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EXHIBIT 1.2
2,041,250 Shares
(subject to increase up to 2,082,938 shares
in the event of an oversubscription)
BAY STATE BANCORP, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
November ___, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Bay State Bancorp, Inc., a Delaware corporation (the
"Company"), and Bay State Federal Savings Bank, a federal savings
bank (the "Bank"), hereby confirm their agreement with Sandler
X'Xxxxx & Partners, L.P. ("Sandler X'Xxxxx" or the "Agent") with
respect to the offer and sale by the Company of 2,041,250 shares
(subject to increase up to 2,347,437 shares in the event of an
oversubscription) of the Company's Common Stock, par value $.01 per
share (the "Common Stock"). The shares of Common Stock to be sold by
the Company are hereinafter sometimes called the "Securities." In
addition, as described herein, the Company expects to contribute
shares of Common Stock in an amount equal to 8% of the shares of
Common Stock sold in the Offerings (as hereinafter defined) to the
Bay State Federal Charitable Foundation (the "Foundation"), such
shares hereinafter being referred to as the "Foundation Shares".
The Securities are being offered for sale and the
Foundation Shares are being contributed in accordance with the plan
of conversion (the "Plan") adopted by the Board of Directors of the
Bank pursuant to which the Bank intends to convert from a federally
chartered mutual savings bank to a federally chartered stock savings
bank and issue all of its stock to the Company. Pursuant to the
Plan, the Company is offering to the Bank's tax qualified employee
benefit plans, including the Employee Stock Ownership Plan (the
"ESOP") (collectively, the "Employee Plans") and to certain of the
Bank's members rights to subscribe for the Securities in a
subscription offering (the "Subscription Offering"). To the extent
the Securities are not subscribed for in the Subscription Offering,
such Securities may be offered to certain members of the general
public, with preference given to certain natural persons residing in
the counties in which the Bank's offices are located, in a direct
community offering (the "Community Offering") to be commenced
subsequent to the Subscription Offering. It is currently anticipated
by the Bank
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and the Company that any Securities not subscribed for in the
Subscription or Community Offering will be offered, subject to
Section 3 hereof, in a syndicated community offering (the "Syndicated
Community Offering"). The Subscription Offering, the Community
Offering and the Syndicated Community Offering are hereinafter
referred to collectively as the "Offerings," and the conversion of
the Bank from mutual to stock form, the acquisition of the capital
stock of the Bank by the Company and the Offerings are hereinafter
referred to collectively as the "Conversion." It is acknowledged
that the number of Securities to be sold in the Conversion may be
increased or decreased as described in the Prospectus (as hereinafter
defined). If the number of Securities is increased or decreased in
accordance with the Plan, the term "Securities" shall mean such
greater or lesser number, where applicable. In the event that a
holding company form of organization is not utilized, all pertinent
terms of this Agreement will apply to the conversion of the Bank from
the mutual to stock form of organization and the sale of the Bank's
common stock.
In connection with the Conversion and pursuant to the terms of
the Plan as described in the Prospectus, the Company has established
the Foundation. Immediately following the consummation of the
Conversion, subject to the approval of the establishment of the
Foundation by the members of the Bank and compliance with certain
conditions as may be imposed by regulatory authorities, the Company
will contribute between 107,100 and 144,900 Foundation Shares of
Common Stock (subject to increase in certain circumstances to 166,635
shares) to the Foundation.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form SB-2
(No. 33-____), including a related prospectus, for the registration
of the Securities and the Foundation Shares 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 Offerings 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 Subscription and Community Offerings. Such prospectus
contains information with respect to the Bank, the Company and the
Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Bank 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 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 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 and the Bank acknowledge appears
only in the sections captioned "Market for Common Stock" and the
first two paragraphs of the section "The Conversion-Marketing
and Underwriting Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the
Treasury, Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the
"Holding Company Application") on Form H-(e)1-S promulgated
under the savings and loan holding company provisions of the
Home Owners' Loan Act, as amended ("HOLA") and the regulations
promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank,
such approval remains in full force and effect and no order has
been issued by the OTS suspending or revoking such approval and
no proceedings therefor have been initiated or, to the knowledge
of the Company or the Bank, threatened by the OTS. At the date
of such approval and at the Closing Time referred to in Section
2, the Holding Company Application complied and will comply in
all material respects with the applicable provisions of HOLA and
the regulations promulgated thereunder.
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(iii) Pursuant to the rules and regulations of the OTS
governing the conversion of federally chartered mutual savings
banks to stock form (the "Conversion Regulations"), the Bank has
filed with the OTS an application for conversion on Form AC, and
has filed such amendments thereto and supplementary materials as
may have been required to the date hereof (such application, as
amended to date, if applicable, and as from time to time amended
or supplemented hereafter, is hereinafter referred to as the
"Conversion Application"), including copies of the Bank's Proxy
Statement, dated ______________, 1997, relating to the
Conversion (the "Proxy Statement"), and the Prospectus. The OTS
has, by letter dated __________, 199__, approved the Conversion
Application, such approval remains in full force and effect and
no order has been issued by the OTS suspending or revoking such
approval and no proceedings therefor have been initiated or, to
the knowledge of the Company or the Bank, threatened by the
OTS. At the date of such approval and at the Closing Time
referred to in Section 2, the Conversion Application complied
and will comply in all material respects with the applicable
provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and
any other proxy solicitation materials will comply in all
material respects with the applicable provisions of the
Conversion Regulations and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
Company and the Bank will promptly file the Prospectus and any
supplemental sales literature with the Commission and the OTS.
