Exhibit 1.2
WESTBOROUGH FINANCIAL SERVICES, INC.
UP TO 859,625 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PURCHASE PRICE: $10.00 PER SHARE
SALES AGENCY AGREEMENT
____________, 1999
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Westborough Financial Services, Inc., a Massachusetts corporation in
organization (the "Company") and Westborough Savings Bank, Westborough,
Massachusetts, a Massachusetts-chartered mutual savings bank (the "Bank"),
hereby confirm as of the date hereof their agreement with Trident Securities,
Inc., a division of McDonald Investments, Inc. ("Trident"), a broker-dealer
registered with the Securities and Exchange Commission ("Commission") and a
member of the National Association of Securities Dealers, Inc. ("NASD"), as
follows:
1. INTRODUCTION. The Bank intends to reorganize from a
Massachusetts-chartered mutual savings bank to the mutual holding company form
of ownership, whereby the Bank will convert to a Massachusetts-chartered stock
savings bank, to be renamed "The Westborough Bank," as a wholly owned subsidiary
of the Company and the Company will become a majority-owned subsidiary of
Westborough Bancorp, MHC ("MHC") (the"Reorganization"). The Reorganization will
be effected in accordance with the laws of the Commonwealth of Massachusetts and
the regulations of the Massachusetts Division of Banks (the "Division"), the
Massachusetts Board of Bank Incorporation (the "Bank Board"), the Federal
Deposit Insurance Corporation ("FDIC") and the Board of Governors of the Federal
Reserve System ("FRB") (such laws and regulations of the Division, Bank Board,
FDIC and FRB, are collectively referred to herein as the "Reorganization
Regulations"). A
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Combined Application for Mutual Holding Company Reorganization and Merger and
Stock Issuance (the "MHC Application") has been filed with the Division, a
Combined Application to Establish De Novo Mutual and Stock Savings Banks/Bank
Holding Company Application (the "Bank Board Application") has been filed with
the Bank Board; a Notice of Intent to Convert (the "Conversion Notice"), a Bank
Merger Act Application (the "BMA Application"), an Application for Interim
Deposit Insurance (the "Insurance Application") and a Request for Waiver of
Depositor Vote (the "Waiver Request") have been filed with the FDIC; and a Bank
Holding Company Application on Form FR Y-3 (the "Holding Company Application")
has been filed with the FRB (the MHC Application, the Bank Board Application,
the Conversion Notice, the BMA Application, the Insurance Application, the
Waiver Request and the Holding Company Application, are collectively referred to
herein as the "Reorganization Applications"); and all amendments to the
Reorganization Applications as required to the date hereof have been filed. The
MHC Application includes among other things, the Bank's Plan of Reorganization
From a Mutual Savings Bank to a Mutual Holding Company and Stock Issuance Plan,
adopted on March 15, 1999, and as amended, (the "Plan"). As part of the
Reorganization and the Plan, the Bank will establish (i) The Westborough Bank, a
Massachusetts-chartered stock savings bank that will succeed to all of the
rights and obligations of the Bank as set forth in the Plan, (ii) Westborough
Bancorp, MHC, a Massachusetts-chartered mutual holding company, and (iii) the
Company. The MHC will own at least 51% of the voting shares of the Company for
so long as the MHC remains in existence. The Bank will be a wholly-owned
subsidiary of the Company. References herein to the Bank shall include the Bank
in its current mutual form or its post-Reorganization stock form as indicated by
the context.
In accordance with the Plan, the Company is offering shares of its common
stock, par value $0.01 per share (the "Shares" and the "Common Stock"), pursuant
to nontransferable subscription rights in a subscription offering (the
"Subscription Offering") in descending order of priority to (i) the Bank's
Eligible Account Holders (defined as holders of deposit accounts totaling $50 or
more as of December 31, 1997), (ii) the Bank's Supplemental Eligible Account
Holders (defined as holders of deposit accounts totaling $50 or more as of
December 31, 1998) and (iii) the Bank's tax-qualified employee benefit plans
(I.E., the Bank's Employee Stock Ownership Plan (the "ESOP")). The Bank may
offer shares of Common Stock not subscribed for in the Subscription Offering
to members of the general public in a community offering, with preference
being given to natural persons who reside in the towns of Grafton, Hopkinton,
Northborough, Shrewsbury, Southborough and Westborough, Massachusetts (the
"Community Offering"), subject to the right of the Company and the Bank, in
their absolute discretion, to reject orders in the Community Offering in
whole or in part.
Shares of the Common Stock not otherwise subscribed for in the
Subscription and Community Offerings may be offered at the discretion of the
Company and the Bank to certain members of the general public on a best efforts
basis by a selling group of selected broker-dealers to be managed by Trident
(the "Syndicated Community Offering"). The Subscription Offering and the
Community Offering and Syndicated Community Offering, if any, are collectively
referred to
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herein as the "Offering." Purchases of Shares in the Offering are subject to
certain limitations and restrictions as described in the Plan.
The Company and the Bank have been advised by Trident that it will utilize
its best efforts in assisting the Company and the Bank with the sale of the
Shares in the Offering. Prior to the execution of this Agreement, the Company
has delivered to Trident the prospectus dated as of the date hereof, and all
supplements thereto to be used in the Offering. Such Prospectus contains
information with respect to the MHC, the Company, the Bank, the Shares and the
Reorganization.
