EXHIBIT 1.2
__________ Shares
(subject to increase up to _________ shares
in the event of an oversubscription)
XXXXXXXX XXXXXXXX BANCORP, INC.
(a Massachusetts corporation)
Common Stock
(no par value)
AGENCY AGREEMENT
___________, 2005
XXXX XXXX & CO.
00 Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Xxxxxxxx Xxxxxxxx Bancorp, M.H.C. (the "MHC"), a Massachusetts mutual
holding company which intends to convert into a Massachusetts business
corporation known as Xxxxxxxx Xxxxxxxx Bancorp, Inc., a Massachusetts business
corporation (the "Company"), and Xxxxxxxx Xxxxxxxx Bank, a Massachusetts
chartered savings bank (the "Bank"), hereby confirm their agreement with Xxxx
Xxxx & Co. ("Xxxx Xxxx" or the "Agent") with respect to the offer and sale by
the Company of ___________ shares (subject to increase up to _____________
shares in the event of an oversubscription) of the Company's Common Stock, no
par value per share (the "Common Stock"). The shares of Common Stock to be sold
by the Company are hereinafter called the "Securities." In addition, as
described herein, the Company expects to contribute up to 400,000 shares of
Common Stock to the Xxxxxxxx Xxxxxxxx Bank 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 Trustees of the MHC on October 28, 2004, as amended on ________,
2005, pursuant to which the MHC intends to convert from a Massachusetts
chartered mutual holding company to a Massachusetts chartered business
corporation and stock holding company. Pursuant to the Plan, the Company is
offering to certain of the Bank's depositors, the Bank's Tax-Qualified Employee
Plan, and each of the Company's and the Bank's directors, trustees, officers and
employees who does not have a higher priority, the right to subscribe for the
Securities in a subscription offering (the "Subscription Offering"). To the
extent Securities are not subscribed for in the Subscription Offering, such
Securities may be offered to certain members of the general public, with
preference given to certain natural persons residing in the Massachusetts
counties of Norfolk, Middlesex and Worcester, in a direct community offering
(the "Community Offering" and together with the Subscription Offering, as each
may be extended or reopened from time to time, the "Subscription and Community
Offering") to be commenced concurrently with, during or promptly after the
Subscription Offering. It is currently anticipated by the Bank, the MHC and the
Company that any
Securities not subscribed for in the Subscription and Community Offering will be
offered, subject to Section 2 hereof, in a syndicated community offering (the
"Syndicated Community Offering"). The Subscription and Community Offering and
the Syndicated Community Offering are hereinafter referred to collectively as
the "Offerings," and the conversion of the MHC from mutual to stock form and the
Offerings are hereinafter referred to collectively as the "Conversion." The
Securities may be offered to the general public in a public offering (the
"Public Offering") in lieu of or subsequent to the Syndicated Community
Offering. If there is a Public Offering, the Public Offering will be governed by
a separate definitive purchase agreement as described in Section 2 hereof. It is
acknowledged that the number of Securities to be sold in the 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.
Simultaneous with the consummation of the Conversion and the Offerings,
the Company will acquire Chart Bank, A Cooperative Bank, a Massachusetts
chartered stock co-operative bank ("Chart Bank") pursuant to the terms of an
Agreement and Plan of Merger dated as of September 1, 2004 (the "Chart Bank
Merger Agreement"). Chart Bank will merge with and into the Bank pursuant to the
Chart Bank Merger Agreement (the "Chart Bank Merger"). The Chart Bank Merger
will be accomplished in accordance with the laws of the Commonwealth of
Massachusetts and the United States and applicable regulations of the
Commonwealth of Massachusetts, the Federal Deposit Insurance Corporation [and
the Board of Governors of the Federal Reserve System] (such laws and the
regulations collectively, the "Chart Bank Merger Regulations"). Xxxx Xxxx is
serving as financial advisor to Chart Bank in connection with the Chart Bank
Merger and has disclosed the engagement to the Company, the MHC and the Bank.
Pursuant to the terms of the Chart Bank Merger Agreement, upon consummation of
the Chart Bank Merger, each outstanding share of common stock, par value one
dollar ($1.00) per share, of Chart Bank ("Chart Bank Common Stock"), will
convert into the right to receive the Chart Bank Merger consideration of $30.75
per share of the Chart Bank Common Stock in the form of cash or 3.075 shares of
common stock of the Company, subject to proration and allocation proceeds
contained in the Chart Bank Merger Agreement. Each holder of an outstanding
option to purchase the Chart Bank Common Stock will receive the difference
between the applicable exercise price of the option and the $30.75 Chart Bank
Merger consideration in the form of cash. The Chart Bank Merger is expected to
close simultaneously with consummation of the Conversion. If the Conversion is
not completed by July 15, 2005, the Bank may be required to pay a $2.3 million
cash payment to Chart Bank.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-1 (No. 333--121154), 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 SEC 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 SEC under the Securities Act, as from time to time amended or
supplemented pursuant to the Securities Act or otherwise (the "Securities Act
Regulations")), are hereinafter referred to as the "Registration Statement" and
the "Prospectus," respectively, except that if any revised prospectus shall be
used by the Company in connection with the Subscription and Community Offering
or the Syndicated Community Offering which differs from the Prospectus on file
at the SEC 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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The Company has also filed with the SEC a registration statement on Form
S-4 (File No. 333-121608) (the "S-4 Registration Statement") containing a proxy
statement to be used to solicit proxies of the Chart Bank stockholders with
respect to the approval of the Chart Bank Merger. The Company has filed such
amendments to the S-4 Registration Statement and such amended prospectus, on
file with the SEC at the time the S-4 Registration Statement becomes effective
is hereinafter called the "S-4 Prospectus," except that if the S-4 Prospectus
filed by the Company pursuant to Rule 424(b) of the rules and regulations of the
SEC under the 1933 Act Regulations differs from the prospectus on file at the
time the Registration Statement becomes effective, the term "S-4 Prospectus"
shall refer to the prospectus filed pursuant to Rule 424(b) from and after the
time such prospectus is filed with or mailed to the SEC for filing.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus to be used in the Subscription
and Community Offering. The Prospectus contains information with respect to the
Company, the MHC, the Bank and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC 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
SEC, no stop order has been issued with respect thereto and no proceedings
therefore have been initiated or, to the knowledge of the Company, the MHC
and the Bank, threatened by the SEC. 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. The Prospectus, at the date hereof does not,
and at the Closing Time referred to in Section 2 hereof will not, include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information with
respect to the Agent furnished to the Company in writing by the Agent
expressly for use in the Registration Statement or Prospectus (the "Agent
Information," which the Company, the MHC and the Bank acknowledge appears
only in the second paragraph of the section captioned "The Conversion and
The Offering--Plan of Distribution and Marketing Arrangements" of the
Prospectus and "The Acquisition of the Chart Bank and the Merger
Agreement--Opinion of Financial Advisor" in the S-4 Registration
Statement).
