XXXXXXX SAVINGS BANCORP, INC.
11,946,706 Shares
COMMON SHARES
(Par Value $.01 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
___________, 2004
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxx Savings Bank, S.L.A., a New Jersey state-chartered mutual savings
and loan association (the "Savings Bank"), Xxxxxxx MHC (In Organization), a
federal mutual holding company to be organized under the laws of the United
States (the "MHC") and Clifton Savings Bancorp, Inc. (In Organization), a
corporation to be organized under the laws of the United States (the "Holding
Company"), hereby confirm, jointly and severally, their agreement with Xxxxx,
Xxxxxxxx & Xxxxx, Inc. ("KBW" or the "Agent"), as follows:
SECTION 1. THE OFFERING. In accordance with the Plan of Reorganization and
Stock Issuance, adopted by the Board of Directors of the Savings Bank on
November 12, 2003 and amended and restated on December 10, 2003 (the "Plan"),
the Savings Bank will convert from a New Jersey state-chartered mutual savings
and loan organization into a New Jersey state-chartered stock savings and loan
organization. As part of the Plan, the following steps will be effectuated: (i)
the Savings Bank will organize an interim stock savings bank as a wholly owned
subsidiary ("Interim One"); (ii) Interim One will organize a stock corporation
as a wholly owned subsidiary (the Holding Company); (iii) Interim One will
organize an interim federal savings bank as a wholly owned subsidiary ("Interim
Two"); (iv) the Savings Bank will convert its certificate of incorporation to a
New Jersey stock savings association certificate of incorporation and Interim
One will exchange its charter for a federal mutual holding company charter to
become the MHC; (v) sequentially with step (iv), Interim Two will merge with and
into the Savings Bank with the Savings Bank as the resulting institution; (vi)
former members of the Savings Bank will become members of the MHC; (vii) MHC
will contribute 100% of the issued common stock of the Savings Bank to the
Holding Company; and (viii) the Holding Company will issue a majority of its
common stock to the MHC.
The Reorganization (as defined below) 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"), as well as the rules and regulations of
the New Jersey Department of Banking and Insurance (the "Department") (such laws
and the regulations of the OTS and the Department are referred to herein as the
"Reorganization Regulations"). In connection with the Reorganization, the
Holding Company will offer and sell
up to 49.9% of its common stock, par value $.01 per share (the "Shares"), 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 Holding Company is
offering a minimum of 8,830,174 and a maximum of 11, 946,706 shares (subject to
an increase up to 13,738,712 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 Holding 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 Holding 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 "Reorganization."
The Holding Company has filed with the United States Securities and
Exchange Commission (the "SEC") a registration statement on Form S-1 (File No.
333-106116) (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 Holding
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 Reorganization, the Holding Company filed with the
OTS and the New Jersey Department of Banking and Insurance (the "Department") an
application for approval of the Holding Company's acquisition of the Savings
Bank, and has filed such amendments thereto and supplementary materials as may
have been required to the date hereof as required by the OTS and the Department
(the "Reorganization Application"). The Holding Company has also filed with the
OTS its application on Form H-(e)1-S (the "Holding Company Application") for
approval to acquire the Savings Bank and 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").
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SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Savings Bank,
the MHC and the Holding 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, the MHC and
the Holding Company with respect to the Holding Company's sale of the Shares in
the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Savings Bank,
the MHC and the Holding 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, the MHC and the Holding 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, the MHC or the Holding Company or upon termination of the Offering, but in
no event later than 90 days after the completion of the Subscription Offering
(the "End Date"). All fees or expenses due to the Agent but unpaid will be
payable to the Agent in next day funds at the earlier of the Closing Date (as
hereinafter defined) or the End Date. In the event the Offering is extended
beyond the End Date, the Savings Bank, the MHC, the Holding Company and the
Agent may agree to renew this Agreement under mutually acceptable terms and
subject to the approval of the OTS and any other governmental agency or
regulatory authority having jurisdiction over such matters.
In the event the Holding Company is unable to sell a minimum of 8,830,174
Shares by the End Date, this Agreement shall terminate and the Holding Company
shall refund to any persons who have subscribed for any of the Shares the full
amount that it may have received from them plus accrued interest, as set forth
in the Prospectus, and none of the parties to this Agreement shall have any
obligation to the other parties hereunder, except as set forth in this Section 2
and in Sections 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 Reorganization,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Holding Company agrees to issue, or have issued, the
Shares sold in the Offering and to release for delivery certificates for such
Shares on the Closing Date (as hereinafter defined) against payment to the
Holding Company by any means authorized by the Plan; provided, however, that no
funds shall be released to the Holding Company until the conditions specified in
Section 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 MHC, the
Holding Company and the Agent. Certificates for Shares shall be delivered
directly to the purchasers in accordance with their directions. The date upon
which the
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Holding 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 $__________ has been paid. Such fees
shall be deemed to have been earned when due. Should the
Reorganization 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 or the MHC 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).
