Exhibit 1.2
OBA FINANCIAL SERVICES,
INC.
up to 4,025,000 Shares
(subject to increase up to 4,628,750
shares)
COMMON SHARES
($0.01 Par Value)
Subscription Price $10.00 Per
Share
AGENCY AGREEMENT
November ____, 2009
Keefe, Bruyette & Woods,
Inc.
10 South Wacker Drive
Investment Banking Suite 3400
Chicago, Illinois 60606
Ladies and Gentlemen:
OBA Financial Services, Inc., a
Maryland corporation (the “Company”), OBA Bancorp, MHC,
a federally chartered mutual holding company (the
“MHC”), OBA Bancorp, Inc., a federal corporation
(“OBA Bancorp”), and OBA Bank, a federal savings bank
located in Germantown, Maryland (the “Bank” and,
together with the Company, the MHC and OBA Bancorp, the “OBA
Parties”) (references to the “Bank” include the
Bank in the mutual holding company or stock holding company form of
organization, as indicated by the context), the deposit accounts of
which are insured by the Federal Deposit Insurance Corporation
(“FDIC”), hereby confirm their agreement with Keefe,
Bruyette & Woods, Inc. (the “Agent”) as
follows:
Section 1. The
Offering. The Bank, in
accordance with the plan of conversion and reorganization adopted
by the Board of Directors of each of the OBA Parties, as amended
(the “Plan”), intends to convert from the mutual
holding company form of organization to the stock holding company
form of organization (the “Conversion”). In connection
with the Conversion, the Bank will become a wholly owned subsidiary
of the Company, and the corporate existence of the MHC and OBA
Bancorp will cease. Pursuant to the Plan, the Company will offer
and sell up to 4,025,000 shares (subject to increase up to
4,628,750 shares) of its common stock, $0.01 par value per share
(the “Shares” or “Common Shares”), in a
subscription offering (the “Subscription Offering”) to
(1) depositors of the Bank with Qualifying Deposits (as
defined in the Plan) as of April 30, 2008 (“Eligible
Account Holders”), (2) the Bank’s tax-qualified
employee benefit plans, including the employee stock ownership plan
established by the Bank (the “ESOP”),
(3) depositors of the Bank with Qualifying Deposits as of
___________ (“Supplemental Eligible Account Holders”),
and (4) Other Members of the MHC as defined in the Plan.
Subject to the prior subscription rights of the above-listed
parties, the Company may offer for sale in a community offering
(the “Community Offering” and when referred to together
with or
subsequent to the Subscription Offering, the
“Subscription and Community Offering”) the Shares not
subscribed for or ordered in the Subscription Offering to members
of the general public to whom a copy of the Prospectus (as
hereinafter defined) is delivered with a preference given first to
natural persons residing in the State of Maryland. It is
anticipated that shares not subscribed for in the Subscription and
Community Offering may be offered to certain members of the general
public on a best efforts basis through a selected dealers agreement
(the “Syndicated Community Offering”) (the Subscription
Offering, Community Offering and Syndicated Community Offering are
collectively referred to as the “Offering”). It is
acknowledged that the purchase of Shares in the Offering is subject
to the maximum and minimum purchase limitations as described in the
Plan and that the Company may reject, in whole or in part, any
orders received in the Community Offering or Syndicated Community
Offering.
In December 2007, the Bank’s
mutual predecessor reorganized into the mutual holding company form
of organization by forming the MHC. The MHC currently owns 100% of
the outstanding shares of OBA Bancorp. The MHC is a mutual holding
company that has no stockholders and is controlled by its members.
OBA Bancorp currently owns 100% of the outstanding shares of common
stock of the Bank. OBA Bancorp has not issued shares of its stock
to the public. Pursuant to the terms of the Plan, upon completion
of the Conversion and the Offering, the MHC and OBA Bancorp will
cease to exist and the Bank will be a wholly owned subsidiary of
the Company.
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (File No. __________) (the
“Registration Statement”), containing a prospectus
relating to the Offering, for the registration of the Shares under
the Securities Act of 1933 (the “1933 Act”), and has
filed such amendments thereof and such amended prospectuses as may
have been required to the date hereof. The term “Registration
Statement” shall include any documents incorporated by
reference therein and all financial schedules and exhibits thereto,
as amended, including post-effective amendments. The prospectus, as
amended, on file with the Commission at the time the Registration
Statement initially became effective is hereinafter called the
“Prospectus,” except that if any prospectus is filed by
the Company pursuant to Rule 424(b) or (c) of the rules and
regulations of the Commission under the 1933 Act (the “1933
Act Regulations”) differing from the prospectus on file at
the time the Registration Statement initially became effective, the
term “Prospectus” shall refer to the prospectus filed
pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the Commission.