The Prospectus and all supplemental sales literature, as of the
date the Registration Statement became effective and at the
Closing Time referred to in Section 2, complied and will comply
in all material respects with the applicable requirements of the
Conversion Regulations and, at or prior to the time of their
first use, will have received all required authorizations of the
OTS for use in final form.
(v) Neither the SEC nor the OTS has, by order or
otherwise, prevented or suspended the use of the Prospectus or
any supplemental sales literature authorized by the Company or
the Bank for use in connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the
Company and the Bank will have completed the conditions
precedent to the Conversion and the establishment of the
Foundation in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS, the
Federal Deposit Insurance Corporation (the "FDIC"), or any other
regulatory authority, other than those which the regulatory
authority permits to be completed after the Conversion.
(vii) Xxxxxx & Company, Inc., which prepared the
valuation of the Bank as part of the Conversion, has advised the
Company and the Bank in writing that it
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satisfies all requirements for an appraiser set forth in the
Conversion Regulations and any interpretations or guidelines
issued by the FDIC with respect thereto.
(viii) Xxxxxxxxx XxxXxxx & Company, P.C., the
accountants who certified the consolidated financial statements
and supporting schedules of the Bank included in the
Registration Statement and the Prospectus, have advised the
Company and the Bank in writing that they are, with respect to
the company and the Bank, independent public accountants within
the meaning of the Code of Ethics of the American Institute of
Certified Public Accountants (the "AICPA"), and such accountants
are, with respect to the Company, the Bank and each subsidiary
of the Bank, independent certified public accountants as
required by the Securities Act and the Securities Act
Regulations.
(ix) The Bank has one subsidiary which is inactive.
(x) The consolidated financial statements and the
related notes thereto included in the Registration Statement and
the Prospectus present fairly the financial position of the
Company, the Bank and its consolidated subsidiary at the dates
indicated and the results of operations, retained earnings and
cash flows for the periods specified, and comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act Regulations and the
Conversion Regulations; except as otherwise stated in the
Registration Statement, 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
present fairly the information required to be stated therein.
(xi) 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 or business affairs of the Company, the
Bank and its subsidiary considered as one enterprise, whether or
not arising in the ordinary course of business, and (B) except
for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the
Company, the Bank or its subsidiary, other than those in the
ordinary course of business, which are material with respect to
the Company, the Bank and its subsidiary, considered as one
enterprise.
(xii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of Massachusetts
and in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the
financial condition, results of operations or business
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affairs of the Company, the Bank and its subsidiary, considered as
one enterprise.
(xiii) Upon consummation of the Conversion and the
contribution of the Foundation Shares as described in the
Prospectus, the authorized, issued and outstanding capital stock
of the Company will be as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus); no shares of Common Stock have
been or will be issued and outstanding prior to the Closing Time
referred to in Section 2; at the time of Conversion, the
Securities will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan
and stated on the cover page of the Prospectus, will be duly and
validly issued and fully paid and non-assessable; the terms and
provisions of the Common Stock and the capital stock of the
Company conform to all statements relating thereto contained in
the Prospectus; the certificates representing the shares of
Common Stock conform to the requirements of applicable law and
regulations; and the issuance of the Securities is not subject
to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a federally
chartered savings bank in mutual form and upon consummation of
the Conversion will be a federally chartered savings bank in
stock form, in both instances with full corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the
Company, the Bank and its subsidiary have obtained all licenses,
permits and other governmental authorizations currently required
for the conduct of their respective businesses or required for
the conduct of their respective businesses as contemplated by
the Holding Company Application and the Conversion Application,
except where the failure to obtain such licenses, permits or
other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations
or business affairs of the Company, the Bank and its subsidiary
considered as one enterprise; all such licenses, permits and
other governmental authorizations are in full force and effect
and the Company, the Bank and its subsidiary are in all material
respects in compliance therewith; neither the Company, the Bank
nor its 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 or
business affairs of the Company, the Bank and its subsidiary,
considered as one enterprise; and the Bank is in good standing
under the laws of the United States and is qualified as a
foreign corporation in any jurisdiction in which the failure to
so qualify would have a material adverse effect on the financial
condition, results of operations or business affairs of the
Company, the Bank and its subsidiary considered as one
enterprise.
(xv) The deposit accounts of the Bank are insured by
the Savings Association Insurance Fund ("SAIF") of the FDIC up
to the applicable limits and upon consummation of the
Conversion, the liquidation account for the benefit of eligible
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account holders and supplemental eligible account holders will be
duly established in accordance with the requirements of the
Conversion Regulations. The Bank is a "qualified thrift lender"
within the meaning of 12 U.S.C. Section 1467a(m).
(xvi) Upon consummation of the Conversion, the
authorized capital stock of the Bank will be 11,000,000 shares
of common stock, par value $.01 per share (the "Bank Common
Stock") and 1,000,000 shares of preferred stock, par value $.01
per share (the "Bank Preferred Stock"), and the issued and
outstanding capital stock of the Bank will be as set forth in
the Prospectus; and as of Closing Time referred to in Section 2,
all of the issued and outstanding capital stock of the Bank will
be duly authorized, validly issued and fully paid and
nonassessable, and have been issued in compliance with all
federal and state securities laws. The shares of Bank Common
Stock to be issued to the Company will have been duly authorized
for issuance and, when issued and delivered by the Bank pursuant
to the Plan against payment of the consideration calculated as
set forth in the Plan and as described in the Prospectus, will
be duly and validly issued and fully paid and nonassessable, and
all such capital stock will be owned beneficially and of record
by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance or legal or equitable claim;
the terms and provisions of the Bank Common Stock and the Bank
Preferred Stock conform to all statements relating thereto
contained in the Prospectus, and the certificates representing
the shares of the Bank Common Stock will conform with the
requirements of applicable laws and regulations; and the
issuance of the Bank Common Stock is not subject to preemptive
or similar rights.
