FORM OF
16,387,500 Shares
(subject to increase up to 18,845,625 shares
in the event of an increase in the pro forma market
value of the Company's Common Stock)
Kearny Financial Corp.
(a federal stock holding company)
Common Stock
(par value $0.10 per share)
AGENCY AGREEMENT
, 2004
Sandler O'Neill & Partners, L.P.
919 Third Avenue, 6th Floor
New York, New York 10022
Ladies and Gentlemen:
Kearny
Financial Corp., a federal stock savings and
loan holding
company
(the "Company"), Kearny MHC, a federal mutual
savings and loan holding company
(the "MHC"), and Kearny Federal Savings Bank, a
federal stock savings bank (the
"Bank"), each chartered under the laws of
the United States of America, hereby
confirm their agreement with Sandler
O'Neill & Partners, L.P. ("Sandler O"Neill"
or the "Agent") with respect to the offer and sale by the
Company of up to
16,387,500 shares (subject to increase up to
18,845,625 shares in
the event of
an increase in the pro forma market value
of the Company's
common stock) of the
Company's common stock, par value $0.10 per share (the
"Common Stock").
The
shares of Common Stock to be sold by the Company in
the Offerings
(as defined
below) are hereinafter called the
"Securities."
The Securities are being offered for sale in
accordance with the
Plan of
Stock Issuance adopted by the Boards of Directors
of the Company, the
MHC and
the Bank which provides for a stock
offering, in
compliance with regulations of
the Office of Thrift Supervision (the
"OTS"), of up to 30.0% of the Common Stock
of the Company.
Pursuant to the
Plan (as defined in Section (a)(ii) hereof), the Company
will offer to certain depositors of the Bank and to the Bank's tax
qualified
employee benefit plans, including the Bank's employee
stock ownership plan (the
"ESOP") (collectively, the "Employee Plans"), rights to subscribe for the
Securities in a subscription offering (the "Subscription Offering"). To the
extent Securities are not subscribed for in the
Subscription
Offering, such
Securities may be offered to certain
members of the general
public and to other
persons in a community offering
1
<PAGE>
(the "Community Offering"), with preference given first to
natural persons and
trusts of natural persons residing in Bergen, Hudson, Passaic, Morris,
Middlesex, Essex, Union, Monmouth and Ocean
Counties, New Jersey, and second to
other persons to whom the Company delivers a Prospectus (as hereinafter
defined). The Community Offering, which
together with the Subscription Offering,
as each may be extended or reopened from
time to time, are herein referred to as
the "Subscription and Community
Offering," may be
commenced concurrently
with,
during or after the Subscription
Offering. It is currently anticipated by the
Bank and the Company that any Securities
not subscribed for in the Subscription
and Community Offering will be offered, subject to Section 2 hereof, in a
syndicated community offering (the "Syndicated Community Offering"). The
Subscription and Community Offering and the Syndicated
Community Offering are
hereinafter referred to collectively as the
"Offerings." The
Securities may be
offered to the general public in a public offering (the "Public Offering") in
lieu of or subsequent to the Syndicated
Community Offering. If there is a Public
Offering, the Public Offering will be
governed by a separate definitive purchase
agreement as described in Section 2 hereof.
It is acknowledged
that the number
of Securities to be sold in the Offerings may be increased or decreased as
described in the Prospectus. If the number of Securities is increased or
decreased in accordance with the Plan, the term "Securities" shall mean such
greater or lesser number, where
applicable.
In addition to
the issuance of Securities in the Offerings, at the Closing
Time referred to in Section 2 hereof the
Company intends to issue 70% of the
total amount of Common Stock outstanding after the Offerings to the MHC (the
"MHC Shares") in exchange for the shares of
Common Stock currently
held by the
MHC, which existing shares shall be
cancelled.
The Company has filed with
the Securities
and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_________),
including a related prospectus, for the
registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended
or supplemented hereafter) and the
prospectuses constituting a part thereof
(including in each
case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are
hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in
connection with the Subscription and
Community Offering or the Syndicated
Community Offering
which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule
424(b) of the Securities Act Regulations),
the term "Prospectus" shall refer to such revised
prospectus from and after the
time it is first provided to the Agent for
such use.
2
<PAGE>
Concurrently
with the execution of this Agreement, the Company is
delivering to the Agent copies of the
Prospectus
of the Company to be
used in
the Offerings. Such prospectus contains information with respect to the
Bank,
the Company, the MHC and the Common
Stock.
Section 1.
REPRESENTATIONS AND WARRANTIES.
