▇▇▇▇▇▇▇ SAVINGS BANCORP, INC.
o Shares
COMMON SHARES
(Par Value $.01 Per Share)
Subscription Price $o Per Share
AGENCY AGREEMENT
___________, 2003
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇ Savings Bank, S.L.A., a New Jersey state-chartered mutual savings
and loan association (the "Savings Bank") and Clifton Savings Bancorp, Inc., a
Delaware corporation (the "Company"), hereby confirm, jointly and severally,
their agreement with ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("KBW" or the "Agent"), as
follows:
SECTION 1. THE OFFERING. The Savings Bank, in accordance with the Plan of
Conversion adopted by the Board of Directors of the Savings Bank on April 15,
2003 (the "Plan"), intends to convert from a New Jersey state-chartered mutual
savings and loan association to a New Jersey state-chartered stock savings and
loan association (the "Conversion"). The Conversion is being conducted in
accordance with the laws of the United States of America and the applicable
regulations of the Office of Thrift Supervision ("OTS") (such laws and the
regulations of the OTS are referred to herein as the "Conversion Regulations").
In connection with the Conversion, the Company will offer stock in a
subscription offering (the "Subscription Offering") on a priority basis to (i)
Eligible Account Holders; (ii) Tax-Qualified Employee Stock Benefit Plans; (iii)
Supplemental Eligible Account Holders; and (iv) Other Members (all capitalized
terms used in this Agreement and not defined in this Agreement shall have the
meanings set forth in the Plan). Pursuant to the Plan, the Company is offering a
minimum of o and a maximum of o shares (subject to an increase up to o shares)
of common stock, par value $.01 per share (the "Shares"), in the Subscription
Offering. Subject to the prior subscription rights of the above-listed parties,
the Company is offering for sale in a community offering (the "Community
Offering" and when referred to together with the Subscription Offering, the
"Subscription and Community Offering") which may be commenced concurrently with,
during, or after the Subscription 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 to natural persons residing in Bergen, Essex and Passaic counties, New
Jersey. 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 and the
Savings Bank may reject, in whole or in part, any orders received in the
Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Conversion."
The Company has filed with the United States Securities and Exchange
Commission (the "SEC") a registration statement on Form S-1 (File No. 333-o)
(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 SEC 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 SEC under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the SEC.
In connection with the Conversion, the Savings Bank filed with the OTS [and
the New Jersey Department of Banking and Insurance (the "Department")] an
application for conversion to a stock company (the "Conversion Application") and
amendments thereto as required by the OTS [and the Department]. The Company has
also filed with the OTS [and the Department] its application on Form H-(e)1-S
(the "Holding Company Application") to become a registered savings and loan
holding company under the Home Owners' Loan Act of 1933, as amended, and the
regulations promulgated thereunder (the "HOLA").
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Savings Bank
and the Company hereby appoint the Agent as their exclusive financial advisor
and marketing agent to utilize its best efforts to solicit subscriptions for
Shares and to advise and assist the Savings Bank and the Company with respect to
the Company's sale of the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Savings Bank
and the Company as to the matters set forth in the letter agreement, dated March
14, 2003, between the Savings Bank and KBW. It is acknowledged by the Savings
Bank and the Company that the Agent shall not be required to purchase any Shares
or be obligated to take any action that is inconsistent with all applicable
laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the Savings
Bank or the Company or upon termination of the Offering, but in no event later
than [90] days after the completion of the
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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 Savings Bank, the Company and the Agent may
agree to renew this Agreement under mutually acceptable terms and subject to the
approval of the OTS [, the Department] and any other governmental agency or
regulatory authority having jurisdiction over such matters.
In the event the Company is unable to sell a minimum of o Shares by the End
Date, this Agreement shall terminate and the Company shall refund to any persons
who have subscribed for any of the Shares the full amount that it may have
received from them plus accrued interest, as set forth in the Prospectus, and
none of the parties to this Agreement shall have any obligation to the other
parties hereunder, except as set forth in this Section 2 and in Sections 6, 8
and 9 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.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the Savings Bank, the Company and the Agent. Certificates
for shares shall be delivered directly to the purchasers in accordance with
their directions. The date upon which the Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $50,000, payable in four consecutive monthly
installments of $12,500, of which $o has been paid. Such fees shall be
deemed to have been earned when due. Should the Conversion be
terminated for any reason not attributable to the action or inaction
of the Agent, the Agent shall have earned and be entitled to be paid
fees accruing through the stage at which the termination occurred,
including any accrued legal fees expended by the Agent.
(b) A success fee of 1.35% of the aggregate purchase price of the Shares
sold in the Subscription Offering and Community Offering excluding
shares purchased by the officers, directors or employees (or members
of their immediate families) of the Savings Bank plus any ESOP,
tax-qualified or stock based compensation plans (except IRAs) or
similar plan created by the Savings Bank for some or all of its
directors or employees. The management fee described in subparagraph
2(a) shall be applied against the success fee described in this
subparagraph 2(b).
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(c) If any of the Shares remain available after the Subscription Offering,
at the request of the Savings Bank, KBW will seek to form a syndicate
of registered broker-dealers ("Selected Dealers") to assist in the
sale of such Shares on a best efforts basis, subject to the terms and
conditions set forth in the selected dealers agreement. KBW will
endeavor to distribute the Shares among the Selected Dealers in a
fashion which best meets the distribution objectives of the Savings
Bank, the Company and the Plan. KBW will be paid a fee not to exceed
5.5% of the aggregate purchase price of the shares sold by the
Selected Dealers. From this fee, KBW will pass onto the Selected
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 Selected Dealers other than KBW shall be
transmitted by KBW to such Selected Dealers. The decision to utilize
Selected Dealers will be made by the Savings Bank and the Company upon
consultation with KBW. In the event, with respect to any stock
purchases, fees are paid pursuant to this subparagraph 2(c), such fees
shall be in lieu of, and not in addition to, payment pursuant to
subparagraph 2(b).
(d) In addition to the fees set forth in this Section 2, the Agent shall
be reimbursed for reasonable out-of-pocket expenses, including costs
of travel, meals and lodging, photocopying, telephone, facsimile and
couriers not to exceed $40,000, and legal fees and expenses not to
exceed $35,000 without the prior consent of the Savings Bank. The
Savings Bank and the Company will bear the expenses of the Offering
customarily borne by issuers including, without limitation, regulatory
filing fees, SEC, "Blue Sky," and NASD filing and registration fees;
the fees of the Savings Bank's and Company's accountants, attorneys,
appraiser, transfer agent and registrar, printing, mailing and
marketing and syndicate expenses associated with the Conversion; the
fees set forth under this Section 2; and fees for "Blue Sky" legal
work. The Savings Bank and the Company will reimburse KBW for such
expenses incurred by KBW on their behalf.
Full payment of KBW's fees and expenses, as described above, shall be made
in next day funds on the earlier of the Closing Date or a determination by the
Savings Bank or the Company to terminate or abandon the Plan.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered in
the Offering at the purchase price set forth on the cover page of the
Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
(a) The Savings Bank and the Company jointly and severally represent and
warrant to and agree with the Agent as follows:
(i) The Registration Statement, which was prepared by the Savings
Bank and the Company and filed with the SEC, was declared
effective by the SEC on o, 2003. At the time the Registration
Statement, including the
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Prospectus contained therein (including any amendment or
supplement), became effective, the Registration Statement
contained all statements that were required to be stated therein
in accordance with the 1933 Act and the 1933 Act Regulations,
complied in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations, and the Registration
Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information
regarding the Savings Bank or the Company contained in Sales
Information (as such term is defined in Section 8 hereof)
authorized by the Savings Bank or 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 SEC and at the Closing Date referred to in Section
2, the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), and any
information regarding the Savings Bank or the Company contained
in Sales Information (as such term is defined in Section 8
hereof) authorized by the Savings Bank or 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)(i) shall not apply to statements or omissions
made in reliance upon and in conformity with written information
furnished to the Savings Bank or the Company by the Agent or its
counsel expressly regarding the Agent for use in the Prospectus
under the caption ["The Conversion and The Stock Offering -
Community Offering and Syndicated Community Offering - Syndicated
Community Offering" and "- Marketing Arrangements"] or in any
Sales Information.