In accordance with Title 12, Part
563b of the Code of Federal Regulations (the “Conversion
Regulations”), the MHC has filed with the Office of Thrift
Supervision (the “OTS”) an Application For Conversion
on Form AC (the “Form AC”), including the Prospectus
and the Conversion Valuation Appraisal Report prepared by RP
Financial, LC., dated September __, 2009 and as amended or
supplemented, regarding the estimated pro forma value of the Common
Shares (the “Appraisal”), and has filed such amendments
thereto as may have been required by the OTS. The Form AC has been
approved by the OTS and the related Prospectus has been authorized
for use by the OTS. In addition, the Company has filed with the OTS
an Application H-(e)l-S (the “Holding Company
Application”) to become a savings and loan holding company
under the Home Owners’ Loan Act, as amended
(“HOLA”) and the regulations promulgated thereunder
(the “Control Act Regulations”).
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Section 2. Retention of
Agent; Compensation; Sale and Delivery of the Shares.
Subject to the terms and conditions
herein set forth, the Company and the Bank hereby appoint the Agent
as their exclusive financial advisor and marketing agent
(i) to utilize its best efforts to solicit subscriptions for
Common Shares and to advise and assist the Company and the Bank
with respect to the Company’s sale of the Shares in the
Offering and (ii) to participate in the Offering in the areas
of market making and in syndicate formation (if
necessary).
On the basis of the representations,
warranties, and agreements herein contained, but subject to the
terms and conditions herein set forth, the Agent accepts such
appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement, dated
April 6, 2009, between the Bank and the Agent (a copy of which
is attached hereto as Exhibit A ). It is acknowledged by the
Company and the Bank that the Agent shall not be required to
purchase any Shares or be obligated to take any action which is
inconsistent with all applicable laws, regulations, decisions or
orders.
The obligations of the Agent
pursuant to this Agreement shall terminate 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 Company and the Agent may agree
to renew this Agreement under mutually acceptable terms.
In the event the Company is unable
to sell a minimum of 2,975,000 Shares within the period herein
provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Shares the
full amount which it may have received from them plus accrued
interest, as set 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 7, 9 and 10 hereof. In the event the Offering is
terminated for any reason not attributable to the action or
inaction of the Agent, the Agent shall be paid the fees due to the
date of such termination pursuant to subparagraphs (a) and
(d) below.
The Agent shall receive the
following compensation for its services hereunder:
(a) A management fee of $30,000
payable in five consecutive monthly installments of $6,000
commencing in May 2009. Such fees shall be deemed to have been
earned when due. Should the Offering be terminated for any reason
not attributable to the action or inaction of Agent, Agent shall
have earned and be entitled to be paid fees accruing through the
stage at which point the termination occurred.
(b) A Success Fee of 1.25% shall be
paid based on the aggregate Purchase Price of Common Stock sold in
the Subscription Offering excluding shares purchased by the
Company’s officers, directors, or employees (or members of
their immediate family) plus any ESOP, tax-qualified or stock based
compensation plans (except IRA’s) or similar plan created by
the Company for some or all of their directors or employees, or any
charitable foundation established by the Company (or any shares
contributed to such a foundation). In addition, a Success Fee of
2.5% shall be paid on the aggregate Purchase Price of Common Stock
sold in the Direct Community Offering. In no event shall the
Success Fees paid for the sale of Common Stock in the Subscription
and Direct Community Offering be less than $275,000. The Management
Fee described in 2(a) above will be credited against the first
Success Fee paid pursuant to this paragraph.
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(c) If any shares of the
Company’s stock remain available after the Subscription
Offering and Direct Community Offering, at the request of the
Company, Agent will seek to form a syndicate of registered
broker-dealers to assist in the sale of such common stock on a best
efforts basis, subject to the terms and conditions set forth in a
selected dealers agreement to be entered into between the Company
and Agent. Agent will endeavor to distribute the common stock among
dealers in a fashion which best meets the distribution objectives
of the Company and the Plan. Agent will be paid a fee not to exceed
6.5% of the aggregate Purchase Price of the shares of common stock
sold in the Syndicated Community Offering. From this fee, Agent
will pass onto selected broker-dealers, who assist in the
Syndicated Community Offering, an amount competitive with gross
underwriting discounts charged at such time for comparable amounts
of stock sold at a comparable price per share in a similar market
environment. Fees with respect to purchases affected with the
assistance of a broker/dealer other than Agent shall be transmitted
by Agent to such broker/dealer. The decision to utilize selected
broker-dealers will be made by Agent upon consultation with the
Company.
(d) The Company shall reimburse the
Agent for reasonable out-of-pocket expenses, including costs of
travel, meals and lodging, photocopying, telephone, facsimile and
couriers. In addition, the Company and the Bank will reimburse the
Agent for fees and expenses of its counsel not to exceed $50,000.