(a) The Company,
the Bank and the MHC
jointly and severally
represent and
warrant to the Agent as of the date hereof
as follows:
(i) The Registration
Statement has been declared effective by the
Commission,
no stop order has been
issued with respect thereto and no
proceedings
therefor have been initiated or, to the knowledge of the
Company,
the MHC and the Bank,
threatened by the
Commission. At the
time
the Registration Statement became effective and at the Closing Time
referred to in
Section 2 hereof, the
Registration Statement
complied and
will
comply in all material respects with the requirements of the
Securities Act
and the Securities Act
Regulations and did not and will not
contain an
untrue statement of a
material fact or omit to state a material
fact
required to be stated
therein or
necessary to make the statements
therein not
misleading. The
Prospectus, at the date hereof does not and at
the Closing Time referred to in Section 2 hereof
will not, include an
untrue
statement of a material fact or omit to state a material fact
necessary
in order to make the
statements
therein, in the light of the
circumstances
under which they were made, not misleading; provided,
however,
that the representations and warranties in
this subsection shall
not apply to
statements in or omissions from the Registration Statement or
Prospectus
made in reliance upon
and in conformity with
information with
respect
to the Agent
furnished to the Company in writing by the Agent
expressly for
use in the
Registration Statement
or Prospectus (the "Agent
Information,"
which the Company,
the MHC and the Bank
acknowledge appears
only in the
[sixth paragraph of
the section "The Stock
Offering - Plan of
Distribution/Marketing Arrangements" of the Prospectus)].
(ii) Pursuant to the rules and regulations of the OTS, as from time
to
time amended or
supplemented (the "OTS Regulations"), the Company, the Bank
and the MHC have
filed with the OTS a Plan of
Stock Issuance, and have
filed such
amendments thereto and supplementary materials as may have been
required to the
date hereof (such plan, as amended to date, if applicable,
and as from time
to time amended or supplemented hereafter, is hereinafter
referred
to as the "Plan"). The Offerings and the Plan have been duly
adopted by the
Boards of Directors of the Company, the Bank and the MHC and
such
adoption has not since
been rescinded or
revoked. The Plan has
been
approved by the
OTS. At the date of such approval and at the Closing Time
referred
to in Section 2, the Plan complied and will comply with the
applicable
provisions of the OTS Regulations.
(iii) The Company, the MHC and the Bank will promptly file the
Prospectus and
any supplemental
sales literature with the Commission
and
the OTS. The
Prospectus and all supplemental sales literature, as of the
date the
Registration
Statement became
3
<PAGE>
effective
and at the Closing
Time referred to in
Section 2, complied
and
will comply in
all material respects
with the applicable
requirements of
the OTS
Regulations and the Securities Act Regulations and, at or prior to
the time of
their first use, will have received all required authorizations
of the OTS and
Commission
for use in final
form, and no order has been
issued by the
OTS or the Commission
suspending
or revoking such
approval
and no
proceedings
therefore have been initiated or, to the
knowledge of
the Company, the
MHC or the Bank, threatened by the OTS or the Commission.
(iv) None of the Commission, the OTS or any "Blue Sky"
authority has,
by order or
otherwise, prevented
or suspended the use of the Prospectus or
any supplemental
sales literature authorized by the Company, the MHC or the
Bank for use in
connection with the Offerings, and no proceedings for such
purposes are
pending or threatened.
(v) At the Closing Time referred to in Section 2, (i) the Company,
the
MHC and the Bank
will have completed the conditions precedent to the
Offerings in
accordance with the
Plan, the applicable OTS Regulations and
all other
applicable laws, regulations, decisions and orders, including
all
material terms, conditions, requirements and provisions
precedent to the
Offerings
imposed upon the Company, the MHC or the Bank by the
Commission,
the OTS or any
other regulatory authority or Blue Sky authority, other than
those which the
regulatory
authority permits to be completed after the
Offerings;
and (ii) the
Offerings will have been effected in the manner
described
in the Prospectus and in accordance with the Plan, the OTS
Regulations and
all other applicable material laws, regulations, decisions
and orders, including in compliance with all terms, conditions,
requirements
and provisions precedent to the Offerings
imposed upon the
Company,
the MHC and the
Bank by the Commission, the OTS or any other
regulatory or
Blue Sky authority or
any other regulatory
authority.
The
Offerings and
other transactions
contemplated
hereby do not and will
not
require any
material consent,
approval,
authorization or permit or filing
with any other
governmental
agency or regulatory authority, except as
disclosed in the
Prospectus.
(vi) RP Financial, LC (the "Appraiser"), which prepared the valuation
of the Bank as
part of the Plan, has
advised the Company,
the MHC and the
Bank in writing
that it satisfies all
requirements
for an appraiser
set
forth in the OTS
Regulations and any
interpretations or
guidelines issued
by the OTS or
its staff with respect thereto.
(vii) Radics & Co., LLC, the accountants who audited and reported on
the consolidated financial statements and supporting schedules of the
Company and its
subsidiaries included in the Registration Statement, have
advised
the Company, the MHC and the Bank in writing that they are
independent
public accountants
within the meaning of the Code of Ethics of
the American
Institute of Certified Public Accountants (the "AICPA"),
that
they are
registered with the
Public Company
Accounting
Oversight Board
("PCAOB") and
such accountants
are, with respect to
the Company, the
MHC
and the Bank,
independent
certified public
accountants as required by the
Securities Act,
the Securities Act Regulations and OTS Regulations and such
accountants are
not in
4
<PAGE>
violation of the
auditors independence
requirements of the
Sarbanes-Oxley
Act of 2002 (the
"Sarbanes-Oxley Act").
