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EXHIBIT 1.2
FORM OF AGENCY AGREEMENT
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2,645,682 Shares
(subject to increase up to 3,042,563 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
(a Missouri corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
___________ __, 2006
SANDLER O'NEILL & PARTNERS, L.P.
919 Third Avenue, 6th Floor
New York, New York 10022
Ladies and Gentlemen:
Liberty Bancorp, Inc., a Missouri corporation (the "Company"),
Liberty
Savings Mutual Holding Company, a federal mutual holding company
(the "MHC"),
and Liberty Savings Bank, F.S.B., a federally chartered stock
savings bank (the
"Bank"), 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 2,645,682 shares (subject to increase up to
3,042,563 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 $0.01 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
Conversion and Reorganization (the "Plan") adopted by the Boards of
Directors of
the MHC and the Bank pursuant to which the Bank intends to convert
from the
mutual to stock holding company form of organization and issue all
of its stock
to the Company pursuant to the following steps: (i) the Bank's
establishment of
the Company as a Missouri-chartered corporation; (ii) the
conversion of the MHC
to an interim federal stock savings bank ("Interim No. 1") and its
simultaneous
merger into the Bank, whereupon the outstanding common stock of the
Bank held by
the MHC will be canceled; (iii) the establishment by the Company of
a second
interim federal stock savings bank ("Interim No. 2"); (iv) the
merger of Interim
No. 2 with and into the Bank, with the Bank as the surviving
entity; and (v) the
sale and exchange of Common Stock pursuant to the Plan and Office
of Thrift
Supervision ("OTS") regulations. As a result of the merger of
Interim No. 2 with
and into the Bank, the Bank will become a wholly owned subsidiary
of the
Company. The
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outstanding shares of common stock of the Bank held by persons
other than the
MHC will be converted into Common Stock pursuant to an exchange
ratio as defined
in the Plan, which will result in the holders of such shares
receiving and
owning in the aggregate approximately the same percentage of the
Common Stock to
be outstanding upon the completion of the conversion as the
percentage of Bank
common stock owned by them in the aggregate immediately prior to
consummation of
the conversion.
Pursuant to the Plan, the Company will offer to certain depositors
and
borrowers 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
certain members of the general public in a community offering (the
"Community
Offering"), with preference given first to persons who are Bank
stockholders and
second to natural persons and trusts of natural persons who are
residents of
Clay, Clinton, Platte and Jackson Counties, Missouri. 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." The conversion and reorganization
of the Bank
from mutual to stock holding company form, the formation of the
Company, Interim
No. 1, Interim No. 2 and the related mergers, the exchange of
Bank's public
stockholders' shares for shares of Common Stock (the "Exchange
Shares"), the
acquisition of the capital stock of the Bank by the Company and the
Offerings
are hereinafter referred to collectively as the "Conversion." It is
acknowledged
that the number of Securities to be sold in the Conversion may be
increased or
decreased as described in the Prospectus (as hereinafter defined).
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.
The
Company has filed with the Securities and Exchange Commission
(the
"Commission") a registration statement on Form SB-2 (No.
333-_______), 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
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Offering or the 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 Subscription and Community Offering. Such prospectus contains
information
with respect to the Bank, the Company, the MHC and the Common
Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(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 sixth paragraph of the section "The Conversion- Plan of
Distribution and Marketing Arrangements" of the Prospectus).
(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. 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), the
Company met
the
conditions required by Rules 164 and 433 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 and, if not required to be
filed, will
retain such free writing prospectus in the Company's records
pursuant to
Rule
433(g) and if any issuer free writing prospectus is
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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.
(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),
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.
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, that is made available without restriction pursuant to
Rule
433(d)(8)(ii) or otherwise, even though not required to be
filed
with the
Commission.
(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
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(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 (the "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 (the "OTS
Regulations"), the MHC has filed with the OTS an Application for
Approval
of
Conversion on Form AC, and has filed such amendments thereto
and
supplementary materials as may have been required to the date
hereof (such
application, as amended to date, if applicable, and as from time to
time
amended or supplemented hereafter, is hereinafter referred to as
the
"Conversion Application"). The Offerings and the Plan have been
duly
adopted by the Boards of Directors of the MHC and the Bank and
such
adoption has not since been rescinded or revoked. The
Conversion
Application, which includes applications to form and merge Interim
No. 1
and
Interim No. 2, has been approved by the OTS. The Prospectus, the
proxy
statement for the solicitation of proxies from MHC members for the
special
meeting to approve the Plan (the "Members' Proxy Statement") and
the proxy
statement for the solicitation of proxies from Bank stockholders
for the
special meeting to approve the Plan (the "Stockholders' Proxy
Statement")
all
included as part of the Conversion Application have been approved
for
use
by the OTS, such approval remains
5
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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 Conversion 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 Members' Proxy Statement,
the
Stockholders' Proxy Statement and any other proxy solicitation
materials
will
comply in all material respects with the applicable provisions of
the
OTS
Regulations and those rules and regulations of the Commission under
the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as from
time
to time amended or supplemented pursuant to the Exchange Act or
otherwise (the "Exchange Act Regulations") (the Securities Act
Regulations
and
the Exchange Act Regulations are collectively referred to herein as
the
"Commission 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 will
promptly
file
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
Members'
Proxy Statement, the Stockholders' 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 threatened.