(ii) The Company and the MHC have filed with the Board of Governors
of the Federal Reserve System (the "FRB") the MHC's application for
approval of its conversion to a Massachusetts chartered stock holding
company of the Bank (the "Holding Company Application") on Form FR Y-3
promulgated under the Bank Holding Company Act of 1956, as amended (the
"BHCA"), and the regulations promulgated thereunder. The Company has
received written notice from the FRB 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 FRB suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company, the MHC or the Bank, threatened by the FRB. 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 the BHCA and the regulations promulgated
thereunder.
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(iii) Pursuant to Chapter 167H, Section 9 of Massachusetts General
Laws and the regulations promulgated thereunder governing the conversion
of Massachusetts chartered mutual holding companies to Massachusetts
chartered stock holding companies and 209 CMR Part [33.__] et seq.
(collectively, the "Offering Regulations"), the MHC has filed an
application for conversion with the Massachusetts Commissioner of Banks
(the "Commissioner"), including copies of the MHC's Information Statement
for Special Meeting of its Corporators, dated _______, 2005, relating to
the Conversion (the "Corporator Statement") and the Prospectus (such
application, as amended to date, if applicable, and as from time to time
amended or supplemented hereafter, is hereinafter referred to as the
"Massachusetts Application"). The Commissioner has, by order dated
____________, 2005, approved the Massachusetts Application, such approval
remains in full force and effect and no order has been issued by the
Commissioner suspending or revoking such approval and no proceedings
therefor have been initiated or, to the knowledge of the Company, the MHC
or the Bank, threatened by the Commissioner. At the date of such approval
by the Commissioner and at the Closing Time referred to in Section 2, the
Massachusetts 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 Prospectus 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, the MHC and the Bank have filed the Prospectus
and sales literature with the Commissioner and the FRB. 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
Commissioner and the FRB for use in final form.
(v) None of the SEC, the Commissioner, the FRB or any Blue Sky
authority has, by order or otherwise, prevented or suspended the use of
the Corporator Statement, Prospectus or any supplemental sales literature
authorized by the Company, the MHC or the Bank for use in connection with
the Offerings, and no action by or before any such governmental entity to
prevent or suspend the use of the Corporator Statement, Prospectus or any
supplemental sales literature is, to the best knowledge of the Company,
the MHC and the Bank, pending or threatened.
(vi) At the Closing Time referred to in Section 2, (i) the Company,
the MHC and the Bank will have completed the conditions precedent to the
Conversion and the Offerings and the establishment of the Foundation in
accordance with the Plan, the 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, the MHC or the Bank by the FRB, the Commissioner
or any other regulatory authority or Blue Sky authority, other than those
which the regulatory authority permits to be completed after the
Conversion; (ii) the Conversion and the Offerings and the establishment of
the Foundation will have been effected in the manner described in the
Prospectus and in accordance with the Plan, the Conversion Regulations and
all other applicable material laws, regulations, decisions and orders,
including in compliance with all terms, conditions, requirements and
provisions precedent to the Conversion and Offering imposed upon the
Company, the MHC and the Bank by the FRB, the Commissioner or any other
regulatory or Blue Sky authority or any other regulatory authority; and
(iii) the Company, the MHC and the Bank will have completed the conditions
precedent to
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the Chart Bank Merger in accordance with the Chart Bank Merger Agreement,
and all applicable laws, regulations, decisions and orders, including all
material terms, conditions, requirements and provisions precedent to the
Chart Bank Merger imposed upon the parties thereto by any regulatory
authority, other than those which the regulatory authority permits to be
completed after the effective time of the Chart Bank Merger ("Chart Bank
Effective Time").
(vii) RP Financial, LC. ("RP Financial"), which prepared the
valuation of the Company as part of the Conversion, has advised the
Company, the MHC and the Bank in writing that it satisfies all
requirements for an appraiser set forth in the Conversion Regulations and
any interpretations or guidelines issued by the Commissioner with respect
thereto.
(viii) Wolf & Company, P.C., the firm which certified the
consolidated financial statements and supporting schedules of the MHC
included in the Registration Statement, have advised the Company, the MHC
and the Bank in writing that they are independent public accountants
within the meaning of the Code of Ethics of the American Institute of
Certified Public Accountants (the "AICPA"), and such accountants are, with
respect to the Company, the MHC, the Bank and each of the Subsidiaries (as
hereinafter defined), independent certified public accountants as required
by the Securities Act and the Securities Act Regulations and such
accountants are not in violation of the auditor independence requirements
of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act"). Wolf &
Company, P.C., the firm which certified the consolidated financial
statements and supporting schedules of Chart Bank included in the
Registration Statement, have advised the Company, the MHC and the Bank in
writing that they are independent public accountants within the meaning of
the Code of Ethics of the AICPA, and such accountants are, with respect to
Chart Bank, independent certified public accountants as required by the
Securities Act and the Securities Act Regulations and such accountants are
not in violation of the auditor independence requirements of the
Xxxxxxxx-Xxxxx Act.
(ix) The only direct and indirect subsidiaries of the Company, the
MHC or the Bank (other than the Bank) are Xxxxxxxx Xxxxxxxx Bank Capital
Trust I and Xxxxxxxx Xxxxxxxx Securities Corp. (collectively, the
"Subsidiaries" and, individually, each a "Subsidiary"). Except for the
Subsidiaries, the Company, the MHC or the Bank do not, directly or
indirectly, control any other corporation, limited liability company,
partnership, joint venture, association, trust or other business
organization. Upon completion of the Conversion, the only direct
subsidiary of the Company will be the Bank.
(x) The consolidated financial statements and the related
schedules and notes thereto included in the Registration Statement and the
Prospectus present fairly the financial condition, results of operations,
changes in retained earnings, equity and cash flows of each of (i) the
Company, the MHC, the Bank and the Subsidiaries, and (ii) to the Company's
knowledge, Chart Bank and its subsidiaries at the dates indicated and the
results of operations, retained earnings, equity and cash flows for the
periods specified, and comply as to form 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
accounting principles generally accepted in the United States 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. The other financial, statistical and pro forma information
and related notes included in the Prospectus present fairly the
information shown therein on a basis consistent with the audited and
unaudited financial statements included in the Prospectus, and as to the
pro forma adjustments, the adjustments made therein have been consistently
applied on the basis described therein.
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(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, business affairs or prospects of the
Company, the MHC, the Bank, Chart Bank or their respective subsidiaries,
whether or not arising in the ordinary course of business, (B) except for
transactions specifically referred to or contemplated in the Prospectus,
there have been no transactions entered into by the Company, the MHC, the
Bank, Chart Bank or their respective subsidiaries, other than those in the
ordinary course of business consistent with past practice, which are
material with respect to the Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise, and (C) the capitalization,
liabilities, assets, properties and business of the Company, the MHC, Bank
and Chart Bank conform in all material respects to the descriptions
contained in the Prospectus and none of the Company, the MHC, the Bank or
Chart Bank has any material liabilities of any kind, contingent or
otherwise, except as disclosed in the Registration Statement or the
Prospectus.
(xii) The MHC has been duly incorporated and is validly existing as
a mutual holding company under the laws of the Commonwealth of
Massachusetts, 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 MHC is duly qualified as a foreign corporation to
transact business in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business. Upon completion of the Conversion, the Company will
be duly incorporated and validly existing as a corporation under the laws
of the Commonwealth of Massachusetts, 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 will be duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business.