(viii) The only direct
or indirect subsidiary
of the Company is
the
Bank;
the only direct or indirect subsidiaries of the Bank are KFS
Financial
Services, Inc., a New Jersey corporation, and Kearny Federal
Investment
Corp., a New Jersey investment company (collectively, the
"Subsidiaries").
Except for the
Subsidiaries, none of the Company, the MHC
or the Bank,
directly or indirectly, controls any other corporation,
limited
liability company, partnership, joint venture, association,
trust
or other
business organization.
(ix) The consolidated
financial statements
and the related schedules
and notes
thereto included in the Registration Statement and the
Prospectus
present fairly the
financial position of
the Company and its
subsidiaries
at the dates
indicated and the
results of operations,
retained earnings,
equity and cash
flows for the periods specified, and comply as to form with
the applicable
accounting
requirements
of the Securities Act
Regulations
and the OTS
Regulations;
except as otherwise
stated in the
Registration
Statement and
Prospectus, said
financial statements
have been prepared in
conformity
with generally accepted accounting principles applied on a
consistent
basis; and the
supporting schedules
and tables included in the
Registration
Statement and Prospectus present fairly the information
required to be
stated therein.
The other financial, statistical and pro
forma
information
and related notes
included in the
Prospectus
present
fairly the
information shown therein on a basis consistent with the
audited
and unaudited
financial statements
included in the
Prospectus, and as
to
the pro forma adjustments, the adjustments made therein have been
consistently
applied on the basis
described therein. The
capitalization,
liabilities,
assets, properties and business of the
Company, the MHC
and
the Bank conform
in all material respects to the descriptions contained in
the Prospectus and, neither the Company, the MHC nor the Bank has any
material
liabilities
of any kind, contingent or otherwise, except as
disclosed in the
Registration Statement or the Prospectus.
(x) Since the respective dates as of which information is given in
the
Registration
Statement and the Prospectus, except as otherwise stated
therein
(A) there has been no
material adverse change in the financial
condition,
results of
operations,
business affairs or prospects of the
Company,
the MHC, the Bank and the Subsidiaries, considered as one
enterprise,
whether or not arising
in the ordinary course of business, (B)
except for
transactions
specifically
referred to or
contemplated in
the
Registration
Statement and Prospectus, there have been no transactions
entered into by
the Company, the MHC
or the Bank, other
than those in the
ordinary
course of business consistent with past practice, which are
material
with respect to the Company, the MHC, the Bank and the
Subsidiaries,
considered as one
enterprise,
and (C) the
capitalization,
liabilities,
assets, properties and business of the
Company, the MHC
and
the Bank conform
in all material respects to the descriptions contained in
the Prospectus and none of the Company, the MHC or the Bank has any
material
liabilities
of any kind, contingent or otherwise, except as
disclosed in the
Registration Statement or the Prospectus.
5
<PAGE>
(xi) The Company has been duly organized and is validly
existing as a
federal stock
holding company chartered under the laws of the United States
of America with full corporate power and authority to own, lease and
operate
its properties, to conduct its business as described in the
Registration
Statement and the
Prospectus,
and to enter into and
perform
its obligations under this Agreement and the transactions contemplated
hereby;
and the Company is
duly qualified to
transact business and
is in
good standing under the laws
of the United States of America, in the State
of New Jersey
and in each other jurisdiction in which such qualification is
required,
whether by reason of
the ownership or leasing of property or the
conduct of
business, except where
the failure to so qualify would not have
a material adverse effect on the financial condition, results of
operations,
business affairs or
prospects of the Company, the MHC and the
Bank, considered
as one enterprise.
(xii) Upon completion of the Offerings as described in the
Prospectus,
the authorized,
issued and outstanding capital stock of the Company will be
within
the range as set
forth in the
Prospectus
under "Capitalization"
(except
for subsequent issuances, if any, pursuant to reservations,
agreements or
employee benefit plans
referred to in the
Prospectus). The
authorized
capital stock of the
Company consists of
75,000,000 shares
of
Common Stock and
25,000,000 shares of
preferred stock, par value $0.10 per
share,
and the issued and
outstanding capital
stock of the Company at the
date hereof is
10,000 shares of Common Stock, all of which are beneficially
owned
of record by the MHC free and clear of any security interest,
mortgage,
pledge, lien, encumbrance or legal or equitable
claim; at the
date hereof and
at the Closing Time,
the Securities will have been duly
authorized
for issuance and, when issued and delivered by the Company
pursuant to the
Plan against payment of the consideration calculated as set
forth in the
Plan and stated on the cover page of the Prospectus, will be
duly and
validly issued and fully paid and nonassessable; at the date
hereof
and at the
Closing Time, the MHC Shares will have been duly
authorized
for issuance and, when issued and delivered by the Company
pursuant to the
Plan, will be duly and
validly issued and fully paid and
nonassessable;
the terms and
provisions of the
Common Stock and the other
capital stock of
the Company conform to
all statements
relating thereto
contained in the
Prospectus; the
certificates
representing the
shares of
Common
Stock will conform to the requirements of applicable law and
regulations;
and the issuance of
the Securities and the
MHC Shares is not
subject to
preemptive or other similar rights.