(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 MHC, the Holding 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, the MHC and
the Holding 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 $______, and legal fees and expenses not to
exceed $______ without the prior consent of the Savings Bank. The
Savings Bank, the MHC and the Holding 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
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registration fees; the fees of the Savings Bank's, the MHC's and the
Holding Company's accountants, attorneys, appraiser, transfer agent
and registrar, printing, mailing and marketing and syndicate expenses
associated with the Reorganization; the fees set forth under this
Section 2; and fees for "Blue Sky" legal work. The Savings Bank, the
MHC and the Holding 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, the MHC or the Holding 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, the MHC and the Holding 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, the MHC and the Holding Company and filed with the SEC, was
declared effective by the SEC on January __, 2004. At the time
the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement), became
effective, the Registration Statement complied as to form in all
material respects with the 1933 Act and the 1933 Act Regulations.
The Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), and any
information regarding the Savings Bank, the MHC or the Holding
Company contained in Sales Information (as such term is defined
in Section 8 hereof) authorized by the Savings Bank, the MHC or
the Holding 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. 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, the MHC or the Holding Company contained in
Sales Information (as such term is defined in Section 8 hereof)
authorized by the Savings Bank, the MHC or the Holding Company
for use in connection with the Offering 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, the
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MHC or the Holding Company by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus under the caption
"The Reorganization and Stock Offering - Community Offering, "-
Syndicated Community Offering" and "- Marketing Arrangements" or
in any Sales Information.
(ii) The Reorganization 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, the
MHC and the Holding Company and filed with the OTS and the
Department, was approved on ________ __, 2004 by the OTS and on
________ __, 2004 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
Reorganization 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 Reorganization Application,
including the Prospectus and Proxy Statement (including any
amendment or supplement thereto), will comply in all material
respects with the Reorganization Regulations, except to the
extent waived in writing by the OTS or the Department, as the
case may be. The Reorganization 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, the MHC
or the Holding Company by the Agent or its counsel expressly
regarding the Agent for use in the Prospectus contained in the
Reorganization Application under the caption "The Reorganization
and Stock Offering - 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, the MHC and the Holding Company in material conformity with
the requirements of the OTS and has been filed with and approved
by the OTS. 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 Reorganization is
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pending or, to the best knowledge of the Savings Bank, the MHC or
the Holding Company, threatened.
(v) Pursuant to the Reorganization Regulations, the Plan has been
approved by the Board of Directors of the Savings Bank and the
Incorporators of the MHC and the Holding Company; 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
Reorganization Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Reorganization imposed upon the Savings Bank, the MHC or the
Holding Company by the OTS, the SEC, the Department or any other
regulatory authority and in the manner described in the
Prospectus. To the best knowledge of the Holding Company, 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
Reorganization 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 association in the
mutual form of organization and upon the Reorganization will
become a duly organized and validly existing New Jersey
state-chartered savings association in stock form of organization
and a wholly-owned subsidiary of the Holding 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, the MHC and the Holding 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 in all material respects with all laws, rules,
regulations and orders applicable to the operation of its
business. 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
Reorganization, (i) all of the authorized and outstanding capital
stock of the Savings Bank will be owned by the Holding Company
free and clear of any security interest, mortgage, pledge, loan,
encumbrance, claim or restriction and (ii) the Holding Company
will have no direct subsidiaries other than the Savings Bank. At
the Closing Date, the Reorganization 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-Reorganization reports, and
documents in compliance with the 1933 Act Regulations, all terms,
conditions, requirements and provisions with respect to the
Reorganization imposed by the OTS, the Department, the SEC and
the FDIC, if any, will have been complied with by the Savings
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Bank, the MHC and the Holding 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) At the Closing Date, the Holding Company will be duly
incorporated and validly existing as a corporation in good
standing under the laws of the United States 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. On or after the Closing Date, the Holding
Company will obtain 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 MHC, the Holding
Company and the Savings Bank, taken as a whole; all such
licenses, permits and governmental authorizations will be in full
force and effect, and the Holding Company will in all material
respects comply with all laws, rules, regulations and orders
applicable to the operation of its business.
(viii) At the Closing Date, the MHC will be duly chartered and validly
existing as a mutual holding company in good standing under the
laws of the United States 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.
(ix) 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, the
MHC or the Holding Company, threatened. Upon consummation of the
Reorganization, 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 Reorganization Regulations.
(x) The only direct subsidiary of the MHC will be the Holding
Company. The only direct subsidiary of the Holding Company will
be the Savings Bank. The Savings Bank has no Subsidiaries.