(xvii) The Foundation has been duly incorporated and is
validly existing as a non stock corporation in good standing
under the laws of the State of Delaware with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the
Foundation will not be a savings and loan holding company within
the meaning of 12 U.S.C. Section 1467a(a)(1)(D) as a result of
the issuance of shares of Common Stock to it in accordance with
the terms of the Plan and in the amounts as described in the
Prospectus; no approvals are required to establish the
Foundation and to contribute the shares of Common Stock thereto
as described in the Prospectus other than those imposed by the
OTS; except as specifically disclosed in the Prospectus and the
Proxy Statement, there are no agreements and/or understandings,
written or oral, between the Company and/or the Bank and the
Foundation with respect to the control, directly or indirectly,
over the voting and the acquisition or disposition of the
Foundation Shares; at the time of the Conversion, the Foundation
Shares will have been duly authorized for issuance and, when
issued and contributed by the Company pursuant to the Plan, will
be duly and validly issued and fully paid and non-assessable;
and the issuance of the Foundation Shares is not subject to
preemptive or similar rights.
(xviii) The subsidiary of the Bank has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own,
lease and operate its properties and to conduct its business,
and is duly qualified to transact business and is in
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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 on the
financial condition, results of operations or business affairs
of the Company, the Bank and its subsidiary considered as one
enterprise; the activities of subsidiary are permitted to
subsidiary of a federally chartered savings bank by the rules,
regulations, resolutions and practices of the OTS; all of the
issued and outstanding capital stock of the 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.
(xix) The Company and the Bank have taken all corporate
action necessary for them to execute, deliver and perform this
Agreement, and this Agreement has been duly executed and
delivered by, and is the valid and binding agreement of, the
Company and the Bank, enforceable 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.
(xx) 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 Bank or its subsidiary will have (A) issued any securities
or incurred any liability or obligation, direct or contingent,
or borrowed money, except borrowings in the ordinary course of
business from the same or similar sources and in similar amounts
and having similar maturities as indicated in the Prospectus, or
(B) entered into any transaction or series of transactions which
is material in light of the business of the Company, the Bank
and its subsidiary, taken as a whole, excluding the origination,
purchase and sale of loans or the purchase or sale of investment
securities or mortgaged-backed securities in the ordinary course
of business or otherwise as indicated in the Prospectus.
(xxi) No approval of any regulatory or supervisory or
other public authority is required in connection with the
execution and delivery of this Agreement or the issuance of the
Securities and the Foundation Shares that has not been obtained
and a copy of which has been delivered to the Agent, except for
the declaration of effectiveness of any required post-effective
amendment to the Registration Statement by the Commission and
approval thereof by the OTS, the issuance of the Stock Charter
by the OTS, and as may be required under the securities laws of
various jurisdictions.
(xxii) Neither the Company, the Bank nor subsidiary is
in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case
may be, or bylaws (and the Bank will not be in violation of its
charter or bylaws in stock form upon consummation of the
Conversion); and neither the Company,
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the Bank nor its subsidiary 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 Bank or its subsidiary is a
party or by which it or them may be bound, or to which the
property or assets of the Company, the Bank or its subsidiary 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 or business of the
Company, the Bank and its subsidiary considered as one
enterprise; and there are no contracts or documents of the
Company, the Bank or its subsidiary which are required to be
filed as exhibits to the Registration Statement or the
Conversion Application which have not been so filed.
(xxiii) 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 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 Bank or its subsidiary pursuant
to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Bank or its
subsidiary is a party or by which it or them may be bound, or
to which the property or assets of the Company or its
subsidiary 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 or business
affairs of the Company, the Bank and its subsidiary considered
as one enterprise; nor will such action result in any violation
of the provisions of the certificate of incorporation,
organization certificate, articles of incorporation or charter
or by-laws of the Company, the Bank or its subsidiary, or any
applicable law, administrative regulation or administrative or
court decree.
(xxiv) No labor dispute with the employees of the
Company, the Bank or its subsidiary exists or, to the knowledge
of the Company or the Bank, is imminent or threatened; and the
Company and the Bank are not aware of any existing or threatened
labor disturbance by the employees of its principal suppliers
or contractors which might be expected to result in any material
adverse change in the financial condition, results of operations
or business affairs of the Company, the Bank and its subsidiary
considered as one enterprise.
(xxv) Each of the Company, the Bank and its subsidiary
has good and marketable title to all properties and assets for
which ownership is material to the business of the Company, the
Bank or its subsidiary and to those properties and assets
described in the Prospectus as owned by them, free and clear of
all liens, charges, encumbrances or restrictions, except such as
are described in the Prospectus or are not material in relation
to the business of the Company, the Bank or its subsidiary
considered as one enterprise; and all of the leases and
subleases material to the business of the Company, the Bank or
its subsidiary under which the Company, the Bank or its
subsidiary hold properties,
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including those described in the Prospectus, are valid and binding
agreements of the Company, the Bank and its subsidiary,
enforceable in accordance with their terms.
(xxvi) None of the Company, the Bank nor its subsidiary
are in violation of any directive from the OTS or the FDIC to
make any material change in the method of conducting its
respective businesses; the Bank and its subsidiary 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 or the FDIC).
(xxvii) 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 or the
Bank, threatened, against or affecting the Company, the Bank or
its subsidiary 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 or business affairs
of the Company, the Bank and its subsidiary considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and
adversely affect the consummation of the Conversion; all pending
legal or governmental proceedings to which the Company, the Bank
or its 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
or any of its subsidiary which are required to be filed as
exhibits to the Registration Statement or the Conversion
Application which have not been so filed.