The Company will bear the expenses of the Offering customarily
borne by issuers including, without limitation, regulatory filing
fees, SEC, Blue Sky and Financial Institution Regulatory Authority
(“FINRA”) filing and registration fees; the fees of the
Company’s accountants, attorneys, appraiser, transfer agent
and registrar, printing, mailing and marketing expenses associated
with the reorganization; and the fees set forth under this
Section 2.
Records Agent Services
. The Agent shall also receive a fee
of $25,000 for certain records agent services set forth in the
letter agreement, dated April 6, 2009, between the Bank and
the Agent (a copy of which is attached hereto as Exhibit B
), $10,000 of which has already been paid to the Agent and is
nonrefundable and the balance of which shall be payable to the
Agent upon mailing of the proxy solicitation and offering
materials. The Company and the Bank will reimburse the Agent, upon
request made from time to time, for its reasonable out-of-pocket
expenses incurred in connection with its records agent
services.
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 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 against
payment to the Company by any means authorized by the Plan;
provided, however, that no funds shall be released to the Company
until the conditions specified in Section 8 hereof shall have
been complied with to the reasonable satisfaction of the Agent or
its counsel. The release of Shares against payment therefor shall
be made on a date and at a place acceptable to the Company, the
Bank and the Agent as set forth in Section 14. Certificates
for shares shall be
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delivered directly to the purchasers in
accordance with their directions as provided by the Company to the
Company’s registrar and transfer agent. The date upon which
the Company shall release or deliver the Shares sold in the
Offering, in accordance with the terms herein, is called the
“Closing Date.”
Section 4. Representations
and Warranties of the OBA Parties. The OBA Parties jointly and severally represent
and warrant to and agree with the Agent as follows:
(a) The Registration Statement,
which was prepared by the Company and the Bank and filed with the
Commission, 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 or
the Bank, threatened by the Commission. At the time the
Registration Statement, including the Prospectus contained therein
(including any amendment or supplement), became effective, at the
Applicable Time (as defined in Section 4(c) hereof) and at the
Closing Date, the Registration Statement complied and will comply
in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Registration Statement, including
the Prospectus contained therein (including any amendment or
supplement thereto), and any information regarding the Company
contained in Sales Information (as such term is defined in
Section 9 hereof) authorized by the Company for use in
connection with the Offering, did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus
is filed with the Commission and at the Closing Date referred to in
Section 2 hereof, the Prospectus (including any amendment or
supplement thereto) and any information regarding the Company
contained in Sales Information (as such term is defined in
Section 9 hereof) authorized by the Company for use in
connection with the Offering will contain all statements that are
required to be stated therein in accordance with the 1933 Act and
the 1933 Act Regulations and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that
the representations and warranties in this Section 4(a) shall
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by the
Agent or its counsel expressly regarding the Agent for use in the
Prospectus in the first sentence of the second paragraph under the
caption “The Conversion; Plan of Distribution—Marketing
and Distribution; Compensation.”
(b) Neither the Company nor the Bank
has directly or indirectly distributed or otherwise used and will
not directly or indirectly distribute or otherwise use any
prospectus, any “free writing prospectus” (as defined
in Rule 405 of the 1933 Act Regulations) or other offering material
(including, without limitation, content on the Company’s
website that may be deemed to be a prospectus, free writing
prospectus or other offering material) in connection with the
offering and sale of the Shares other than any Permitted Free
Writing Prospectus or the Prospectus or other materials permitted
by the 1933 Act and the 1933 Act Regulations distributed by the
Company and reviewed and approved in advance for distribution by
the Agent. The Company has not, directly
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or indirectly, prepared or used and
will not directly or indirectly, prepare or use, any Permitted Free
Writing Prospectus except in compliance with the filing and other
requirements of Rules 164 and 433 of the 1933 Act Regulations;
assuming that such Permitted Free Writing Prospectus is so sent or
given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was,
if required pursuant to Rule 433(d) under the Act, filed with the
Commission), the sending or giving, by the Agent, of any Permitted
Free Writing Prospectus will satisfy the provisions of Rules 164
and 433 (without reliance on subsections (b), (c) and
(d) for Rule 164); and the Company is not an “ineligible
issuer” (as defined in Rule 405 of the 1933 Act Regulations)
as of the eligibility determination date for purposes of Rules 164
and 433 of the 1933 Act Regulations with respect to the offering of
the Shares or otherwise precluded under Rule 164 from using free
writing prospectuses in connection with the offering of the
Shares.
(c) As of the Applicable Time (as
defined below), 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
Shares 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 Shares.
2. “Statutory
Prospectus,” as of any time, means the Prospectus relating to
the offered Shares that is included in the Registration Statement
relating to the offered Shares immediately prior to the Applicable
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 1933 Act
Regulations, relating to the offered Shares in the form filed or
required or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) under the 1933
Act Regulations. 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 1933 Act Regulations.