(ii) The Conversion Application, including the Prospectus and the
proxy statement for the solicitation of proxies from members of
the Savings Bank for the special meeting to approve the Plan (the
"Proxy Statement"), which was prepared by the Savings Bank and
the Company and filed with the OTS [and the Department], was
approved on o, 2003 by the OTS [and on o, 2003 by the Department]
and the related Prospectus and Proxy Statement has been
authorized for use by the OTS [and the Department]. At the time
of the approval of the Conversion Application, including the
Prospectus and Proxy Statement (including any amendment or
supplement thereto), by the OTS [and the Department], and at all
times subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus and Proxy Statement
(including any amendment or supplement thereto), will comply in
all material respects with the Conversion
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Regulations, except to the extent waived in writing by the OTS
[or the Department, as the case may be]. The Conversion
Application, including the Prospectus and Proxy Statement
(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(a)(ii) shall not
apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Savings Bank
or the Company by the Agent or its counsel expressly regarding
the Agent for use in the Prospectus contained in the Conversion
Application under the caption ["The Conversion and The Stock
Offering - Community Offering and Syndicated Community Offering -
Syndicated Community Offering" and "- Marketing Arrangements"] or
in any Sales Information.
(iii) The Holding Company Application has been prepared by the Savings
Bank and the Company in material conformity with the requirements
of all applicable regulations and has been filed with and
approved by the OTS [and the Department]. A conformed copy of the
Holding Company Application has been delivered to the Agent and
its counsel.
(iv) No order has been issued by the OTS, the SEC, [the Department,]
any state securities administrator or the Federal Deposit
Insurance Corporation (the "FDIC") preventing or suspending the
use of the Prospectus, and no action by or before any such
government entity to revoke any approval, authorization or order
of effectiveness related to the Conversion is pending or, to the
best knowledge of the Savings Bank or the Company, threatened.
(v) Pursuant to the Conversion Regulations, the Plan has been
approved by the Boards of Directors of both the Company and the
Savings Bank; at the Closing Date, the offer and sale of the
Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations, and all
other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Savings Bank or the
Company by the OTS, the SEC [, the Department] or any other
regulatory authority and in the manner described in the
Prospectus. No person has sought to obtain review of the final
action of the OTS [or the Department] in approving the Plan or in
approving the Conversion or the Holding Company Application
pursuant to the HOLA or any other statute or regulation.
(vi) The Savings Bank has been duly organized and is a validly
existing New Jersey state-chartered savings bank in mutual form
of organization and upon the Conversion will become a duly
organized and validly existing
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New Jersey state-chartered savings bank in stock form of
organization, wholly-owned by the Company, in both instances duly
authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus; the
Savings 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 materially adversely affect the financial condition,
earnings, capital, assets, properties or business of the Savings
Bank and the Company, taken as a whole; all such licenses,
permits and governmental authorizations are in full force and
effect, and the Savings Bank is in compliance with all material
laws, rules, regulations and orders applicable to the operation
of its business; the Savings 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 individually or in the
aggregate have a material adverse effect on the financial
condition, earnings, capital, assets, properties or business of
the Savings Bank. The Savings Bank does not own equity securities
or any equity interest in any other active business enterprise
except as described in the Prospectus or as would not be material
to the operations of the Savings Bank. Upon completion of the
Conversion, (i) all of the authorized and outstanding capital
stock of the Savings Bank will be owned by the Company free and
clear of any security interest, mortgage, pledge, loan,
encumbrance, claim or equity and (ii) the Company will have no
direct subsidiaries other than the Savings Bank. At the Closing
Date, the Conversion will have been effected in all material
respects in accordance with all applicable statutes, regulations,
decisions and orders; and, except with respect to the filing of
certain post-sale, post-Conversion reports, and documents in
compliance with the 1933 Act Regulations, all terms, conditions,
requirements and provisions with respect to the Conversion
imposed by the OTS, [the Department,] the SEC and the FDIC, if
any, will have been complied with by the Savings Bank and the
Company in all material respects or appropriate waivers will have
been obtained and all material notice and waiting periods will
have been satisfied, waived or elapsed.
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus; the Company is
qualified to do business as a foreign corporation in each
jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of the Company.
The Company has obtained all licenses, permits and other
governmental authorizations
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currently required for the conduct of its business except those
that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital,
assets, properties or business of the Savings Bank and the
Company, taken as a whole; all such licenses, permits and
governmental authorizations are in full force and effect, and the
Company is in all material respects complying with all laws,
rules, regulations and orders applicable to the operation of its
business.
(viii) The Savings Bank is a member of the Federal Home Loan Bank of
New York ("FHLB-New York"). The deposit accounts of the Savings
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 Savings Bank or the
Company, threatened. 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 Conversion
Regulations.
(ix) The Savings 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 Savings Bank and the Company, taken as a
whole, and to those properties and assets described in the
Registration Statement and Prospectus as owned by them, in each
case free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration
Statement and Prospectus, or are not material to the business of
the Savings Bank and the Company, taken as a whole; and all of
the leases and subleases material to the business of the Savings
Bank and the Company, taken as a whole, under which the Savings
Bank or the Company hold properties, including those described in
the Registration Statement and Prospectus, are in full force and
effect.
(x) The Savings Bank and the Company have received an opinion of
their special counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, with
respect to the federal income tax consequences of the Conversion
and an opinion from Radics & Co., LLC with respect to the New
Jersey income tax consequences of the Conversion; all material
aspects of the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and
Radics & Co., LLC are accurately summarized in the Registration
Statement and Prospectus; the facts upon which such opinions are
based are truthful, accurate and complete.
(xi) The Savings Bank and the Company have all such power, authority,
authorizations, approvals and orders as may be required to enter
into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the Shares to be sold by the Company
as provided herein and as described in the Prospectus, except
approval or confirmation by the OTS of the final appraisal of the
Savings Bank. The consummation of the Conversion, the execution,
delivery and performance of this Agreement
8
and the consummation of the transactions herein contemplated have
been duly and validly authorized by all necessary corporate
action on the part of the Savings Bank and the Company and this
Agreement has been validly executed and delivered by the Savings
Bank and the Company and is the valid, legal and binding
agreement of the Savings Bank and the Company 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 bank 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 8 and 9 hereof
may be unenforceable as against public policy).
(xii) Neither the Savings Bank nor the Company is in violation of any
directive received from the OTS, the FDIC, [the Department] or
any other agency to make any material change in the method of
conducting their businesses so as to comply in all material
respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders
of the OTS, the FDIC and [the Department]) and, except as may be
set forth in the Registration Statement and the Prospectus, there
is no suit, proceeding, charge or action before or by any court,
regulatory authority or governmental agency or body, pending or,
to the best knowledge of the Savings Bank or the Company,
threatened, which might materially and adversely affect the
Conversion, the performance of this Agreement or the consummation
of the transactions contemplated in the Plan and as described in
the Registration Statement and the Prospectus or which might
result in any material adverse change in the financial condition,
earnings, capital, assets, properties or business of the Savings
Bank and the Company, taken as a whole.
(xiii) The financial statements, schedules and notes related thereto
that are included in the Prospectus fairly present the financial
condition, results of operations, equity and cash flows of the
Savings Bank at the respective dates indicated and for the
respective periods covered thereby and comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X of the SEC and United States generally accepted
accounting principles (including those requiring the recording of
certain assets at their current market value). Such financial
statements, schedules and notes related thereto have been
prepared in accordance with generally accepted accounting
principles consistently applied through the periods involved,
present fairly in all material respects the information required
to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Savings Bank
with the OTS, [the Department] and any other applicable
regulatory authority, except that accounting principles employed
in such regulatory filings
9
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 financial statements of the Savings 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.
(xiv) Since the respective dates as of which information is given in
the Registration Statement including the Prospectus: (i) there
has not been any material adverse change in the financial
condition, earnings, capital, assets, properties or business of
the Savings Bank and the Company, taken as a whole, whether or
not arising in the ordinary course of business; (ii) there has
not been any material increase in the long-term debt of the
Savings Bank or in the principal amount of the Savings Bank's
assets that are classified by the Savings Bank as substandard,
doubtful or loss or in loans past due 90 days or more or real
estate acquired by foreclosure, by deed-in-lieu of foreclosure or
deemed in-substance foreclosure or any material decrease in
equity capital or total assets of the Savings Bank, nor has the
Savings Bank or the Company issued any securities 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 Savings Bank or the Company (iv)
there has not been any material adverse change in the aggregate
dollar amount of the Savings Bank's deposits or its consolidated
net worth; (v) there has been no material adverse change in the
Savings Bank's or the Company's relationship with its insurance
carriers, including, without limitation, cancellation or other
termination of the Savings Bank's or the Company's fidelity bond
or any other type of insurance coverage; (vi) [except as
disclosed in the Prospectus,] there has been no material change
in management of the Savings Bank or the Company, neither of
which has any material undisclosed liability of any kind,
contingent or otherwise; (vii) neither the Savings Bank or the
Company 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) neither the Savings Bank nor the Company is in
default in the payment of principal or interest on any
outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the Savings Bank
and the Company conform in all material respects to the
descriptions thereof contained in the Prospectus; and (x) neither
the Savings Bank nor the Company has any material contingent
liabilities, except as set forth in the Prospectus.