(ix) At the Closing Time referred to in Section 2, the Company,
the
MHC
and the Bank will have completed the conditions precedent to
the
Conversion 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
Conversion imposed upon the Company, the MHC or the Bank by the
OTS, the
Federal Deposit Insurance Corporation (the "FDIC"), or any other
regulatory
authority, other than those which the regulatory authority permits
to be
completed after the
Conversion. The Conversion, 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) FinPro, Inc. (the "Appraiser"), which prepared the valuation
of
the
Bank as part of the Conversion, 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.
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(xi) Michael Trokey & Company, P.C., the accountants who
audited and
reported on the financial statements 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 (the "PCAOB"), and such accountants are,
with
respect to the
Company, the MHC and the Bank, independent certified public
accountants as required by 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
(the
"Sarbanes-Oxley Act").
(xii) The only direct subsidiary of the MHC is the Bank. The Bank
does
not
have any active subsidiaries. The Bank does not, directly or
indirectly, control any other corporation, limited liability
company,
partnership, joint venture, association, trust or other
business
organization. Upon completion of the Conversion, the only direct
subsidiary
of
the Company will be the Bank.
(xiii) The
financial statements and the related notes thereto included
in
the Registration Statement and the Prospectus present fairly
the
financial position of the MHC and the Bank at the dates indicated
and the
results of operations, retained earnings, stockholders' 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.
(xiv) 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,
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,
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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.
(xv) The Company has been duly incorporated and is validly existing
as
a
corporation in good standing under the laws of the State of
Missouri with
full
corporate power and authority to own, lease and operate its
properties
and
to conduct its business as described in the Prospectus and to
enter
into
and perform its obligations under this Agreement and the
transactions
contemplated hereby; and the Company is duly qualified to transact
business
and
is in good standing in the State of Missouri 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, business affairs or
prospects of the Company, the MHC and the Bank, considered as
one
enterprise (a "Material Adverse Effect").
(xvi) Upon consummation of the Conversion, the authorized, issued
and
outstanding capital stock of the Company will be 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); no shares of Common Stock have been or will be
issued
and
outstanding prior to the Closing Time referred to in Section 2; at
the
time
of Conversion, 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 Exchange Shares have
been duly
authorized for issuance and, when issued, 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 and the
Exchange
Shares is not subject to preemptive or other similar rights.
(xvii) The MHC has been duly chartered and is validly existing as
a
mutual holding company under the laws of the United States of
America with
corporate power and authority to own, lease and operate its
properties and
to
conduct its business as described in the Prospectus and to enter
into
and
perform its obligations under this Agreement; the MHC is duly
qualified
to
transact business and in good standing under the laws of the State
of
Missouri and is qualified to do business 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 have a Material Adverse Effect on the financial
condition,
results of operations, business affairs or prospects of the
Company, the
MHC
and the Bank, considered as one enterprise; upon consummation of
the
Conversion, the MHC will convert into Interim No. 1, which will
merge with
and
into the Bank, with the Bank being the surviving institution.
(xviii) The MHC has no capital stock. All holders of the
savings,
demand or other authorized accounts of the Bank are members of the
MHC.
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(xix) The Bank has been duly organized and is validly existing as
a
federally chartered savings bank in stock form and upon
consummation of the
Conversion will continue to be a federally chartered savings bank
in stock
form, in both instances with full corporate power and authority to
own,
lease and operate its properties and to conduct its business as
described
in
the Prospectus and to enter into and perform its obligations under
this
Agreement and the transactions contemplated thereby; the Company,
the MHC
and
the Bank have obtained all licenses, permits and other
governmental
authorizations currently required for the conduct of their
respective
businesses or required for the conduct of their respective
businesses as
contemplated by the Holding Company Application and the
Conversion
Application, except where the failure to obtain such licenses,
permits or
other governmental authorizations would not have a Material Adverse
Effect
on
the financial condition, results of operations or business affairs
of
the
Company, the MHC and the Bank, considered as one enterprise; 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; neither the Company, the MHC nor
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 on the financial condition, results of operations or
business
affairs of the Company, the MHC and the Bank, considered as one
enterprise;
and
the Bank is duly qualified to transact business and is in good
standing
under the laws of the United States and in each 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 have a Material Adverse Effect on the financial condition,
results of
operations or business affairs of the Company, the MHC and the
Bank,
considered as one enterprise.