(xiii) Upon completion of the Conversion and the contribution of the
Foundation Shares and the issuance of shares of Common Stock to Chart Bank
stockholders as merger consideration, all as described in the Prospectus,
the authorized, issued and outstanding capital stock of the Company will
be in the range as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus); no
shares of Common Stock or other capital stock of the Company 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 nonassessable; 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 and the Foundation Shares is not subject to preemptive or other
similar rights.
(xiv) The Bank is a Massachusetts chartered savings bank in stock
form and Chart Bank is a Massachusetts-chartered cooperative bank in stock
form, in all 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 MHC, the Bank, Chart Bank and their
respective subsidiaries each has 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
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the Massachusetts 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,
business affairs or prospects of the Company, the MHC, the Bank and the
Subsidiaries; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the MHC, the
Bank, Chart Bank and their respective subsidiaries are in all material
respects in compliance therewith; none of the Company, the MHC, the Bank,
Chart Bank nor any of their respective subsidiaries 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, is the subject of an unfavorable decision, ruling or
finding, might have a material adverse effect on the financial condition,
results of operations, business affairs or prospects of the Company, the
MHC, the Bank and the Subsidiaries; and each of the Bank and Chart Bank is
validly existing and in good standing under the laws of the Commonwealth
of Massachusetts 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, business
affairs or prospects of the Company, the MHC, the Bank and the
Subsidiaries, considered as one enterprise.
(xv) The deposit accounts of each of the Bank and Chart Bank are
insured by the FDIC up to the applicable limits. Upon consummation of the
Conversion, the liquidation account for the benefit of eligible
accountholders of the Bank will be duly established in accordance with the
Plan and the requirements of the Conversion Regulations.
(xvi) Upon consummation of the Conversion, the authorized capital
stock of the Bank will be 2,000,000 shares of common stock, par value
$1.00 per share ("Bank Common Stock") and 500,000 shares of preferred
stock, par value $1.00 per share ("Bank Preferred Stock"), and the issued
and outstanding capital stock of the Bank will be 500,000 shares of Bank
Common Stock and no shares of Bank Preferred Stock, and one share of Bank
Common Stock and no shares of Bank Preferred Stock have been or will be
issued prior to the Closing Time referred to in Section 2; and as of the
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 issued
and to be issued to the Company have been and will have been duly
authorized for issuance and are, or, when issued and delivered by the
Bank, will be, duly and validly issued and fully paid and nonassessable,
and all such Bank Common Stock is and 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; and the
certificates representing the shares of the Bank Common Stock will conform
with the requirements of applicable laws and regulations; the issuance of
the Bank Common Stock is not subject to preemptive or similar rights; and
there are no other warrants, options or rights of any kind to acquire
additional shares of Bank Common Stock or any shares of Bank Preferred
Stock.
(xvii) The Foundation has been duly authorized and incorporated and
is validly existing as a non-stock corporation in good standing under the
laws of the Commonwealth of Massachusetts 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 bank
holding company within the meaning of 12 C.F.R. Section 225.2(c) 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 Commissioner; except as specifically disclosed
in the Prospectus and the Corporator Statement, there are no agreements
and/or understandings, written or oral, between the Company and/or the
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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 nonassessable; and the issuance of the
Foundation Shares is not subject to preemptive or similar rights. The
issuance of the Foundation Shares to the Foundation pursuant to the Plan
has been registered pursuant to the Registration Statement.
(xviii) Each subsidiary of the Bank and Chart 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
Prospectus, and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of operations,
business affairs or prospects of the Company, the MHC, the Bank and the
Subsidiaries considered as one enterprise; the activities of each
subsidiary of the Bank and Chart Bank are permitted to subsidiaries of a
Massachusetts chartered savings bank by the rules, regulations,
resolutions and practices of the Commissioner; all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the
Bank or Chart Bank, as appropriate, directly, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim; and there are no warrants, options or rights of any kind
to acquire shares of capital stock of any subsidiary of the Bank and Chart
Bank.
(xix) The Company, the MHC, and the Bank each has taken all
corporate actions necessary for them to execute, deliver and perform this
Agreement, and this Agreement and the Chart Bank Merger Agreement, as
applicable, have been duly executed and delivered by, and are the valid
and binding agreements of, the Company, the MHC, the Bank and Chart Bank,
enforceable in accordance with their respective terms.
(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 MHC, the Bank and Chart Bank or any
subsidiary thereof will have (A) issued any securities or incurred any
liability or obligation, direct or contingent, or borrowed money, except
borrowings in the ordinary course of business consistent with past
practice from the same or similar sources and in similar amounts as
indicated in the Prospectus, or (B) entered into any transaction or series
of transactions which are material in light of the business of the
Company, the MHC, the Bank and the Subsidiaries.
(xxi) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of
this Agreement, the issuance of the Securities and the Foundation Shares
or the Chart Bank Merger that has not been obtained and a copy of which
has been delivered to the Agent, except as may be required under the "blue
sky" or state securities laws of various jurisdictions.
(xxii) None of the Company, the MHC, the Bank, Chart Bank nor any of
their respective subsidiaries is in violation of their respective
certificate of incorporation, organization certificate, articles of
incorporation or charter, as the case may be, or bylaws or other written
corporate governance requirements or guidelines, including board committee
charters; and none of the Company, the MHC, the Bank, Chart Bank nor any
of their respective subsidiaries is in
8
default (nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the MHC, the Bank, Chart Bank or any of their
respective subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, the MHC,
the Bank, Chart Bank or any of their respective subsidiaries is subject,
except for such defaults that would not, individually or in the aggregate,
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, The MHC, the
Bank, Chart Bank and their respective subsidiaries; and there are no
contracts or documents of the Company, the MHC, the Bank, Chart Bank or
any of their respective subsidiaries which are required to be filed as
exhibits to the Registration Statement, the Massachusetts Application or
the Holding Company Application which have not been so filed.
(xxiii) The consummation of the Conversion, the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of the Company, the MHC and the Bank and do not and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the MHC, the Bank, Chart Bank
or any of their respective subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, the MHC, the Bank, Chart Bank or any of their
respective subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, the MHC,
the Bank, Chart Bank or any of their respective subsidiaries is subject,
except for such defaults that would not, individually or in the aggregate,
have a material adverse effect on the financial condition, results of
operations, business affairs or prospects of the Company, the MHC, the
Bank and the Subsidiaries; nor will such action result in any violation of
the provisions of the certificate of incorporation, organization
certificate, articles of incorporation or charter or bylaws of the
Company, the MHC, the Bank, Chart Bank or any of their respective
subsidiaries, or any applicable law, administrative regulation or
administrative or court decree.
(xxiv) No labor dispute with the employees of the Company, the MHC,
the Bank, Chart Bank or any of their respective subsidiaries exists or, to
the knowledge of the Company, the MHC, or the Bank is imminent or
threatened; and the Company, the MHC, and the Bank are not aware of any
existing or threatened labor disturbance by the employees of any of its
principal suppliers or contractors which might be expected to result in
any material adverse change in the financial condition, results of
operations, business affairs or prospects of the Company, the MHC, the
Bank and the Subsidiaries considered as one enterprise.