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the Bank and the MHC jointly and severally
represent and warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including a prospectus relating to the Offering and
exhibits, and an amendment or amendments thereto, on Form SB-2 (No.
333-80075), for the registration of the Shares under the Securities
Act of 1933, as amended (the "Securities Act"); and such
registration has been declared effective under the Securities Act
and no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the best knowledge
of the Company and the Bank, threatened by the Commission. Except as
the context may otherwise require, such registration statement, as
amended or supplemented, on file with the Commission at the time the
registration statement became effective, including the prospectus,
financial statements, schedules, exhibits and all other documents
filed as a part thereof, as amended and supplemented, is herein
called the "Registration Statement," and the prospectus, as amended
and supplemented, on file with the Commission at the time the
Registration Statement became effective is herein called the
"Prospectus", except that if the prospectus filed by the Company
with the Commission pursuant to Rule 424(b) of the general rules and
regulations of the Commission under the Securities Act (together
with enforceable published policies and actions of the Commission
thereunder, the "Securities Act Regulations") differs from the form
of prospectus on file at the time the Registration Statement became
effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with or mailed for
filing to the Commission and shall include any amendments or
supplements thereto from and after their dates of effectiveness or
use, respectively. If any Shares remain unsubscribed following the
completion of the Subscription Offering and the Community Offering,
the Company (i) will promptly file with the Commission a
post-effective amendment to such Registration Statement relating to
the results of the Offering, any additional information with respect
to the proposed
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plan of distribution and any revised pricing information, or (ii) if
no such post-effective amendment is required, will file with the
Commission a prospectus or prospectus supplement containing
information relating to the results of the Offering and pricing
information pursuant to Rule 424(c) of the SEC Regulations, in
either case, in a form reasonably acceptable to the Company and
Trident. The Registrations Statement complies in all material
respects with the Securities Act and the Securities Act Regulations.
(ii) The Bank has filed with the Division the MHC Application,
including the Plan, the Registration Statement, the Prospectus and
exhibits and supplemental material, and an amendment or amendments
thereto, as required, and has published notice of such filing, as
required, which application has been or prior to the Closing Date
will be approved by the Division; and the Plan has been adopted by
the Board of Trustees of the Bank and the corporators of the Bank
(by a vote of at least two-thirds of the corporators, including a
majority of the Bank's "independent corporators" constituting at
least 60% of all corporators, at a meeting specially called to
consider the Plan).
(iii) The Bank has filed with the Bank Board the Bank Board
Application, including the stock charter and bylaws of the Bank and
exhibits and supplemental material, and an amendment or amendments
thereto, as required, and has published notice of such filing, as
required, which application has been or prior to the Closing Date
will be approved by the Bank Board.
(iv) The Bank and the Company have filed with the FDIC the
Conversion Notice, the BMA Application, the Insurance Application
and the Waiver Request, including the Registration Statement, the
Prospectus and exhibits and supplemental material, and an amendment
or amendments thereto, as required, and have published notice of the
filing of the BMA Application and the Insurance Application, as
required, and the FDIC has or prior to the Closing Date will have
issued a notice of non-objection to the Conversion Notice and has or
prior to the Closing Date will have approved the BMA Application,
the Insurance Application and the Waiver Request.
(v) The Company and the MHC have filed with the FRB the
Holding Company Application, including exhibits and supplemental
material, and an amendment or amendments thereto, as required, and
have published notice of such filing, as required, which Application
has been or prior to the Closing Date will be approved by the FRB.
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(vi) At the Closing Date, the Reorganization and the Offering
will have been effected in the manner described in the Prospectus
and in accordance with the Plan, the Reorganization Regulations and
all other applicable material laws, regulations, decisions and
orders, including in compliance with all terms, conditions,
requirements and provisions precedent to the Reorganization and the
Offering imposed upon the Company or the Bank by the Commission, the
Division, the Bank Board, the FDIC, the FRB, any state regulatory or
Blue Sky authority or any other regulatory authority.
(vii) No order has been issued by the Commission, the
Division, the Bank Board, the FDIC, the FRB or any state regulatory
or Blue Sky authority preventing or suspending the use of the
Prospectus, and no action by or before any such governmental entity
to revoke any approval, authorization or order of effectiveness
related to the Reorganization or the Offering is pending or
threatened.
(viii) At the time of the approval of the Reorganization
Applications by the applicable regulatory authorities (including any
amendment or supplement thereto) and at all times subsequent thereto
until the Closing Date, the Reorganization Applications complied and
will comply in all material respects with the Reorganization
Regulations. The Prospectus contained in the Reorganization
Applications (including any amendment or supplement thereto), at the
time of the approval of the Reorganization Applications by the
applicable regulatory authorities and at all times subsequent
thereto until the Closing Date, complied and will comply in all
material respects with the Reorganization Regulations.
(ix) As of the date hereof (i) the Registration Statement and
the Prospectus complied with the Securities Act and the Securities
Act Regulations, (ii) the Registration Statement does not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, and (iii) the Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. Representations or warranties in this subsection
shall not apply to statements or omissions made in reliance upon and
in conformity with written information relating to Trident furnished
to the Company or the Bank by or on behalf of Trident and expressly
provided for use in the Registration Statement or Prospectus.
