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
Xxxxxxx X'Xxxxx & Partners, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 X'Xxxxx & Partners, L.P. ("Sandler O"Xxxxx"
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
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(the "Community Offering"), with preference given first to natural persons and
trusts of natural persons residing in Bergen, Hudson, Passaic, Xxxxxx,
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.
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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
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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
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violation of the auditors independence requirements of the Xxxxxxxx-Xxxxx
Act of 2002 (the "Xxxxxxxx-Xxxxx 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.
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(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
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
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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
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
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.
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(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, Xxxxxxx Spidi & Xxxxx, 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
(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
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
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 Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx Act that will
become effective in the future upon their effectiveness.
14
(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 XXXXXXX X'XXXXX; 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 Xxxxxxx X'Xxxxx 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,
Xxxxxxx X'Xxxxx 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 Xxxxxxx X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the
Plan; (ii) reviewing with the Board of Directors of the Company the securities
marketing implications of the Appraiser's appraisal of the Common Stock; (iii)
reviewing all offering documents, including the Prospectus, stock order forms
and related offering materials (it being understood that preparation and filing
of such documents is the sole responsibility of the Company, the MHC and the
Bank and their counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) assisting management of the Company in
preparing and scheduling for meetings with potential investors and
broker-dealers; and (vi) providing such other general advice and assistance as
may be requested to promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earliest to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the
Securities may be sold, or (b) the receipt and acceptance of subscriptions and
purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank
and subject to the continued accuracy of the representations and warranties of
the Company and the Bank set forth herein and compliance with the covenants and
conditions set forth herein, Sandler X'Xxxxx will assist in the solicitation of
purchase orders of such Securities on a best efforts basis, which may include,
at Sandler O'Neill's discretion, the formation of a syndicate of registered
brokers or dealers ("Selected Dealers"). Sandler X'Xxxxx will endeavor to limit
the aggregate fees to be paid by the Company, the MHC and the Bank
15
to an amount competitive with gross underwriting discounts charged at such time
for underwritings of comparable amounts of stock sold at a comparable price per
share in a similar market environment; provided, however, that the aggregate
fees payable to Sandler X'Xxxxx and Selected Dealers shall not exceed 5.5% of
the aggregate dollar amount of the Securities sold in the Syndicated Community
Offering by such Selected Dealers. Xxxxxxx X'Xxxxx will endeavor to distribute
the Securities among the Selected Dealers in a fashion which best meets the
distribution objective of the Company and the Bank, which may result in limiting
the allocation of stock to certain Selected Dealers. It is understood that in no
event shall Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take
or purchase any Securities.
If any of the Securities remain available after the expiration of the
Offerings, the Company agrees to offer the Agent the first right to act as lead
managing underwriter for the Public Offering. The terms of the Public Offering
will be set forth in a separate definitive purchase agreement in a form
satisfactory to Sandler X'Xxxxx and containing customary representations,
warranties, conditions, agreements and indemnities, which purchase agreement,
when executed, will supersede and replace this Agreement with respect to
Securities sold thereunder (the "Purchase Agreement"). This Agreement is not
intended to constitute, and should not be construed as, an agreement or
commitment between the Company, the Bank and Sandler X'Xxxxx relating to the
firm commitment underwriting of any securities, and Xxxxxxx X'Xxxxx may, in its
sole judgment and discretion, determine at any time not to proceed with the
proposed firm commitment underwriting. Such proposed underwriting will be
subject, among other things, to: (i) satisfactory completion by Xxxxxxx X'Xxxxx