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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 1933 Act Regulations, that is made
available without restriction pursuant to Rule 433(d)(8)(ii)
of the 1933 Act Regulations or otherwise, even though not required
to be filed with the Commission.
6. “Permitted Free Writing
Prospectus” means any free writing prospectus as defined in
Rule 405 of the 1933 Act Regulations that is consented to by the
Company, the Bank and the Agent.
(d) Each Issuer-Represented Free
Writing Prospectus, as of its date of first use and at all
subsequent times through the completion of the Offering and sale of
the offered Shares 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, 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 Shares 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.
(e) The Form AC, which was prepared
by the OBA Parties and filed with the OTS, has been approved by the
OTS and the related Prospectus and proxy statement to be delivered
to members of the MHC have been authorized for use by the OTS. No
order has been issued by the OTS preventing or suspending the use
of the Prospectus or the proxy statement, and no action by or
before the OTS to revoke any approval, authorization or order of
effectiveness related to the Offering is pending or, to the best
knowledge of the Company, threatened. At the time of the approval
of the Form AC, including the Prospectus (including any amendment
or supplement thereto) by the OTS
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and at all times subsequent thereto
until the Closing Date, the Form AC, including the Prospectus
(including any amendment or supplement thereto), will comply in all
material respects with the Conversion Regulations, except to the
extent waived or otherwise approved by the OTS. The Form AC,
including the Prospectus (including any amendment or supplement
thereto), does not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this
Section 4(e) shall not apply to statements or omissions made
in reliance upon and in conformity with written information
furnished to the Company by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus contained in the Form
AC under the caption “The Conversion; Plan of
Distribution—Marketing and Distribution;
Compensation.”
(f) The Company has filed the
Holding Company Application with the OTS and has published notice
of such filing and the Holding Company Application is accurate and
complete in all material respects. 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, to the knowledge of
the Company or the Bank, threatened by the OTS. At the date of such
approval, the Holding Company Application complied in all material
respects with the applicable provisions of HOLA and the regulations
promulgated thereunder, except as the OTS has expressly waived such
regulations in writing.
(g) The Company and the MHC 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 on the Closing Date referred to in Section 2,
complied and will comply in all material respects with the
applicable requirements of the 1933 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. No approval of any other regulatory or supervisory or other
public authority is required in connection with the distribution of
the Prospectus and any supplemental sales literature that has not
been obtained and a copy of which has been delivered to the Agent.
The Company and the MHC have not distributed any offering material
in connection with the Offering except for the Prospectus and any
supplemental sales material that has been filed with the
Registration Statement and the Form AC and authorized for use by
the Commission and the OTS. The information contained in the
supplemental sales material filed as an exhibit to both the
Registration Statement and the Form AC does not conflict in any
material respects with information contained in the Registration
Statement and the Prospectus.
(h) The Plan has been adopted by the
Boards of Directors of each of the OBA Parties and, at the Closing
Date, will have been approved by the members of the MHC, 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 to the extent waived or otherwise approved by
the OTS, and all other applicable laws, regulations, decisions
and
8
orders, including all terms,
conditions, requirements and provisions precedent to the Offering
imposed upon the Company and the Bank by the OTS, the Commission,
or any other regulatory authority and in the manner described in
the Prospectus. To the best knowledge of the OBA Parties, no person
has sought to obtain review of the final action of the OTS in
approving the Conversion pursuant to the HOLA.