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(x) The Bank is now a Massachusetts-chartered mutual savings
bank and upon consummation of the Reorganization will become a
Massachusetts-chartered stock savings bank, in both instances duly
authorized to conduct its business and own its property as described
in the Registration Statement and Prospectus. As of the Closing
Date, the Company and the MHC, will have been duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with full power and the corporate
authority to conduct its business and own its property as described
in the Registration Statement and Prospectus. The Bank's first-tier
subsidiaries, Xxx Xxxxxxx Security Corporation, One Hundredth
Security Corporation and The Hundredth Corporation (individually, a
"Subsidiary" and collectively, the "Subsidiaries") have been duly
incorporated as Massachusetts corporations. The Company, the MHC,
the Bank and the Subsidiaries have obtained all material licenses,
permits and other governmental authorizations currently required for
the conduct of their respective businesses; all such licenses,
permits and governmental authorizations are in full force and
effect; the Company, the MHC, the Bank and the Subsidiaries are in
all material respects complying with all laws, rules, regulations
and orders applicable to the operation of their respective
businesses, and none of the Company, the MHC, the Bank or any
Subsidiary has received notice of any proceeding or action relating
to the revocation or modification of any such license, permit or
governmental authorization which, singly or in the aggregate, if
subject to an unfavorable decision, ruling or finding, might
materially and adversely affect the conduct of the business, or the
condition, financial or otherwise, or the income, affairs or
prospects of the Company, the MHC, the Bank or any Subsidiary. The
Bank is in good standing with the Division; the Bank's charter is in
full force and effect; no conservator or receiver has been appointed
for the Company, the MHC, the Bank or any Subsidiary.
(xi) The Company, the MHC, the Bank and the Subsidiaries have
good, marketable and insurable title to all assets material to their
businesses and to those assets described in the Prospectus as owned
by them, free and clear of all material liens, charges, encumbrances
or restrictions, except for liens for taxes not yet due, except as
described in the Prospectus and except as could not in the aggregate
reasonably be expected to have a material adverse effect upon the
operations or financial condition of the Company, the Bank and the
Subsidiaries, taken as a whole; and all of the leases and subleases
material to the operations or financial condition of the Company,
the Bank and the Subsidiaries, taken as a whole, under which it
holds properties, including those described in the Prospectus, are
in full force and effect as described therein.
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(xii) Each of the Company, the MHC, and the Bank, and each
subsidiary is duly qualified to transact business and is in good
standing in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations,
income or prospects of the Company and the Bank taken as a whole.
(xiii) The Bank is operating as an insured depository
institution and the deposit accounts of the Bank in mutual form are,
and the deposit accounts of the Bank in stock form will be, insured
by the Bank Insurance Fund (the "BIF"), as administered by the FDIC,
up to maximum amounts allowed by law.
(xiv) Upon consummation of the Reorganization and the
Offering, all of the outstanding capital stock of the Bank will be
duly authorized and validly issued and fully paid and nonassessable;
all such stock will be owned directly by the Company, free and clear
of all liens, encumbrances, claims or other restrictions; and the
Company will have no direct subsidiaries other than the Bank.
(xv) The Bank does not own equity securities or any equity
interest in any other business enterprise except as described in the
Prospectus; each of the Subsidiaries has been duly organized is
validly existing and in good standing under the laws of its
jurisdiction of organization with the authority to conduct its
business and own its property as described in the Registration
Statement and the Prospectus; all of the outstanding stock of each
Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; all of the outstanding stock of each
Subsidiary is owned directly by the Bank free and clear of all
liens, encumbrances, claims or other restrictions; and each of the
Subsidiaries is duly qualified to transact business and is in good
standing in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification,
unless the failure to be so qualified would not have a material
adverse effect on the operations of the Bank. The activities of the
Subsidiaries are permitted to subsidiaries of a
Massachusetts-chartered mutual savings bank by the rules,
regulations, policies and practices of the Division, the FDIC and
any other state or federal authority having jurisdiction over such
matters, and such activities are permitted to subsidiaries of a
Massachusetts-chartered stock savings bank by the rules,
regulations, policies and practices of the Division, the FRB and any
other state or federal authority having jurisdiction over such
matters.
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(xvi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary actions on the part of the
Bank, and at the Closing Date, on the part of the Company, and this
Agreement is a valid and binding obligation with valid execution and
delivery of the Bank and, at the Closing Date, the Company,
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of financial institution holding companies the accounts of
whose subsidiaries are insured by the FDIC or by general equity
principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law, and except to the extent that
the provisions of Sections 8 and 9 hereof may be unenforceable as
against public policy or pursuant to Section 23A of the Federal
Reserve Act, 12 U.S.C.
Section 371c ("Section 23A")).
(xvii) As of the date hereof and as of the Closing Date, the
Company and the Bank are not and will not be in violation of any
directive from the Commission, the Division, the Bank Board, the
FDIC, the FRB or any other state or federal agency to make any
material change in the method of conducting their respective
businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the Commission, the
Division, the Bank Board, the FDIC and the FRB) and no suit or
proceeding, charge, investigation or action before or by any court,
regulatory authority or governmental agency or body is or will be
pending or, to the knowledge of the Company or the Bank, threatened,
which might materially and adversely affect the Reorganization, the
Offering, the performance of this Agreement or the consummation of
the transactions contemplated in the Plan and as described in the
Prospectus, or which might result in any material adverse change in
the condition (financial or otherwise), earnings, capital,
properties, affairs or prospects of the Company and the Bank taken
as a whole or which would materially affect their respective
properties and assets.