of such due diligence investigation or inquiries as it may deem appropriate,
(ii) approval of the proposed underwriting by Xxxxxxx O'Neill's commitment
committee or such other authorization as may be required by its internal
procedures, (iii) market conditions, which, in the sole judgment of Xxxxxxx
X'Xxxxx, shall be satisfactory, and (iv) the execution and delivery of a
definitive Purchase Agreement.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the MHC and the
Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the
Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Securities or other offers to
purchase Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
16
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Xxxxxxx Xxxxxxxx & Xxxx LLP, at 10:00 a.m., local time, or at such
other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One percent (1.00%) of the aggregate purchase price of the Securities
sold in the Subscription and Community Offering, excluding in each case shares
purchased by (i) any employee benefit plan of the Company or the Bank
established for the benefit of their respective directors, officers and
employees, and (ii) any director, officer or employee of the Company or the Bank
or members of their immediate families (which term shall mean parents,
grandparents, spouse, siblings, children and grandchildren); and
(b) With respect to any Securities sold by a NASD member firm (other than
Xxxxxxx X'Xxxxx) in the Syndicated Community Offering, (i) the compensation
payable to Selected Dealers, (ii) any sponsoring dealer's fees; and (iii) a
management fee to Xxxxxxx X'Xxxxx of one percent (1.00%) of the aggregate
purchase price of the Securities sold in the Syndicated Community Offering. Any
fees payable to Sandler X'Xxxxx for Securities sold by Xxxxxxx X'Xxxxx under any
such agreement shall be limited to an aggregate of five and one-half percent
(5.5%) of the purchase price of the Securities sold by Xxxxxxx X'Xxxxx and other
NASD member firms.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof, no fee shall be payable by the Company to
Sandler X'Xxxxx; provided, however, that the Company shall reimburse the Agent
for all of its reasonable out-of-pocket expenses incurred prior to termination,
including the reasonable fees and disbursements of counsel for the Agent in
accordance with the provisions of Section 4 hereof. In addition, the Company
shall be obligated to pay the fees and expenses as contemplated by the
provisions of Section 4 hereof in the event of any such termination.
17
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $25,000, all of which has been previously paid, which shall
be credited against any fees or reimbursement of expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE BANK. The Company, the
MHC and the Bank covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such amendments
or supplements to the Registration Statement, the Prospectus and the Plan as may
hereafter be required by the Securities Act Regulations or the OTS Regulations
or as may hereafter be requested by the Agent. Following completion of the
Subscription and Community Offering, in the event of a Syndicated Community
Offering, the Company, the MHC and the Bank will (i) promptly prepare and file
with the Commission a post-effective amendment to the Registration Statement
relating to the results of the Subscription and Community Offering, any
additional information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if no such post-effective amendment is
required, will file with the Commission a prospectus or prospectus supplement
containing information relating to the results of the Subscription and Community
Offering and pricing information pursuant to Rule 424 of the Securities Act
Regulations, in either case in a form acceptable to the Agent. The Company, the
MHC and the Bank will notify the Agent immediately, and confirm the notice in
writing, (i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus and the
filing of any amendment to the Plan, (ii) of the receipt of any comments from
the OTS or the Commission with respect to the transactions contemplated by this
Agreement or the Plan, (iii) of any request by the Commission or the OTS for any
amendment to the Registration Statement or the Plan or any amendment or
supplement to the Prospectus or for additional information, (iv) of the issuance
by the OTS of any order suspending the Offerings or the use of the Prospectus or
the initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and (vi) of the
receipt of any notice with respect to the suspension of any qualification of the
Securities for offering or sale in any jurisdiction. The Company, the MHC and
the Bank will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company, the MHC and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Plan or Registration Statement
(including any posteffective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for use
in connection with the Syndicated Community Offering of the Securities which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes
18
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the Securities Act Regulations), will furnish the
Agent with copies of any such amendment or supplement a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or use any such prospectus to which the Agent
or counsel for the Agent may object.