(xxviii) The Bank has obtained an opinion of its counsel,
Xxxxxxx, Xxxxxx & Xxxxxxxx with respect to the legality of the
Securities to be issued and the Foundation Shares and the state
and local income tax and federal income tax consequences of the
Conversion (including franchise tax, sales or use tax, license
fee on foreign corporations, stock transfer tax, real property
transfer gain tax and real estate transfer tax), copies of which
are filed as exhibits to the Registration Statement; all
material aspects of the aforesaid opinions are accurately
summarized in the Prospectus; the facts and representations upon
which such opinions are based are truthful, accurate and
complete in all material respects; and neither the Bank nor the
Company has taken or will take any action inconsistent therewith.
(xxix) The Bank has obtained an opinion of Xxxxxxxxx
XxxXxxx & Company, P.C. with respect to the Massachusetts income
tax consequences of the Conversion, a copy of which is filed as
an exhibit to the Registration Statement, and an opinion of
Xxxxxxx Xxxxxx & Xxxxxxxx with respect to the federal income tax
consequences of the Foundation; all material aspects of the
aforesaid opinions that are required to be disclosed are
accurately summarized in the Prospectus; the facts and
representation upon which such opinions are based are truthful,
accurate and complete in
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all material respects, and neither the Bank nor the Company has taken
or will take any action inconsistent therewith.
(xxx) The Company is not 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 consolidated
selected financial information of the Bank included in the
Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of
Regulation Z and 12 C.F.R. Parts 226 and 560, 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 or business of the Company, the Bank and its
subsidiary considered as one enterprise.
(xxxii) To the knowledge of the Company and the Bank,
with the exception of the intended loan to the Bank's ESOP by
the Company to enable the ESOP to purchase shares of Common
Stock in an amount of up to 8% of the Common Stock issued in the
Conversion, none of the Company, the Bank or employees of the
Bank has made any payment of funds of the Company 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) The Company, the Bank and its 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.
(xxxiv) None of the Company, the Bank nor its subsidiary
nor any properties owned or operated by the Company, the Bank or
its 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
Bank and its 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 governmental
agency) instituted or pending, or to the knowledge of the
Company or the Bank threatened, relating to the liability of any
property owned or operated by the Company, the Bank or the
subsidiary thereof, under any Environmental Law. 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,
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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.
(xxxv) The Company, the Bank and its subsidiary have
filed all federal income and state and local 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.
(xxxvi) The Company has received approval, subject to
regulatory approval to consummate the Offerings, to have the
Securities quoted on the American Stock Exchange ("AMEX")
effective as of the Closing Time.
(xxxvii) The Company has filed a registration statement
for the Common Stock under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and has
requested that such registration statement be effective
concurrent with the effectiveness of the Registration Statement.
(b) Any certificate signed by officer of the Company
or the Bank and delivered to either of the Agent to counsel for
the Agent shall be deemed a representation and warranty by the
Company or the Bank to each Agent as to the matters covered
thereby.
SECTION 2. APPOINTMENT OF SANDLER 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 Sandler 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 and in reliance upon the representations and
warranties herein contained, and subject to the terms and conditions
herein set forth, Sandler 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 Sandler X'Xxxxx pursuant to this appointment include
the following: (i) consulting as to the securities marketing
implications of any aspect of the Plan of Conversion or related
corporate documents; (ii) reviewing with the Board of Directors the
independent appraiser's appraisal of the Common Stock; (iii)
reviewing all offering documents, including the Prospectus,
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stock order form and related offering materials (it being understood
that preparation and filing of such documents are the sole
responsibility of the Company and the Bank and their counsel); (iv)
assisting in the design and implementation of a marketing strategy
for the Offerings; (v) assisting the Company and the Bank in
obtaining all requisite regulatory approvals; (vi) assisting Bank
management in scheduling and preparing for meetings with potential
investors and broker-dealers; and (vii) providing such other general
advice and assistance as may be requested to promote the successful
completion of the Conversion.
The appointment of the Agent hereunder shall terminate upon
the earlier to occur of (a) forty-five (45) days after the last day
of the Subscription or Community Offering, unless the Company and the
Agent agree in writing to extend such period and the OTS agrees to
extend the period of time in which the Securities may be sold, or (b)
the receipt and acceptance of subscriptions and purchase orders for
all of the Securities, or (c) the completion of the Syndicated
Community Offering.
If any of the Securities remain available after the
expiration of the Subscription and Community Offering, at the request
of the Company and the Bank, Sandler X'Xxxxx will seek to form a
syndicate of registered broker or dealers ("Selected Dealers") to
assist in the solicitation of purchase orders of such Securities on a
best efforts basis, subject to the terms and conditions set forth in
a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement.
Sandler X'Xxxxx will endeavor to limit the aggregate fees to be paid
by the Company and the Bank under any such Selected Dealers'
Agreement 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 7% of the aggregate Purchase
Price of the Securities sold by such Selected Dealers. Sandler
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 requirements of the Plan, 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.
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 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
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
which shall survive any such termination. 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 not less than 1,338,750 shares of
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Common Stock are sold.
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 _________________________, 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 reimbursement of the expenses specified in
Section 4 hereof, the Agent will receive the following compensation
for its services hereunder:
(a) One and 55/100 percent (1.55%) of the aggregate Actual
Purchase Price (as defined in the Prospectus) 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, (ii) by the
Foundation or and (iii) 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 an NASD member
firm (other than Sandler X'Xxxxx) under the Selected Dealers'
Agreement in the Syndicated Community Offering, (i) the
compensation payable to Selected Dealers under any Selected
Dealers' Agreement, (ii) any sponsoring dealer's fees; and (iii)
a management fee to Sandler X'Xxxxx of one and one-half percent
(1.5%). Any fees payable to Sandler X'Xxxxx for Securities sold
by Sandler X'Xxxxx under any such agreement shall be limited to
an aggregate of One and fifty-five one hundredths of one percent
(1.55%) of the Actual Purchase Price of such Securities.