(xviii) Except as described in the Prospectus, there is no
litigation or governmental proceeding pending or, to the best
knowledge of the Company
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or the Bank, threatened against or involving the Company, the Bank
or any Subsidiary, or any of their respective assets which
individually or in the aggregate would reasonably be expected to
have a material adverse effect on the Company, the Bank and the
Subsidiaries, taken as a whole.
(xix) The Bank has received the opinion of its counsel,
Xxxxxxx Xxxxxxxx & Xxxx, with respect to the federal income tax
consequences of the Reorganization, and an opinion of Wolf & Co.,
P.C., with respect to the Massachusetts state income tax
consequences of the Reorganization, all material aspects of said
opinions are accurately summarized in the MHC Application and the
Prospectus; and the facts and representations upon which such
opinions are based are truthful, accurate and complete, and neither
the Company nor the Bank will take any action inconsistent
therewith.
(xx) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter
into this Agreement and to carry out the provisions and conditions
hereof, and the Company has all such power, authority,
authorizations and orders as may be required to issue and sell the
Shares as provided in the Plan and described in the Prospectus, and
in the case of the Bank, to issue and sell the shares of its capital
stock to the Company as provided in the Plan and described in the
Prospectus, subject to the approval of the applicable regulatory
authorities and the satisfaction of any conditions of such approval.
(xxi) No order has been issued by the Commission, the
Division, the Bank Board, the FDIC, the FRB or any state regulatory
or Blue Sky authority preventing or suspending the use of the
Prospectus, and no action by or before any such governmental entity
to revoke any approval, authorization or order of effectiveness
related to the Reorganization or the Offering is pending or
threatened.
(xxii) The financial statements together with any related
notes or schedules thereto which are included in the Registration
Statement and the Prospectus fairly present the consolidated
financial condition, income, retained earnings and cash flows of the
Bank and the Subsidiaries at the respective dates thereof and for
the respective periods covered thereby and comply as to form with
the applicable accounting requirements of the SEC Regulations and
the Reorganization Regulations. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set
forth therein, and such financial statements are consistent with
financial statements and other reports filed by the Bank with
supervisory and regulatory authorities, except as such generally
accepted accounting principles may
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otherwise require. The tables in the Prospectus accurately present
the information purported to be shown thereby at the respective
dates thereof and for the respective periods therein.
(xxiii) There has been no material change in the condition
(financial or otherwise), results of operations or business,
including assets and properties, of the Company, the Bank and the
Subsidiaries, taken as a whole, since the latest date as of which
such condition is set forth in the Prospectus, except as set forth
therein; and the capitalization, assets, properties and business of
the Company, the Bank and the Subsidiaries conform to the
descriptions thereof contained in the Prospectus. The Company, the
Bank or the Subsidiaries have no material liabilities of any kind,
contingent or otherwise, except as set forth in the Prospectus.
(xxiv) There has been no breach or default (or the occurrence
of any event which, with notice or lapse of time or both, would
constitute a default) under, or creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the Company, the Bank or any Subsidiary pursuant to any of the
terms, provisions or conditions of, any agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which
the Company, the Bank or any Subsidiary is a party or by which any
of them or any of their respective assets or properties may be bound
or is subject, or violation of any governmental license or permit or
any enforceable published law, administrative regulation or order or
court order, writ, injunction or decree, which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), operations, business, assets or
properties of the Company, the Bank and the Subsidiaries, taken as a
whole; all agreements which are material to the condition (financial
or otherwise), results of operations or business of the Company, the
Bank and the Subsidiaries, taken as a whole, are in full force and
effect, and no party to any such agreement has instituted or, to the
best knowledge of the Bank and, as of the Closing Date, the Company
threatened any action or proceeding wherein the Company, the Bank or
a Subsidiary would be alleged to be in default thereunder.
(xxv) None of the Company, the MHC, the Bank or any Subsidiary
is in violation of its respective charter or bylaws. The execution
and delivery hereof and the consummation of the transactions
contemplated hereby by the MHC, the Company and Bank do not conflict
with or result in a breach of the charter or bylaws of the MHC, the
Company, the Bank (in either mutual or stock form) or any
Subsidiary, or constitute a material breach of or default (or an
event which, with notice or lapse of time or both, would constitute
a default) under, give rise to any right of termination,
cancellation or acceleration contained in, or result in the creation
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or imposition of any lien, charge or other encumbrance upon any of
the properties or assets of the Company, the Bank or any Subsidiary
pursuant to any of the terms, provisions or conditions of, any
material agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Company, the Bank or any
Subsidiary is a party or violate any governmental license or permit
or any enforceable published law, administrative regulation or order
or court order, writ, injunction or decree, which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), operations or business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(xxvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus
and prior to the Closing Date, except as otherwise may be indicated
or contemplated therein, none of the Company, the Bank or any
Subsidiary has issued any securities which will remain issued at the
Closing Date or incurred any liability or obligation, direct or
contingent, or borrowed money except borrowings in the ordinary
course of business, or entered into any other transaction not in the
ordinary course of business and consistent with prior practices,
which is material in light of the business of the Company, the Bank
and the Subsidiaries taken as a whole.