(xv) All documents made available to or delivered or to be made
available to or delivered by the Savings Bank, the Company or
their representatives in connection with the issuance and sale of
the Shares, including records of account holders, depositors and
borrowers of the Savings Bank, or in
10
connection with the Agent's exercise of due diligence, except for
those documents which were prepared by parties other than the
Savings Bank, the Company or their representatives, to the best
knowledge of the Savings Bank and the Company, were on the dates
on which they were delivered, or will be on the dates on which
they are to be delivered, true, complete and correct in all
material respects.
(xvi) Neither the Company nor the Savings Bank is (i) in violation of
its articles of incorporation, organization or charter or bylaws,
as applicable, (and the Savings Bank will not be in violation of
its [Charter] or Bylaws upon consummation of the Conversion), or
(ii) in default in the performance or observance of any material
obligation, agreement, covenant, or condition contained in any
material contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it or any of its
property may be bound. The 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 material
lien, charge or encumbrance (with the exception of the
liquidation account established in the Conversion) upon any of
the property or assets of the Savings Bank or the Company
pursuant to their respective articles of incorporation,
organization, charter or bylaws, as applicable, or any material
contract, lease or other instrument in which the Savings Bank or
the Company has a beneficial interest, or any applicable law,
rule, regulation or order; or (ii) violate any authorization,
approval, judgement, decree, order, statute, rule or regulation
applicable to the Savings Bank or the Company, except for such
violations which would not have a material adverse effect on the
financial condition and results of operations of the Savings Bank
and the Company on a consolidated basis.
(xvii) 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 the Savings Bank or the Company in the due performance and
observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, note, bank loan or credit agreement or
any other instrument or agreement to which the Savings Bank or
the Company is a party or by which any of them or any of their
property is bound or affected, except such defaults which would
not have a material adverse effect on the financial condition or
results of operations of the Savings Bank and the Company on a
consolidated basis; such agreements are in full force and effect;
and no other party to any such agreements has instituted or, to
the best knowledge of the Savings Bank and the Company threatened
any action or proceeding wherein the Savings Bank or the Company
would or might be alleged to be in default thereunder, where such
action or proceeding, if determined adversely to the Savings Bank
or the Company, would have a material adverse effect on the
financial condition, earnings, capital, assets, properties or
business of the Savings Bank and the Company, taken as a whole.
11
(xviii) Upon consummation of the Conversion, the authorized, issued
and outstanding equity capital of the Company will be within the
range set forth in the Prospectus under the caption
"Capitalization," and no Shares have been or will be issued and
outstanding prior to the Closing Date; the 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 Tax-Qualified
Employee Stock Benefit Plans 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 conform in all material respects to
the description thereof contained in the Registration Statement
and the Prospectus. To the best knowledge of the Savings Bank and
the Company, 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.
(xix) 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 OTS [, the Department] and the SEC, 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 National
Association of Securities Dealers, Inc. ("NASD") and/or [The
Nasdaq Stock Market].
(xx) [Radics & Co., LLC], which has certified the audited financial
statements and schedules of the Savings Bank included in the
Prospectus, has advised the Savings Bank and the Company in
writing that they are, with respect to the Savings Bank and the
Company, independent public accountants within the meaning of the
Code of Professional Ethics of the American Institute of
Certified Public Accountants and applicable regulations of the
SEC and the OTS.
(xxi) [FinPro, Inc.], which has prepared the Savings Bank's
[Conversion Valuation Appraisal Report] as of o, 2003 (as amended
or supplemented, if so amended or supplemented) (the
"Appraisal"), has advised the Company in writing that it is
independent of the Savings Bank and the Company within the
meaning of the Conversion Regulations.
(xxii) The Savings Bank and the Company have timely filed all required
federal, state and local tax returns; the Savings Bank and the
Company have paid all taxes that have become due and payable in
respect of such returns,
12
except where permitted to be extended, have made adequate
reserves for similar future tax liabilities and no deficiency has
been asserted with respect thereto by any taxing authority.
(xxiii) The Savings Bank is in compliance in all material respects
with the applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, and the regulations and rules
thereunder.
(xxiv) To the knowledge of the Savings Bank and the Company, none of
the Savings Bank, the Company or employees of the Savings Bank or
the Company has made any payment of funds of the Savings Bank or
the Company 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.
(xxv) Neither the Savings Bank nor the Company 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 [or shares issued in connection with the
incorporation of the Company]); (ii) had any material dealings
within the 12 months prior to the date hereof with any member of
the NASD, or any person related to or associated with such
member, other than discussions and meetings relating to the
proposed Offering and routine purchases and sales of United
States government and agency and other securities in the ordinary
course 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 Savings Bank
and the Company in connection with the offering of the Shares,
and no person is being compensated in any manner for such
service. Appropriate arrangements have been made for placing the
funds received from subscriptions for Shares in a special
interest-bearing account with the Savings Bank until all Shares
are sold and paid for, with provision for refund to the
purchasers in the event that the Conversion is not completed for
whatever reason or for delivery to the Company if all Shares are
sold.
(xxvi) The Savings Bank and the Company have not relied upon the Agent
or its legal counsel or other advisors for any legal, tax or
accounting advice in connection with the Conversion.
(xxvii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxviii) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-14 and 15d-14
under the Exchange Act) that (i) are designed to ensure that
material information
13
relating to the Company, including its consolidated subsidiaries,
is made known to the Company's Chief Executive Officer and its
Chief Financial Officer by others within those entities,
particularly during the periods in which the filings made by the
Company with the Commission which it may make under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act are being prepared,
(ii) have been evaluated for effectiveness as of a date within 90
days prior to the filing of the Company's most recent Annual
Report filed with the Commission and (iii) are effective to
perform the functions for which they were established.
The accountants and the Audit Committee of the Board of Directors
have been advised of (i) any significant deficiencies in the
design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize, and
report financial data and (ii) any fraud, whether or not
material, that involves management or other employees who have a
role in the Company's internal controls; any material weaknesses
in internal controls have been identified for the accountants;
and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that
could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
(xxix) Any certificates signed by an officer of the Savings Bank or
the Company pursuant to the conditions of this Agreement and
delivered to the Agent or their counsel that refers to this
Agreement shall be deemed to be a representation and warranty by
the Savings Bank or the Company to the Agent as to the matters
covered thereby with the same effect as if such representation
and warranty were set forth herein.
(b) The Agent represents and warrants to the Savings Bank and the Company
that:
(i) KBW is a corporation validly existing in good standing under the
laws of the State of New York with full power and authority to
provide the services to be furnished to the Savings Bank and the
Company hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the
Agent, and this Agreement has been duly and validly executed and
delivered by the Agent and is a legal, valid and binding
agreement of the Agent, enforceable in accordance with its terms
(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 by general equity principles, regardless of
whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent,
14
if any, that the provisions of Sections 8 and 9 hereof may, with
respect to the Agent, be unenforceable as against public policy).
(iii) Each of the Agent and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and the Agent is
a registered selling agent in each of the jurisdictions in which
the Shares are to be offered by the Company in reliance upon the
Agent as a registered selling agent as set forth in the blue sky
memorandum prepared with respect to the Offering.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not conflict
with, or result in a breach of, any of the terms, provisions or
conditions of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default)
under, the Articles of Incorporation or Bylaws of the Agent or
any material agreement, indenture or other instrument to which
the Agent is a party or by which it or its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution
and delivery of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or,
to the knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this
Agreement.
SECTION 5. COVENANTS OF THE SAVINGS BANK AND THE COMPANY. The Savings Bank
and the Company hereby jointly and severally covenant with the Agent as follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the Agent or
its counsel shall reasonably object.
(b) Neither the Savings Bank nor the Company will file any amendment or
supplement to the Conversion Application without providing the Agent
and its counsel an opportunity to review such amendment or supplement
or file any amendment or supplement to which amendment or supplement
the Agent or its counsel shall reasonably object.