If this Agreement is terminated by the Agent in accordance
with the provisions of Section 9(a) hereof or the Conversion is
terminated by the Company or the Bank, no fee shall be payable by the
Company to Sandler X'Xxxxx; however, the Company shall reimburse the
Agent for all of its reasonable out-of-pocket expenses incurred prior
to termination, including the
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reasonable fees and disbursements of counsel for the Agent, in
accordance with the provisions of Section 4 hereof.
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 and the remaining
$___________ of which shall be payable upon execution hereof which
shall be credited against any fees or reimbursement of expenses
payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY. The Company and the
Bank covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the
Prospectus, the Conversion Application and the Proxy Statement
as may hereafter be required by the Securities Act Regulations
or the Conversion Regulations or as may hereafter be requested
by the Agent. Following completion of the Subscription or
Community Offering, in the event of a Syndicated Community
Offering, the Company 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 Offerings, 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, or mail for filing to,
the Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and
Community Offerings and pricing information pursuant to Rule 424
of the Securities Act Regulations, in either case in a form
acceptable to the Agent. The Company 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 Conversion
Application, (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 Conversion Application 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 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.
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(b) The Company and the Bank will give the Agent notice of
its intention to file or prepare any amendment to the Conversion
Application or Registration Statement (including any
post-effective 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 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 and the Bank will deliver to the Agent as
many signed copies and as many conformed copies of the
Conversion Application 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 "Offering Period"), the Company and the Bank
will comply, at their own expense, with all requirements imposed
upon them by the OTS, by the applicable Conversion Regulations,
as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Securities Exchange Act of 1934,
as amended (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 the Offering 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 reasonable opinion of counsel
for the Agent, to amend or supplement the 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 and the Bank will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to
counsel for the Agent) so that, as so amended or supplemented,
the 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 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 and the Bank will each furnish such information with
respect to itself as the Agent may from time to time reasonably
request.
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(f) The Company and the Bank will take all necessary
action, in cooperation with the Agent, to qualify the Securities
for offer and sale under the applicable securities laws of such
states of the United States and other jurisdictions as the
Conversion Regulations may require and as the Agent and the
Company have agreed; provided, however, that neither the Company
nor the Bank shall be obligated to execute or 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 and the Bank will file such
statements 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 Sandler X'Xxxxx and any
Selected Dealers 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 1933 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 (beginning with its 1998 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, the Bank and its subsidiary 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 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
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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 and the Bank will conduct the Conversion
including the formation and operation of the Foundation in all
material respects in accordance with the Plan, the Conversion
Regulations and all other applicable regulations, decisions and
orders, including all applicable terms, requirements and
conditions precedent to the Conversion imposed upon the Company
or the Bank by the OTS.
(l) 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."
(m) [Reserved]
(n) The Company will maintain the effectiveness of the
Exchange Act Registration Statement for not less than three
years. The Company will use its best efforts to effect the
listing of the Common Stock on AMEX or for such longer period as
OTS may require.
(o) 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 the
National Association of Securities Dealers, Inc.'s
"Interpretation Relating to Free-Riding and Withholding."
(p) 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 for a period of 180
days following the Closing Time.
(q) During the period beginning on the date hereof and
ending on the later of the third 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, neither the Company nor the Bank shall, without
the prior written consent of the Agent, which consent shall not
be unreasonably withheld, take or permit to be taken any action
that could result in the Bank Common Stock becoming subject to
any security interest, mortgage, pledge, lien or encumbrance;
provided, however, that this covenant shall be null and void if
the Board of Governors of the Federal Reserve System, by
regulation, policy statement or interpretive release, or by
written order or written advice addressed to the Bank or the
Agent specifically addressing the provisions of Section 6(a)
hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
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(r) 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 Holding Company Application and with
the FDIC in connection with their approval or non-objection of,
or non-objection to, the Conversion Application including those
conditions relating to the establishment and the operation of
the Foundation; the Company and the Bank shall use their best
efforts to ensure that the Foundation submits within the time
frames required by applicable law a request to the Internal
Revenue Service to be recognized as a tax-exempt organization
under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"); the Company and the Bank will take no
action which will result in the possible loss of the
Foundation's tax exempt status; and neither the Company nor the
Bank will contribute any additional assets to the Foundation
until such time that such additional contributions will be
deductible for federal and state income tax purposes.
(s) During the period ending on the first anniversary of
the Closing Time, the Bank will comply with all applicable law
and regulation necessary for the Bank to continue to be a
"qualified thrift lender" within the meaning of 12 U.S.C.
Section 1467a(m).
(t) The Company shall not deliver the Securities until the
Company and the Bank have satisfied each condition set forth in
Section 5 hereof, unless such condition is waived by the Agent.
(u) The Company or the Bank will furnish to Sandler
X'Xxxxx as early as practicable prior to the Closing Date, but
no later than two (2) full business days prior thereto, a copy
of the latest available unaudited interim consolidated financial
statements of the Bank and its subsidiary which have been
prepared by Xxxxxxxxx, XxxXxxx & Company, P.C., as stated in
their letters to be furnished pursuant to subsections (e) and
(f) of Section 5 hereof.