(xx) The Bank is a member in good standing of the Federal Home
Loan
Bank
of Des Moines; the deposit accounts of the Bank are insured by
the
FDIC
up to the applicable limits and upon consummation of the
Conversion,
the
liquidation account for the benefit of eligible account holders
and
supplemental eligible account holders will be duly established
in
accordance with the requirements of the OTS Regulations. The Bank
is a
"qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(xxi) The authorized capital stock of the Bank consists of
_______
shares of common stock, par value $_____ per share (the "Bank
Common
Stock"), and _________ shares of preferred stock, par value $____
per share
(the
"Bank Preferred Stock") of which _________ 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 Time referred
to
in
Section 2; 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 800,000 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
relating
thereto contained in the Prospectus. At the time of the
consummation of the
Conversion,
9
<PAGE>
immediately following the mergers of Interim No. 1 and Interim No.
2 with
and
into the Bank, with the Bank being the surviving institution,
the
shares of common stock of Interim No. 2 held by the Company shall
be
converted into shares of Bank Common Stock on a one-for-one basis.
Upon
consummation of the Conversion, the authorized capital stock of the
Bank
will
be _____ shares of common stock, par value $____ per share, and
________ shares of preferred stock, par value $____ per share, and
the
issued and outstanding capital stock of the Bank will be _______
shares of
Bank
Common Stock. 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 described in the Plan and 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; and the certificates representing the
shares of
the
Bank Common Stock will conform with the requirements of applicable
laws
and
regulations; and the issuance of the Bank Common Stock is not
subject
to
preemptive or similar rights.
(xxii) From the date of their formation until the Closing Time,
neither Interim No. 1 nor Interim No. 2 will be in violation of
their
respective charter or bylaws, nor will either Interim No. 1 or
Interim No.
2
engage in any business other than in connection with
organizational
matters and actions taken in connection with the consummation of
the
Conversion.
(xxiii) 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.
(xxiv) Subsequent to the respective dates as of which information
is
given in the Registration Statement and the Prospectus and prior to
the
Closing Time, except as otherwise may be indicated or contemplated
therein,
none
of the Company, the MHC or the Bank will have (A) issued any
securities or incurred any liability or obligation, direct or
contingent,
or
borrowed money, except borrowings in the ordinary course of
business
from
the same or similar sources and in similar amounts as indicated in
the
Prospectus, or (B) entered into any transaction or series of
transactions
which is material in light of the business of the Company, the MHC
and the
Bank, considered as one enterprise.
(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 securities laws of various jurisdictions.
(xxvi) None of the Company, the MHC or the Bank is in violation
of
their respective charters of its certificate of incorporation,
organization
certificate, articles of incorporation or charter or bylaws; and
none of
the
Company, the MHC or the Bank is in
10
<PAGE>
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
on
the financial condition, results of operations, business affairs
or
prospects of the Company, the MHC and the Bank considered as
one
enterprise; 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 or the Conversion Application which have not been so
filed.
(xxvii) The Conversion, 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 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 on the financial condition, results of operations, business
affairs
or
prospects of the Company, the MHC and the Bank, considered as
one
enterprise; nor will such action result in any violation of the
provisions
of
the respective the certificate of incorporation, organization
certificate, articles of incorporation or charter or bylaws of the
Company,
the
MHC or the Bank, or any applicable law, administrative regulation
or
administrative or court decree.
(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
result in any Material Adverse Effect on the financial condition,
results
of
operations, business affairs or prospects of the Company, the MHC
and
the
Bank considered as one enterprise.
(xxix) Each of the Company, the MHC and the Bank has good and
marketable title to all 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
11
<PAGE>
or
the Bank, enforceable in accordance with their terms, except as may
be
limited by bankruptcy, insolvency or similar laws and availability
of
equitable remedies.
(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 MHC and its subsidiaries have conducted and are
conducting
their business so as to comply in all material respects 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
restricts in any material respect the conduct of their business or
that in
any
material 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 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, in
the
reasonable judgment of the Company or the Bank, is expected to
result
in a
Material Adverse Effect on 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 materially
and
adversely affect the consummation of the Conversion or the
performance of
this
Agreement. As used herein, the term "Regulatory 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 Effect on 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,
the
performance of this Agreement or the consummation of the
Conversion; 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,
12
<PAGE>
including ordinary routine litigation incidental to the business,
are
considered in the aggregate not material; and there are no
material
contracts or documents of the Company, MHC or Bank which are
required to be
filed as exhibits to the Registration Statement or Conversion
Application
which have not been so filed.