(xiii) The MHC has been duly organized and is validly existing as a
federal mutual
savings and loan holding company chartered under the laws of
the United
States of America with
full corporate
power and authority to
own, lease and
operate its properties, to conduct its business as described
in the
Registration
Statement and the
Prospectus,
and to enter into
and
perform
its obligations under this Agreement and the transactions
contemplated
thereby; and the MHC is duly qualified to
transact business
and is in good
standing under the laws of the United States of America,
in
the State of New Jersey and in each other jurisdiction in which such
qualification is
required, whether by reason of the ownership or leasing of
property or the
conduct of business, except where the failure to so qualify
would
not have a
material adverse effect on the financial
6
<PAGE>
condition,
results of
operations,
business affairs or prospects of the
Company, the MHC
and the Bank, considered as one enterprise.
(xiv) The MHC has no capital stock. All holders of the savings,
demand
or other
authorized accounts of the Bank are members of the MHC.
(xv)
The Bank has been duly
organized and is
validly existing
as a
federal
savings bank chartered under the laws of the United States of
America with
full corporate
power and authority to
own, lease and operate
its properties, to conduct its business as
described in the
Registration
Statement and
the Prospectus, and to enter into and perform its obligations
under this
Agreement and the transactions contemplated hereby; and the
Bank
is duly
qualified to transact
business and is in
good standing under
the
laws of the
United States of
America and in each
other jurisdiction in
which such
qualification is required, whether by reason of the ownership
or
leasing of
property or the conduct of business, except where the failure
to
so qualify would not have a material adverse effect on the financial
condition,
results of operations
or business
affairs or prospects
of the
Company, the MHC
and the Bank, considered as one enterprise.
(xvi) The authorized
capital stock of the Bank consists of 75,000,000
shares of common
stock, par value $0.10 per share, and 25,000,000 shares of
serial
preferred stock, par value $0.10 per share, and the issued and
outstanding
capital stock of the
Bank is ____ shares of such common stock,
all of which are
owned beneficially
and of record by the
Company free and
clear of any
security interest,
mortgage, pledge, lien, encumbrance or
legal or
equitable claim. All
of the issued and outstanding capital stock
of the Bank has
been duly authorized,
validly issued and fully paid and
nonassessable
and has been issued in
compliance with all federal and state
securities
laws.
(xvii) The
Company, the MHC, the
Bank and the Subsidiaries have each
obtained
all licenses, permits and other governmental authorizations
currently
required for the conduct of their respective businesses or
required for the
conduct of their respective businesses, except where the
failure
to obtain such licenses, permits or other governmental
authorizations
would not have a
material adverse
effect on the
financial
condition,
results of
operations,
business affairs or prospects of the
Company,
the MHC, the Bank and the Subsidiaries, considered as one
enterprise;
all such licenses, permits and other governmental
authorizations
are in full force and
effect and the Company, the MHC, the
Bank
and the Subsidiaries are in all material respects in compliance
therewith;
none of the Company,
the MHC, the Bank or
any Subsidiary
has
received
notice of any
proceeding or action
relating to the revocation or
modification
of any such license, permit or other governmental
authorization
which, singly or in the aggregate, if the subject of an
unfavorable
decision, ruling or finding, might have a material adverse
effect on the
financial condition, results of operations, business affairs
or prospects of the Company, the MHC, the Bank and the Subsidiaries,
considered as
one enterprise.
(xviii) Each
Subsidiary
has been duly
incorporated
and is validly
existing
as a corporation in good standing under the laws of the
jurisdiction of
its incorporation,
has
7
<PAGE>
full corporate
power and authority to own, lease and operate its properties
and to conduct
its business as described in the Registration Statement and
Prospectus,
and is duly
qualified as a foreign corporation to transact
business
and is in good standing in each jurisdiction in which such
qualification is
required, whether by reason of the ownership or leasing of
property or the
conduct of business, except where the failure to so qualify
would not have a
material adverse
effect upon the financial condition,
results of
operations, business
affairs or prospects
of the Company,
the
MHC,
the Bank and the Subsidiaries considered as one enterprise; the
activities of
each Subsidiary are permitted for subsidiaries of a federally
chartered
savings bank and a federally chartered mutual holding company
by
the OTS
Regulations;
all of the issued and
outstanding
capital stock of
each Subsidiary
has been duly authorized and validly issued, is fully paid
and
nonassessable and is owned by the Bank directly, free and clear of any
security
interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim;
and there are no
warrants, options or
rights of any kind
to acquire
shares of capital stock of any Subsidiary.
(xix) The Bank is a member in good standing of the Federal
Home Loan
Bank of New
York; the deposit accounts of the Bank are insured by the
Federal
Deposit Insurance Corporation (the "FDIC") up to the
applicable
limits.
The Bank is a
"qualified thrift
lender" within the
meaning of 12
U.S.C. Section
1467a(m).