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(xi) The Savings Bank, has good and marketable title to all real
property and good title to all other assets material to the
business of the Savings Bank, the MHC and the Holding 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, the MHC and the Holding Company, taken as a
whole; and all of the leases and subleases material to the
business of the Savings Bank, the MHC and the Holding Company,
taken as a whole, under which the Savings Bank, the MHC or the
Holding Company hold properties, including those described in the
Registration Statement and Prospectus, are in full force and
effect.
(xii) The Savings Bank, the MHC and the Holding Company have received
an opinion of their special counsel, Xxxxxxx Xxxxxx & Xxxxxxxx
LLP, with respect to the federal income tax consequences of the
Reorganization and an opinion from Radics & Co., LLC with respect
to the New Jersey income tax consequences of the Reorganization;
all material aspects of the opinions of Xxxxxxx Xxxxxx & Xxxxxxxx
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.
(xiii) The Savings Bank, the MHC and the Holding 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 Holding 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 Reorganization, the execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly
authorized by all
9
necessary corporate action on the part of the Savings Bank, the
MHC and the Holding Company and this Agreement has been validly
executed and delivered by the Savings Bank, the MHC and the
Holding Company and is the valid, legal and binding agreement of
the Savings Bank, the MHC and the Holding 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).
(xiv) None of the Savings Bank, the MHC or the Holding 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, the MHC or the Holding Company, threatened, which might
materially and adversely affect the Reorganization, 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, the MHC and the Holding Company, taken as a whole.
(xv) The financial statements, schedules and notes related thereto
that are included in the Prospectus fairly present in all
material respects 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 (except as noted in the Notes to the financial
statements), 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 and any other applicable
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regulatory authority, except that accounting principles employed
in such regulatory filings conform to the requirements of the OTS
and the SEC 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 and the MHC included in the
Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been properly applied on the basis described
therein.
(xvi) 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, 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, the MHC or the Holding 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, the MHC or the Holding 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,
the MHC's or the Holding Company's relationship with its
insurance carriers, including, without limitation, cancellation
or other termination of the Savings Bank's, the MHC's or the
Holding 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, the
MHC or the Holding Company, neither of which has any material
undisclosed liability of any kind, contingent or otherwise; (vii)
neither the Savings Bank, the MHC or the Holding 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) none of the Savings Bank, the MHC or the Holding 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,
the MHC and the Holding Company conform in all material respects
to the descriptions thereof contained in the Prospectus; and (x)
none of the Savings Bank, the MHC or the Holding Company has any
material contingent liabilities, except as set forth in the
Prospectus.
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(xvii) All documents made available to or delivered or to be made
available to or delivered by the Savings Bank, the MHC, the
Holding 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
connection with the Agent's exercise of due diligence, except for
those documents which were prepared by parties other than the
Savings Bank, the MHC, the Holding Company or their
representatives, to the best knowledge of the Savings Bank, the
MHC and the Holding 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.
(xviii) The Savings Bank is not in violation of its charter or bylaws or
in default in the performance or observance of any obligation,
agreement, covenant, or condition contained in any contract,
lease, loan agreement, indenture or other investment to which it
is a party or by which it or any of its property may be bound
which would result in a material adverse effect on the financial
condition and results of operations of the Savings Bank, the MHC
and the Holding Company on a consolidated basis. At the Closing
Date, neither the Holding Company nor the MHC will be in
violation of their respective charters or bylaws or in default in
the performance or observance of any obligation, agreement,
covenant, or condition contained in any contract, lease, loan
agreement, indenture or other instrument to which it is a party
or by which it or any of its property may be bound which would
result in a material adverse effect on the financial condition
and results of operations of the Savings Bank, the MHC and the
Holding Company on a consolidated basis. The execution and
delivery of this Agreement and the consummation of the
transactions herein contemplated will not: (i) conflict with or
constitute a breach of, or default under, or result in the
creation of any lien, charge or encumbrance upon any of the
property or assets of the Savings Bank, the MHC or the Holding
Company pursuant to their respective certificate of
incorporation, charter or bylaws as applicable or any contract,
lease or other instrument in which the Savings Bank, the MHC or
the Holding Company has a beneficial interest, or any applicable
law, rule, regulation or order that would individually or in the
aggregate result in a material adverse effect on the financial
condition and results of operations of the Savings Bank, the MHC
and the Holding Company on a consolidated basis; or (ii) violate
any authorization, approval, judgement, decree, order, statute,
rule or regulation applicable to the Savings Bank, the MHC or the
Holding 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, the MHC and the Holding
Company on a consolidated basis.
(xix) 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, the MHC or the Holding 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, the MHC or the Holding 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
12
effect on the financial condition or results of operations of the
Savings Bank, the MHC and the Holding 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, the MHC and the Holding Company
threatened any action or proceeding wherein the Savings Bank, the
MHC or the Holding Company is alleged to be in default
thereunder, where such action or proceeding, if determined
adversely to the Savings Bank, the MHC or the Holding Company,
would have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of the Savings
Bank, the MHC and the Holding Company, taken as a whole.