(c) Neither the Savings Bank nor the Company will file any amendment or
supplement to the Holding Company Application without providing the
Agent and its counsel an opportunity to review the nonconfidential
portions of such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its counsel
shall reasonably object.
15
(d) The Savings Bank and the Company will use their best efforts to cause
any post-effective amendment to the Registration Statement to be
declared effective by the SEC and any post-approval amendment to the
Conversion Application to be approved by the OTS [and the Department]
and will immediately upon receipt of any information concerning the
events listed below notify the Agent: (i) when the Registration
Statement, as amended, has become effective; (ii) when the Conversion
Application, as amended, has been approved by the OTS [and the
Department]; (iii) when the Savings Bank or the Company receives any
comments from the SEC, the OTS, [the Department] or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (iv) when the SEC, the OTS, [the
Department] or any other governmental entity requests any amendment or
supplement to the Registration Statement, the Conversion Application
or any additional information; (v) the issuance by the SEC, the OTS,
[the Department] or any other governmental entity of any order or
other action suspending the Offering or the use of the Registration
Statement or the Prospectus or any other filing of the Savings Bank or
the Company under the Conversion Regulations, or other applicable law,
or the threat of any such action; (vi) the issuance by the SEC, the
OTS, [the Department] or any authority of any stop order suspending
the effectiveness of the Registration Statement or of the initiation
or threat of initiation or threat of any proceedings for that purpose;
or (vii) the occurrence of any event mentioned in paragraph (h) below.
The Savings Bank and the Company will make every reasonable effort (i)
to prevent the issuance by the SEC, the OTS, [the Department] or any
other regulatory authority of any such order and, if any such order
shall at any time be issued, (ii) to obtain the lifting thereof at the
earliest possible time.
(e) The Savings Bank and the Company will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement, the
Conversion Application and the Holding Company Application, as
originally filed and of each amendment or supplement thereto,
including all exhibits. Further, the Savings Bank and the Company will
deliver such additional copies of the foregoing documents to counsel
to the Agent as may be required for any NASD filings.
(f) The Savings Bank and the Company will furnish to the Agent, from time
to time during the period when the Prospectus (or any later prospectus
related to this offering) is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes contemplated by the
1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes the Agent to use the Prospectus
(as amended or supplemented, if amended or supplemented) in any lawful
manner contemplated by the Plan in connection with the sale of the
Shares by the Agent.
(g) The Savings Bank and the Company will comply with any and all material
terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the
SEC, the OTS [, the
16
Department] or the Conversion Regulations, and by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when the
Prospectus is required to be delivered, and during such time period,
the Savings Bank and the Company will comply, at their own expense,
with all material requirements imposed upon them by the SEC, the OTS
[, the Department] or the Conversion Regulations, and by the 1933 Act,
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations,
including, without limitation, Rule 10b-5 under the 1934 Act, in each
case as from time to time in force, so far as necessary to permit the
continuance of sales or dealing in the Shares during such period in
accordance with the provisions hereof and the Prospectus.
(h) If, at any time during the period when the Prospectus is required to
be delivered, any event relating to or affecting the Savings Bank or
the Company shall occur, as a result of which it is necessary or
appropriate, in the reasonable opinion of the Agent's counsel, to
amend or supplement the Registration Statement or Prospectus in order
to make the Registration Statement or Prospectus not misleading in
light of the circumstances existing at the time the Prospectus is
delivered, the Savings Bank and the Company will at their own expense,
prepare and file with the SEC and the OTS and furnish to the Agent a
reasonable number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement or Prospectus
(in form and substance reasonably satisfactory to the Agent and its
counsel after a reasonable time for review) which will amend or
supplement the Registration Statement or Prospectus so that as amended
or supplemented it will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, not misleading. For the
purpose of this Agreement, the Savings Bank and the Company each will
timely furnish to the Agent such information with respect to itself as
the Agent may from time to time reasonably request.
(i) The Savings Bank and the Company will take all necessary actions in
cooperating with the Agent and furnish to whomever the Agent may
direct such information as may be required to qualify or register the
Shares for offering and sale by the Company or to exempt such Shares
from registration, or to exempt the Company as a broker-dealer and its
officers, directors and employees as broker-dealers or agents under
the applicable securities or blue sky laws of such jurisdictions in
which the Shares are required under the Conversion Regulations to be
sold or as the Agent and the Savings Bank and the Company may
reasonably agree upon; provided, however, that the Company shall not
be obligated to file any general consent to service of process, to
qualify to do business in any jurisdiction in which it is not so
qualified, or to register its directors or officers as brokers,
dealers, salesmen or agents in any jurisdiction. In each jurisdiction
where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and
reports in each fiscal period as are or may be required by the laws of
such jurisdiction.
17
(j) The Savings Bank and the Company shall duly establish and maintain the
liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders in accordance with the
requirements of the Conversion Regulations and such Eligible Account
Holders and Supplemental Eligible Account Holders who continue to
maintain their savings accounts in the Savings Bank will have an
inchoate interest in their pro rata portion of the liquidation
account, which shall have a priority superior to that of the holders
of the Shares in the event of a complete liquidation of the Savings
Bank.
(k) The Savings Bank and the Company will not sell or issue, contract to
sell or otherwise dispose of, for a period of [180] days after the
Closing Date, without the Agent's prior written consent, any of their
capital stock, other than in connection with any plan or arrangement
described in the Prospectus.
(l) The Company shall register its Shares under Section 12(b) of the 1934
Act concurrently with the Offering and shall request that such
registration be effective prior to or upon completion of the
Conversion. The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as
may be required by applicable law.
(m) During the period during which the Shares are registered under the
1934 Act or for three (3) years from the date hereof, whichever period
is greater, the Company will furnish to its shareholders as soon as
practicable after the end of each fiscal year an annual report of the
Company in accordance with the 1934 Act Regulations (including a
consolidated balance sheet and statements of consolidated income,
shareholders' equity and cash flows of the Company and its
subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under
the 1933 Act and the 1934 Act).
(n) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the
Company furnished to or filed with the SEC under the 1934 Act or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its
shareholders or filed with the SEC, the OTS [, the Department] or any
other supervisory or regulatory authority or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and
additional documents and information with respect to the Savings Bank
or the Company as the Agent may reasonably request; and (iii) from
time to time, such other nonconfidential information concerning the
Savings Bank, the Company as the Agent may reasonably request.
18
(o) The Savings Bank and the Company will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus under the
caption "[Use of Proceeds]."
(p) Other than as permitted by the Conversion Regulations, the HOLA, the
1933 Act, the 1933 Act Regulations and its rules and regulations and
the laws of any state in which the Shares are registered or qualified
for sale or exempt from registration, neither the Savings Bank nor the
Company will distribute any prospectus, offering circular or other
offering material in connection with the offer and sale of the Shares.
(q) The Company will use its best efforts to list and maintain its listing
of the Shares on [The Nasdaq Stock Market] effective on or prior to
the Closing Date.
(r) The Savings Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offering on an interest-bearing basis at the
rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the Savings
Bank's obligation to refund payments received from persons subscribing
for or ordering Shares in the Offering in accordance with the Plan and
as described in the Prospectus or until refunds of such funds have
been made to the persons entitled thereto or withdrawal authorizations
canceled in accordance with the Plan and as described in the
Prospectus. The Savings Bank will maintain such records of all funds
received to permit the funds of each subscriber to be separately
insured by the FDIC (to the maximum extent allowable) and to enable
the Savings Bank to make the appropriate refunds of such funds in the
event that such refunds are required to be made in accordance with the
Plan and as described in the Prospectus.
(s) The Company will promptly take all necessary action to register as a
savings and loan holding company under the HOLA.
(t) The Savings Bank and the Company will take such actions and furnish
such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the NASD's "Interpretation
Relating to Free Riding and Withholding."
(u) Neither the Savings Bank nor the Company will amend the Plan without
notifying the Agent prior thereto.
(v) The Company shall assist the Agent, if necessary, in connection with
the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Company in allocating the Shares in such event and such information
shall be accurate and reliable in all material respects.
(w) Prior to the Closing Date, the Savings Bank and the Company will
inform the Agent of any event or circumstances of which it is aware as
a result of which the
19
Registration Statement and/or Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein not misleading.