(i) The Bank has been duly organized
and validly existing as a federally-chartered savings bank in stock
form and upon completion of the Conversion will continue to be a
duly organized and validly existing federally-chartered savings
bank in stock form, in both instances duly authorized to conduct
its business and own its property as described in the Registration
Statement and the Prospectus; the Bank has obtained all licenses,
permits and other governmental authorizations currently required
for the conduct of its business, except those that individually or
in the aggregate would not have a material adverse effect on the
conduct of the business, financial condition, results of
operations, affairs or prospects of the OBA Parties, taken as a
whole (a “Material Adverse Effect”); all such licenses,
permits and governmental authorizations are in full force and
effect, and the Bank is in compliance with all material laws,
rules, regulations and orders applicable to the operation of its
business, except where failure to be in compliance would not have a
Material Adverse Effect; the Bank is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of
property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more
of such jurisdictions would not have a Material Adverse Effect. The
Bank does not own equity securities or any equity interest in any
other business enterprise except as described in the Prospectus or
as would not be material to the operations of the OBA Parties,
taken as a whole. The authorized capital stock of the Bank consists
of 10,000,000 shares of common stock, par value $0.01 per share
(the “Bank Common Stock”), and 1,000,000 shares of
preferred stock, par value $0.01 per share (the “Bank
Preferred Stock”), of which 100 shares of Bank Common Stock
and no shares of Bank Preferred Stock are issued and outstanding as
of the date hereof; no additional shares of Bank Common Stock and
no shares of Bank Preferred Stock will be issued prior to the
Closing (defined below); the issued and outstanding shares of Bank
Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable and have been issued in compliance
with all federal and state securities laws; the MHC owns,
indirectly, 100 shares of Bank Common Stock beneficially and of
record free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; the terms and provisions of the
Bank Common Stock conform to all statements thereto contained in
the Prospectus. At the Closing, (i) all of the outstanding
capital stock of the Bank will be duly authorized, validly issued
and fully paid and non-assessable and owned directly by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrances or legal or equitable claim and (ii) the Company
will have no subsidiaries other than the Bank. The Conversion will
be effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except
with respect to the filing of certain post-sale, post-Conversion
reports, and documents in compliance with the 1933 Act Regulations,
the Conversion Regulations or letters of approval, at the Closing
Date, all terms, conditions, requirements and provisions with
respect to the Conversion imposed by the Commission and the OTS if
any, will have been complied with by the OBA Parties in all
material respects or appropriate waivers will have been obtained
and all applicable notice and waiting periods will have been
satisfied, waived or elapsed.
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(j) The Company is duly organized,
validly existing and in good standing as a corporation under the
laws of the State of Maryland with full corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus, and the Company is, and at the Closing Date will be,
qualified to do business as a foreign corporation in each
jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a Material Adverse Effect. 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 Adverse
Effect; all such licenses, permits and governmental authorizations
are in full force and effect, and the Company is in all material
respects complying therewith and with all laws, rules, regulations
and orders applicable to the operation of its business. There are
no outstanding warrants or options to purchase any securities of
the Company.
(k) The MHC is duly organized,
validly existing and in good standing as a mutual holding company
organized under the laws of the United States of America with full
corporate power and authority to own and operate its properties and
to conduct its business as described in the Registration Statement
and the Prospectus and, at the Closing Date, the corporate
existence of the MHC will cease to exist. The MHC 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 governmental authorizations
are in full force and effect, and the MHC is in all material
respects complying therewith and with all laws, rules, regulations
and orders applicable to the operation of its business.
(l) OBA Bancorp is duly organized,
validly existing and in good standing as a stock holding company
organized under the laws of the United States of America with full
corporate power and authority to own and operate its properties and
to conduct its business as described in the Registration Statement
and the Prospectus and, at the Closing Date, the corporate
existence of OBA Bancorp will cease to exist. OBA Bancorp 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
governmental authorizations are in full force and effect, and OBA
Bancorp is in all material respects complying therewith and with
all laws, rules, regulations and orders applicable to the operation
of its business.
(m) Except as described in the
Prospectus there are no contractual encumbrances or restrictions or
requirements or material legal restrictions or requirements
required to be described therein, on the ability of any of the OBA
Parties, (A) to pay dividends or make any other distributions
on its capital stock or to pay any indebtedness owed to another
party, (B) to make any loans or advances to, or investments
in, another party or (C) to
10
transfer any of its property or
assets to another party. Except as described in the Prospectus,
there are no restrictions, encumbrances or requirements affecting
the payment of dividends or the making of any other distributions
on any of the capital stock of the Company.
(n) The Bank has properly
administered all accounts for which it acts as a fiduciary,
including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of
the governing documents and applicable state and federal law and
regulation, except where the failure to do so would not have a
Material Adverse Effect. Neither the Bank, nor any of its
respective directors, officers or employees has committed any
material breach of trust with respect to any such fiduciary
account, and the accountings for each such fiduciary account are
true and correct in all material respects and accurately reflect
the assets of such fiduciary account in all material
respects.
(o) The Bank is a member of the
Federal Home Loan Bank of Atlanta (“FHLB-Atlanta”). The
deposit accounts of the Bank are insured by the FDIC up to the
applicable limits, and no proceedings for the termination or
revocation of such insurance are pending or, to the best knowledge
of the Company or the Bank, threatened. The Bank is a
“qualified thrift lender” within the meaning of 12
U.S.C. § 1467a(m).
(p) The Bank and the Company have
good and marketable title to all real property and good title to
all other assets material to the business of the Company and the
Bank, taken as a whole, and to those properties and assets
described in the Registration Statement and Prospectus as owned by
them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration
Statement and Prospectus or as are not material to the business of
the Company and the Bank, taken as a whole; and all of the leases
and subleases material to the business of the Company and the Bank,
taken as a whole, under which the Company or the Bank hold
properties, including those described in the Registration Statement
and Prospectus, are in full force and effect.