(c) The Company, the MHC and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Plan and the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) as the Agent may
reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered, the
Company, the MHC and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable OTS Regulations, as
from time to time in force, and by the Nasdaq National Market, the Securities
Act, the Securities Act Regulations, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the Exchange Act, so far as necessary to permit
the continuance of sales or dealing in shares of Common Stock during such period
in accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Registration Statement or Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, the MHC and the Bank will forthwith amend
or supplement the Registration Statement or Prospectus (in form and substance
satisfactory to counsel for the Agent) so that, as so amended or supplemented,
the Registration Statement or Prospectus 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 existing at the time it is
delivered to a purchaser, not misleading, and the Company, the MHC and the Bank
will furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the MHC and the
Bank will each furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the MHC and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the OTS Regulations may require and as the Agent and the
Company have agreed; provided, however, that none of the Company, the MHC or the
Bank shall be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so qualified,
the Company, the MHC and the Bank will file such statements
19
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company authorizes Xxxxxxx X'Xxxxx and any Selected Dealer to act
as agent of the Company in distributing the Prospectus to persons entitled to
receive subscription rights and other persons to be offered Securities having
record addresses in the states or jurisdictions set forth in a survey of the
securities or "blue sky" laws of the various jurisdictions in which the
Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the Securities Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions contemplated hereby
occurs, the Company will furnish to its stockholders as soon as practicable
after the end of each such fiscal year an annual report (including consolidated
statements of financial condition and consolidated statements of income,
stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated summary
financial information of the Company and the Bank for such quarter in reasonable
detail. In addition, such annual report and quarterly consolidated summary
financial information shall be made public through the issuance of appropriate
press releases at the same time or prior to the time of the furnishing thereof
to stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions contemplated hereby
occurs, the Company will furnish to the Agent (i) as soon as publicly available,
a copy of each report or other document of the Company furnished generally to
stockholders of the Company or furnished to or filed with the Commission under
the Exchange Act or any national securities exchange or system on which any
class of securities of the Company is listed, and (ii) from time to time, such
other information concerning the Company as the Agent may reasonably request.
(k) The Company, the MHC and the Bank will conduct the Offerings in all
material respects in accordance with the Plan, the OTS Regulations, the
Securities Act Regulations and all other applicable regulations, decisions and
orders, including all applicable terms, requirements and conditions precedent to
the Offerings imposed upon the Company, the MHC or the Bank by the OTS and the
Commission.
20
(l) The Company, the MHC and the Bank will comply, at their own expense,
with all requirements imposed by the Commission, the OTS and the Nasdaq National
Market, or pursuant to the applicable Securities Act Regulations, OTS
Regulations and Nasdaq National Market Regulations, as from time to time in
force and will file with Nasdaq all documents and notices required by the NASD
of companies that have issued securities that are trading on the Nasdaq National
Market.
(m) The Company will promptly inform the Agent upon its receipt of service
with respect to any material litigation or administrative action instituted with
respect to the Offerings and will promptly inform the Agent of any material
developments with respect to any such litigation or action.
(n) Each of the Company and the Bank will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(o) The Company will report the use of proceeds from the Offerings on its
first periodic or current report required to be filed pursuant to Sections 13(a)
and 15(d) of the Exchange Act and on any subsequent periodic reports as may be
required pursuant to Rule 463 of the Securities Act Regulations.
(p) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq National Market and, once listed on the Nasdaq
National Market, the Company will comply with all applicable corporate
governance standards required by the Nasdaq National Market. The Company will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have issued securities that are traded
in the over-the-counter market and quotations for which are reported by the
Nasdaq National Market.
(q) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with Rule 2790 of the National Association of Securities
Dealers, Inc.
(r) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior written
consent of the Agent, sell or issue, contract to sell or otherwise dispose of,
any shares of Common Stock other than the Securities and the MHC Shares for a
period of 180 days following the Closing Time.
(s) During the period beginning on the date hereof and ending on the later
of the fifth anniversary of the Closing Time or the date on which the Agent
receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7,
respectively, none of the Company, the MHC or
21
the Bank shall, without the prior written consent of the Agent, take or permit
to be taken any action that could result in the common stock of the Bank
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance.
(t) The Company, the MHC and the Bank will comply with the conditions
imposed by or agreed to with the OTS in connection with its approval of the
Plan.
(u) During the period ending on the first anniversary of the Closing Time,
the Bank will comply with all applicable laws and regulations necessary for the
Bank to continue to be a "qualified thrift lender" within the meaning of 12
U.S.C. Section 1467a(m).
(v) The Company shall not deliver the Securities until the Company, the MHC
and the Bank have satisfied each condition set forth in Section 5 hereof, unless
such condition is waived in writing by the Agent.
(w) The Company, the MHC and the Bank will furnish to Sandler X'Xxxxx as
early as practicable prior to the Closing Time, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Company which have been read by Radics
& Co., LLC, as stated in their letters to be furnished pursuant to subsections
(f) and (g) of Section 5 hereof.
(x) Each of the Company, the MHC and the Bank will conduct its business in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders, including all decisions,
directives and orders of the Commission, the Nasdaq National Market and the OTS.