(xx) The Company, the MHC and the Bank have taken all corporate
action
necessary for
them to execute,
deliver and perform this Agreement and the
transactions
contemplated hereby, and this Agreement has been duly executed
and delivered
by, and is the valid
and binding agreement
of, the Company,
the MHC and the
Bank, enforceable
against each of them
in accordance with
its terms,
except as may be limited by bankruptcy, insolvency or other
laws
affecting
the enforceability of the rights of creditors generally and
judicial
limitations on the right of specific performance and except as
the
enforceability
of indemnification and contribution provisions may be
limited by
applicable securities laws.
(xxi) Subsequent to
the respective dates
as of which
information is
given in the
Registration
Statement and the
Prospectus
and prior to the
Closing Time,
except as otherwise may be indicated or contemplated therein,
none
of the Company, the MHC or the Bank will have (A) issued any
securities or
incurred any liability or obligation, direct or contingent,
or borrowed
money, except borrowings in the ordinary
course of business
consistent
with past practice from the same or similar sources and in
similar
amounts as
indicated in the
Prospectus,
or (B) entered into
any
transaction
or series of
transactions
which are material in
light of the
business
of the Company, the MHC and the Bank, considered as one
enterprise.
(xxii) No approval of any regulatory or supervisory or other public
authority is
required in connection with the execution and delivery of this
Agreement or the
issuance of the Securities and the MHC Shares that has not
been obtained
and a copy of which has
8
<PAGE>
been delivered
to the Agent, except as may be required under the "Blue Sky"
or securities
laws of various jurisdictions.
(xxiii) None
of the Company, the MHC, the Bank of any of the
Subsidiaries
is in violation of their respective certificate of
incorporation,
organization
certificate,
articles of incorporation or
charter,
as the case may be, or bylaws or other written corporate
governance
requirements or guidelines, including board committee
charters;
and none of the
Company, the MHC, the Bank or any of the Subsidiaries is in
default (nor has
any event occurred which, with notice or lapse of time
or
both,
would constitute a default) in the
performance or observance of any
obligation,
agreement,
covenant or condition
contained in any
contract,
indenture,
mortgage, loan agreement, note, lease or other instrument to
which the
Company, the MHC, the
Bank or any of the Subsidiaries is a party
or by which it
or any of them may be bound, or to which any of the property
or assets of the
Company, the MHC, the
Bank or any of the
Subsidiaries is
subject,
except for such
defaults that would not, individually or in the
aggregate,
have a material adverse effect on the financial condition,
results of
operations, business
affairs or prospects
of the Company,
the
MHC, and the
Bank, considered as one enterprise; and there are no contracts
or documents
of the Company,
the MHC or the Bank
which are required to be
filed as
exhibits to the Registration Statement or the Plan which have
not
been so
filed.
(xxiv) The execution,
delivery and
performance of this Agreement and
the consummation
of the transactions
contemplated herein,
have been duly
authorized
by all necessary
corporate action on the part of the
Company,
the MHC, and the
Bank, and do not and
will not conflict with or constitute
a breach of, or
default under,
or result in the
creation or imposition of
any lien, charge
or encumbrance upon any property or assets of the Company,
the MHC or the
Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note,
lease or other instrument to which the Company, the MHC or
the Bank is a
party or by which it or any of them may be bound, or to which
any of the
property or assets of the Company, the MHC or the Bank is
subject;
nor will such action
result in any violation of the provisions of
the respective
charter, bylaws or
corporate governance
guidelines of the
Company,
the MHC or the Bank, or any applicable law, administrative
regulation or
administrative or court decree.
(xxv) No labor dispute with the employees of the Company, the MHC,
the
Bank or the
Subsidiaries
exists or, to the
knowledge of the Company, the
MHC,
the Bank or the
Subsidiaries,
is imminent or threatened; and the
Company,
the MHC and the Bank
are not aware of any existing or threatened
labor
disturbance
by the employees of
any of its principal
suppliers or
contractors
which might be expected to result in any material adverse
change in the
financial condition, results of operations, business affairs
or prospects of the Company, the MHC and the Bank considered as one
enterprise.
(xxvi) Each of the Company, the MHC, the Bank and the Subsidiaries
has
good and
marketable title to
all properties and assets for which ownership
is material to the business of the Company, the MHC, the Bank or the
Subsidiaries and
to those properties and assets described in the Prospectus
as owned by
them, free and clear
of all liens,
9
<PAGE>
charges,
encumbrances or restrictions, except such as are described in
the
Prospectus
or are not material in
relation to the business of the Company,
the MHC, the
Bank or the
Subsidiaries,
considered as one enterprise; and
all of the
leases and subleases
material to the
business of the
Company,
the MHC, the
Bank or the Subsidiaries under which the Company, the MHC, the
Bank or the
Subsidiaries hold properties, including those described in
the
Prospectus,
are valid and binding
agreements of the Company, the MHC, the
Bank
or the Subsidiaries, in full force and effect, enforceable in
accordance
with their terms except as may be limited by bankruptcy,
insolvency
or other laws
affecting the enforceability of the rights of
creditors
generally and judicial limitations on the right of specific
performance
and except as the enforceability of indemnification and
contribution
provisions may be limited by applicable securities laws.