(xxvii) Upon consummation of the Reorganization and Offering,
the authorized, issued and outstanding equity capital of the Company
shall be within the range as set forth in the Prospectus under the
caption "Capitalization," and no Common Stock of the Company shall
be outstanding immediately prior to the Closing Date; to the
knowledge of the Company and the Bank, the Company has taken all
necessary action to make such filings and/or to qualify or register
the Shares for offer and sale in the Offering under the securities
or Blue Sky laws of all jurisdictions wherein such Shares will be
offered which require such filings and/or qualification or
registration.
(xxviii) All Sales Information used by the Company in
connection with the Offering that is required by the Reorganization
Regulations to be filed as been filed with and approved by the
applicable regulatory authority.
(xxix)No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except
such approvals as have been
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obtained, except for the declaration of effectiveness by the
Commission of any required post-effective amendment of the
Registration Statement not yet filed, except as may be required by
the "blue sky" or securities laws of various jurisdictions, and
except as may be required by the conditions of the approval of the
Conversion Application by the Division.
(xxx) All contracts and other documents required to be filed
as exhibits to the Registration Statement, the Conversion
Application or the Reorganization Applications have been filed with
the Commission or the Division or both, as may be required.
(xxxi) Wolf & Co., P.C., which has audited the financial
statements of the Bank at September 30, 1998, 1997 and 1996 and for
the three years ended September 30, 1998, 1997 and 1996 included in
the Prospectus, is an independent public accountant within the
meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants and Title 12 of the Code of Federal
Regulations, Section 571.2(c)(3).
(xxxii) RP Financial, L.C. ("RP Financial"), which prepared
the Independent Valuation dated as of September 17, 1999, described
in the Prospectus, is independent with respect to the Company and
the Bank within the meaning of the Plan and the Reorganization
Regulations and the Company and the Bank believe that RP Financial
has prepared the pricing information set forth in the Prospectus in
accordance with the requirements of the Reorganization Regulations.
(xxxiii) For the past five years, the Bank and Subsidiaries
have timely filed all required federal, state and local franchise
tax returns, and no material deficiency has been asserted with
respect to such returns by any taxing authorities, and the Bank has
paid all taxes that have become due and, to the best of their
knowledge, have made adequate reserves for similar future tax
liabilities, except where any failure to make such filings, payments
and reserves, or the assertion of such a deficiency, would not have
a material adverse effect on the condition of the Bank.
(xxxiv) All of the loans represented as assets of the Bank on
the most recent financial statements of the Bank included in the
Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of
Regulation Z and 12 C.F.R. 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 have a material adverse effect on the
financial
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condition, results of operations or business of the Company, the
Bank and Subsidiaries taken as a whole.
(xxxv) The records of account holders, depositors and other
members of the Bank delivered to Trident by the Bank or its agent
for use during the Reorganization have been prepared or reviewed by
the Bank and, to the best knowledge of the Company, the Bank and the
MHC, are reliable, accurate and complete.
(xxxvi) None of the Company, the Bank or the Subsidiaries or
to the best knowledge of the Bank and, at the Closing Date, the
Company, no employees of the Bank, the Company or the Subsidiaries
have made any payment of funds of the Company, the Bank or the
Subsidiaries prohibited by law, and no funds of the Company, the
Bank or any Subsidiary have been set aside to be used for any
payment prohibited by law.
(xxxvii) To the best knowledge of the Bank and, at the Closing
Date, the Company, each of the Company, the Bank and the
Subsidiaries is in compliance with all laws, rules and regulations
relating to the discharge, storage, handling and disposal of
hazardous or toxic substances, pollutants or contaminants and
neither the Bank nor, at the Closing Date, the Company, believes
that the Company, the Bank or any Subsidiary is subject to liability
under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar law, except for
violations which, if asserted, would not have a material adverse
effect on the Company, the Bank and the Subsidiaries, taken as a
whole. There are no actions, suits, regulatory investigations or
other proceedings pending or, to the best knowledge of the Bank or,
at the Closing Date, the Company, threatened against the Company,
the Bank or any Subsidiary relating to the discharge, storage,
handling and disposal of hazardous or toxic substances, pollutants
or contaminants. To the best knowledge of the Bank and, at the
Closing Date, the Company, no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may be defined
under federal, state or local law, has been caused by the Company,
the Bank or any Subsidiary or, to the best knowledge of the Bank or,
at the Closing Date, the Company, has occurred on, in or at any of
the facilities or properties of the Company or the Bank, except such
disposal, release or discharge which would not have a material
adverse effect on the Company, the Bank and the Subsidiaries, taken
as a whole.
(xxxviii) All documents delivered by the Company, the Bank or
any Subsidiary or their representatives in connection with the
issuance and sale of the Shares, except for those documents that
were prepared by parties other than the
Trident Securities, Inc.
Sales Agency Agreement
Page 14
Company, the Bank, and Subsidiary or their representatives, were, on
the dates on which they were delivered, true, complete and correct
in all material respects.
(xxxix) At the Closing Date, the Reorganization and the
Offering will have been effected in the manner described in the
Prospectus and in accordance with the Plan, the Reorganization
Regulations and all other applicable material laws, regulations,
decisions and orders, including in compliance with all terms,
conditions, requirements and provisions precedent to the
Reorganization and the Offering imposed upon the Company, the Bank
or the MHC by the Commission, the Division, the Bank Board, the
FDIC, the FRB, any state regulatory or Blue Sky authority or any
other regulatory authority.
(b) Trident represents and warrants to the Company, the Bank and the
MHC that:
(i) Trident is registered as a broker-dealer with the NASD.