(xx) Upon consummation of the Reorganization, the authorized, issued
and outstanding equity capital of the Holding 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 Holding 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 Holding Company to the extent payment therefor in cash
has not been received by the Holding 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, the MHC and the Holding
Company, upon the issuance of the Shares, good title to the
Shares will be transferred from the Holding Company to the
purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants.
(xxi) 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.
(xxii) 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,
13
in writing that they are, with respect to the Savings Bank,
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.
(xxiii) FinPro, Inc., which has prepared the Savings Bank's Independent
Appraisal as of December 29, 2003 (as amended or supplemented, if
so amended or supplemented) (the "Appraisal"), has advised the
Savings Bank in writing that it is independent of the Savings
Bank within the meaning of the Reorganization Regulations.
(xxiv) The Savings Bank, the MHC and the Holding Company have timely
filed all required federal, state and local tax returns; the
Savings Bank, the MHC and the Holding Company have paid all taxes
that have become due and payable in respect of such returns,
except where permitted to be extended, have made adequate
reserves for similar future tax liabilities to the extent
required by GAAP and no deficiency has been asserted with respect
thereto by any taxing authority.
(xxv) 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.
(xxvi) To the knowledge of the Savings Bank, the MHC and the Holding
Company, none of the Savings Bank, the MHC, the Holding Company
or employees of the Savings Bank, the MHC or the Holding Company
has made any payment of funds of the Savings Bank, the MHC or the
Holding Company as a loan for the purchase of the Shares, [except
for the Holding Company's loan to the ESOP], 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.
(xxvii) None of the Savings Bank, the MHC or the Holding 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); (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; or (iv)
engaged any intermediary between the
14
Agent and the Savings Bank, the MHC and the Holding 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
Reorganization is not completed for whatever reason or for
delivery to the Holding Company if all Shares are sold.
(xxviii) The Savings Bank, the MHC and the Holding 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
Reorganization.
(xxix) The Holding Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxx) Immediately upon closing, the Holding Company will establish and
maintain 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 relating to
the Holding Company, including its consolidated subsidiaries, is
made known to the Holding 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
Holding Company with the SEC which it may make under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act are being prepared,
(ii) will be evaluated for effectiveness as of a date within 90
days prior to the filing of the Holding Company's most recent
Annual Report filed with the SEC and (iii) will be 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 Holding 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 Holding 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.
(xxxi) Any certificates signed by an officer of the Savings Bank, the
MHC or the Holding 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, the
15
MHC or the Holding 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, the MHC and the
Holding 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, the
MHC and the Holding 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, 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 Holding 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.
16
(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, THE MHC AND THE HOLDING COMPANY.
The Savings Bank, the MHC and the Holding Company hereby jointly and severally
covenant with the Agent as follows:
(a) The Holding Company will not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel a
reasonable 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, the MHC nor the Holding Company will file
any amendment or supplement to the Reorganization Application without
providing the Agent and its counsel a reasonable 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, the MHC nor the Holding Company will file
any amendment or supplement to the Holding Company Application without
providing the Agent and its counsel a reasonable 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.
(d) The Savings Bank, the MHC and the Holding 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 Reorganization 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 Reorganization Application, as amended, has been
approved by the OTS and the Department; (iii) when the Savings Bank,
the MHC or the Holding Company receives any comments from the SEC, the
OTS, the Department or any other governmental entity with respect to
the Reorganization 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 Reorganization 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, the MHC or the
Holding Company under the Reorganization 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
17
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, the MHC and the
Holding 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, the MHC and the Holding Company will deliver to the
Agent and to its counsel two conformed copies of the Registration
Statement, the Reorganization Application and the Holding Company
Application, as originally filed and of each amendment or supplement
thereto, including all exhibits. Further, the Savings Bank, the MHC
and the Holding 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, the MHC and the Holding 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 Holding 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, the MHC and the Holding Company will comply in all
material respects with any and all terms, conditions, requirements and
provisions with respect to the Reorganization and the transactions
contemplated thereby imposed by the SEC, the OTS, the Department or
the Reorganization 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, the MHC and the Holding Company will comply in all
material respects, at their own expense, with all requirements imposed
upon them by the SEC, the OTS, the Department or the Reorganization
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, the
MHC or the Holding Company shall occur, as a result of which it is
necessary or appropriate, in the
18
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,
the MHC and the Holding 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, the MHC and the Holding
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, the MHC and the Holding 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 Holding
Company or to exempt such Shares from registration, or to exempt the
Holding 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 Reorganization Regulations to be sold or as the
Agent and the Savings Bank, the MHC and the Holding Company may
reasonably agree upon; provided, however, that the Holding 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 Holding 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.
(j) [Reserved].