SECTION 4. PAYMENT OF EXPENSES. The Company 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 printing and filing of the
Registration Statement as originally filed and of each amendment
thereto, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the purchasers in the Offerings,
(iv) the fees and disbursements of the Company's and the Bank's
counsel, 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 to the
Agent, (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 AMEX. In the
event the Agent incurs any such fees and expenses
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on behalf of the Bank or the Company, 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 Bank or the Company pursuant to
this Section without the prior approval of the Bank.
The Company 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
Conversion is consummated, including (i) the filing fees paid or
incurred by the Agent in connection with all filings with the
National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to
the Offerings, including, without limitation, advertising,
promotional, syndication and travel expenses and fees and expenses of
the Agent's counsel. 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 or the Bank of a
written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent, up to an aggregate maximum of $80,000.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company,
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 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 and the Bank made pursuant to the provisions hereof, to the
performance by the Company and the Bank of their obligations
hereunder, and to the following further conditions:
(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
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, Xxxxxx & Xxxxxxxx, counsel for the Company and
the Bank, in form and substance satisfactory to counsel for
the Agent, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company 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 to enter
into
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and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in the State of Massachusetts 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 or business affairs of the Company, the
Bank and its subsidiary, considered as one enterprise.
(iv) Upon consummation of the Conversion, and the
issuance of the Foundation Shares to the Foundation
immediately upon completion thereof, the authorized,
issued and outstanding capital stock of the Company
will be as set forth in the Prospectus and, no shares
of Common Stock have been or will be issued and
outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares
have been duly and validly authorized for issuance and
sale and, when issued and delivered by the Company
pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, or
contributed by the Company pursuant to the Plan in the
case of the Foundation Shares, will be duly and
validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the
Foundation Shares is not subject to preemptive or
other similar rights arising by operation of law or,
to the best of their knowledge and information,
otherwise.
(vii) The Bank has been at all times since the
date hereof and prior to the Closing Time duly
organized and validly existing under the laws of the
United States of America as a federally chartered
savings bank of mutual form, and, at Closing Time, has
become duly organized and validly existing under the
laws of the United States of America as a federally
chartered savings bank of stock form, in both
instances with full corporate power and authority to
own, lease and operate its properties and to conduct
its business as described in the Registration
Statement and the Prospectus; and the Bank is not
required to be qualified as a foreign corporation in
any other jurisdiction in which the failure to so
qualify would have a material adverse effect upon the
financial condition, results of operations or business
affairs of the Bank.
(viii) The Bank is a member in good standing of the
Federal Home Loan Bank of Massachusetts and the
deposit accounts of the Bank
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are insured by the SAIF of the FDIC up to the applicable
limits.
(ix) The subsidiary of the Bank has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of
its incorporation, 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 is not required to be
qualified as a foreign corporation in any jurisdiction
in which the failure to so qualify would have a
material adverse effect upon the financial condition,
results of operations or business of the Company, the
Bank and its subsidiary, taken as a whole; the
activities of the subsidiary are permitted to a
subsidiary of a savings and loan holding company and
of a federally chartered savings bank by the rules,
regulations, resolutions and practices of the OTS; all
of the issued and outstanding capital stock of the
subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned
by the Bank directly free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(x) The Foundation has been duly incorporated
and is validly existing as a non-stock corporation in
good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus; the Foundation is not a
savings and loan holding company within the meaning of
12 U.S.C. Section 1467a(a)(1)(D) as a result of the
issuance of shares of Common Stock to it in accordance
with the terms of the Plan and in the amounts as
described in the Prospectus; no approvals are required
to establish the Foundation and to contribute the
shares of Common Stock thereto as described in the
Prospectus other than those set forth in any written
notice or order of approval or non-objection of the
Conversion, the Conversion Application or the Holding
Company Application, copies of which were provided to
the Agent prior to the Closing Time.
(xi) Upon consummation of the Conversion, all of
the issued and outstanding capital stock of the Bank,
will be duly authorized and when issued and paid for
in accordance with the Plan, will be validly issued
and fully paid and nonassessable, and all such capital
stock will be owned beneficially and of record by the
Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
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(xii) The OTS has approved the Holding Company
Application and the Conversion Application and, to
such counsel's knowledge, no action is pending or
threatened with respect to the Holding Company
Application or the Conversion Application or the
acquisition by the Company of all of the Bank's issued
and outstanding capital stock; the Holding Company
Application and the Conversion Application comply as
to form in all material respects with the applicable
requirements of the OTS, (except as to financial notes
to financial statements, related schedules and other
financial, appraisal and statistical data) and the
Company is duly authorized to become a savings and
loan holding company and is duly authorized to own all
of the issued and outstanding capital stock of the
Bank to be issued pursuant to the Plan.
(xiii) (A) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby, including the establishment of
the Foundation and the contribution thereto of the
Foundation Shares, have been duly and validly
authorized by all necessary action on the part of each
of the Company and the Bank, and this Agreement
constitutes the legal, valid and binding agreement of
each of the Company and the Bank, enforceable in
accordance with its terms, except as rights to
indemnity and contribution hereunder maybe limited
under applicable law (it being understood that such
counsel may avail itself of customary exceptions
concerning the effect of bankruptcy, insolvency,
reorganization, moratorium or similar laws and the
availability of equitable remedies).
(B) The execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and
the consummation of the transactions contemplated here
by, including the establishment of the Foundation and
the contribution thereto of the Foundation Shares,
will not result in any violation of the provisions of
the charter or certificate of incorporation, as the
case may be, or by-laws of the Company, the Bank or
its subsidiary; and the execution and delivery of this
Agreement, the incurrence of the obligations herein
set forth and the consummation of the transactions
contemplated herein 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 upon any property or assets of the
Company, the Bank and its subsidiary considered as one
enterprise pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or its
subsidiary is a party or by which any of them may be
bound, or to which the property or assets of the
Company, the Bank or its subsidiary is subject, that
individually or in the aggregate, would have a
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material adverse effect on the financial condition,
results of operations or business of the Company, the
Bank and its subsidiary considered as one enterprise.