(xxxii) The Company, MHC and Bank have obtained (i) an opinion of
its
counsel, Muldoon Murphy & Aguggia, LLP with respect to the
legality of the
Securities and the Exchange Shares to be issued and the federal
income tax
consequences of the Conversion and (ii) the opinion of Michael
Trokey &
Company, P.C. with respect to the state tax consequences of the
Conversion,
copies of which are filed as exhibits to the Registration
Statement; all
material aspects of the aforesaid opinions are accurately
summarized in the
Prospectus; 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 Conversion
and
the
Offerings and sale of the Common Stock and the application of the
net
proceeds therefrom, will not be, required to be registered 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 on the financial condition,
results
of
operations, business affairs or prospects of the Company, the MHC
and
the
Bank, considered as one enterprise.
(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 purchase securities in an amount up to 8.0% of the
Securities
sold
in the Conversion, 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
13
<PAGE>
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 in
all
material respects 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 in all material respects 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 on the financial condition, results of
operations
or
business affairs of the Company, MHC and the Bank, considered as
one
enterprise. 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.
(xxxix) The Company, the MHC and the Bank have 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. The Company, the MHC and the Bank have no
knowledge of any tax deficiency which has been asserted or could
be
asserted against the Company, the MHC or the Bank.
14
<PAGE>
(xl) The Company has received all approvals required to consummate
the
Conversion, and to have the Securities and Exchange Shares quoted
on the
Nasdaq Capital Market effective as of the Closing Time referred to
in
Section 2 hereof.
(xli) The Company has filed a registration statement for the
Securities and Exchange Shares under Section 12(g) of 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
Conversion.
(xlv) The records of eligible account holders, supplemental
eligible
account holders, and other depositors or borrower members are
accurate and
complete in all material respects.
(xlvi) The Company, the MHC and the Bank are in compliance in
all
material respects 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 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 in all material
respects
and
nothing has occurred, whether by action or by failure to act,
which
would cause the loss of such qualification.
(xlvii) The Company is in compliance with the applicable provisions
of
the
Sarbanes-Oxley Act, the rules and regulations of the Commission
thereunder, and the Nasdaq corporate governance rules applicable to
the
Company, and will use its best efforts to comply with those
provisions of
the
Sarbanes-Oxley Act and the Nasdaq corporate governance rules that
will
become effective in the future upon their effectiveness.
15
<PAGE>
(b)
Any certificate signed by any officer of the Company, the MHC or
the
Bank and delivered to either of the Agent or counsel for the Agent
shall be
deemed a representation and warranty by the Company, the MHC or the
Bank to the
Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT
OF SANDLER O'NEILL; SALE AND DELIVERY OF THE
SECURITIES; CLOSING. On the basis of the representations and
warranties herein
contained and subject to the terms and conditions herein set forth,
the Company
hereby appoints Sandler O'Neill as its Agent to consult with and
advise the
Company, and to assist the Company with the solicitation of
subscriptions and
purchase orders for Securities, in connection with the Company's
sale of Common
Stock in the Offerings. On the basis of the representations and
warranties
herein contained, and subject to the terms and conditions herein
set forth,
Sandler O'Neill accepts such appointment and agrees to use its best
efforts to
assist the Company with the solicitation of subscriptions and
purchase orders
for Securities in accordance with this Agreement; provided,
however, that the
Agent shall not be obligated to take any action which is
inconsistent with any
applicable laws, regulations, decisions or orders. The services to
be rendered
by Sandler O'Neill pursuant to this appointment include the
following: (i)
consulting as to the securities marketing implications of any
aspect of the Plan
or related corporate documents; (ii) reviewing with the Board of
Directors
financial and securities marketing implications of the Appraiser's
appraisal of
the Common Stock; (iii) reviewing all offering documents, including
the
Prospectus, stock order form and related offering materials (it
being understood
that preparation and filing of such documents is the sole
responsibility of the
Company and the Bank and their counsel); (iv) assisting in the
design and
implementation of a marketing strategy for the Offerings; (v)
assisting Bank
management in scheduling and preparing for meetings with potential
investors and
broker-dealers; and (vi) providing such other general advice and
assistance as
may be requested to promote the successful completion of the
Offering.
The
appointment of the Agent hereunder shall terminate upon the earlier
to
occur of (a) forty-five (45) days after the last day of the
Subscription and
Community Offering, unless the Company and the Agent agree in
writing to extend
such period and the OTS agrees to extend the period of time in
which the
Securities may be sold, or (b) the receipt and acceptance of
subscriptions and
purchase orders for all of the Securities, or (c) the completion of
the
Syndicated Community Offering.
If
any of the Securities remain available after the expiration of
the
Subscription and Community Offering, at the request of the Company
and the Bank,
Sandler O'Neill will seek to form a syndicate of registered brokers
or dealers
("Selected Dealers")