(q) The Company has received an
opinion of its special counsel, Luse Gorman Pomerenk &
Schick, P.C., with respect to the federal income tax consequences
of the Conversion and the opinions of its tax advisor, Beard Miller
Company LLP, with respect to the Maryland income tax consequences
of the Conversion and all material aspects of such opinions are
accurately summarized in the Registration Statement and the
Prospectus. The Company and the Bank represent and warrant that the
facts upon which such opinions are based are truthful, accurate and
complete in all material respects. Neither the Company nor the Bank
will take any action inconsistent therewith.
(r) Each of the OBA Parties has all
such power, authority, authorizations, approvals and orders as may
be required to enter into this Agreement, to carry out the
provisions and conditions hereof and to issue and sell the Shares
to be sold by the Company as provided herein and as described in
the Prospectus, subject to approval or confirmation by the OTS of
the final Appraisal. The execution, delivery and performance of
this
11
Agreement and the consummation of
the transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of each of
the OBA Parties. This Agreement has been validly executed and
delivered by each of the OBA Parties and, assuming due execution
and delivery by the Agent, is the valid, legal and binding
agreement of each of the OBA Parties enforceable in accordance with
its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors’ rights
generally or the rights of creditors of savings and loan holding
companies, the accounts of whose subsidiaries are insured by the
FDIC, or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law,
and except to the extent, if any, that the provisions of Sections 9
and 10 hereof may be unenforceable as against public policy or
pursuant to applicable Federal law and the rules and regulations of
the Federal Reserve System).
(s) None of the OBA Parties is in
violation of any directive received from the OTS, the FDIC, or any
other agency to make any material change in the method of
conducting its business so as to comply in all material respects
with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the
OTS and the FDIC) and, except as may be set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus, there is no suit or proceeding or charge or action
before or by any court, regulatory authority or governmental agency
or body, pending or, to the knowledge of any of the OBA Parties,
threatened, which might materially and adversely affect the
Offering, or which might result in any Material Adverse
Effect.
(t) The consolidated financial
statements, schedules and notes related thereto which are included
in the General Disclosure Package and the Prospectus fairly present
the balance sheet, income statement, statement of changes in equity
capital and statement of cash flows of the MHC on a consolidated
basis at the respective dates indicated and for the respective
periods covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the 1933
Act Regulations and Title 12 of the Code of Federal Regulations.
Such consolidated financial statements, schedules and notes related
thereto have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”) consistently
applied through the periods involved except as noted therein and
present fairly in all material respects the information required to
be stated therein and are consistent with financial statements and
other reports filed by the Bank with the OTS, except to the extent
that accounting principles employed in such filings conform to the
requirements of the OTS and not necessarily to GAAP. The other
financial, statistical and pro forma information and related notes
included in the Prospectus present fairly the information shown
therein on a basis consistent with the audited and unaudited
consolidated financial statements of the Bank included in the
Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been properly applied on the basis described
therein.
(u) The OBA Parties carry, or are
covered by, insurance in such amounts and covering such risks as
the OBA Parties deem reasonably adequate for the conduct of their
respective businesses and the value of their respective
properties.
12
(v) Since the respective dates as of
which information is given in the Registration Statement including
the Prospectus and except as disclosed in the General Disclosure
Package and the Prospectus: (i) there has not been any
material adverse change, financial or otherwise, in the condition
of the OBA Parties and their subsidiaries, considered as one
enterprise, or in the earnings, capital, properties, business or
prospects of the OBA Parties and their subsidiaries 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 any of the OBA Parties or in the principal amount
of the OBA Parties’ consolidated assets which are classified
by any of such entities as impaired, substandard, doubtful or loss
or in loans past due 90 days or more or real estate acquired by
foreclosure, by deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in equity capital or total
assets of any of the OBA Parties; nor has any of the OBA 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 the OBA Parties; (iv) there has not been any
material adverse change in the aggregate dollar amount (on a
consolidated basis with the OBA Parties) of the MHC’s
deposits or its net worth; (v) there has been no material
adverse change in any of the OBA Parties’ relationship with
its insurance carriers, including, without limitation, cancellation
or other termination of any of the OBA Parties’ fidelity bond
or any other type of insurance coverage; (vi) there has been
no material change in management of any of the OBA Parties;
(vii) none of the OBA Parties has sustained any material loss
or interference with its respective business or properties from
fire, flood, windstorm, earthquake, accident or other calamity,
whether or not covered by insurance; (viii) none of the OBA
Parties has defaulted in the payment of principal or interest on
any outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the OBA Parties
conform in all material respects to the descriptions thereof
contained in the General Disclosure Package and the Prospectus; and
(x) none of the OBA Parties has any material liabilities,
contingent or otherwise, except as set forth in the
Prospectus.