(y) The Bank will not amend the Plan in any manner that would affect the
sale of the Securities or the terms of this Agreement without the consent of the
Agent.
(z) The Company, the MHC and the Bank will not, prior to the Closing Time,
incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business consistent
with past practice, except as contemplated by the Prospectus.
(aa) The Company, the MHC and the Bank will use all reasonable efforts to
comply with, or cause to be complied with, the conditions precedent to the
several obligations of the Agent specified in Section 5 hereof.
(ab) The Company, the MHC and the Bank will provide the Agent with any
information necessary to carry out the allocation of the Securities in the event
of an oversubscription, and such information will be accurate and reliable in
all material respects.
(ac) The Company, the MHC and the Bank will notify the Agent when funds
have been received for the minimum number of Securities set forth in the
Prospectus.
22
(ad) The Company and the Bank will comply with the conditions imposed by or
agreed to with the OTS in connection with its approval of the Plan.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the Bank jointly
and severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the preparation,
printing and filing of the Registration Statement and the Plan as originally
filed and of each amendment thereto, (iii) the preparation, issuance and
delivery of the certificates for the Securities purchased in the Offerings, (iv)
the fees and disbursements of the Company's, the MHC's and the Bank's counsel,
conversion agent, accountants, appraiser and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent (in such quantities as the Agent shall reasonably request), (vii) the
printing and delivery to the Agent of copies of a Blue Sky Survey, and (viii)
the fees and expenses incurred in connection with the listing of the Securities
on the Nasdaq National Market. In the event the Agent incurs any such fees and
expenses on behalf of the Company, the MHC or the Bank, the Bank will reimburse
the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Company, the MHC or the Bank pursuant to this Section
without the prior approval of the Bank.
The Company, the MHC and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Offerings are consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out-of-pocket expenses incurred by the
Agent relating to the Offerings, including without limitation, fees and expenses
of the Agent's counsel, advertising, promotional, syndication and travel
expenses. All fees and expenses to which the Agent is entitled to reimbursement
under this paragraph of this Section 4 shall be due and payable upon receipt by
the Company, the MHC or the Bank of a written accounting therefor setting forth
in reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC, the
Bank and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, the MHC and the Bank herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company, the MHC and the Bank made
pursuant to the provisions hereof, to the performance by the Company, the MHC
and the Bank of their obligations hereunder, and to the following further
conditions:
23
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the Commission or the
OTS, and no order suspending the sale of the Securities in any jurisdiction
shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxxx
Xxxxx & Xxxxx, PC, counsel for the Company, the MHC and the Bank, in
form and substance satisfactory to counsel for the Agent, to the
effect that:
(i) 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; the MHC has been duly
organized and is validly existing as a federal mutual holding
company chartered under the laws of the United States of America;
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.
(ii) Each of the Company, the MHC and the Bank has full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement and the transactions
contemplated hereby.
(iii) Each of the Company, the MHC and the Bank is duly
qualified as a domestic or foreign corporation 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 upon the financial condition, results of
operations, business affairs or prospects of the Company, the MHC
and the Bank, considered as one enterprise.
(iv) 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 is 10,000 shares of
Common Stock, all of which are owned beneficially and of record
24
by the MHC free and clear of any security interest, mortgage,
pledge, lien, encumbrance or legal or equitable claim; upon
consummation of the Offerings and the issuance of the MHC Shares,
the issued and outstanding capital stock of the Company will be
within the range set forth in the Prospectus under
"Capitalization."
(v) 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 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.
(vi) The Securities and the MHC Shares have been duly and
validly authorized for issuance and sale; the Securities, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan,
will be duly and validly issued and fully paid and nonassessable.
(vii) The issuance of the Securities and the MHC Shares is
not subject to preemptive or other similar rights arising by
operation of law or, to such counsel's knowledge after due
inquiry, otherwise.
(viii) The Company is issuing the Securities and the MHC
Shares in compliance with all conditions imposed upon the
Company, the MHC and the Bank by the OTS under the terms of their
written approval or notice of intention not to object, as
applicable.
(ix) Each of the Company and the MHC is registered as a
savings and loan holding company under the Home Owners Loan Act.