(k) The Savings Bank, the MHC and the Holding Company will not sell or
issue, contract to sell or otherwise dispose of, for a period of 180
days after the Closing
19
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 Holding 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
Reorganization. The Holding 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 Holding Company will furnish to its shareholders as
soon as practicable after the end of each fiscal year an annual report
of the Holding 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 Holding 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 Holding
Company will furnish to the Agent: (i) as soon as practicable after
such information is publicly available, a copy of each report of the
Holding 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 Holding 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 Holding 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 Holding
Company is listed or quoted, each press release and material news
items and additional documents and information with respect to the
Savings Bank, the MHC and the Holding Company as the Agent may
reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Savings Bank, the MHC and
the Holding Company as the Agent may reasonably request.
(o) The Savings Bank, the MHC and the Holding 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 Reorganization 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, none of the Savings
Bank, the MHC or the Holding Company will distribute any prospectus,
offering circular or other offering material in connection with the
offer and sale of the Shares.
20
(q) The Holding 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 Holding Company will promptly take all necessary action to
register as a savings and loan holding company under the HOLA.
(t) The Savings Bank, the MHC and the Holding 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) None of the Savings Bank, the MHC or the Holding Company will amend
the Plan without notifying the Agent prior thereto.
(v) The Holding 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 Holding 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, the MHC and the Holding
Company will inform the Agent of any event or circumstances of which
it is aware as a result of which the Registration Statement and/or
Prospectus, as then amended or supplemented, would contain an untrue
statement of a material 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, none of the Savings Bank, the MHC or
the Holding Company will have: (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed
21
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, the MHC and the Holding Company, taken
as a whole.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Reorganization is
completed or the sale of the Shares by the Holding Company is consummated, the
Savings Bank, the MHC and the Holding 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 Reorganization, including but not limited to the Savings Bank's,
the MHC's, the Holding 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 Reorganization. In the event the Holding Company is unable to sell a minimum
of 8,830,174 Shares or the Reorganization is terminated or otherwise abandoned,
the Savings Bank, the MHC and the Holding 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,
the MHC and the Holding 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, the MHC and the Holding Company
shall have performed in all material respects all of their obligations hereunder
to be performed on or before such dates, and to the following further
conditions:
(a) At the Closing Date, the Savings Bank, the MHC and the Holding Company
shall have conducted the Reorganization in all material respects in
accordance with the Plan, the Reorganization Regulations and all other
applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the
Reorganization 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 Reorganization Application approved by the OTS and the
Department; and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or 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 Reorganization shall have been issued or proceedings therefor
initiated or, to the Savings Bank's, the MHC's or the Holding
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:
22
(1) The opinion, dated as of the Closing Date and addressed to the
Agent and for its benefit, of Xxxxxxx Xxxxxx & Xxxxxxxx LLP, special
counsel for the Savings Bank, the MHC and the Holding Company, in form
and substance to the effect that:
(i) The Holding Company has been duly incorporated and
is validly existing in good standing as a corporation under the
laws of the United States; the MHC has been duly organized and is
validly existing in good standing as a mutual holding company
under the laws of the United States.
(ii) Each of the Savings Bank, the MHC and the Holding
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.
(iii) The Savings Bank is a validly existing
state-chartered savings and loan association in stock form 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 Reorganization will be duly authorized and will
be validly issued, fully paid and non-assessable and will be
owned by the Holding 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 Reorganization
and Stock Offering - Effects of Reorganization on Deposits,
Borrowers and Members - Effect on 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
Reorganization, the authorized, issued and outstanding Shares of
the Holding 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 Holding
Company pursuant to the Plan against payment of the consideration
23
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 Holding Company to the extent
payment therefor in cash has not been received by the Holding
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.
To such counsel's Actual Knowledge, upon the issuance of the
Shares, good title to the Shares will be transferred from the
Holding Company to the purchasers thereof against payment
therefor, subject to such claims as may be asserted against the
purchasers thereof by third-party claimants.
(vi) The Savings Bank, the MHC and the Holding 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 corporate
action on the part of the Savings Bank, the MHC and the Holding
Company; and this Agreement is a valid and binding obligation of
the Savings Bank, the MHC and the Holding Company, enforceable
against the Savings Bank, the MHC and the Holding 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).
(vii) The Reorganization Application has been approved by
the OTS and the Department and the Prospectus and Proxy Statement
have been authorized for use by the OTS and the Department. The
OTS has approved the Holding Company Application 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.
24
(viii) Pursuant to the Reorganization Regulations, the
Plan has been approved by the MHC's members and duly adopted by
the required vote of the directors of the Savings Bank, the MHC
and the Holding Company.