(xxvii) None of the
Company, the MHC or the Bank is in
violation of
any order or
directive from the OTS, the Commission or any regulatory
authority
to make any
material change in the method of conducting its
respective
businesses;
the Company, the MHC, the Bank and each of the
Subsidiaries
have conducted and are conducting their business so as to
comply in all material
respects with all applicable statutes, regulations
and
administrative and court decrees (including, without limitation, all
regulations,
decisions,
directives
and orders of the OTS,
the FDIC, the
Commission
and The Nasdaq
Stock Market, Inc. ("Nasdaq")). Neither the
Company,
the MHC, the Bank nor any of the
Subsidiaries
is subject or is
party to, or has
received any notice or
advice that any of them may become
subject or party
to, any investigation with respect to any cease-and-desist
order,
agreement, consent
agreement, memorandum
of understanding or other
regulatory
enforcement
action, proceeding or order with or by, or is a
party to any
commitment letter or similar undertaking to, or is subject
to
any directive
by, or has been a recipient of any supervisory letter from,
or has adopted
any board resolutions at the request of, any Regulatory
Agency (as
defined below) that currently restricts in any material
respect
the conduct of
their business or that
in any material
manner relates to
their capital
adequacy, their credit policies,
their management or
their
business (each,
a "Regulatory
Agreement"), nor has
the Company, the
MHC,
the Bank or any
of the Subsidiaries
been advised by any Regulatory Agency
that it is
considering issuing or requesting any such Regulatory
Agreement;
and there is no unresolved violation, criticism or exception by any
Regulatory
Agency with respect to
any report or statement relating to any
examinations of
the Company, the MHC,
the Bank or any of the
Subsidiaries
which, in the
reasonable judgment of
the Company, the MHC
or the Bank, is
expected to
result in a material adverse change in the financial condition,
results of
operations, business
affairs or prospects
of the Company,
the
MHC, the Bank
and the Subsidiaries,
considered as one enterprise, or which
might
materially and
adversely affect the
properties or assets thereof or
which might
adversely affect the consummation of the Offerings or the
performance of
this Agreement. As used herein, the term "Regulatory Agency"
means
any federal or state agency charged with the supervision or
regulation of
depositary
institutions or
holding companies of
depositary
institutions,
or engaged in the insurance of depositary institution
deposits,
or any court, administrative agency or commission or other
governmental
agency, authority or instrumentality having supervisory or
regulatory
authority with respect
to the Company, the MHC, the Bank or any
of the
Subsidiaries.
10
<PAGE>
(xxviii) There is no action, suit or proceeding before or by any
court
or governmental
agency or body,
domestic or foreign,
now pending, or,
to
the knowledge of
the Company, the MHC or the Bank, threatened, against or
affecting
the Company, the MHC, the Bank or the Subsidiaries which is
required
to be disclosed in the Registration Statement (other than as
disclosed
therein), or which might result in any material adverse change
in
the financial condition, results of operations, business affairs or
prospects
of the Company, the MHC, the Bank and the Subsidiaries,
considered
as one enterprise, or which might materially and adversely
affect the
properties or assets thereof, or which might adversely affect
the consummation
of the Offerings or the performance of this Agreement; all
pending legal or
governmental
proceedings to which
the Company, the
MHC,
the Bank or any
Subsidiary is a party
or of which any of their respective
property
or assets is the subject which are not described in the
Registration
Statement, including ordinary routine litigation incidental to
the business,
are considered in the
aggregate not material; and there are
no contracts or
documents of the Company, MHC, the Bank or any Subsidiary
which are
required to be filed as exhibits to the Plan or the Registration
Statement which
have not been so filed.
(xxix) The Company,
MHC and the Bank have
obtained (i) an opinion of
its counsel,
Malizia Spidi & Fisch, PC, with respect to the legality of
the
Securities
and the MHC Shares to
be issued and certain
federal income tax
consequences
of the Offerings and
the Plan, and (ii) the opinion of Radics
& Co., LLC
with respect to certain state and local income tax consequences
of the Offerings
and the Plan, copies of which are filed as exhibits to the
Registration
Statement; all
material aspects of the aforesaid opinions are
accurately
summarized
in the Prospectus under "The Stock Offering -
Material Income
Tax Consequences," the facts and representations upon which
such opinions
are based are truthful, accurate and complete in all material
respects;
and neither the
Company, the MHC nor
the Bank has taken or will
take any action
inconsistent therewith.
(xxx) None of the Company, the MHC or the Bank is, and upon
completion
of the
Offerings and sale of
the Common Stock and the application of the
net proceeds
therefrom,
will not be, required
to be registered under
the
Investment
Company Act of 1940, as amended.