(w) None of the OBA Parties is
(i) in violation of their respective articles, charters or
bylaws (and none of the OBA Parties will not be in violation of its
articles of incorporation, charter or bylaws upon completion of the
Conversion), or (ii) in default in the performance or
observance of any obligation, agreement, covenant, or condition
contained in any material contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it
or any of its property may be bound. The execution and delivery of
this Agreement and the consummation of the transactions herein
contemplated will not: (i) conflict with or constitute a
breach of, or default under, or result in the creation of any lien,
charge or encumbrance upon any of the assets of any of the OBA
Parties pursuant to the respective articles of incorporation,
charters or bylaws of the OBA Parties or any contract, lease or
other instrument in which the OBA Parties has a beneficial
interest, or any applicable law, rule, regulation or order;
(ii) violate any authorization, approval, judgment, decree,
order, statute, rule or regulation applicable to any of the OBA
Parties, except for such violations which would not have a Material
Adverse Effect; or (iii) result in the creation of any
material lien, charge or encumbrance upon any property of the OBA
Parties.
13
(x) All documents made available or
delivered by, or to be made available to or delivered by the OBA
Parties or their representatives in connection with the issuance
and sale of the Shares, including records of account holders and
depositors 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 OBA Parties or their
representatives, to the best knowledge of the OBA 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.
(y) Upon consummation of the
Conversion, the authorized, issued and outstanding equity capital
of the Company will be within the range set forth in the General
Disclosure Package and the Prospectus under the caption
“Capitalization,” and no Shares have been or will be
issued and outstanding prior to the Closing Date; the Shares will
have been duly and validly authorized for issuance and, when issued
and delivered by the Company pursuant to the Plan against payment
of the consideration calculated as set forth in the Plan and in the
Prospectus, will be duly and validly issued, 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 by the Company; except to the extent that
subscription rights and priorities pursuant thereto exist pursuant
to the Plan, no preemptive rights exist with respect to the Shares;
and the terms and provisions of the Shares will conform in all
material respects to the description thereof contained in the
Registration Statement and the Prospectus. The Shares have been
approved for listing on the Nasdaq Capital Market, subject to
issuance. Upon the issuance of the Shares, good title to the Shares
will be transferred from the Company to the purchasers thereof
against payment therefor, subject to such claims as may be asserted
against the purchasers thereof by third-party claimants.
(z) 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 OBA Parties in the
due performance and observance of any term, covenant, agreement,
obligation, representation, warranty or condition of any indenture,
mortgage, deed of trust, note, bank loan or credit agreement,
lease, license, Permit or any other instrument or agreement to
which the OBA Parties or by which any of them or any of their
respective property is bound or affected which, in any such case,
could have, individually or in the aggregate with other breaches,
violations or defaults, a Material Adverse Effect; each of such
agreements is in full force and effect and is the legal, valid and
binding agreement of the applicable party and the other parties
thereto, enforceable, to the knowledge of the OBA Parties, in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity and no other party to any such agreement has
instituted or, to the knowledge of the OBA Parties, threatened any
action or proceeding wherein any of the OBA Parties or any
subsidiary thereof would or might be alleged to be in default
thereunder where such action or proceeding, if determined adversely
to the OBA Parties, would have a Material Adverse Effect. There are
no contracts or documents that are required to be filed as exhibits
to the Registration Statement or described in the Registration
Statement, the Prospectus, or any Permitted Free Writing Prospectus
which are not so filed or described as required, and
such
14
contracts and documents as are
summarized in the Registration Statement, the Prospectus, and any
Permitted Free Writing Prospectus are fairly summarized in all
material respects. No party has sent or received any notice
indicating the termination of or intention to terminate any of the
contracts or agreements referred to or described in the
Registration Statement, the Prospectus, or any Permitted Free
Writing Prospectus, or filed as an exhibit to the Registration
Statement, and, to the knowledge of the OBA Parties, no such
termination has been threatened by any party to any such contract
or agreement.
(aa) 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 in the Registration Statement, none of the OBA Parties
has or will have 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.
(bb) None of the OBA Parties
maintains any “pension plan,” as defined in the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). In addition, (A) the employee benefit
plans, including employee welfare benefit plans, of the OBA Parties
(the “Employee Plans”) have been operated in compliance
with the applicable provisions of ERISA, the Internal Revenue Code
of 1986, as amended (the “Code”), all regulations,
rulings and announcements promulgated or issued thereunder and all
other applicable laws and governmental regulations, (B) no
reportable event under Section 4043(c) of ERISA has occurred
with respect to any Employee Plan of the OBA Parties for which the
reporting requirements have not been waived by the Pension Benefit
Guaranty Corporation, (C) no prohibited transaction under
Section 406 of ERISA, for which an exemption does not apply,
has occurred with respect to any Employee Plan of the OBA Parties
and (D) all Employee Plans that are group health plans have
been operated in compliance with the group health plan continuation
coverage requirements of Section 4980B of the Code, except to
the extent such noncompliance, reportable event or prohibited
transaction would not have, individually or in the aggregate, a
Material Adverse Effect. There are no pending or, to the knowledge
of the OBA Parties, threatened, claims by or on behalf of any
Employee Plan, by any employee or beneficiary covered under any
such Employee Plan or by any governmental authority, or otherwise
involving such Employee Plans or any of their respective
fiduciaries (other than for routine claims for
benefits).