(xxv) Each of the Company, the MHC, the Bank, Chart Bank and their
respective subsidiaries have good and marketable title to all properties
and assets for which ownership is material to the business of the Company,
the MHC, the Bank or the Subsidiaries and to those properties and assets
described in the Prospectus as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the Company,
the MHC, the Bank and the Subsidiaries; and all of the leases and
subleases material to the business of the Company, the MHC, the Bank,
Chart Bank or their respective subsidiaries under which the Company, the
MHC, the Bank, Chart Bank, or their respective subsidiaries hold
properties, including those described in the Prospectus, are valid and
binding agreements thereon, as applicable, in full force and effect,
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of the
rights of creditors generally and judicial limitations on the right
9
of specific performance and except as the enforceability of
indemnification and contribution provisions may be limited by applicable
securities laws.
(xxvi) None of the Company, the MHC, the Bank, Chart Bank nor their
respective subsidiaries are in violation of any directive from the SEC,
the FRB, the Commissioner or any other governmental authority to make any
material change in the method of conducting their respective businesses;
the Bank and Chart Bank and their respective Subsidiaries have conducted
and are conducting their business so as to comply in all material respects
with all applicable statutes, regulations and administrative and court
decrees (including, without limitation, all regulations, decisions,
directives and orders of the SEC, FRB and the Commissioner). Except as set
forth in the Prospectus, none of the Company, the MHC, the Bank, Chart
Bank nor any of their respective subsidiaries is subject or is party to,
or has received any notice or advice that any of them may become subject
or party to, any investigation with respect to any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a
party to any commitment letter or similar undertaking to, or is subject to
any directive by, or has been a recipient of any supervisory letter from,
or has adopted any board resolutions at the request of, any Regulatory
Agency (as defined below) that currently restricts in any material respect
the conduct of their business or that in any material manner relates to
their capital adequacy, their credit policies, their management or their
business (each, a "Regulatory Agreement"), nor has the Company, the MHC,
the Bank, Chart Bank or any of their respective subsidiaries been advised
by any Regulatory Agency that it is considering issuing or requesting any
such Regulatory Agreement; and there is no unresolved violation, criticism
or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of the Company, the MHC, the Bank,
Chart Bank or any of their respective subsidiaries which, in the
reasonable judgment of the Company, the MHC or the Bank, is expected to
result in a Material Adverse Effect. As used herein, the term "Regulatory
Agency" means any federal or state agency charged with the supervision or
regulation of depositary institutions or holding companies of depositary
institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company, the MHC, the Bank, Chart
Bank or any of their respective subsidiaries.
(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, the MHC or the Bank, threatened,
against or affecting the Company, the MHC, the Bank, Chart Bank or any of
their respective subsidiaries which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
result in any material adverse change in the financial condition, results
of operations, business affairs or prospects of the Company, the MHC, the
Bank and the Subsidiaries, or which might materially and adversely affect
the properties or assets thereof or which might materially and adversely
affect the consummation of the Conversion, Chart Bank or the Chart Bank
Merger or the performance of this Agreement; all pending legal or
governmental proceedings to which the Company, the MHC, the Bank, Chart
Bank or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, are considered in the aggregate not material; and there
are no contracts or documents of the Company, the MHC or any of the
Subsidiaries which are required to be filed as exhibits to the
Registration Statement, the Massachusetts Application or the Holding
Company Application which have not been so filed.
10
(xxviii) The Company, the MHC and the Bank have obtained opinions of
its outside legal and tax counsel, Xxxxx Xxxx LLP, respectively, with
respect to the legality of the Securities and the Foundation Shares to be
issued and the federal income tax consequences of the Conversion, 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 (including the Subsidiaries) nor the Company has taken or
will take any action inconsistent therewith.
(xxix) The Company is not and, upon completion of the Conversion and
the Offerings and sale of the Common Stock and the application of the net
proceeds therefrom, will not be, required to be registered under the
Investment Company Act of 1940, as amended.
(xxx) All of the loans represented as assets on the most recent
consolidated financial statements or in selected consolidated financial
and other data of the Bank, the MHC and Chart 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 Regulations Z and 12 C.F.R. Part
226), real estate settlement procedures, consumer credit protection, equal
credit opportunity and all disclosure laws applicable to such loans,
except for violations which, if asserted, would not result in a material
adverse effect on the financial condition, results of operations, business
affairs or prospects of the Company, the MHC, the Bank and the
Subsidiaries considered as one enterprise.
(xxxi) To the knowledge of the Company, the MHC and the Bank, with
the exception of the intended loan to the Bank's ESOP by the Company to
enable the ESOP to purchase shares of Common Stock in an amount of up to
8.0% of the Common Stock issued in the Conversion, including shares
contributed to the Foundation, none of the Company, the MHC, the Bank or
employees of the Bank has made any payment of funds of the Company, the
MHC or the Bank as a loan for the purchase of the Common Stock or made any
other payment of funds prohibited by law, and no funds have been set aside
to be used for any payment prohibited by law.
(xxxii) To the knowledge of the Company, there are no affiliations
or associations (as such terms are defined by the National Association of
Securities Dealers, Inc. ("NASD")) between any member of the NASD and any
of the Company's officers or directors except as previously disclosed to
the Agent.
(xxxiii) Each of the Company, the MHC, the Bank, Chart Bank and each
of their respective subsidiaries carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of
their respective businesses and the value of their respective properties
as is customary for companies engaged in similar industries.
(xxxiv) Each of the Company, the MHC, the Bank, Chart Bank and each
of their respective subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (a) transactions
are executed in accordance with management's general or specific
authorizations; (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (c) access to
assets is permitted only in accordance with management's general or
specific authorization; and (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
11
(xxxv) Each of the Company, the MHC, the Bank, Chart Bank and each
of their respective subsidiaries is in compliance in all material respects
with the applicable financial record keeping and reporting requirements of
the Currency and Foreign Transaction Reporting Act of 1970, as amended,
and the rules and regulations thereunder.
(xxxvi) The Company, the MHC and the Bank have not relied on Agent
or its counsel for any legal, tax or accounting advice in connection with
the Conversion.
(xxxvii) The records of eligible account holders, supplemental
eligible account holders and other depositors are accurate and complete in
all material respects.
(xxxiii) Each of the Company, the MHC, the Bank, Chart Bank and each
of their respective subsidiaries is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company, the MHC, the Bank or any Subsidiary,
respectively, would have any liability; each of the Company, the MHC, the
Bank and each Subsidiary has not incurred and does not expect to incur
liability under (1) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company, the MHC, the Bank and any Subsidiary would have any
liability that is intended to be qualified under Section 401 (a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(xxxix) None of the Company, the MHC, the Bank, Chart Bank nor their
respective subsidiaries nor any properties owned or operated thereby 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, business affairs or prospects of the
Company, the MHC, the Bank and the Subsidiaries considered as one
enterprise. There are no actions, suits or proceedings, or demands,
claims, notices or investigations (including, without limitation, notices,
demand letters or requests for information from any environmental agency)
instituted or pending, or to the knowledge of the Company, the MHC or the
Bank threatened, relating to the liability of any property owned or
operated by the Company, the MHC, the Bank, Chart Bank or their respective
subsidiaries, 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 (1) the
protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil, plant and animal
life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic, radioactive
or dangerous, or otherwise regulated, whether by type or by quantity,
including any material containing any such substance as a component.