(xiv) The Prospectus has been duly approved by the
OTS for final use pursuant to the Conversion
Regulations and no action is pending or is threatened
by the OTS to revoke such authorization.
(xv) The Registration Statement has been declared
effective under the Securities Act and no stop order
suspending the effectiveness of the Registration
Statement has been issued under the Securities Act or,
to the best of such counsel's knowledge, proceedings
therefor initiated or threatened by the Commission.
(xvi) 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 and the
consummation of the Conversion, except as may be
required under the securities or Blue Sky laws of
various jurisdictions as to which no opinion need be
rendered.
(xvii) At the time the Registration Statement
became effective, the Registration Statement (other
than the financial statements, the notes thereto,
related schedules and other financial, appraisal 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 Conversion Regulations.
(xviii) The Common Stock conforms in all material
respects 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.
(xix) There are no legal or governmental
proceedings pending or threatened against or affecting
the Company, the Bank or its subsidiary which are
required, individually or in the aggregate, to be
disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or
governmental proceedings to which the Company, the
Bank or any of its 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.
(xx) The information in the Prospectus under
"Risk Factors -
25
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Establishment of the Charitable Foundation," "- Financial
Institution Regulation and Possible Legislation," "-
Possible Anti-Takeover Provisions Which May Discourage
Takeover Attempts," "Business of the Bank - Legal
Proceedings," "Dividend Policy," "Federal and State
Taxation," "Regulation," "The Conversion - Establishment of
the Charitable Foundation," and "- Tax Aspects,"
"Restrictions on Acquisitions of the Company and the Bank,"
"Description of Capital Stock of the Company," and
"Description of Capital Stock of the Bank" 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.
(xxi) 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 or to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto, 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.
(xxii) The Plan has been duly authorized by the
Board of Directors of the Company and the Board of
Directors of the Bank and the OTS's approval of the
Plan remains in full force and effect; the Bank's
charter has been amended, effective upon consummation
of the Conversion and the filing of such amended
charter with the OTS, to authorize the issuance of
permanent capital stock; the Company and the Bank have
conducted the Conversion and the establishment and
funding of the Foundation in all material respects in
accordance with applicable requirements of the
Conversion Regulations, the Plan and all other
applicable regulations, decisions and orders
thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to
the Conversion imposed upon the Company or the Bank by
the OTS and no order has been issued by the OTS to
suspend the Conversion or 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,
no person has sought to obtain review of the final
action of the OTS in approving the Conversion
Application (which includes the Plan which provides
for the establishment of the Foundation) or the
Holding Company Application.
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(xxiii) To the best of such counsel's knowledge, the
Company and the Bank and its subsidiary have obtained
all licenses, permits and other governmental
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 and the Bank and its subsidiary are in all
material respects complying therewith.
(xxiv) Neither the Company, the Bank nor its
subsidiary is in violation of its certificate of
incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or
bylaws (and the Bank will not be in violation of its
charter in stock form upon consummation of the
Conversion) or, to the best of such counsel's
knowledge, 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 Bank or its subsidiary is a party or
by which the Company, the Bank or its subsidiary or
their property may be bound.
(xxv) The Company is not required to be registered
as an investment company under the Investment Company
Act of 1940.
(2) The favorable opinion, dated as of Closing Time,
of Xxxxxxx & Zelermyer, LLP, counsel for the Agent, with
respect to the matters set forth in Section 5(b)(1)(i),
(iv), (v), (vi) (solely as to preemptive rights arising by
operation of law), (xiii)(A), (xvii) and (xviii) and such
other matters as the Agent may reasonably require.
(3) In addition to opinions required by subsections
(b)(l) and (b)(2), respectively, of this Section, Xxxxxxx,
Xxxxxx & Xxxxxxxx and Xxxxxxx & Xxxxxxxxx, LLP shall each
state that nothing has come to their attention that would
lead them to believe that the Registration Statement
(except for financial statements, the notes thereto,
related schedules and other financial, statistical or
appraisal 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 made therein not
misleading or that the Prospectus (except for financial
statements the notes thereto, related schedules and other
financial, statistical or appraisal data included therein,
as to which counsel need make no statement), at the time
the Registration Statement became effective or at Closing
Time, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading. In giving their
27
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opinions under the sections referenced above, Xxxxxxx,
Xxxxxx & Xxxxxxxx and Xxxxxxx & Xxxxxxxxx, LLP shall each
state that they have not independently verified the
information with respect to the Company and the Bank
contained in the Registration Statement, the Conversion
Application and the Prospectus and may rely as to matters
of fact on certificates of officers and directors of the
Company and the Bank and certificates of public officials,
and Xxxxxxx & Zelermyer, LLP may also rely on the opinion
of Xxxxxxx, Xxxxxx & Xxxxxxxx.
(c) At Closing Time referred to in Section 2, the Company
and the Bank shall have completed in all material respects the
conditions precedent to the Conversion in accordance with the
Plan, the applicable Conversion Regulations and all other
applicable laws, regulations, decisions and orders, including
all terms, conditions, requirements and provisions precedent to
the Conversion imposed upon the Company or the Bank by the OTS,
or any other regulatory authority other than those which the OTS
permits to be completed after the Conversion.