(ii) Trident is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to provide the services to be
furnished to the Company and the Bank hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of
Trident, and this Agreement is a legal, valid and binding obligation
of Trident, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts of whose may be
protected by the Securities Investor Protection Corporation or by
general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A).
(iv) Each of Trident and, to Trident's knowledge, its
employees, agents and representatives who shall perform any of the
services required hereunder to be performed by Trident shall be duly
authorized and shall have all licenses, approvals and permits
necessary to perform such services, and Trident is a registered
selling agent in the jurisdictions listed in Exhibit A hereto and
will remain registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until the
Reorganization is consummated or terminated.
Trident Securities, Inc.
Sales Agency Agreement
Page 15
(v) The execution and delivery of this Agreement by Trident,
the fulfillment of the terms set forth herein and the consummation
of the transactions contemplated hereby shall not violate or
conflict with the corporate charter or bylaws of Trident or violate,
conflict with or constitute a breach of, or default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, any material agreement, indenture or other
instrument by which Trident is bound or under any governmental
license or permit or any law, administrative regulation,
authorization, approval or order or court decree, injunction or
order, which breach, default or violation could have a material
adverse effect on the condition (financial or otherwise),
operations, business, assets or properties of Trident, or its
ability to perform its obligations under this Agreement.
(vi) Any funds received by Trident to purchase Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which could
have a material adverse effect on the condition (financial or
otherwise), operations, business, assets or properties of Trident,
or its ability to perform its obligations under this Agreement.
(vii) There is not now pending or, to Trident's knowledge,
threatened against Trident any action or proceeding before the
Commission, the NASD, any state securities commission or any state
or federal court concerning Trident's activities as a broker-dealer,
which action or proceeding could have a material adverse effect on
the condition (financial or otherwise), operations, business, assets
or properties of Trident in its ability to perform its obligations
under this Agreement.
3. EMPLOYMENT OF TRIDENT; SALE AND DELIVERY OF THE SHARES. On the basis of
the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank hereby employ Trident
as their agent to utilize its best efforts in assisting the Company with the
Company's sale of the Shares in the Offering. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Subscription and
Community Offerings close, unless the Company and the Bank, with the approval of
the Commissioner of Banks of the Commonwealth of Massachusetts ("the
Commissioner") and if necessary, the FDIC, are permitted to extend such period
of time, or (b) upon consummation of the Reorganization, whichever date shall
first occur.
In the event the Company is unable to sell a minimum of 552,500 Shares (or
such lesser amount as may be permitted by the Commissioner and, the FDIC, if
required) within the period herein provided, this Agreement shall terminate, and
the Company and the Bank shall refund promptly to any persons who have
subscribed for any of the Shares, the full amount which it may have received
from them, together with interest as provided in the Prospectus, and no party to
this
Trident Securities, Inc.
Sales Agency Agreement
Page 16
Agreement shall have any obligation to the other party hereunder, except as set
forth in Sections 6, 8, 9 and 10 hereof. Appropriate arrangements for placing
the funds received from subscriptions for Shares in special interest-bearing
accounts with the Bank until all Shares are sold and paid for will be made prior
to the commencement of the Subscription and Community Offerings, with provision
for prompt refund to the purchasers as set forth above, or for delivery to the
Company if all Shares are sold.
If all conditions precedent to the consummation of the Reorganization and
Offering are satisfied, including the sale of all Shares required by the Plan to
be sold, the Company agrees to issue or have issued such Shares and to release
for delivery certificates to subscribers thereof for such Shares on the Closing
Date against payment to the Company by any means authorized pursuant to the
Prospectus, at the principal office of the Company at 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 or at such other place as shall be agreed upon
between the parties hereto. The date upon which the Company shall release or
deliver the Shares sold in the Offerings, in accordance with the terms hereof,
and Trident is paid the compensation due hereunder is herein called the "Closing
Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the offering price of the Common Stock ordered on or
before twelve noon on the next business day following receipt or execution of an
order form by Trident to the Bank for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) Trident will subsequently
contact any potential subscriber indicating interest to confirm the interest and
give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgments of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the third business day ("Debit Date")
following the receipt of the confirmation referred to in (i), and (iv) Trident
will forward completed order forms together with such funds to the Bank on or
before twelve noon on the next business day following the Debit Date for deposit
in a segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
Debit Date.
In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder:
(a)(i)a commission equal to 2.0% of the aggregate dollar amount of
Common Stock sold in the Subscription Offering and the Community Offering
(excluding shares sold to the Company's or the Bank's directors, trustees,
officers, employees and the employee benefit plans and "associates" as
such term is defined in the Plan, of the Company's or the Bank's
directors, trustees and executive officers), and (ii) a commission payable
to Trident for any Shares sold by other member firms of the NASD in the
Syndicated Community
Trident Securities, Inc.