(x) The Bank is a member in good standing of the Federal
Home Loan Bank of Boston and the deposit accounts of the Bank are
insured by the FDIC up to the applicable limits.
(xi) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of
25
the jurisdiction of its incorporation, and each of the
Subsidiaries has 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, in the case of the Bank, and a federally
chartered stock holding company, in the case of the Company, by
the rules, regulations, resolutions and practices of the OTS; all
of the issued and outstanding capital stock of each Subsidiary
has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the MHC or the Bank, as the case
may be, directly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, or legal or equitable claim.
(xiii) The OTS has duly approved the Plan; such approval
remains in full force and effect and no action is pending, or to
the best of such counsel's knowledge, threatened respecting the
Plan; the Plan complies with the applicable requirements of the
OTS, includes all documents required to be filed as exhibits
thereto, and is, to the best of such counsel's knowledge after
due inquiry, truthful, accurate and complete.
(xiv) The execution and delivery of the Agreement, the
incurrence of the obligations herein set forth, and the
consummation of the transactions contemplated thereby, (A) have
been duly and validly authorized by all necessary action on the
part of each of the Company, the MHC and the Bank, and the
Agreement constitutes the legal, valid and binding agreement of
each of the Company, the MHC and the Bank, enforceable in
accordance with its terms, except as rights to indemnity and
contribution thereunder may be limited under applicable law (it
being understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency or
similar laws and the availability of equitable remedies); (B)
will not result in any violation of the provisions of the
certificate of incorporation, reorganization certificate,
articles of incorporation or charter, as the case may be, bylaws
or corporate governance guidelines of the Company, the MHC, the
Bank or any Subsidiary;
26
and, (C) will not conflict with or constitute a breach of, or
default under, and no event has occurred which, with notice or
lapse of time or both, would constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance, that, individually or in the aggregate, would 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,
upon any property or assets of the Company, the MHC, the Bank or
the Subsidiaries pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company, the MHC, the Bank or the Subsidiaries is a party or by
which any of them may be bound, or to which any of the property
or assets of the Company, the MHC, the Bank or the Subsidiaries
is subject.
(xv) The Prospectus has been duly authorized by the OTS for
final use pursuant to the OTS Regulations and no action has been
taken or is pending, or to the best of such counsel's knowledge
after due inquiry, is threatened, by the OTS to revoke such
authorization.
(xvi) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities
Act or, proceedings therefor initiated or, to the best of such
counsel's knowledge, threatened by the Commission.
(xvii) No further approval, authorization, consent or other
order of any public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the
Securities, the MHC Shares and the consummation of the Plan,
except as may be required under the securities or "Blue Sky" laws
of various jurisdictions as to which no opinion need be rendered.
(xviii) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and statistical data included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations and the OTS Regulations.
(xix) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements.
27
(xx) There are no legal or governmental proceedings pending
or threatened against or affecting the Company, the MHC, the Bank
or the Subsidiaries which are required, individually or in the
aggregate, to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and all pending
legal or governmental proceedings to which the Company, the MHC,
the Bank or any Subsidiary is a party or to which any of their
property is subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material.
(xxi) The information in the Prospectus under "Risk Factors
- Persons who purchase stock in the offering will own a minority
of Kearny Financial Corp.'s common stock and will not be able to
exercise voting control over most matters put to a vote of
stockholders, including any proposal regarding the acquisition of
Kearny Financial Corp.," "- Office of Thrift Supervision policy
on remutualization transactions could prohibit acquisition of
Kearny Financial Corp., which may adversely affect our stock
price," "- We operate in a highly regulated environment and may
be adversely affected by changes in law and regulations," "Policy
Regarding Dividends," "Regulation," "Taxation," "The Stock
Offering," "Restrictions on Acquisition of Kearny Financial
Corp." "Description of Capital Stock," and "Legal and Tax
Opinions" to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is complete and
accurate in all material respects.
(xxii) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement and Prospectus or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto and the descriptions thereof
or references thereto are correct, and no default exists, and no
event has occurred which, with notice or lapse of time or both,
would constitute a default, in the due performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument so described, referred to or
filed.