(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 or business of the Company, the
Bank and its subsidiary considered as one enterprise, whether or
not arising in the ordinary course of business, and the Agent
shall have received a certificate of the Chief Executive Officer
of the Company and of the Bank, the President of the Company and
the Bank and the chief financial or chief accounting officer of
the Company 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 entered into
by the Company or the Bank from the latest date as of which the
financial condition of the Company 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, (iii) neither
the Company nor the Bank shall have received from the OTS any
direction (oral or written) to make any material change in the
method of conducting its business with which it has not complied
(which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the
business, financial condition or results of operations of the
Company, the Bank or its subsidiary, (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) the Company 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 Offerings 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 or the FDIC
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 Conversion Regulations nor has any person sought to
obtain regulatory or judicial review of the action
28
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of the OTS in approving the Holding Company Application.
(e) At the time of the execution of this Agreement, the
Agent shall have received from Xxxxxxxxx XxxXxxx & Company, P.C.
a letter dated such date, in form and substance satisfactory to
the Agent, to the effect that (i) they are independent public
accountants with respect to the Company, the Bank and its
subsidiary within the meaning of the Code of Ethics of the
American Institute of Certified Public Accountants, the
Securities Act and the Securities Act Regulations and the
Conversion Regulations; (ii) it is their opinion that the
consolidated financial statements and supporting notes and
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 and the
Conversion Regulations; (iii) based upon limited procedures set
forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited
financial statements and supporting schedules of the Bank and
its subsidiary 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 Conversion Regulations or are not
presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that
of the audited financial statements included in the Registration
Statement and the Prospectus, (B) the unaudited amounts set
forth 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 in the
Prospectus 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 days prior to the date of this Agreement, there has been
any increase in the consolidated long term or short term debt of
the Bank and its subsidiary or any decrease in consolidated
total assets, the allowance for loan losses, total deposits or
net worth of the Bank and its subsidiary, in each case as
compared with the amounts shown in the September 30, 1997
balance sheet included in the Registration Statement or, (D)
during the period from September 30, 1997 to a specified date
not more than five days prior to the date of this Agreement,
there were any decreases, as compared with the corresponding
period in the preceding 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
Bank and its subsidiary, 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 Bank and its subsidiary identified
in such letter.
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(f) At Closing Time, the Agent shall have received from
Xxxxxxxxx, XxxXxxx & Company, P.C. a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (d) of this Section,
except that the specified date referred to shall be a date not
more than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been
approved for listing on the AMEX upon notice of issuance.
(h) At Closing Time, the Agent shall have received a
letter from Xxxxxx & Company, Inc., dated as of the Closing
Time, confirming its appraisal.
(i) 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 and the Foundation Shares as herein
contemplated and related proceedings, or in order to evidence
the accuracy 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 Foundation Shares as herein
contemplated shall be satisfactory in form and substance to the
Agent and counsel for the Agent.
(j) At any time prior to the 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 effects 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 the American Stock Exchange or 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 or state authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company 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 Conversion (including the establishment of
the Foundation and the contribution of the Foundation Shares
thereto
30
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by the Company) or any action taken by the Agent where acting as
agent of the Company 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 Proxy Statement or
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;
(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 pending or
threatened whatsoever described in clauses (i) or (ii) above, if
such settlement is effected with the written consent of the
Company 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 for 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 (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. Notwithstanding the
foregoing, the indemnification provided for leave in this paragraph
(a) shall not apply to the Bank to the extent that such
indemnification by the Bank would constitute a covered transaction
under Section 23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the
Company, the Bank, their respective directors and 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,
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but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the
Registration Statement or the Prospectus (or any amendments or
supplements 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.
(d) The Company 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 Bank, the Company, its security holders
or the Bank's or the Company'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 respective 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 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 and the Bank jointly and severally
agree to reimburse the Agent for all reasonable and necessary
out-of-pocket expenses incurred by it in connection with preparing or
appearing as a witness or otherwise giving testimony and to
compensate the Agent 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 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 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
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aggregate gross proceeds appearing thereon and the Company 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 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 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 and of the Bank, each officer of the
Company who signed the Registration Statement, and each person, if
any, who controls the Company 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 Company 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 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 the 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 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 or business affairs of the Company or the Bank, or the
Company, the Bank and its subsidiary considered as one enterprise,
whether or not arising in the ordinary course of business, or (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 Stock
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 or Massachusetts authorities, (iv)
if, any condition specified in Section 5 shall not have been
fulfilled when and as required to be fulfilled;
33
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(v) if there shall have been such material adverse change in the
condition or prospects of the Company 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 price for the Securities established by Xxxxxx &
Company, Inc., is not reasonable or equitable under then prevailing
market conditions, or (vii) if the Conversion is not consummated on
or prior to ____________________, 1998.
(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 Section 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 Two World Trade Center, 104th Floor, New York, New York
10048, attention of Xxxxxxxxx X. Xxxxxx, Esq., Vice President;
notices to the Company and the Bank shall be directed to either of
them at 0000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, attention
of _____________________________ , ___________________ .
SECTION 11. PARTIES. This Agreement shall inure to the
benefit of and be binding upon the Agent, the Company 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 and the Bank
and their respective successors and the controlling persons and
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 and the Bank and their
respective successors, and said controlling persons and officers and
directors and their heirs and 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 prior oral or written agreements, except for the two
engagement letter agreements, each dated September 9, 1997 by and
between the Agent and the Bank, relating to the Agent's providing
conversion agent and financial advisor services to the Company and
the Bank in connection with the Conversion. 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.
34
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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.
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, the Company and the
Bank in accordance with its terms.
Very truly yours,
BAY STATE BANCORP, INC.
By:
------------------------------------
Title:
BAY STATE FEDERAL SAVINGS BANK
By:
------------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:
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[Name]
Vice President