(ix) Subject to the satisfaction of the conditions to
the OTS's and the Department's approval of the Reorganization, 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
Reorganization, 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, to such counsel's Actual Knowledge, 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 Reorganization Application,
including the Prospectus and Proxy Statement contained therein,
was approved by the OTS and the Department, the Reorganization
Application, including the Prospectus and Proxy Statement
contained therein, complied as to form in all material respects
with the requirements of the Reorganization 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 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 Reorganization Regulations and federal law.
(xiii) The terms and provisions of the Shares of the
Holding Company conform to the description thereof contained in
the Registration
25
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 Reorganization 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 Reorganization Application, the
Registration Statement or the Prospectus. The description in the
Reorganization 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 the
Reorganization Regulations, the Reorganization Application and
the Holding Company Application; 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 Reorganization
Application, the Holding Company Application or the Prospectus.
(xvii) To such counsel's Actual Knowledge: the Savings
Bank, the MHC and the Holding Company have obtained all licenses,
permits and other governmental authorizations that are material
for the conduct of their businesses; all such licenses, permits
and other governmental authorizations are in full force and
effect; and the Savings Bank, the MHC and the Holding Company are
in all material respects complying therewith.
(xviii) To such counsel's Actual Knowledge, none of the
Savings Bank, the MHC or the Holding Company is in violation of
its Certificate of Incorporation and Bylaws or its Charter 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
26
impact on the financial condition or results of operations of the
Savings Bank, the MHC and the Holding 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, the MHC or the Holding Company
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Savings
Bank, the MHC or the Holding 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, the MHC or the Holding Company are subject
(other than the establishment of the liquidation account), (b)
result in any violation of the provisions of the Certificate of
Incorporation, Charter or Bylaws of the MHC, the Holding Company
or 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, to such
counsel's Actual Knowledge, order or court order, writ,
injunction or decree.
(xix) The Holding Company's Certificate of Incorporation
and Bylaws comply in all material respects with the laws of the
United States. The MHC's Charter and Bylaws comply in all
material respects with the laws of the United States. The Savings
Bank's Certificate of Incorporation and Bylaws comply in all
material respects with the laws of the State of New Jersey.
(xx) To such counsel's Actual Knowledge, none of the
Savings Bank, the MHC or the Holding 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 Management," "Our Dividend Policy," "Regulation and
Supervision," "Federal and State Taxation," "The Reorganization
and Stock Offering," "Restrictions on Acquisition of Xxxxxxx
Savings Bancorp and Xxxxxxx Savings" and "Description of Xxxxxxx
Savings Bancorp Capital Stock," to the extent that such
information constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in all material respects.
27
The description of the Reorganization process in the Prospectus
under the caption "The Reorganization and 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 Reorganization and
Stock Offering - Material Income Tax Consequences" has been
reviewed by such counsel and fairly describes the opinion
rendered by them to the Savings Bank, the MHC and the Holding
Company with respect to federal tax matters.
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, the MHC, the Holding Company and
certificates of public officials. Such counsel's opinion shall be
limited to matters governed by federal laws and the law of the
State of New Jersey. The term "Actual Knowledge" as used herein
shall have the meaning set forth in the 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 any of the Savings Bank, the
MHC or the Holding 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 Reorganization 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, the MHC or the Holding Company.
(2) A letter of Xxxxxxx Xxxxxx & Xxxxxxxx LLP which shall state that
during the preparation of the Registration Statement and the
Prospectus, Xxxxxxx Xxxxxx & Xxxxxxxx LLP participated in conferences
with certain officers of, the independent public and internal
accountants for, and other representatives of, the Savings Bank, the
MHC and the Holding Company, at which conferences the contents of the
Registration Statement and the Prospectus 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
Registration Statement and the Prospectus and do not assume any
responsibility for such information, based upon the foregoing (relying
as to materiality as to factual matters on certificates of officers
and other factual representations by the Savings Bank, the MHC and the
Holding Company), nothing has come to their attention that would lead
them to believe that the Registration Statement or the Prospectus
(other than the financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal
28
data included therein as to which no view need be rendered) at the
time it was declared effective by the SEC and as of the date of such
letter, 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.