(xxxi) All of the
loans represented
as assets on the most recent
consolidated
financial statements or in selected consolidated financial and
other data of
the Company
included in the
Prospectus
meet or are exempt
from all
requirements of federal, state or local law pertaining to
lending,
including
without limitation
truth in lending
(including the requirements
of Regulations Z
and 12 C.F.R. Part 226
and Section 563.99),
real estate
settlement
procedures, consumer credit protection, equal credit
opportunity
and all
disclosure
laws applicable to such loans,
except for
violations
which,
if asserted,
would not result in a
material adverse
effect on the
financial
condition, results of
operations, business
affairs or prospects
of the Company,
the MHC and the Bank, considered as one enterprise.
11
<PAGE>
(xxxii) To the
knowledge of the Company, the MHC and the Bank, with
the exception of the intended loan to the Bank's ESOP by the
Company to
enable
the ESOP to
purchase securities in an amount up to 8.0% of the
Securities sold
in the Offerings, none of the Company, the MHC, the Bank or
their
employees has made any payment of funds of
the Company, the MHC
or
the Bank as a
loan for the purchase
of the Common Stock or
made any other
payment of funds
prohibited by law, and
no funds have been set aside to be
used for any
payment prohibited by law.
(xxxiii) Each of the
Company, the MHC, the Bank and each of the
Subsidiaries
maintains a system of
internal accounting controls sufficient
to provide
reasonable
assurance that (a) transactions are executed in
accordance
with management's general or specific authorizations; (b)
transactions
are recorded as
necessary to permit
preparation of financial
statements in
conformity with generally accepted accounting principles and
to maintain
asset accountability; (c) access to assets is permitted only in
accordance with
management's general or specific authorization; and (d) the
recorded
accountability for
assets is compared with the existing assets at
reasonable
intervals and
appropriate
action is taken with
respect to any
differences.
(xxxiv) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule
13a-15(e) and 15d-15(e)
under the 1934
Act); such disclosure controls and procedures (i) are
designed
to ensure that
material information relating to the Company,
including
its consolidated subsidiaries, is made known to the Company's
Chief Executive
Officer and its Chief
Financial Officer by others within
those
entities, particularly during the periods in which the 1934 Act
Reports are
being prepared, (ii)
have been evaluated for effectiveness as
of the end of
the annual or quarterly period reported to the Commission and
(iii)
are effective to perform the functions for which they were
established; the
Company's auditors and the Audit Committee of the Board of
Directors
have been advised of:
(A) any significant
deficiencies
in the
design or
operation of internal
controls which could adversely affect the
Company's
ability to record, process, summarize, and report financial
data
and (B) any
fraud, whether or not
material, that
involves management or
other
employees who have a
role in the Company's
internal controls;
any
material
weaknesses
in internal
controls have been identified for the
Company's
auditors; 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.
(xxxiv) The Company,
the MHC, the Bank and each Subsidiary are in
compliance
in all material respects with the applicable financial
recordkeeping
and reporting requirements of the Currency and Foreign
Transaction
Reporting
Act of 1970, as amended, and the rules and
regulations
thereunder.
The Bank has
established compliance
programs to
ensure
compliance with the
requirements of the
Uniting and
Strengthening
America by
Providing Appropriate
Tools Required to
Intercept and Obstruct
Terrorism
Act of 2001 (the "USA Patriot Act") and all applicable
regulations
promulgated
12
<PAGE>
thereunder. The
Bank is in compliance in all material respects with the USA
Patriot Act and
all applicable
regulations
promulgated
thereunder,
and
there is no
charge, investigation,
action, suit or proceeding before any
court,
regulatory
authority or
governmental agency or body pending or, to
the best
knowledge of the Company, the MHC, and the Bank, threatened
regarding the
Bank's compliance with the USA Patriot Act or any regulations
promulgated
thereunder.
(xxxv) None of the Company, the MHC, the Bank or any
Subsidiary
nor
any properties
owned or operated by
the Company, the MHC,
the Bank or any
Subsidiary
is in violation of or
liable under any
Environmental
Law (as
defined
below),
except
for such violations or liabilities that,
individually or
in the aggregate,
would not have a material adverse effect
on the financial
condition,
results of operations
or business affairs
of
the Company, the MHC, the Bank and any Subsidiary, considered as one
enterprise.
There are no actions, suits or proceedings, or demands, claims,
notices or
investigations (including, without limitation, notices, demand
letters
or requests for information from any environmental agency)
instituted
or pending,
or to the knowledge of the Company,
the MHC, the
Bank
or any Subsidiary threatened, relating to the liability of any
property
owned or operated by the Company, the MHC, the Bank or any
Subsidiary,
under any
Environmental Law, except for such actions, suits or
proceedings,
or demands, claims, notices or investigations that,
individually or
in the aggregate,
would not have a material adverse effect
on the financial
condition,
results of operations
or business affairs
of
the Company, the MHC, the Bank and any Subsidiary, considered as one
enterprise.