(xl) Each of the Company, the MHC, the Bank, Chart Bank and their
respective subsidiaries has filed all federal income and state and local
income and franchise tax returns required to be filed and has 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
12
authority. The Company, the MHC and the Bank have no knowledge of any tax
deficiency which has been asserted or could be asserted against the
Company, the MHC, the Bank, Chart Bank or their respective subsidiaries.
(xli) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Securities
and the Foundation Shares listed on the Nasdaq Stock Market effective as
of the Closing Time referred to in Section 2 hereof.
(xlii) 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 such registration statement was declared
effective concurrent with the effectiveness of the Registration Statement.
(xliii) The Bank and Chart Bank have established compliance programs
to ensure compliance with the requirements of the USA Patriot Act and all
applicable regulations promulgated thereunder. Neither the Bank nor Chart
Bank is in violation of the USA Patriot Act or any applicable regulations
promulgated thereunder, and there is no charge, investigation, action,
suit or proceeding before any court, regulatory authority or governmental
agency or body pending or, to the best knowledge of the Company, the MHC
and the Bank, threatened regarding the Bank's or Chart Bank's compliance
with the USA Patriot Act or any regulations promulgated thereunder.
(xliv) The Company and Chart Bank are in compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act and will comply with those
provisions of the Xxxxxxxx-Xxxxx Act that will become effective in the
future upon their effectiveness.
(b) Any certificate signed by any officer of the Company, the MHC, the
Bank, Chart Bank or their respective subsidiaries and delivered to either of the
Agent or counsel for the Agent shall be deemed a representation and warranty by
the Company, the MHC, the Bank and Chart Bank to the Agent and, for purposes of
the opinion to be delivered to the Agent pursuant to Section 5(b)(2) hereof, to
the counsel for the Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT OF XXXX XXXX; 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 Xxxx Xxxx 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
Subscription and Community Offerings and the Syndicated Community Offering. On
the basis of the representations and warranties herein contained, and subject to
the terms and conditions herein set forth, Xxxx Xxxx 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 Xxxx Xxxx pursuant to this appointment
include the following: (i) consulting as to the securities marketing
implications of any aspect of the Plan or related corporate documents; (ii)
reviewing with the Board of Directors the financial and securities marketing
implications of the independent appraiser's appraisal of the Common Stock; (iii)
reviewing all offering documents, including the Prospectus, stock order forms
and related offering materials (it being understood that preparation and filing
of such documents is the sole responsibility of the Company, the MHC and the
Bank and their counsel); (iv) assisting in the design and implementation of a
marketing
13
strategy for the Offerings; (v) assisting the Company, the MHC and the Bank in
obtaining all requisite regulatory approvals; (vi) assisting Bank management in
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 Offerings.
The appointment of the Agent hereunder shall terminate one year from the
date of the engagement, unless terminated earlier by the Company or the Agent
upon receipt of written notice to that effect.
If any of the Securities remain available after the expiration of both the
Subscription and Community Offerings, at the request of the Company, the MHC and
the Bank and subject to the continued accuracy of the representations and
warranties of the Company, the MHC and the Bank set forth herein and compliance
with the covenants and conditions set forth herein, Xxxx Xxxx will seek to form
a syndicate of registered brokers 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 dealer's agreement
(the "Selected Dealer's Agreement"), substantially in the form set forth in
Exhibit A to this Agreement. Xxxx Xxxx will endeavor to limit the aggregate fees
to be paid by the Company, the MHC and the Bank under any such Selected Dealer's
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 Xxxx Xxxx and Selected Dealers shall not exceed 6.0%
of the aggregate purchase price of the Securities sold by such Selected Dealers.
Xxxx Xxxx 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 Xxxx Xxxx
be obligated to act as a Selected Dealer or to take or purchase any Securities.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering and the Syndicated Community Offering, the
Company agrees to offer Xxxx Xxxx the first right to act as lead managing
underwriter for the Public Offering. The terms of the Public Offering will be
set forth in a separate definitive purchase agreement in a form satisfactory to
Xxxx Xxxx and containing customary representations, warranties, conditions,
agreements and indemnities, which purchase agreement, when executed, will
supersede and replace this Agreement with respect to Securities sold thereunder
(the "Purchase Agreement"). This Agreement is not intended to constitute, and
should not be construed as, an agreement or commitment between the Company, the
MHC, the Bank and Xxxx Xxxx relating to the firm commitment underwriting of any
securities, and Xxxx Xxxx may, in its sole judgment and discretion, determine at
any time not to proceed with the proposed firm commitment underwriting. Such
proposed underwriting will be subject, among other things, to: (i) satisfactory
completion by Xxxx Xxxx of such due diligence investigation or inquiries as it
may deem appropriate, (ii) approval of the proposed underwriting by Xxxx Xxxx'x
commitment committee or such other authorization as may be required by its
internal procedures, (iii) market conditions, which, in the sole judgment of
Xxxx Xxxx, shall be satisfactory, and (iv) the execution and delivery of a
definitive Purchase Agreement.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company, the MHC and the
Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the
Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Securities or other offers to
purchase Securities in special interest-bearing
14
accounts with the Bank until all Securities are sold and paid for were made
prior to the commencement of the Subscription Offering, with provision for
refund to the purchasers as set forth above, or for delivery to the Company if
all Securities are sold.
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
Boston, Massachusetts offices of Xxxxx Xxxx LLP, at 10:00 a.m., local time, or
at such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate. The
hour and date upon which the Company shall release for delivery all of the
Securities, in accordance with the terms hereof, is herein called the "Closing
Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One percent (1.0%) of the aggregate price (the "Purchase
Price") of the Securities sold in the Subscription and Community Offering,
excluding in each case shares purchased by (i) any qualified or
non-qualified employee benefit plans of the Company, (ii) by any
charitable foundation established by the Bank in connection with the
Conversion, (iii) any director or employee of the Company, the MHC or the
Bank or members of their immediate families (which term shall mean
parents, grandparents, spouse, siblings, children and grandchildren), and
(iv) any shares issued to Chart Bank stockholders as merger consideration;
and
(b) with respect to any Securities sold by an NASD member firm
(including Xxxx Xxxx) under the Selected Dealer's Agreement in the
Syndicated Community Offering, (i) the compensation payable to Selected
Dealers under any Selected Dealer's Agreement, (ii) any sponsoring
dealer's fees; and (iii) a management fee to Xxxx Xxxx of one percent
(1.0%). The 1.0% management fee payable to Xxxx Xxxx in connection with
the Syndicated Community Offering, along with the fees payable by the
Company directly to Selected Dealers, shall not exceed an aggregate of six
percent (6.0%) of the Purchase Price of the Securities sold by Xxxx Xxxx
and other NASD member firms under such Selected Dealer's Agreement.