(3) The favorable opinion, dated as of the Closing Date and addressed
to the Agent and for its benefit, of Xxxxxx Xxxxxx Xxxxx & Xxxx 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 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, the MHC and the Holding 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, the MHC or the Holding 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, the MHC and the Holding 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 Registration Statement, and at the time the Registration
Statement became authorized for final use, the Registration 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 Registration Statement became
authorized for final use, no event has occurred which should have been
set forth in an amendment or supplement to the Registration Statement
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, the MHC and the Holding Company on a consolidated basis
and the conditions set forth in this Section 7 have been satisfied;
(iii) since the respective dates as of which information is given in
the Registration Statement, there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, capital
or properties of the Savings Bank, the MHC or the Holding Company
independently, or of the Savings Bank, the MHC or the Holding 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,
the MHC and the Holding 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 Reorganization; (vi) no stop order suspending the
effectiveness of the Registration Statement has been issued or, to the
best knowledge of the Savings
29
Bank, the MHC or the Holding Company, threatened by the SEC or any
state authority; (vii) no order suspending the Offering, the
Reorganization, the acquisition of all of the outstanding capital
stock of the Savings Bank by the Holding Company or the effectiveness
of the Registration Statement has been issued and, to the best of
their knowledge, no proceedings for that purpose are pending or
threatened by the SEC, the OTS, the FDIC, the Department or any
governmental authority; and (viii) to the best knowledge of the
Savings Bank, the MHC and the Holding 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
financial condition or in the earnings or business of the Savings
Bank, the MHC or the Holding Company independently, or of the Savings
Bank, the MHC and the Holding 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, the MHC or the Holding
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, the
MHC and the Holding Company taken as a whole; (iii) none of the
Savings Bank, the MHC or the Holding 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, the
MHC or the Holding Company, threatened against the Savings Bank, the
MHC or the Holding 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, the MHC and the Holding 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, the MHC and the
Holding Company.
(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 Savings Bank as of
September 30, 2003 and 2002, and for each of the three years in the
period ended September 30, 2003, included in the Prospectus and
covered by their opinion
30
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 Savings
Bank prepared by the Savings Bank, a reading of the minutes of the
meetings of the Board of Directors of the Savings Bank and
consultations with officers of 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 Savings Bank; or (C) there was any
decrease in the net assets or retained earnings of 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 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 Savings Bank,
which are subject to the internal controls of the Savings Bank, the
accounting system and other data prepared by 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 in the letter delivered by it pursuant to
subsection (f) of this Section 7 (modified, as appropriate, to include
the MHC and the Holding Company), 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, the MHC and the
Holding Company and is experienced and expert in the area of corporate
appraisals within the meaning of the Reorganization Regulations, (ii)
stating in effect that the Appraisal prepared
31
by such firm complies in all material respects with the applicable
requirements of the Reorganization Regulations, and (iii) further
stating that its opinion of the aggregate pro forma market value of
the Savings Bank, the MHC and the Holding Company expressed in its
Appraisal, as most recently updated, remains in effect.
(i) The Savings Bank, the MHC and the Holding 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, the MHC or the Holding 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, the MHC or the Holding 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
Reorganization Application; (ii) a copy of the order from the SEC
declaring the Registration Statement effective; (iii) a certificate
from the Department evidencing the existence and good standing of the
Savings Bank; (iv) a certificate from the FDIC evidencing the Savings
Bank's insurance of accounts; (v) a copy of the letters from the OTS
approving the Holding Company's Holding Company Application; (vi) to
the extent available, a certified copy of the Savings Bank's
Certificate of Incorporation and Bylaws, to the extent available, and
the MHC's and the Holding Company's Charter and Bylaws or such other
documentation available from the OTS evidencing their formation and
(vii) 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 other than temporary trading
halts; (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
32
authorities; or (iii) a material adverse change in the financial
markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis,
including terrorist attacks after the date hereof, the effect of
which, 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) All proceedings taken by the Savings Bank, the MHC or the Holding
Company in connection with the Reorganization 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, the MHC and the Holding 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 Reorganization or any action taken
by the Agent where acting as agent of the Savings Bank, the MHC and
the Holding Company; (ii) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment or supplement thereto),
the Prospectus (or any amendment or supplement thereto), the
Reorganization Application (or any amendment or supplement thereto),
the Holding Company Application or any instrument or document executed
by the Savings Bank, the MHC or the Holding Company or based upon
written information supplied by the Savings Bank, the MHC or the
Holding 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 Holding 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, the
MHC or the Holding Company with their consent or based upon written or
oral information furnished by or on behalf of the Savings Bank, the
MHC or the Holding Company, 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
33
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), the Prospectus (or any amendment or supplement
thereto), the Reorganization 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 Reorganization; 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), the Prospectus (or any amendment or supplement
thereto), the Reorganization Application, any Blue Sky Application or
Sales Information made in reliance upon and in conformity with
information furnished in writing to the Savings Bank, the MHC or the
Holding 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, the MHC or the Holding
Company by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Reorganization and Stock Offering -
Community Offering and Syndicated Community Offering" and "- Marketing
Arrangements"; and, provided further, that the Savings Bank, the MHC
and/or the Holding Company shall not be responsible for any loss,
liability, claim, damage or expense to the extent a court of competent
jurisdiction finds they result primarily from material oral
misstatements by the Agent to a purchaser or prospective purchaser of
Shares which are not based upon information in the Registration
Statement or Prospectus, or from actions taken or omitted to be taken
by the Agent in bad faith or from the Agent's gross negligence or
willful misconduct and the Agent agrees to repay to the Holding
Company any amounts advanced to it by the MHC, the Holding Company or
Savings Bank in connection with matters as to which it is found by a
court of competent jurisdiction not to be entitled to indemnification
hereunder; and the Savings Bank, the MHC and/or the Holding 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 MHC, the Holding
Company and the Savings Bank, their directors and officers and each
person, if any, who controls the MHC, the Holding 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 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 MHC, the Holding Company, the Savings Bank and any such
persons upon written demand for any expenses (including reasonable
fees and out-of-pocket expenses and disbursements of counsel) incurred
by them, as incurred, or any of them, in connection with
investigating, preparing to defend or defending any
34
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 Reorganization
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
Reorganization Application (or any amendment or supplement thereto),
or any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Reorganization;
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
Reorganization 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,
the MHC or the Holding 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, the MHC or the
Holding Company by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Reorganization and 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 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
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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. No indemnifying party shall be liable for any
settlement of any action, proceeding or suit that is effected without
its prior written consent. Any such settlement must provide that the
indemnifying party is unconditionally and irrevocably released from
all liability in respect of such claim.