(cc) No approval of any regulatory
or supervisory or other public authority is required in connection
with the execution and delivery of this Agreement or the issuance
of the Shares, except for the approval of the Commission and the
OTS, and any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered, and except as may be
required under the rules and regulations of the FINRA.
(dd) Beard Miller Company LLP, which
has certified the audited consolidated financial statements and
schedules of the MHC included in the Prospectus, has advised the
OBA Parties in writing that they are, with respect to the OBA
Parties, independent registered public accountants within the
applicable rules of the Public Company Accounting Oversight Board
(United States).
15
(ee) RP Financial, LC., which has
prepared the Appraisal, has advised the MHC in writing that it is
independent of the OBA Parties within the meaning of the Conversion
Regulations and is believed by the OBA Parties to be experienced
and expert in the valuation and the appraisal of business entities,
including savings institutions, and the OBA Parties believe that RP
Financial, LC. has prepared the pricing information set forth in
the Prospectus in accordance with the requirements of the
Conversion Regulations.
(ff) The OBA Parties have timely
filed or extended all required federal, state and local tax
returns; the OBA Parties have paid all taxes that have become due
and payable in respect of such returns, except where permitted to
be extended or where such taxes may be contested in good faith,
have made adequate reserves for similar future tax liabilities and
no deficiency has been asserted with respect thereto by any taxing
authority. The OBA Parties have no knowledge of any tax deficiency
which has been or might be assessed against either of them which,
if the subject of an unfavorable decision, ruling or finding, could
have, individually or in the aggregate with other tax deficiencies,
a Material Adverse Effect. All material tax liabilities have been
adequately provided for in the financial statements of the OBA
Parties in accordance with GAAP. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement by the
Company or with the issuance or sale by the Company of the
Shares.
(gg) Each of the OBA Parties is in
compliance in all material respects with the applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(hh) All Sales Information (as
defined in Section 9(a)) used by the Company in connection
with the Conversion that is required by the OTS to be filed has
been filed with and approved by the OTS.
(ii) To the knowledge of the OBA
Parties, none of the OBA Parties or the employees of the OBA
Parties has made any payment of funds of the OBA Parties as a loan
for the purchase of the Shares 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.
(jj) None of the OBA Parties has:
(i) issued any securities within the last 18 months (except
for notes to evidence bank loans and reverse repurchase agreements
or other liabilities in the ordinary course of business or as
described in the Prospectus); (ii) had any material dealings
within the 12 months prior to the date hereof with any member of
the FINRA, or any person related to or associated with such member,
other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of United States
government and agency and other securities in the ordinary
course
16
of business; (iii) entered into
a financial or management consulting agreement except as
contemplated hereunder; and (iv) engaged any intermediary
between the Agent and the Company or the Bank in connection with
the offering of the Shares, and no person is being compensated in
any manner for such service.
(kk) The OBA Parties have not relied
upon the Agent or its legal counsel for any legal, tax or
accounting advice in connection with the Conversion.
(ll) The records used by the OBA
Parties to determine the identities of Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members are
accurate and complete in all material respects.
(mm) None of the OBA Parties is, and
neither intends to conduct business in a manner which would cause
it to become, an “investment company,” an entity
“controlled” by an “investment company” or
an “investment adviser” within the meaning of the
Investment Company Act of 1940, as amended, or the Investment
Advisers Act of 1940, as amended.
(nn) None of the OBA Parties or any
properties owned or operated by any of the OBA Parties, is in
violation of or liable under any Environmental Law (as defined
below), except for such violations or liabilities that,
individually or in the aggregate, would not have a Material Adverse
Effect. 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 OBA Parties, threatened relating to the liability of any
property owned or operated by the OBA Parties under any
Environmental Law. To the knowledge of the OBA Parties, there are
no events or circumstances that could form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or
affecting the OBA Parties relating to any Environmental Law. For
purposes of this subsection, the term “Environmental
Law” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement
with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface soil, subsurface soil, plant and animal life
or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of any
substance presently listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated,
whether by type or by quantity, including any material containing
any such substance as a component.
(oo) The OBA Parties maintain 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
accountability for assets, (C) access to
17
assets is permitted only in
accordance with management’s general or