(x) Subsequent to the date the Registration Statement is declared
effective by the SEC and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set forth in an
amendment or supplement thereto, neither the Savings Bank nor the
Company will have: (i) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money, except
borrowings from the same or similar sources indicated in the
Prospectus in the ordinary course of its business, or (ii) entered
into any transaction which is material in light of the business and
properties of the Savings Bank and the Company, taken as a whole.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is completed
or the sale of the Shares by the Company is consummated, the Savings Bank and
the Company jointly and severally agree to pay or reimburse the Agent for: (a)
all filing fees in connection with all filings related to the Offering with the
NASD; (b) any stock issue or transfer taxes which may be payable with respect to
the sale of the Shares; (c) all reasonable expenses of the Conversion, including
but not limited to the Savings Bank's, the Company's and the Agent's attorneys'
fees (subject to Section 2 of this Agreement) and expenses, blue sky fees,
transfer agent, registrar and other agent charges, fees relating to auditing and
accounting or other advisors and costs of printing all documents necessary in
connection with the Conversion. In the event the Company is unable to sell a
minimum of o Shares or the Conversion is terminated or otherwise abandoned, the
Savings Bank and the Company shall promptly reimburse the Agent in accordance
with Section 2(d) hereof.
SECTION 7. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of the
Agent hereunder are subject, to the extent not waived in writing by the Agent,
to the condition that all representations and warranties of the Savings Bank and
the Company herein are, at and as of the commencement of the Offering and at and
as of the Closing Date, true and correct in all material respects, the condition
that the Savings Bank and the Company shall have performed all of their
obligations hereunder to be performed on or before such dates, and to the
following further conditions:
(a) At the Closing Date, the Savings Bank and the Company shall have
conducted the Conversion in all material respects in accordance with
the Plan, the Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon
them by the SEC, the OTS [, the Department] and any state securities
agency.
(b) The Registration Statement shall have been declared effective by the
SEC and the Conversion Application approved by the OTS [and the
Department] not later than 5:30 p.m. on the date of this Agreement, or
with the Agent's consent at a later time and date; and at the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or
20
proceedings therefor initiated or threatened by the SEC or any state
authority, and no order or other action suspending the authorization
of the Prospectus or the consummation of the Conversion shall have
been issued or proceedings therefor initiated or, to the Savings
Bank's or the Company's knowledge, threatened by the SEC, the OTS, the
FDIC [, the Department] or any other governmental authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for its benefit, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
special counsel for the Savings Bank and the Company, in form and
substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the
State of Delaware; the Savings Bank has been duly organized and
is validly existing in good standing as a mutual savings and loan
association under the laws of the State of New Jersey.
(ii) Both of the Savings Bank and the Company have full
corporate power and authority to own, lease and operate their
respective properties and to conduct their business as described
in the Registration Statement and the Prospectus; and both of the
Savings Bank and Company are qualified to transact business as a
foreign corporation in each jurisdiction in which the failure to
so qualify would have a material adverse effect upon the
financial condition, results of operations or business affairs of
the Savings Bank and the Company considered as one enterprise.
(iii) The Savings Bank is a validly existing state-chartered
savings bank in mutual form and immediately following the
completion of the Conversion will be a validly existing
state-chartered savings bank in stock form of organization, in
both instances duly authorized to conduct its business and own
its property as described in the Registration Statement and the
Prospectus. All of the capital stock of the Savings Bank
outstanding upon completion of the Conversion will be duly
authorized and will be validly issued, fully paid and
non-assessable and will be owned by the Company, to such
counsel's Actual Knowledge, free and clear of any liens,
encumbrances, claims or other restrictions.
(iv) The Savings Bank is a member in good standing of the
FHLB-New York. The deposit accounts of the Savings Bank are
insured by the FDIC up to the maximum amount allowed under law,
and no proceedings for the termination or revocation of such
insurance are pending or, to such counsel's Actual Knowledge,
threatened; the description of the liquidation account as set
forth in the Prospectus under the captions ["The Conversion and
the Stock Offering - Effects of the
21
Conversion - Liquidation Rights,"] to the extent that such
information constitutes matters of law and legal conclusions, has
been reviewed by such counsel and is accurately described in all
material respects.
(v) Immediately following the consummation of the
Conversion, the authorized, issued and outstanding Shares of the
Company will be within the range set forth in the Prospectus
under the caption "Capitalization" and no Shares have been issued
prior to the Closing Date; the Shares subscribed for pursuant to
the Offering 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 the Prospectus, will be duly and validly issued and
fully paid and non-assessable, except for Shares purchased by the
Tax-Qualified Employee Stock Benefit Plans 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, the issuance of the Shares is not subject
to preemptive rights and the terms and provisions of the Shares
conform in all material respects to the description thereof
contained in the Prospectus. The form of certificate used to
evidence the Shares complies with applicable laws. To such
counsel's Actual Knowledge, 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.
(vi) The Savings Bank and the Company have full corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and by the Plan.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the
Savings Bank and the Company; and this Agreement is a valid and
binding obligation of the Savings Bank and the Company,
enforceable against the Savings Bank and the Company in
accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership or other similar laws
now or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally or the rights of
creditors of New Jersey state-chartered savings institutions,
(ii) general equitable principles, (iii) laws relating to the
safety and soundness of insured depository institutions, and (iv)
applicable law or public policy with respect to the
indemnification and/or contribution provisions contained herein,
including without limitation the provisions of Sections 23A and
23B of the Federal Reserve Act and except that no opinion need be
expressed as to the effect or availability of equitable remedies
or injunctive relief (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
22
(vii) The Conversion Application has been approved by the
OTS [and the Department] and the Prospectus and Proxy Statement
has been authorized for use by the OTS [and the Department]. The
OTS [and the Department] has approved the Holding Company
Application and the exchange by the Company of all of the issued
and outstanding capital stock of the Savings Bank for a majority
interest in the Company, and no action has been taken and, to
such counsel's Actual Knowledge, none is pending or threatened to
revoke any such authorization or approval.
(viii) Pursuant to the Conversion Regulations, the Plan has
been approved and duly adopted by the required vote of the
directors of the Savings Bank and the Company.
(ix) Subject to the satisfaction of the conditions to the
OTS's [and the Department's] approval of the Conversion, no
further approval, registration, authorization, consent or other
order of any federal or state regulatory agency is required in
connection with the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the Conversion,
except as may be required under the securities or blue sky laws
of various jurisdictions (as to which no opinion need be
rendered) and except as may be required under the rules and
regulations of the NASD and/or [The Nasdaq Stock Market] (as to
which no opinion need be rendered).
(x) The Registration Statement is effective under the 1933
Act and no stop order suspending the effectiveness has been
issued under the 1933 Act or proceedings therefor initiated or,
to such counsel's Actual Knowledge, threatened by the SEC.
(xi) At the time the Conversion Application, including the
Prospectus and Proxy Statement contained therein, was approved by
the OTS [and the Department], the Conversion Application,
including the Prospectus and Proxy Statement contained therein,
complied as to form in all material respects with the
requirements of the Conversion Regulations, federal and state law
and all applicable rules and regulations promulgated thereunder
(other than the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal data included
therein, as to which no opinion need be rendered).
(xii) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included therein, as to
which no opinion need be rendered), complied as to form in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations, and (ii) the Prospectus (other than the
financial statements, the notes thereto, and other tabular,
financial, statistical and
23
appraisal data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the
Conversion Regulations and federal law.
(xiii) The terms and provisions of the Shares of the Company
conform to the description thereof contained in the Registration
Statement and Prospectus, and the form of certificate used to
evidence the Shares is in due and proper form.
(xiv) To such counsel's Actual Knowledge, there are no legal
or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein.
(xv) To such counsel's Actual Knowledge, there are no
material contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Conversion Application, the Registration
Statement or the Prospectus or required to be filed as exhibits
thereto other than those described or referred to therein or
filed as exhibits thereto in the Conversion Application, the
Registration Statement or the Prospectus. The description in the
Conversion Application, the Registration Statement and the
Prospectus of such documents and exhibits is accurate in all
material respects and fairly presents the information required to
be shown.
(xvi) The Plan complies in all material respects with all
applicable laws, rules, regulations, decisions and orders
including, but not limited to, the Conversion Regulations; no
order has been issued by the SEC, the OTS, [the Department,] the
FDIC or any other governmental authority to suspend the Offering
or the use of the Prospectus, and no action for such purposes has
been instituted, or to such counsel's Actual Knowledge,
threatened by the SEC, the OTS, [the Department,] the FDIC or any
other governmental authority and, to such counsel's Actual
Knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the OTS [or the Department]
approving the Plan, the Conversion Application, the Holding
Company Application or the Prospectus.