Sales Agency Agreement
Page 17
Offering, said commission to be agreed upon by the Company, the Bank and
Trident, not to exceed 4.5 %. All such funds are to be payable in next-day
funds to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses, including
but not limited to travel, meals, lodging, communications, legal fees and
postage, incurred by it whether or not the Offering is successfully
completed; provided, however, that reimbursable legal fees will not exceed
$30,000 (excluding out-of-pocket expenses), that other reimbursable
expenses will not exceed $15,000 and that neither the Company nor the Bank
shall pay or reimburse Trident for any of the foregoing expenses accrued
after Trident's reimbursable expenses shall have notified the Company or
the Bank of its election to terminate this Agreement pursuant to Section
11 hereof or after such time as the Company or the Bank shall have given
notice in accordance with Section 12 hereof that Trident is in breach of
this Agreement. Full payment to Trident for reimbursable expenses shall be
made in next-day funds on the Closing Date or, if the Reorganization and
Offering is not completed and is terminated for any reason, within ten
(10) business days of receipt by the Company of a written request from
Trident detailing its allocable expenses. Trident acknowledges receipt of
$_____ advance payment from the Bank which shall be credited against the
total payment and reimbursement due Trident hereunder.
(c) Reimbursement for any expenses of the Company and the
Institution set forth in Section 6 hereof to the extent paid by Trident on
behalf of the Company or the Institution. Full reimbursement shall be made
in next-day funds on the Closing Date or, if the Conversion is not
completed and is terminated for any reason, within ten (10) business days
of receipt by the Company and the Institution of a written request from
Trident detailing such expenses.
(d) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in paragraph (b), and notwithstanding any
reimbursement of Trident pursuant to paragraph (c) above, in the event
that a resolicitation or other event causes the Offering to be extended
beyond the expiration date set forth in the Prospectus, Trident shall be
reimbursed for its allocable expenses incurred during such extended
period, provided that the allowance for allocable expenses provided for in
paragraph (b) above have been exhausted and subject to the following: such
reimbursement shall be in an amount equal to the product obtained by
dividing the reimbursable expenses and legal fees limitations set forth in
paragraph (b) above by the total number of days of the unextended
Subscription Offering (calculated from the date of the Prospectus to the
intended close of the Subscription Offering as stated in the Prospectus)
and multiplying such product by the number of days of the extension (that
number of days from the date of the intended close of the Subscription
Offering to the closing of the extension of the Subscription Offering).
Trident Securities, Inc.
Sales Agency Agreement
Page 18
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Reorganization and Offering incurred by them or on
their prior approval including but not limited to their attorneys' fees, NASD
filing fees, and attorneys' fees relating to any required state securities laws
research and filings, telephone charges, air freight, rental equipment,
supplies, transfer agent charges, fees relating to auditing and accounting and
costs of printing all documents necessary in connection with the Reorganization
and Offering.
4. OFFERING. Subject to the provisions of Section 7 hereof, Trident is
assisting the Company on a best efforts basis in offering a minimum of 552,500
and a maximum of 747,500 Shares, with the possibility of offering up to 859,625
Shares (except as permitted to be increased or decreased by the Commissioner,
and the FDIC, if required) in the Subscription Offering and Community Offering.
The Shares are to be offered to the public at the price set forth on the cover
page of the Prospectus and the first page of this Agreement.
5. FURTHER AGREEMENTS. The Company, the Bank and the MHC jointly and
severally covenant and agree that:
(a) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus and through and
including the Closing Date, except as otherwise may be indicated or
contemplated therein, neither the Company, the Bank nor any Subsidiary
will issue any securities which will remain issued at the Closing Date or
incur any liability or obligation, direct or contingent, or borrow money,
except borrowings or liabilities in the ordinary course of business, or
enter into any other transaction not in the ordinary course of business
and consistent with prior practices, which is material in light of the
financial condition or operations of the Company, the Bank and any
Subsidiary, taken as a whole.
(b) If any Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offerings, the Company (i) will,
if required by the Securities Act Regulations, promptly file with the
Commission a post-effective amendment to such Registration Statement
relating to the results of the Subscription and the Community Offerings,
any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will, if required by the Securities
Act Regulations, file with the Commission a prospectus or prospectus
supplement containing information pursuant to Rule 424(c) of the
Securities Act Regulations, in either case in a form reasonably acceptable
to the Company and Trident.
Trident Securities, Inc.
Sales Agency Agreement
Page 19
(c) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be within the range as set
forth in the Prospectus under the caption "Capitalization," and no Common
Stock of the Company shall be outstanding immediately prior to the Closing
Date (other than shares of Common Stock issued in connection with the
initial capitalization of the Company, which shares will be canceled upon
consummation of the Reorganization and Offering), and the certificates
representing the Shares will conform in all material respects with the
requirements of applicable laws and regulations.
(d) Upon issuance of the Bank's stock charter and bylaws as provided
in the Reorganization Regulations and completion of the sale by the
Company of the Shares as contemplated by the Prospectus, (i) the Bank will
be converted pursuant to the Plan to a Massachusetts chartered capital
stock savings bank with full power and authority to own its property and
conduct its business as described in the Prospectus, (ii) all of the
authorized and outstanding capital stock of the Bank will be owned of
record and beneficially by the Company, and (iii) the Company will have no
direct subsidiaries other than the Bank.