(xxiii) The Plan has been duly authorized by the Boards of
Directors of the Company, the MHC and the Bank and, the OTS's
approval of the Plan remains in full force and effect; the
28
Company, the MHC and the Bank have conducted the Offerings in all
material respects in accordance with applicable requirements of
the OTS Regulations, the Plan and all other applicable
regulations, decisions and orders thereunder, including all
material applicable terms, conditions, requirements and
conditions precedent to the Offerings imposed upon the Company,
the MHC or the Bank by the OTS and, no order has been issued by
the OTS to suspend the Offerings and no action for such purpose
has been instituted or threatened by the OTS; and, to the best of
such counsel's knowledge after due inquiry, no person has sought
to obtain review of the final action of the OTS in approving the
Plan.
(xxiv) To the best of such counsel's knowledge after due
inquiry, the Company, the MHC and the Bank have obtained all
licenses, permits and other governmental approvals and
authorizations currently required for the conduct of their
respective businesses as described in the Registration Statement
and Prospectus, and 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 complying therewith.
(xxv) (A) None of the Company, the MHC, the Bank or any of
the Subsidiaries is in violation of their respective certificates
of incorporation, organization certificate, articles of
incorporation or charter, as the case may be, bylaws or corporate
governance guidelines or committee charters and (B) to the best
of such counsel's knowledge, the Company, the MHC, the Bank and
the Subsidiaries are not 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 the
Subsidiaries is a party or by which the Company, the MHC, the
Bank, the Subsidiaries or any of their property may be bound.
(xxvi) The Company is in compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(xxvii) The Company is not and, upon completion of the
Offerings and the sale of the Common Stock and the application of
the net proceeds therefrom, will not be required to be registered
as an investment company under the Investment Company Act of
1940.
29
(2) The favorable opinion, dated as of Closing Time, of Xxxxxxx
Xxxxxxxx & Xxxx LLP, counsel for the Agent, with respect to the
matters set forth in Section 5(b)(1)(i), (iv), (vi), (vii), (xiv),
(xv), (xvi), (xvii) and (xviii) and such other matters as the Agent
may reasonably require.
(3) In addition to giving their opinions required by subsections
(b)(l) and (b)(2), respectively, of this Section, Xxxxxxx Spidi &
Xxxxx, PC and Xxxxxxx Xxxxxxxx & Xxxx LLP shall each additionally
state that nothing has come to their attention that would lead them to
believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement), at the
time it became effective, 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 not misleading or that the
Prospectus (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel
need make no statement), at the time the Registration Statement became
effective or at Closing Time, included an untrue statement of a
material fact or omitted 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.
In giving their opinions, Xxxxxxx Xxxxx & Xxxxx, PC and Xxxxxxx Xxxxxxxx &
Xxxx LLP may rely as to matters of fact on certificates of officers and
directors of the Company, the MHC, the Bank and the Subsidiaries and
certificates of public officials, and Xxxxxxx Xxxxxxxx & Xxxx LLP may also rely
on the opinion of Xxxxxxx Xxxxx & Xxxxx, PC with respect to matters set forth in
paragraphs (i), (iv), (v), (vi), (ix), (xi), (xv) and (xvii).
(c) At Closing Time. the Company, the MHC and the Bank shall have completed
in all material respects 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 terms, conditions, requirements
and provisions precedent to the Offerings imposed upon the Company, the MHC or
the Bank by the OTS, or any other regulatory authority other than those which
the OTS permits to be completed after the Offerings.
(d) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, 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, whether or
not arising in the ordinary course of business consistent with past practice,
and the Agent shall have received a certificate of the President and Chief
Executive Officer of the Company, of the MHC and of the Bank and the chief
financial or chief accounting officer of the Company, of the MHC and of the
Bank, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there shall have been no material transaction
30
entered into by the Company, the MHC or the Bank from the latest date as of
which the financial condition of the Company, the MHC or the Bank, as set forth
in the Registration Statement and the Prospectus other than transactions
referred to or contemplated therein and transactions in the ordinary course of
business consistent with past practice (iii) neither the Company, the MHC nor
the Bank shall have received from the OTS any order or direction (oral or
written) to make any material change in the method of conducting its business
with which it has not complied (which order or direction, if any, shall have
been disclosed in writing to the Agent) or which materially and adversely would
affect the business, financial condition, results of operations or prospects of
the Company, the MHC or the Bank, considered as one enterprise, (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v) each of the Company, the MHC and the Bank have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied at or
prior to Closing Time, (vi) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission, and (vii) no order suspending
the Subscription and Community Offering or Syndicated Community Offering or the
authorization for final use of the Prospectus has been issued and no proceedings
for that purpose have been initiated or threatened by the OTS and no person has
sought to obtain regulatory or judicial review of the action of the OTS in
approving the Plan in accordance with the OTS Regulations nor has any person
sought to obtain regulatory or judicial review of the action of the OTS in
approving the Plan.
(e) At the Closing Time, the Agent shall have received a certificate of the
President and Chief Executive Officer of the Company, of the MHC and of the Bank
and the Senior Vice President and Chief Financial Officer of the Company, of the
MHC and of the Bank, dated as of Closing Time, to the effect that (i) they have
reviewed the contents of the Registration Statement and the Prospectus; (ii)
based on each of their knowledge, the Registration Statement and the Prospectus
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which such statements were made, not misleading;
(iii) based on each of their knowledge, the financial statements and other
financial information included in the Registration Statement and the Prospectus
fairly present the financial condition and results of operations of the Bank and
the Subsidiaries as of and for the dates and periods covered by the Registration
Statement and the Prospectus; (iv) they are responsible for establishing and
maintaining internal controls; (v) they have designed such internal controls to
ensure that material information relating to the Company, the MHC, the Bank and
the Subsidiaries is made known to them; (vi) they have evaluated the
effectiveness of their internal controls; and (vii) they have disclosed to
Radics & Co., LLC and the audit committee (A) all significant deficiencies in
the design or operation of internal controls which could adversely affect the
Company's, the MHC's and the Bank's ability to record, process, summarize, and
report financial data, and have identified for the Company's, the MHC's and the
Bank's auditors any material weaknesses in internal controls and (B) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's, the MHC's and the Bank's internal controls.
(f) At the time of the execution of this Agreement, the Agent shall have
received from Radics & Co., LLC a letter dated such date, in form and substance
satisfactory to the
31
Agent, to the effect that: (i) they are independent public accountants with
respect to the Company, the MHC, the Bank and the Subsidiaries within the
meaning of the Code of Professional Ethics of the AICPA, the Securities Act and
the Securities Act Regulations and the OTS Regulations, they are registered with
the PCAOB, and they are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included in the
Registration Statement and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and Radics & Co., LLC set forth in detail
in such letter, nothing has come to their attention which causes them to believe
that (A) the unaudited consolidated financial statements and supporting
schedules of the Company included in the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements of
the Securities Act, the Securities Act Regulations and the OTS Regulations or
any material modifications should be made to the unaudited consolidated
financial statements and supporting schedules included in the Registration
Statement are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration Statement and the
Prospectus, (B) the unaudited amounts of net interest income and net income set
forth under "Selected Financial and Other Data" in the Registration Statement
and Prospectus do not agree with the amounts set forth in unaudited consolidated
financial statements as of and for the dates and periods presented under such
captions or such amounts were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified date not
more than five (5) days prior to the date of this Agreement, there has been any
increase in borrowed money of the Company or any decrease in consolidated total
assets or total stockholders' equity, the allowance for loan losses, total
deposits or net worth of the Company, in each case as compared with the amounts
shown in the consolidated statement of financial condition included in the
Registration Statement or, (D) during the period from October 1, 2004 to a
specified date not more than five (5) days prior to the date of this Agreement,
there were any decreases, as compared to the corresponding period in the
preceding fiscal year, in total interest income, net interest income, net
interest income after provision for loan losses, income before income tax
expense or net income of the Company, except in all instances for increases or
decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (iv) in addition to the examination referred to in
their opinions and the limited procedures referred to in clause (iii) above,
they have carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are specified by
the Agent, and have found such amounts, percentages and financial information to
be in agreement with the relevant accounting, financial and other records of the
Company, the MHC and the Bank identified in such letter.
(g) At Closing Time, the Agent shall have received from ____________ a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more
than five (5) days prior to Closing Time.
32
(h) At Closing Time, the Securities shall have been approved for quotation
on the Nasdaq National Market upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from the
Appraiser, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities and the MHC Shares as herein
contemplated shall be satisfactory in form and substance to the Agent and
counsel for the Agent.
(k) At any time prior to Closing Time, (i) there shall not have occurred
any 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 the effect of which, in the judgment of the Agent, are so material and
adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on either the American Stock Exchange, the New York
Stock Exchange or the Nasdaq Stock Market shall not have been suspended, and
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, and a banking
moratorium shall not have been declared by either Federal, New Jersey or New
York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the Offerings
or any action taken by the Agent where acting as agent of the Company, the
MHC or the Bank or otherwise as described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
33
(iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company, the MHC or the Bank,
which consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any claim pending or threatened whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid
under clause (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information.
(b) The Agent agrees to indemnify and hold harmless the Company, the MHC
and the Bank, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
34
(d) The Company, the MHC and the Bank also agree that the Agent shall not
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the MHC and its members, the Bank, the Company's, the MHC's or the
Bank's creditors relating to or arising out of the engagement of the Agent
pursuant to, or the performance by the Agent of the services contemplated by,
this Agreement, except to the extent that any loss, claim, damage or liability
is found in a final judgment by a court of competent jurisdiction to have
resulted primarily from the Agent's bad faith, willful misconduct or gross
negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company, the MHC, and the Bank, jointly and severally, agree to reimburse the
Agent and its partners, directors, officers, employees or agents for all
reasonable and necessary out-of-pocket expenses incurred by them in connection
with preparing or appearing as a witness or otherwise giving testimony and to
compensate the Agent and its partners, directors, officers, employees or agents
in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the MHC,
the Bank and the Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the MHC or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company, the MHC and the Bank are
jointly and severally responsible for the balance or (ii) if, but only if, the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits to
the Company, the MHC and the Bank on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company, the MHC and
the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, the MHC and the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company, the MHC or the Bank within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the
35
Company, the MHC and the Bank. Notwithstanding anything to the contrary set
forth herein, to the extent permitted by applicable law, in no event shall the
Agent be required to contribute an aggregate amount in excess of the aggregate
marketing fees to which the Agent is entitled and actually paid pursuant to this
Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company, the MHC or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to the Closing Time (i) if there has been, since the date
of this Agreement or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company,
the MHC or the Bank, considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) if there has occurred any 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 the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq National Market, the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, New Jersey or New York authorities, (iv) if any condition specified in
Section 5 shall not have been fulfilled when and as required to be fulfilled;
(v) if there shall have been such material adverse changes in the condition or
prospects of the Company, the MHC or the Bank or the prospective market for the
Company's Securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the aggregate value for the
Securities established by the Appraiser is not reasonable or equitable under
then prevailing market conditions, or (vii) if the Offerings are not consummated
on or prior to __________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 919 Third
36
Avenue, 6th Floor, New York, New York 10022, attention of General Counsel, with
a copy to Xxxxxxx Xxxxxxxx & Xxxx, LLP; notices to the Company, the MHC and the
Bank shall be directed to any of them at _________________.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the MHC and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company, the MHC and the Bank and their respective successors and the
controlling persons and the partners, officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein or therein contained. This Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Agent, the Company, the MHC and the Bank and their respective
successors, and said controlling persons, partners, officers and directors and
their heirs, partners, legal representatives, and for the benefit of no other
person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated ______________________,
by and between the Agent and the Bank, relating to the Agent's providing
conversion agent services to the Company and the Bank. No waiver, amendment or
other modification of this Agreement shall be effective unless in writing and
signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times of
day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
[The next page is the signature page]
37
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent on the one hand, and the Company, the MHC and the Bank on the other in
accordance with its terms.
Very truly yours,
KEARNY FINANCIAL CORP.
By:
---------------------------------
Name:
Title:
KEARNY FEDERAL SAVINGS BANK
By:
---------------------------------
Name:
Title:
KEARNY MHC
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Xxxxxxx X'Xxxxx & Partners Corp.,
the sole general partner
By:_______________________________
Name:
Vice President