(xvii) To such counsel's Actual Knowledge, the Savings Bank
and the Company have obtained all material licenses, permits and
other governmental authorizations currently required for the
conduct of their businesses and all such licenses, permits and
other governmental authorizations are in full force and effect,
and the Savings Bank, the Company and the Savings Bank are in all
material respects complying therewith.
24
(xviii) To such counsel's Actual Knowledge, neither the
Savings Bank nor the Company, is in violation of its [Charter]
and Bylaws or its [Certificate of Incorporation] and Bylaws, as
appropriate or, to such counsel's Actual Knowledge, in default or
violation of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by
which it or its property may be bound, except for such defaults
or violations which would not have a material adverse impact on
the financial condition or results of operations of the Savings
Bank and the Company on a consolidated basis; the execution and
delivery of this Agreement, the incurrence of the obligations
herein set forth and the consummation of the transactions
contemplated herein do not (a), to such counsel's Actual
Knowledge, 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 Savings
Bank or the Company pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Savings Bank or the Company is a party or by which any
of them may be bound, or to which any of the property or assets
of the Savings Bank or the Company are subject (other than the
establishment of the liquidation account), (b) result in any
violation of the provisions of the [Certificate of Incorporation]
or Bylaws of the Company or the [Charter] or the Bylaws of the
Savings Bank or, (c) result in any violation of any applicable
federal or state law, act, regulation (except that no opinion
with respect to the securities and blue sky laws of various
jurisdictions or the rules or regulations of the NASD and/or [The
Nasdaq Stock Market] need be rendered) or order or court order,
writ, injunction or decree.
(xix) The Company's [Certificate of Incorporation] and
Bylaws comply in all material respects with the laws of the State
of Delaware. The Savings Bank's [Charter] and Bylaws comply in
all material respects with the laws of the State of New Jersey.
(xx) To such counsel's Actual Knowledge, neither the
Savings Bank nor the Company is in violation of any directive
from the OTS, the SEC [, the Department] or the FDIC to make any
material change in the method of conducting its respective
business.
(xxi) The information in the Prospectus under the captions
["Our Policy Regarding Dividends," "Regulation of ▇▇▇▇▇▇▇ Savings
Bank, and ▇▇▇▇▇▇▇ Savings Bancorp, Inc.," "Taxation," "The
Conversion and The Stock Offering," "Restrictions on Transfer of
Subscription Rights and Shares of Stock," "Restrictions on
Acquisition of ▇▇▇▇▇▇▇ Savings Bancorp, Inc.," "Description of
Capital Stock of ▇▇▇▇▇▇▇ Savings Bancorp, Inc." and "Registration
Requirements"] to the extent that such information constitutes
matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such
counsel and
25
is correct in all material respects. The description of the
Conversion process in the Prospectus under the caption ["The
Conversion and The Stock Offering"] to the extent that such
information constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been
reviewed by such counsel and fairly describes such process in all
material respects. The descriptions in the Prospectus of statutes
or regulations are accurate summaries and fairly present the
information required to be shown. The information under the
caption ["The Conversion and The Stock Offering - Effects of the
Conversion - Tax Aspects"] has been reviewed by such counsel and
fairly describes the opinions rendered by them to the Savings
Bank and the Company with respect to such matters. The
information in the Prospectus under ["Risk Factors"] to the
extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been
reviewed by counsel and is complete and accurate in all material
respects.
In addition, such counsel shall state that during the
preparation of the Conversion Application, the Registration
Statement, the Prospectus and the Proxy Statement, they
participated in conferences with certain officers of, the
independent public and internal accountants for, and other
representatives of, the Savings Bank and the Company, at which
conferences the contents of the Conversion Application, the
Registration Statement, the Prospectus and the Proxy Statement,
and related matters were discussed and, while such counsel have
not confirmed the accuracy or completeness of or otherwise
verified the information contained in the Conversion Application,
the Registration Statement, the Prospectus or and the Proxy
Statement, and do not assume any responsibility for such
information, based upon such conferences and a review of
documents deemed relevant for the purpose of rendering their
opinion (relying as to materiality as to factual matters on
certificates of officers and other factual representations by the
Savings Bank and the Company), nothing has come to their
attention that would lead them to believe that the Conversion
Application, the Registration Statement, the Prospectus or the
Proxy Statement, or any amendment or supplement thereto (other
than the financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data included
therein as to which no view need be rendered) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or trustees or
directors of the Savings Bank and the Company and certificates of
public officials. Such counsel's opinion shall be limited to
matters governed by federal laws, the laws of the State of
Delaware and the laws of the State of New Jersey. The term
"Actual Knowledge" as used herein shall have the meaning set
forth in the
26
Legal Opinion Accord of the American Bar Association Section of
Business Law. For purposes of such opinion, no proceedings shall
be deemed to be pending, no order or stop order shall be deemed
to be issued, and no action shall be deemed to be instituted
unless, in each case, a director or executive officer of either
of the Savings Bank or the Company shall have received a copy of
such proceedings, order, stop order or action. In addition, such
opinion may be limited to present statutes, regulations and
judicial interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no obligation to
revise or supplement it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise;
and such counsel need express no view, opinion or belief with
respect to whether any proposed or pending legislation, if
enacted, or any proposed or pending regulations or policy
statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the
validity of the Conversion or any aspect thereof. Such counsel
may assume that any agreement is the valid and binding obligation
of any parties to such agreement other than each of the Savings
Bank or the Company.
(2) The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for its benefit, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Agent, with respect to the issue and sale of the
Shares and such other matters as the Agent may request. In rendering
their opinion, Agent's counsel may limit such opinion to matters
governed by federal laws, the General Corporation Law of the State of
Delaware and the laws of the State of New York.. In giving such
opinion, such counsel also may rely as to all matters of fact on
certificates of officers or trustees or directors of the Savings Bank
and the Company and certificates of public officials. Such counsel may
assume that any agreement is the valid and binding obligation of any
parties to such agreement other than each of the Savings Bank or the
Company.
(d) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the principal accounting officer of each
of the Savings Bank and the Company in form and substance reasonably
satisfactory to the Agent's Counsel, dated as of such Closing Date, to
the effect that: (i) they have carefully examined the Prospectus and
the Proxy Statement, and, in their opinion, at the time the Prospectus
and the Proxy Statement became authorized for final use, the
Prospectus and the Proxy Statement did not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) since
the date the Prospectus became authorized for final use, no event has
occurred which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth,
including specifically, but without limitation, any material adverse
change in the condition, financial or otherwise, or in the earnings,
capital, properties or business of the Savings Bank or the Company and
the conditions set forth in this Section 7 have been satisfied; (iii)
since the respective dates as of which information is given in
27
the Registration Statement and the Prospectus, there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, capital or properties of the Savings Bank or the
Company independently, or of the Savings Bank and the Company
considered as one enterprise, whether or not arising in the ordinary
course of business; (iv) the representations and warranties in Section
4 are true and correct with the same force and effect as though
expressly made at and as of the Closing Date; (v) the Savings Bank and
the Company have complied in all material respects with all agreements
and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date and will comply in all
material respects with all obligations to be satisfied by them after
the Conversion; (vi) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of
the Savings Bank or the Company, threatened by the SEC or any state
authority; (vii) no order suspending the Offering, the Conversion, the
acquisition of all of the outstanding capital stock of the Savings
Bank by the Company or the effectiveness of the Prospectus has been
issued and no proceedings for that purpose are pending or, to the best
knowledge of the Savings Bank or the Company, threatened by the SEC,
the OTS, the FDIC, [the Department] or any governmental authority; and
(viii) to the best knowledge of the Savings Bank and the Company, no
person has sought to obtain review of the final action of the OTS [or
the Department] approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of the
Agent, there shall have been no material adverse change in the
condition, financial or otherwise, or in the earnings or business of
the Savings Bank or the Company independently, or of the Savings Bank
and the Company considered as one enterprise, from that as of the
latest dates as of which such condition is set forth in the
Prospectus, other than transactions referred to or contemplated
therein; (ii) the Savings Bank or the Company shall not have received
from the OTS, the FDIC [or the Department] any direction (oral or
written) to make any material change in the method of conducting their
business with which it has not complied (which direction, if any,
shall have been disclosed to the Agent) or which materially and
adversely would affect the business, operations or financial condition
or income of the Savings Bank and the Company taken as a whole; (iii)
neither the Savings Bank nor the Company shall have been in default
(nor shall an event have occurred which, with notice or lapse of time
or both, would constitute a default) under any provision of any
agreement or instrument relating to any outstanding indebtedness; (iv)
no action, suit or proceeding, at law or in equity or before or by any
federal or state commission, board or other administrative agency,
shall be pending or, to the knowledge of the Savings Bank or the
Company, threatened against the Savings Bank or the Company or
affecting any of their properties wherein an unfavorable decision,
ruling or finding would materially and adversely affect the business,
operations, financial condition or income of the Savings Bank and the
Company taken as a whole; and (v) the Shares shall have been qualified
or registered for offering and sale or exempted therefrom under the
securities or blue sky laws of the jurisdictions as the Agent shall
have reasonably requested and as agreed to by the Savings Bank and the
Company.
28
(f) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from [Radics & Co., LLC] dated as of the date of the
Prospectus and addressed to the Agent: (i) confirming that [Radics &
Co., LLC] is a firm of independent public accountants within the
meaning of Rule 101 of the Code of Professional Ethics of the American
Institute of Certified Public Accountants and applicable regulations
of the SEC and stating in effect that in their opinion the financial
statements, schedules and related notes of the Company and the Savings
Bank as of [June 30, 2003] and 2002, and for each of the three years
in the period ended [June 30, 2003], included in the Prospectus and
covered by their opinion included therein, comply as to form in all
material respects with the applicable accounting requirements and
related published rules and regulations of the 1933 Act; (ii) stating
in effect that, on the basis of certain agreed upon procedures (but
not an audit in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim
financial statements of the Company and the Savings Bank prepared by
the Company and the Savings Bank, a reading of the minutes of the
meetings of the Board of Directors of the Company and the Savings Bank
and consultations with officers of the Company and the Savings Bank
responsible for financial and accounting matters, nothing came to
their attention which caused them to believe that: (A) the unaudited
financial statements included in the Prospectus are not in conformity
with the 1933 Act, and generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the
period from the date of the latest unaudited financial statements
included in the Prospectus to a specified date not more than three
business days prior to the date of the Prospectus, except as has been
described in the Prospectus, there was any increase in borrowings,
other than normal deposit fluctuations, by the Company and the Savings
Bank; or (C) there was any decrease in the net assets or retained
earnings of the Company and the Savings Bank at the date of such
letter as compared with amounts shown in the latest unaudited balance
sheets included in the Prospectus or there was any decrease in net
income or net interest income of the Company and the Savings Bank for
the number of full months commencing immediately after the period
covered by the latest audited income statement included in the
Prospectus and ended on the latest month end prior to the date of the
Prospectus as compared to the corresponding period in the preceding
year; and (iii) stating that, in addition to the audit referred to in
their opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (f), they
have compared with the general accounting records of the Company and
the Savings Bank, which are subject to the internal controls of the
Company and the Savings Bank, the accounting system and other data
prepared by the Company and the Savings Bank, directly from such
accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as the Agent
may reasonably request, and they have found such amounts and
percentages to be in agreement therewith.
(g) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements made
by [Radics & Co., LLC]
29
in the letter delivered by it pursuant to subsection (f) of this
Section 7, the "specified date" referred to in clause (ii) of
subsection (f) to be a date specified in the letter required by this
subsection (g) which for purposes of such letter shall not be more
than three business days prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from [FinPro,
Inc.], dated the Closing Date and addressed to the Agent (i)
confirming that said firm is independent of the Savings Bank and the
Company and is experienced and expert in the area of corporate
appraisals within the meaning of the Conversion Regulations, (ii)
stating in effect that the Appraisal prepared by such firm complies in
all material respects with the applicable requirements of the
Conversion Regulations, and (iii) further stating that its opinion of
the aggregate pro forma market value of the Savings Bank and the
Company expressed in its Appraisal, as most recently updated, remains
in effect.
(i) The Savings Bank and the Company shall not have sustained since the
date of the latest financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Registration
Statement and Prospectus and since the respective dates as of which
information is given in the Registration Statement and Prospectus,
there shall not have been any change in the long-term debt of the
Savings Bank or the Company other than debt incurred in relation to
the purchase of Shares by the Savings Bank's eligible plans, or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Savings Bank or
the Company, otherwise than as set forth or contemplated in the
Registration Statement and Prospectus, the effect of which, in any
such case described above, is in KBW's reasonable judgment
sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Subscription Offering or the delivery
of the Shares on the terms and in the manner contemplated in the
Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a copy
of the letters from the OTS [and the Department] approving the
Conversion Application and authorizing the use of the Prospectus and
Proxy Statement; (ii) a copy of the order from the SEC declaring the
Registration Statement effective; (iii) a certificate from the OTS
evidencing the existence of the Savings Bank; (iv) a certificate of
good standing from the State of New Jersey evidencing the good
standing of the Savings Bank; (v) a certificate of good standing from
the State of Delaware evidencing the good standing of the Company;
(vi) a certificate from the FDIC evidencing the Savings Bank's
insurance of accounts; (vii) a certificate from the FHLB-New York
evidencing the Savings Bank's membership in good standing therein;
(viii) a copy of the letters from the OTS [and the Department]
approving the Company's Holding Company Application; (ix) a certified
copy of the
30
Savings Bank's [Charter] and Bylaws and (x) any other documents that
the Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange, American Stock Exchange or
in the over-the-counter market, or quotations halted generally on The
Nasdaq Stock Market, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the
SEC or any other governmental authority; (ii) a general moratorium on
the operations of commercial banks, or New Jersey savings banks or a
general moratorium on the withdrawal of deposits from commercial banks
or New Jersey savings banks declared by federal or state authorities;
(iii) the engagement by the United States in hostilities which have
resulted in the declaration, on or after the date hereof, of a
national emergency or war; or (iv) a material decline in the price of
equity or debt securities if the effect of such a declaration or
decline, in the Agent's reasonable judgement, makes it impracticable
or inadvisable to proceed with the Offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus.
(l) At or prior to the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the sale of the
Shares as herein contemplated and related proceedings or in order to
evidence the occurrence or completeness of any of the representations
or warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Savings Bank or the
Company in connection with the Conversion and the sale of the Shares
as herein contemplated shall be satisfactory in form and substance to
KBW and its counsel.
SECTION 8. INDEMNIFICATION.
(a) The Savings Bank and the Company jointly and severally agree to
indemnify and hold harmless the Agent, its officers and directors,
employees and agents, and each person, if any, who controls the Agent
within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, against any and all loss, liability, claim, damage or
expense whatsoever (including, but not limited to, settlement
expenses), joint or several, as incurred, that the Agent or any of
them may suffer or to which the Agent and any such persons may become
subject under all applicable federal or state laws or otherwise, and
to promptly reimburse the Agent and any such persons upon written
demand for any expenses (including reasonable fees and disbursements
of counsel) incurred by the Agent or any of them in connection with
investigating, preparing to defend or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions: (i) arise out of
or are related to the Conversion or any action taken by the Agent
where acting as agent of the Savings Bank and the Company; (ii) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the
31
Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement
thereto), the Holding Company Application or any instrument or
document executed by the Savings Bank or the Company or based upon
written information supplied by the Savings Bank or the Company filed
in any state or jurisdiction to register or qualify any or all of the
Shares or to claim an exemption therefrom or provided to any state or
jurisdiction to exempt the Company as a broker-dealer or its officers,
directors and employees as broker-dealers or agent, under the
securities laws thereof (collectively, the "Blue Sky Application"), or
any document, advertisement, oral statement or communication ("Sales
Information") prepared, made or executed by or on behalf of the
Savings Bank or the Company with their consent or based upon written
or oral information furnished by or on behalf of the Savings Bank or
the Company, whether or not filed in any jurisdiction, in order to
qualify or register the Shares or to claim an exemption therefrom
under the securities laws thereof; (iii) arise out of or are based
upon the omission or alleged omission to state in any of the foregoing
documents or information a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iv)
arise from any theory of liability whatsoever relating to or arising
from or based upon the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment
or supplement thereto), the Conversion Application, including the
Proxy Statement, (or any amendment or supplement thereto), any Blue
Sky Application or Sales Information or other documentation
distributed in connection with the Conversion; provided, however, that
no indemnification is required under this paragraph (a) to the extent
such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue material statement or alleged untrue
material statement in, or material omission or alleged material
omission from, the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment
or supplement thereto), the Conversion Application, any Blue Sky
Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Savings Bank
or the Company by the Agent or its counsel regarding the Agent,
provided, that it is agreed and understood that the only information
furnished in writing to the Savings Bank or the Company by the Agent
regarding the Agent is set forth in the Prospectus under the caption
["The Conversion and The Stock Offering - Community Offering and
Syndicated Community Offering" and "- Marketing Arrangements"]; and,
provided further, that the Savings Bank and/or the Company shall not
provide any indemnification under this Agreement to the extent
prohibited by applicable law, rule, order or directive by the SEC, the
OTS or the FDIC.