For purposes of this
subsection, the term
"Environmental Law"
means any
federal, state, local or foreign law, statute, ordinance, rule,
regulation,
code, license, permit, authorization, approval, consent, order,
judgment,
decree, injunction or agreement with any
regulatory
authority
relating
to (i) the protection, preservation or restoration of the
environment
(including,
without limitation,
air, water,
vapor, surface
water,
groundwater,
drinking water supply,
surface soil, subsurface soil,
plant and animal
life or any other natural resource), and/or (ii) the use,
storage, recycling, treatment, generation, transportation, processing,
handling,
labeling, production, release or disposal of any substance
presently
listed, defined,
designated or
classified as hazardous, toxic,
radioactive
or dangerous,
or otherwise
regulated,
whether by type or
by
quantity,
including any material containing any such substance as a
component.
(xxxvi) The Company,
the MHC, the Bank and each Subsidiary have filed
all federal,
state and local income
and franchise tax returns required to
be filed
and have made timely payments of all taxes shown as due and
payable in
respect of such
returns, and no
deficiency
has been asserted
with respect
thereto by any taxing authority. The Company, the MHC and the
Bank have no
knowledge of any tax
deficiency
which has been
asserted or
could
be asserted against the Company, the MHC, the Bank or the
Subsidiaries.
(xxxvii)The Company
has received all approvals required to consummate
the Offerings,
has filed with Nasdaq
all documents and notices required by
Nasdaq and has
complied with all
corporate governance requirements and
guidelines of
Nasdaq necessary
13
<PAGE>
to have the
Securities quoted on the Nasdaq National Market effective as of
the Closing Time
referred to in Section 2 hereof.
(xxxviii) The
Company has filed a registration statement for the
Securities
under Section 12(g) of
the Securities
Exchange Act of 1934, as
amended (the
"Exchange Act"), and such registration statement was declared
effective
concurrent with the effectiveness of the Registration
Statement.
(xxxix) To the
knowledge of the
Company and the Bank,
there are no
affiliations
or associations (as such terms are defined by the
National
Association of
Securities Dealers, Inc. ("NASD")) between any member of the
NASD and any of the Company's or
the Bank's officers or directors.
(xl) The Company, the MHC, the Bank and each Subsidiary carries, or
is
covered
by, insurance in such amounts and covering such risks as is
adequate for the
conduct of their
respective businesses
and the value for
their
respective
properties
as is customary for companies engaged in
similar
industries.
(xli) The Company,
the MHC and the Bank
have not relied on
Agent or
its counsel for
any legal, tax or accounting advice in connection with the
Offerings.
(xlii) The records of eligible account holders, supplemental eligible
account
holders and other
depositors
are accurate and complete in all
material
respects.
(xliii) The
Company, the MHC, the Bank and each Subsidiary is in
compliance
in all material respects with all presently applicable
provisions
of the Employee
Retirement
Income Security Act of 1974, as
amended,
including the regulations and published interpretations
thereunder
("ERISA");
no "reportable event" (as defined in ERISA) has
occurred with
respect to any
"pension plan" (as
defined in ERISA) for which the Company,
the MHC, the Bank or any Subsidiary, respectively, would have any
liability;
each of the Company,
the MHC, the Bank and
each Subsidiary has
not incurred and
does expect to incur liability under (i) Title IV of ERISA
with respect to
termination of, or
withdrawal from, any
"pension plan" or
(ii) Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the
regulations
and published
interpretations
thereunder (the
"Code");
and each "pension
plan" for which the Company, the MHC, the Bank
and any Subsidiary would have any liability that is intended to be
qualified
under Section 401(a)
of the Code is so qualified in all material
respects and
nothing has occurred,
whether by action or by failure to act,
which would
cause the loss of such qualification.
(xliv) The Company is in compliance with the applicable
provisions of
the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and all
applicable
rules, regulations,
guidelines and interpretations promulgated
by any
governmental
authorities
pursuant thereto and will use its best
efforts to
comply with those provisions of the Sarbanes-Oxley Act that
will
become effective
in the future upon their effectiveness.
14
<PAGE>
(b) Any
certificate signed by any officer of the Company, the MHC, the
Bank
or any Subsidiary and delivered to either
of the Agent or counsel for the Agent
shall be deemed a representation and warranty by the Company, the MHC or the
Bank to the Agent and, for purposes of the opinion to be
delivered to the Agent
pursuant to Section 5(b)(2) hereof, to the counsel for the Agent,
as to the
matters covered thereby.
SECTION
2. APPOINTMENT OF SANDLER O'NEILL; SALE AND DELIVERY OF THE
SECURITIES; CLOSING. On the basis of the
representations and warranties herein
contained and subject to the terms and
conditions herein set
forth, the Company
hereby appoints Sandler O'Neill as its agent to
consult with and advise the
Company, and to assist the Company with the
solicitation of
subscriptions and
purchase orders for Securities,
in connection with the
Company's sale of Common
Stock in the Offerings. On the basis of the representations and warranties
herein contained, and subject to the terms and
conditions
herein set forth,
Sandler O'Neill accepts such appointment and agrees to use its
best efforts to
assist the Company with the solicitation of subscriptions and purchase orders
for Securities in accordance with this
Agreement; provided,
however, that the
Agent shall not be obligated to take any
action which is
inconsistent with
any
applicable laws, regulations, decisions or orders. The services
to be rendered
by Sandler O'Neill pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect