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, no fee shall be payable by the Company to Xxxx Xxxx; provided, however,
that the Company shall reimburse the Agent for all of its reasonable
out-of-pocket expenses (inclusive of fees and disbursements of counsel) incurred
prior to termination up to a maximum of $25,000 for expenses and $75,000 for
legal counsel, with no expenses over $2000 without prior approval by the
Company. In addition, the Company shall be obligated to pay the fees and
expenses as contemplated by the provisions of Section 4 hereof in the event of
any such termination.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at the Closing Time, or upon termination of this Agreement, as
the case may be.
15
SECTION 3. COVENANTS OF THE COMPANY. The Company, the MHC and the Bank
covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such
amendments or supplements to the Registration Statement, the Prospectus, the
Massachusetts Application, the Holding Company Application 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 and Community Offering, in the event of a Syndicated Community
Offering, the Company, the MHC and the Bank will (i) promptly prepare and file
with the SEC a post-effective amendment to the Registration Statement relating
to the results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any revised
pricing information or (ii) if no such post-effective amendment is required,
will file with, or mail for filing to, the SEC a prospectus or prospectus
supplement containing information relating to the results of the Subscription
and Community Offering and pricing information pursuant to Rule 424 of the
Securities Act Regulations, in either case in a form acceptable to the Agent.
The Company, the MHC and the Bank will notify the Agent immediately, and confirm
the notice in writing, (i) of the effectiveness of any post-effective amendment
of the Registration Statement or the filing of any supplement to the Prospectus
and the filing of any amendment to the Massachusetts Application, (ii) of the
receipt of any comments from the Commissioner, the FRB or the SEC with respect
to the transactions contemplated by this Agreement, the Plan or the Chart Bank
Merger, (iii) of any request by the Commissioner, the FRB or the SEC for any
amendment to the Registration Statement, the Massachusetts Application or the
Holding Company Application or any amendment or supplement to the Prospectus or
for additional information, (iv) of the issuance by the Commissioner or the FRB
of any order suspending the Offerings, the use of the Prospectus or the Chart
Bank Merger or the initiation of any proceedings for that purpose, (v) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
and (vi) of the receipt of any notice with respect to the suspension of any
qualification of the Securities for offering or sale in any jurisdiction. The
Company, the MHC and the Bank will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) The Company, the MHC and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Holding Company Application,
the Massachusetts Application or the 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 SEC 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, the MHC and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Massachusetts 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 Company, the MHC and the Bank will comply, at their own expense, with all
requirements imposed upon them by the Commissioner and the FRB by the applicable
Conversion Regulations, as from time to time in force, and
16
by the Nasdaq Stock Market, the Securities Act, the Securities Act Regulations,
the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder, including, without limitation, Regulation M under the Exchange Act,
so far as necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions hereof and the
Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company,
the MHC and the Bank will forthwith amend or supplement the 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
factor omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company, the MHC and the Bank will
furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the MHC and the
Bank will each furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the MHC and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company, the MHC and
the Bank shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, the MHC and the Bank will file such statements 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 Xxxx Xxxx 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 Securities Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year an annual report (including
consolidated statements of financial condition and consolidated statements of
income, stockholders' equity and cash flows, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated summary
financial information of the Company, the MHC, the Bank and the Subsidiaries 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.
17
(j) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Agent (i) as soon as publicly
available, a copy of each report or other document of the Company furnished
generally to stockholders of the Company or furnished to or filed with the SEC
under the Exchange Act or any national securities exchange or system on which
any class of securities of the Company is listed, and (ii) from time to time,
such other information concerning the Company as the Agent may reasonably
request.
(k) The Company, the MHC and the Bank will conduct the 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, the MHC or the Bank by the Commissioner or the FRB.
(l) The Company, the MHC 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 "How We Intend to Use the Net Proceeds from the Offering."
(m) The Company will report the use of proceeds from the Offerings on
its first periodic report filed with the SEC pursuant to Section 13(a) or 15(d)
of the Exchange Act and on any subsequent periodic reports as may be required
pursuant to Rule 463 of the Securities Act Regulations.
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years and will comply in all
material respects with its filing obligations under the Exchange Act. The
Company will use its best efforts to effect and maintain the listing of the
Common Stock on the Nasdaq Stock Market and, once listed on the Nasdaq Stock
Market, the Company will comply with all applicable corporate governance
standards required by the Nasdaq Stock Market.
(o) The Company, the MHC 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 NASD's "Interpretation Relating to Free-Riding and
Withholding."
(p) Other than in connection with the Chart Bank Merger or any employee
benefit plan or arrangement described in the Prospectus, the Company will not,
without the prior written consent of the Agent, sell or issue, contract to sell
or otherwise dispose of, any shares of Common Stock other than the Securities
and the Foundation Shares 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, none of the Company, the MHC or the Bank shall, without the prior
written consent of the Agent, 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 FRB, by regulation, policy statement or
interpretative 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.
(r) The Company, the MHC and the Bank will comply with the conditions
imposed by or agreed to with the FRB in connection with its approval of the
Holding Company Application in connection with their approval or non-objection
of, or non-objection to, the Conversion, including those
18
conditions relating to the establishment and the operation of the Foundation;
the Company, the MHC 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 Code; the Company, the MHC and the
Bank will take no action which will result in the possible loss of the
Foundation's tax exempt status; and none of the Company, the MHC or 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) The Company shall not deliver the Securities until the Company, the
MHC and the Bank have satisfied each condition set forth in Section 5 hereof,
unless such condition is waived in writing by the Agent.
(t) The Company, the MHC or the Bank will furnish to Xxxx Xxxx as early
as practicable prior to the Closing Time, but no later than two (2) full
business days prior thereto, a copy of the latest available audited consolidated
financial statements of the Company, the MHC and the Bank and the Subsidiaries
which have been read by Wolf & Company, P.C., as stated in their letters to be
furnished pursuant to subsections (e) and (f) of Section 5 hereof.
(u) The Company will promptly register as a bank holding company under
the BHCA, as required.
(v) Each of the Company, the MHC and the Bank will conduct its business
in compliance in all material respects with all applicable federal and state
laws, rules, regulations, decisions, directives and orders, including all
decisions, directives and orders of the SEC, the Nasdaq Stock Market, the
Commissioner and the FRB.
(w) The Bank will not amend the Plan in any manner that would affect the
sale of the Securities or the terms of this Agreement.
(x) The Company, the MHC and the Bank will not, prior to the Closing
Time, incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business consistent
with past practice, except as contemplated by the Prospectus.
(y) The Company, the MHC and the Bank will use all reasonable efforts to
comply with, or cause to be complied with, the conditions precedent to the
several obligations of the Agent specified in Section 5 hereof.
(z) The Company, the MHC and the Bank will provide the Agent with any
information necessary to carry out the allocation of the Securities in the event
of an oversubscription, and such information will be accurate and reliable in
all material respects.
(aa) The Company, the MHC and the Bank will notify the Agent when funds
have been received for the minimum number of Securities set forth in the
Prospectus.
(bb) Prior to the Closing Time, the Company, the MHC and the Bank shall
have received each approval required to consummate the Chart Bank Merger, and
all applicable waiting periods shall have expired.