(b) The Agent agrees to indemnify and hold harmless, the Company and the
Savings Bank, their directors and officers and each person, if any,
who controls the Company or the Savings Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against
any and all loss, liability, claim, damage or expense whatsoever
(including but not limited to settlement expenses), joint or
32
several, which they, or any of them, may suffer or to which they, or
any of them may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Company, the Savings
Bank, and any such persons upon written demand for any expenses
(including reasonable fees and disbursements of counsel) incurred by
them, as incurred, or any of them, in connection with investigating,
preparing to defend or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or
supplement thereto), the Conversion Application (or any amendment or
supplement thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), any Blue Sky Application or Sales
Information, (ii) are based upon the omission or alleged omission to
state in any of the foregoing documents a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or (iii) arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Conversion Application (or
any amendment or supplement thereto), or any Blue Sky Application or
Sales Information or other documentation distributed in connection
with the Conversion; provided, however, that the Agent's obligations
under this Section 8(b) shall exist only if and only to the extent
that such untrue statement or alleged untrue statement was made in, or
such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement
thereto), any Blue Sky Application or Sales Information in reliance
upon and in conformity with information furnished in writing to the
Savings Bank or the Company by the Agent or its counsel regarding the
Agent, provided, that it is agreed and understood that the only
information furnished in writing to the Savings Bank or the Company by
the Agent regarding the Agent is set forth in the Prospectus under the
caption ["The Conversion and The Stock Offering - Community Offering
and Syndicated Community Offering" and "- Marketing Arrangements."]
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced
or threatened), or suit instituted against it in respect of which
indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it
may have on account of this Section 8 or otherwise. An indemnifying
party may participate at its own expense in the defense of such
action. In addition, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such
action with counsel chosen by it and approved by the indemnified
parties that are defendants in such action, unless such indemnified
parties reasonably object to such assumption on the ground that
33
there may be legal defenses available to them that are different from
or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection
with such action, proceeding or claim, other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one separate firm of attorneys
(and any special counsel that said firm may retain) for each
indemnified party in connection with any one action, proceeding or
claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof and
the representations and warranties of the Savings Bank and the Company
set forth in this Agreement shall remain operative and in full force
and effect regardless of: (i) any investigation made by or on behalf
of the Agent or its officers, directors or controlling persons, agent
or employees or by or on behalf of the Savings Bank or the Company or
any officers, directors, trustees or controlling persons, agent or
employees of the Savings Bank or the Company; (ii) delivery of and
payment hereunder for the Shares; or (iii) any termination of this
Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Savings Bank, the Company or the Agent, the
Savings Bank, the Company and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding, but after deducting any contribution
received by the Savings Bank, the Company or the Agent from persons other than
the other parties thereto, who may also be liable for contribution) in such
proportion so that the Agent is responsible for that portion represented by the
percentage that the fees paid to the Agent pursuant to Section 2 of this
Agreement (not including expenses) bears to the gross proceeds received by the
Company from the sale of the Shares in the Offering, and the Savings Bank and
the Company shall be responsible for the balance. If, however, the allocation
provided above is not permitted by applicable law, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative fault of the
Savings Bank and the Company on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the Savings Bank and the
Company on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Savings Bank and/or the Company on the one hand or
the Agent on the other and the parties' relative intent, good faith, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Savings Bank, the Company and the Agent agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro-rata allocation or by any other
34
method of allocation which does not take into account the equitable
considerations referred to above in this Section 9. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
the Agent shall not be liable for any loss, liability, claim, damage or expense
or be required to contribute any amount pursuant to Section 8(b) or this Section
9 which in the aggregate exceeds the amount paid (excluding reimbursable
expenses) to the Agent under this Agreement. It is understood that the above
stated limitation on the Agent's liability is essential to the Agent and that
the Agent would not have entered into this Agreement if such limitation had not
been agreed to by the parties to this Agreement. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Savings Bank, the
Company and the Agent under this Section 9 and under Section 8 shall be in
addition to any liability which the Savings Bank, the Company and the Agent may
otherwise have. For purposes of this Section 9, each of the Agent's, the Savings
Bank's or the Company's officers, trustees and directors and each person, if
any, who controls the Agent or the Savings Bank or the Company within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Agent, the Savings Bank or the Company. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 9, will notify
such party from whom contribution may be sought, but the omission to so notify
such party shall not relieve the party from whom contribution may be sought from
any other obligation it may have hereunder or otherwise than under this Section
9. Notwithstanding anything to the contrary in this Agreement, the Savings Bank
and/or the Company shall not provide any contribution under this Agreement to
the extent prohibited by applicable law, rule, order or directive by the SEC,
the OTS or the FDIC.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Savings Bank, the Company and the Agent and the
representations and warranties and other statements of the Savings Bank, the
Company and the Agent set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of the Agent, the
Savings Bank, the Company or any controlling person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any successor or
assign of the Agent, the Savings Bank, the Company and any such controlling
person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
SECTION 11. TERMINATION. The Agent may terminate this Agreement by giving
the notice indicated below in this Section 11 at any time after this Agreement
becomes effective as follows:
(a) In the event the Company fails to sell the required minimum number of
the Shares by o, and in accordance with the provisions of the Plan or
as required by the Conversion Regulations, and any other applicable
law, this Agreement shall terminate upon refund by the Company to each
person who has subscribed for or
35
ordered any of the Shares the full amount which it may have received
from such person, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation
to the other hereunder, except as set forth in Sections 2(a), 6, 8 and
9 hereof.
(b) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement, unless waived in
writing, or by the Closing Date, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying the
Savings Bank and the Company of such cancellation in writing or by
telegram at any time at or prior to the Closing Date, and any such
cancellation shall be without liability of any party to any other
party except as otherwise provided in Sections 2(a), 6, 8 and 9
hereof.
(c) In the event either the Savings Bank or the Company is in material
breach of the representations and warranties or covenants contained in
Sections 4 and 5 and such breach has not been cured after the Agent
has provided the Savings Bank and the Company with notice of such
breach.
If the Agent elects to terminate this Agreement as provided in this
Section, the Savings Bank and the Company shall be notified promptly by
telephone or telegram, confirmed by letter.
The Savings Bank and the Company may terminate this Agreement in the event
the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
Savings Bank and the Company have provided the Agent with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (with a copy to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.), and, if sent
to the Savings Bank and the Company, shall be mailed, delivered or telegraphed
and confirmed to the Savings Bank and the Company at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: [▇▇▇▇▇▇ ▇▇▇▇▇▇, President and CEO]
(with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.).
SECTION 13. PARTIES. The Savings Bank and the Company shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of the Agent when the same shall have been given by the
undersigned. The Agent shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the Savings Bank or
the Company, when the same shall have been given by the undersigned or any other
officer of the Savings Bank or the Company. This Agreement shall inure solely to
the benefit of, and shall be binding upon, the Agent, the Savings Bank, the
Company and their respective successors and assigns, and no other person shall
have or be construed to have any
36
legal or equitable right, remedy or claim under or in respect of or by virtue of
this Agreement or any provision herein contained. It is understood and agreed
that this Agreement is the exclusive agreement among the parties hereto, and
supersedes any prior agreement among the parties (except for specific references
to the letter agreement with the Agent) and may not be varied except in writing
signed by all the parties.
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent,
the Savings Bank and the Company. At the closing, the Savings Bank and the
Company shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and
the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in accordance
with the laws of the State of New York.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
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If the foregoing correctly sets forth the arrangement among the Savings
Bank, the Company and the Agent, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
▇▇▇▇▇▇▇ SAVINGS BANK, S.L.A.
By Its Authorized
Representative:
---------------------------
CLIFTON SAVINGS BANCORP, INC.
By Its Authorized
Representative:
---------------------------
Accepted as of the date first above written
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
By Its Authorized
Representative:
---------------------------
38