intended
loan to the Bank’s ESOP by the Company to enable the ESOP
to
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purchase up to 4.9% of the Common
Stock issued in the Reorganization, none of the Company, the MHC,
the Bank or their employees has made any payment of funds of the
Company, the MHC or the Bank as a loan for the purchase of the
Common Stock or made any other payment of funds prohibited by law,
and no funds have been set aside to be used for any payment
prohibited by law.
(xxxvi) Each of the Company, the MHC
and the Bank maintains a system of internal accounting controls
sufficient to provide reasonable assurance that
(a) transactions are executed in accordance with
management’s general or specific authorizations;
(b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (c) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(xxxvii) The Company, the MHC and
the Bank are in compliance with the applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transaction Reporting Act of 1970, as amended, and the
rules and regulations thereunder. The Bank has established
compliance programs and is in compliance with the requirements of
the USA Patriot Act and all applicable regulations promulgated
thereunder. The Bank is in compliance with the USA Patriot Act and
all applicable regulations promulgated thereunder, and there is no
charge, investigation, action, suit or proceeding before any court,
regulatory authority or governmental agency or body pending or, to
the best knowledge of the Company, the MHC, and the Bank,
threatened regarding the Bank’s compliance with the USA
Patriot Act or any regulations promulgated thereunder.
(xxxviii) None of the Company, the
MHC or the Bank nor any properties owned or operated by the
Company, the MHC or the Bank is in violation of or liable under any
Environmental Law (as defined below). There are no actions, suits
or proceedings, or demands, claims, notices or investigations
(including, without limitation, notices, demand letters or requests
for information from any environmental agency) instituted or
pending, or to the knowledge of the Company, the MHC or the Bank
threatened, relating to the liability of any property owned or
operated by the Company, the MHC or the Bank, under any
Environmental Law, except for such actions, suits or proceedings,
or demands, claims, notices or investigations that, individually or
in the aggregate, would not have a Material Adverse Effect. For
purposes of this subsection, the term “Environmental
Law” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement
with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life
or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of any
substance presently listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated,
whether by type or by quantity, including any material containing
any such substance as a component.
13
(xxxix) The Company, the MHC and the
Bank have timely filed all federal, state and local income and
franchise tax returns required to be filed and have made timely
payments of all taxes shown as due and payable in respect of such
returns, and no deficiency has been asserted with respect thereto
by any taxing authority. No tax deficiency has been asserted, and
the Company, the MHC and the Bank have no knowledge of any tax
deficiency which could be asserted against the Company, the MHC or
the Bank.
(xl) The Company has received all
approvals required to consummate the Offerings and to have the
Securities quoted on the Nasdaq National Market effective as of the
Closing Time referred to in Section 2 hereof.
(xli) The Company has filed a
registration statement for the Securities under Section 12(g)
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and such registration statement was
declared effective concurrent with the effectiveness of the
Registration Statement.
(xlii) There are no affiliations or
associations (as such terms are defined by the National Association
of Securities Dealers, Inc. (“NASD”)) between any
member of the NASD and any of the MHC’s, Company’s or
Bank’s officers or directors.
(xliii) The Company, the MHC and the
Bank carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their
respective businesses and the value for their respective properties
as is customary for companies engaged in similar
industries.
(xliv) The Company, the MHC and the
Bank have not relied on Agent or its counsel for any legal, tax or
accounting advice in connection with the Offerings.
(xlv) The records of eligible
account holders, supplemental eligible account holders, and other
depositors are accurate and complete in all material
respects.
(xlvi) The Company, the MHC and the
Bank is in compliance with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
(“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension
plan” (as defined in ERISA) for which the Company, the MHC or
the Bank, respectively, would have any liability; each of the
Company, the MHC and the Bank, has not incurred and does not expect
to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”
or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “Code”); and each
“pension plan” for which the Company, the MHC and the
Bank would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
14
(xlvii) The Company has established
and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-14 and 15d-14 under the Exchange Act), which
(i) are designed to ensure that material information relating
to the Company, i