SECTION 4. PAYMENT OF EXPENSES. The Company, the MHC and the Bank jointly
and severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals relating
19
to the Conversion, the Offerings, and the Chart Bank Merger, (ii) the
preparation, printing and filing of the Registration Statement, the
Massachusetts Application and the Holding Company Application each 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, the MHC'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(g) hereof, including filing fees and the fees and disbursements of the
Agent's counsel in connection therewith and in connection with the preparation
of the Blue Sky Survey, (vi) the printing and delivery to the Agent (in such
quantities as the Agent shall reasonably request) of copies of the Registration
Statement as originally filed and of each amendment thereto and the printing and
delivery of the Prospectus and any amendments or supplements thereto to the
purchasers in the Offerings and the Agent (in such quantities as the Agent shall
reasonably request), (vii) the printing and delivery to the Agent of copies of a
Blue Sky Survey, and (viii) the fees and expenses incurred in connection with
the listing of the Securities on the Nasdaq Stock Market. In the event the Agent
incurs any such fees and expenses on behalf of the Company, the Bank or the MHC,
the Bank will reimburse the Agent for such fees and expenses whether or not the
Conversion is consummated; provided, however, that the Agent shall not incur any
substantial expenses on behalf of the Company, the MHC or the Bank pursuant to
this Section without the prior approval of the Bank.
The Company, the MHC and the Bank jointly and severally agree to pay
certain expenses incident to the performance of the Agent's obligations under
this Agreement, regardless of whether the Conversion is consummated, including
(i) the filing fees paid or incurred by the Agent in connection with all filings
with the NASD, and (ii) all reasonable out of pocket expenses (including legal
fees and expenses) incurred by the Agent relating to the filings with the NASD.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the
Company, the MHC or the Bank of a written accounting therefor setting forth in
reasonable detail the expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHC, the
Bank and the Agent agree that the issuance and the sale of Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company, the MHC and the Bank herein
contained as of the date hereof and the Closing Time, to the accuracy of the
statements of officers and directors of the Company, the MHC and the Bank made
pursuant to the provisions hereof, to the performance by the Company, the MHC
and the Bank of their obligations hereunder, and to the following further
conditions:
(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 SEC, 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 Commissioner, the FRB or any
state securities or Blue Sky authority, and no order suspending the sale of the
Securities in any jurisdiction shall have been issued.
(b) At the Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Time, of Xxxxx
Xxxx LLP, counsel for the Company, the MHC and the Bank, in form and
substance satisfactory to counsel for the Agent as to matters set forth in
Exhibit B hereto.
(2) The favorable opinion, dated as of Closing Time, of Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, counsel for the Agent, with respect to the
matters set forth on Exhibit C hereto.
20
(3) In giving their opinions required by subsections (b)(1) and
(b)(2), respectively, of this Section, Xxxxx Xxxx LLP and Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx shall each additionally state that nothing has come to
their attention that would lead them to believe that the Registration
Statement (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel need
make no statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for financial statements and
schedules and other financial or statistical data included therein, as to
which counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In giving their opinions,
Xxxxx Xxxx LLP and Xxxx Xxxxxx Xxxxxxxx & Xxxxxx may rely as to matters of
fact on certificates of officers and directors of the Company, the MHC and
the Bank and certificates of public officials, and Xxxx Xxxxxx Xxxxxxxx &
Xxxxxx may also rely on the opinion of Xxxxx Xxxx LLP.
(c) At the Closing Time referred to in Section 2, the Company, the MHC
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, the MHC or the Bank by the FRB or
the Commissioner, or any other regulatory authority, other than those which the
FRB or the Commissioner permit 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, business affairs or prospects of the Company,
the MHC, the Bank, Chart Bank or their respective subsidiaries, whether or not
arising in the ordinary course of business consistent with past practice, and
the Agent shall have received a certificate of the Chief Executive Officer and
President of the Company, the MHC and of the Bank and the Chief Financial
Officer of the Company, the MHC and of the Bank, dated as of Closing Time, to
the effect that (i) there has been no such material adverse change; (ii) there
shall have been no material transaction entered into by the Company, the MHC,
the Bank, Chart Bank or their respective subsidiaries from the latest date as of
which the financial condition of the Company, the MHC or the Bank is set forth
in the Registration Statement and the Prospectus other than transactions
referred to or contemplated therein and transactions in the ordinary course of
business consistent with past practice, (iii) none of the Company, the MHC or
the Bank shall have received from the FRB or the Commissioner 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 affairs, financial condition, results of operations or prospects of the
Company, the MHC, the Bank or the Subsidiaries, (iv) the representations and
warranties in Section 2 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,
the MHC and the Bank have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to the 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 SEC 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
Commissioner and no person has sought to obtain regulatory or judicial review of
the action of the Commissioner in approving the Plan in accordance with the
Conversion
21
Regulations nor has any person sought to obtain regulatory or judicial review of
the action of the FRB in approving the Holding Company Application.
(e) At the Closing Time, the Agent shall have received a certificate of
the Chief Executive Officer and President of the Company, the MHC and the Bank
and the Chief Financial Officer of the Company, the MHC and the Bank, dated as
of Closing Time, to the effect that (i) they have reviewed the contents of the
Registration Statement and the Prospectus; (ii) based on each of their
knowledge, the Registration Statement and the Prospectus do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which such statements were made, not misleading; (iii) based on each of
their knowledge, the financial statements and other financial information
included in the Registration Statement and the Prospectus fairly present the
financial condition and results of operations of the Company, the MHC, the Bank,
Chart Bank and their respective subsidiaries as of and for the dates and periods
covered by the Registration Statement and the Prospectus; (iv) they are
responsible for establishing and maintaining internal controls; (v) they have
designed such internal controls to ensure that material information relating to
the Company, the MHC, the Bank and the Subsidiaries is made known to them; (vi)
they have evaluated the effectiveness of their internal controls; and (vii) they
have disclosed to Wolf & Company, P.C. and the audit committee (A) all
significant deficiencies in the design or operation of internal controls which
could adversely affect the Company's, the MHC and the Bank's ability to record,
process, summarize, and report financial data, and have identified for the
Company's, the MHC's and the Bank's auditors any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's, the MHC's and the
Bank's internal controls.
(f) (1) At the time of the execution of this Agreement, the Agent shall
have received from Wolf & 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 MHC, the Bank and the
Subsidiaries within the meaning of the Code of Ethics of the AICPA, the
Securities Act and the Securities Act Regulations and the Conversion Regulations
and they are not in violation of the auditor independence requirements of the
Xxxxxxxx-Xxxxx Act; (ii) it is their opinion that the consolidated financial
statements and supporting schedules included in the Registration Statement and
covered by their opinions therein comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and the
Securities Act Regulations; (iii) based upon limited procedures as agreed upon
by the Agent and Wolf & Company, P.C. 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 Company, the MHC
and the Bank and the Subsidiaries 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 of net interest income and net
income set forth under "Selected Consolidated Financial Information of Xxxxxxxx
Xxxxxxxx Bancorp" in the Registration Statement and the Prospectus do not agree
with the amounts set forth in unaudited consolidated financial statements as of
and for the dates and periods presented under such captions or such amounts were
not determined on a basis substantially consistent with that used in determining
the corresponding amounts in the audited financial statements included in the
Registration Statement, (C) at a specified date not more than five days prior to
the date of this Agreement, there has been any increase in the consolidated long
term or short term debt of the Company, the MHC and the Bank and the
Subsidiaries or any decrease in consolidated total assets, the allowance for
loan losses, total deposits or net worth of the Company, the MHC and the Bank
and the Subsidiaries, in each case as compared with the amounts shown in the
September 30, 2004 balance sheet included in the Registration Statement or, (D)
during the period from September 30, 2004 to a specified
22
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 Company,
the MHC and the Bank and the Subsidiaries, 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 the Prospectus and which are
specified by the Agent, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and other
records of the Company, the MHC, the Bank and the Subsidiaries identified in
such letter.
(2) At the time of the execution of this Agreement, the Agent shall
have received from Wolf & 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 Chart Bank and its subsidiaries within the
meaning of the Code of Ethics of the AICPA, the Securities Act and the
Securities Act Regulations and the Conversion Regulations and they are not in
violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act;
(ii) it is their opinion that the consolidated financial statements and
supporting schedules included in the Registration Statement and covered by their
opinions therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the Agent and
Wolf & Company, P.C. 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 Chart Bank and its subsidiaries 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 of
net interest income and net income set forth under "Selected Consolidated
Financial Information of Chart Bank" in the Registration Statement and the
Prospectus do not agree with the amounts set forth in unaudited consolidated
financial statements as of and for the dates and periods presented under such
captions or such amounts were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified date not
more than five days prior to the date of this Agreement, there has been any
increase in the consolidated long term or short term debt of Char Bank and its
subsidiaries or any decrease in consolidated total assets, the allowance for
loan losses, total deposits or net worth of Chart Bank and its subsidiaries, in
each case as compared with the amounts shown in the September 30, 2004 balance
sheet included in the Registration Statement or, (D) during the period from
September 30, 2004 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 the Subsidiaries, 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 the
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 Chart Bank and its subsidiaries
identified in such letter.
23
(g) At Closing Time, the Agent shall have received a letter from Wolf &
Company, P.C., dated as of Closing Time, to the effect that it reaffirms the
statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(h) At Closing Time, the Securities shall have been approved for listing
on the Nasdaq Stock Market upon notice of issuance.
(i) At Closing Time, the Agent shall have received a letter from RP
Financial, dated as of the Closing Time, confirming its appraisal.
(j) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities and the Foundation
Shares as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities and the
Foundation Shares as herein contemplated shall be satisfactory in form and
substance to the Agent and counsel for the Agent.
(k) At any time prior to Closing Time, (1) there shall not have occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, are so material and
adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on the American Stock Exchange, the New York Stock
Exchange or the Nasdaq Stock Market shall not have been suspended, and minimum
or maximum prices for trading shall not have been fixed, or maximum ranges for
prices for securities have been required, by any of said exchanges or by order
of the SEC or any other governmental authority, and a banking moratorium shall
not have been declared by either Federal or New York authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, the MHC and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, related to or arising out of the
Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any
action taken by the Agent where acting as agent of the Company, the MHC or
the Bank or otherwise as described in Section 2 hereof;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, based upon or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Corporator Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a
24
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 whatsoever described in clauses (i) or (ii) above, if such
settlement is effected with the written consent of the Company, the MHC or
the Bank, which consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing 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.
(b) The Agent agrees to indemnify and hold harmless the Company, the
MHC, the Bank, their directors, their trustees, each of their officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with the
Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement unless
the failure to so notify materially prejudices the indemnifying party's defense
of the action. An indemnifying party may participate at its own expense in the
defense of any such action. In addition, if it so elects within a reasonable
time after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably acceptable to the indemnified
parties that are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them that are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, proceeding or claim, other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable for 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
25
circumstances. No indemnifying party shall be liable for any settlement of any
action, proceeding or suit effected without its prior written consent.
(d) The Company, the MHC and the Bank also agree that the Agent shall
not have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Bank, the MHC, the Company, its security holders or the
Bank's, the MHC'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.
(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 Actor any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant, the
Company, the MHC and the Bank jointly and severally agree to reimburse the Agent
or such other persons for all reasonable and necessary out-of-pocket expenses
incurred by it or them 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 MHC,
the Bank and the Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the MHC or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company, the MHC and the Bank are
jointly and severally responsible for the balance or (ii) if, but only if, the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits to
the Company, the MHC and the Bank on the one hand and the Agent on the other, as
reflected in clause (i), but also the relative fault of the Company, the MHC and
the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, the MHC or the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company, the MHC or the Bank within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company, the MHC and the Bank.
Notwithstanding anything to the contrary set forth herein, to the extent
permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company, the MHC or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of
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the Agent or any controlling person, or by or on behalf of the Company, the MHC
and the Bank, and shall survive delivery of the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to the Closing Time (i) if there has been, since the date
of this Agreement or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the financial
condition, results of operations, business affairs or prospects of the Company,
the MHC or the Bank, or the Company, the MHC, the Bank and the Subsidiaries
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, or (iii) if trading
generally on the Nasdaq Stock Market, the American Stock Exchange or the Nasdaq
Stock Market has been suspended, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
any of said exchanges or by order of the SEC or any other governmental
authority, or if a banking moratorium has been declared by either Federal or New
York authorities, (iv) if any condition specified in Section 5 shall not have
been fulfilled when and as required to be fulfilled; (v) if there shall have
been such material adverse change in the condition or prospects of the Company,
the MHC or the Bank or the prospective market for the Company's securities as in
the Agent's good faith opinion would make it inadvisable to proceed with the
offering, sale or delivery of the Securities; (vi) if, in the Agent's good faith
opinion, the aggregate value for the Securities established by RP Financial is
not reasonable or equitable under then prevailing market conditions; or (vii) if
the Conversion is not consummated on or prior to [____________].
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Sections 2 and 4 hereof relating to the reimbursement of expenses
and except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at 00 Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx
00000, attention of Chief Executive Officer, facsimile number (000) 000-0000;
notices to the Company, the MHC and the Bank shall be directed to either of them
at 00 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000, attention: Chief Executive
Officer.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, the MHC and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company, the MHC and the Bank and their respective successors and the
controlling persons and partners, 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, the MHC and the Bank and their respective
successors, and said controlling persons and partners and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation.
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SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated October 13, 2004, by and
between the Agent and the MHC and the Bank, relating to the Agent's providing
conversion agent services to the Company, the MHC 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 Commonwealth of Massachusetts
applicable to agreements made and to be performed in said state without regard
to the conflicts of laws provisions thereof. Unless otherwise noted, specified
times of day refer to Eastern time.
SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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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, the MHC and the Bank in accordance with its
terms.
Very truly yours,
XXXXXXXX XXXXXXXX BANCORP,INC.
By: ____________________________
Name:
Title:
XXXXXXXX XXXXXXXX BANCORP,M.H.C.
By: ____________________________
Name:
Title:
XXXXXXXX XXXXXXXX BANK
By: ____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXX XXXX & CO.
By: _________________________________
Name:
Title:
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