(d) The agreements contained in this Section 8 and in Section 9 hereof and
the representations and warranties of the Savings Bank, the MHC and
the Holding 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,
the MHC or the Holding Company or any officers, directors, trustees or
controlling persons, agent or employees of the Savings Bank, the MHC
or the Holding 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 MHC, the Holding Company or
the Agent, the Savings Bank, the MHC, the Holding 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 MHC, the Holding
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 Holding Company from the sale of the
Shares in the Offering, and the Savings Bank, the MHC and the Holding 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, the MHC and the Holding 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,
the MHC and the Holding 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, the MHC
and/or the Holding 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 MHC, the Holding 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 method of allocation which does not take into account
the equitable
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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 1933
Act) shall be entitled to contribution from any person who was not found guilty
of such fraudulent misrepresentation. The obligations of the Savings Bank, the
MHC, the Holding Company and the Agent under this Section 9 and under Section 8
shall be in addition to any liability which the Savings Bank, the MHC, the
Holding Company and the Agent may otherwise have. For purposes of this Section
9, each of the Agent's, the Savings Bank's, the MHC's or the Holding Company's
officers, trustees and directors and each person, if any, who controls the
Agent, the Savings Bank, the MHC or the Holding 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, the MHC or the Holding 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,
the MHC and/or the Holding 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 MHC, the Holding Company and the
Agent and the representations and warranties and other statements of the Savings
Bank, the MHC, the Holding 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 MHC, the Holding 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 MHC, the Holding 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 Plan is abandoned or terminated by the Holding
Company; the Holding Company fails to sell the required minimum number
of the Shares by
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8,830,174, and in accordance with the provisions of the Plan or as
required by the Reorganization Regulations, and any other applicable
law, this Agreement shall terminate upon refund by the Holding Company
to each person who has subscribed for or ordered any of the Shares the
full amount which it may have received from such person, together with
interest 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, the MHC and the Holding 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 one of the Savings Bank, the MHC or the Holding 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, the MHC and the
Holding Company with notice of such breach.
If the Agent elects to terminate this Agreement as provided in this
Section, the Savings Bank, the MHC and the Holding Company shall be notified
promptly by telephone or telegram, confirmed by letter.
The Savings Bank, the MHC and the Holding 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, the MHC and the Holding 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 Xxxxx, Xxxxxxxx
& Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xx.
Xxxxxxxx X. XxXxxxx (with a copy to Xxxxxx Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx X. Xxxxxxxxx, Esq.), and, if sent
to the Savings Bank, the MHC and the Holding Company, shall be mailed, delivered
or telegraphed and confirmed to the Savings Bank at 0000 Xxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxx Xxxxxx 00000-0000, Attention: Xxxxxx Xxxxxx, President (with a copy
to Xxxxxxx Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, Attention: Xxxx Xxxxxxx, Esq.).
SECTION 13. PARTIES. The Savings Bank, the MHC and the Holding 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
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be entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Savings Bank, the MHC or the Holding Company,
when the same shall have been given by the undersigned or any other officer of
the Savings Bank, the MHC or the Holding Company. This Agreement shall inure
solely to the benefit of, and shall be binding upon, the Agent, the Savings
Bank, the MHC, the Holding Company and their respective successors and assigns,
and no other person shall have or be construed to have any 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, the MHC and the Holding Company. At the closing, the Savings
Bank, the MHC and the Holding 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 MHC, the Holding 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,
Xxxxxxx Savings Bank, S.L.A. Xxxxxxx MHC
(In Organization)
By Its Authorized
Representative: By Its Authorized Incorporator:
_______________________________ _______________________________
Xxxxxxx Savings Bancorp, Inc. (In Organization)
By Its Authorized
Incorporator:
_______________________________
Accepted as of the date first above written
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
By Its Authorized
Representative:
_______________________________
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