(e) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(f) The Company and the Bank will use their best efforts to cause
each Reorganization Application not heretofore approved to be approved by
the applicable regulatory authority and will immediately upon receipt of
any information concerning the events listed below notify Trident: (i) of
the approval of any Reorganization Application not heretofore approved;
(ii) of the receipt of any comments from the Commission, the Division, the
Bank Board, the FDIC, the FRB or any other government entity with respect
to the Reorganization or the transactions contemplated by this Agreement;
(iii) of the request by Commission, the Division, the Bank Board, the
FDIC, the FRB or any other governmental entity for any amendment or
supplement to the Registration Statement, the Prospectus or any
Reorganization Application or for additional information; (iv) of the
issuance by the Commission, the Division, the Bank Board, the FDIC, the
FRB or any other governmental entity of any order or any other action
suspending the Reorganization or the use of the Registration Statement or
the Prospectus or any other filing of the Company and the Bank under the
Reorganization Regulations, the Act, the SEC Regulations or other
applicable law, or the threat of any such action; (v) of the issuance by
the Commission, the Division, the Bank Board, the FDIC, the FRB or any
other state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or any Reorganization
Application or of the initiation or threat of any proceedings for such
purpose; or (vi) of the
Trident Securities, Inc.
Sales Agency Agreement
Page 20
occurrence of any event mentioned in paragraph (c) below. The Company and
the Bank will make every reasonable effort to prevent the issuance by the
Commission, the Division, the Bank Board, the FDIC, the FRB or any of
other governmental authority of any such order and, if any such order
shall at any time be issued, to obtain the lifting thereof at the earliest
possible time. The Company and the Bank will provide copies of the
foregoing comments, requests and orders to Trident upon receipt of such
items.
(g) During the time when an Prospectus is required to be delivered
under the Securities Act, the Company will comply so far as it is able
with all requirements imposed upon it by the Securities Act, as now in
effect and hereafter amended, and by applicable Securities Act Regulations
and Reorganization Regulations, as from time to time in force, so far as
necessary to permit the continuance of offers and sales of or dealings in
the Shares in accordance with the provisions hereof and the Prospectus. If
during the period when the Prospectus is required to be delivered in
connection with the offer and sale of the Shares any event relating to or
affecting the Company, the Bank and the MHC, taken as a whole, shall occur
as a result of which it is necessary, in the reasonable opinion of counsel
for Trident, after consultation with, and the concurrence of counsel to
the Company and the Bank, to amend or supplement the Prospectus in order
to make the Prospectus not false or misleading in light of the
circumstances existing at the time it is delivered to a purchaser of the
Shares, the Company shall prepare and furnish to Trident a reasonable
number of copies of an amendment or amendments or of a supplement or
supplements to the Prospectus (in form and substance reasonably
satisfactory to counsel for Trident) which shall amend or supplement the
Prospectus so that, as amended or supplemented, the Prospectus shall not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser of the Shares, not misleading. None of the Company, the Bank and
the MHC will file any amendment or supplement to the Registration
Statement, Reorganization Application, or Prospectus without notifying
Trident of its intention to do so and providing Trident and its counsel an
opportunity to review such amendment or supplement, nor will any of the
Company, the Bank and the MHC file or use any such amendment or supplement
to which Trident or its counsel shall reasonably object. For the purposes
of this subsection, the Company, the Bank and the MHC shall furnish such
information with respect to themselves as Trident from time to time may
reasonably request. The Company, the Bank and the MHC will comply with any
and all terms, conditions, requirements and provisions with respect to the
Reorganization and the transactions contemplated thereby imposed by the
Commission, the Division, the Bank Board, the FDIC, the FRB, any state
regulatory or Blue Sky authority or any other governmental entity,
including the terms, conditions, requirements and provisions contained in
the Reorganization Regulations, the Securities Act, the Securities Act
Regulations, the Exchange Act and the rules and regulations promulgated
under the Exchange Act.
Trident Securities, Inc.
Sales Agency Agreement
Page 21
(h) The Company and the Bank have taken or will take all reasonably
necessary action as may be required to qualify or register the Shares for
offer and sale by the Company under the securities or Blue Sky laws of
such jurisdictions as Trident and either the Company or its counsel may
agree upon; provided, however, that the Company shall not be obligated to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction. In each jurisdiction where such qualification or
registration shall be effected, the Company, unless Trident agrees that
such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or reports
as are, or reasonably may be, required by the laws of such jurisdiction.
(i) Appropriate entries will be made in the financial records of the
Bank sufficient to establish a Liquidation Account for the benefit of
Eligible Account Holders as of December 31, 1997 and Supplemental Eligible
Account Holders as of December 31, 1998 in accordance with the
requirements of the Reorganization Regulations.
(j) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the regulations promulgated under the
Act) 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.
(k) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act, as applicable, prior to the
completion of the Offering and shall request such registration statement
to be effective upon completion of the Reorganization and Offering. The
Company shall maintain the effectiveness of such registration for a
minimum period of three (3) years or for such shorter period as may be
required by applicable law.
(l) For a period of three (3) years from the date of this Agreement,
the Company will furnish to Trident, as soon as publicly available after
the end of each fiscal year, a copy of its annual report to shareholders
and Annual Report on Form 10-KSB for such year; and the Company will
furnish to Trident (i) as soon as publicly available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, all Quarterly
Reports on Form 10-QSB and all Current Reports on Form 8-K, and (ii) from
time to time, such other public information concerning the Company and the
Bank as Trident may reasonably request.
Trident Securities, Inc.
Sales Agency Agreement
Page 22
(m) The Company and the Bank shall use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus.
(n) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived by Trident.
(o) The Company and the Bank or its agent shall be responsible for
the allocation of shares, based on deposits in the case of account holders
in the event of an oversubscription and shall determine final instructions
as to the allocation of the shares ("Allocation Instructions") in such
event. Trident shall have no liability in respect to the Allocation
Instructions or process, and no liability for or related to any denial or
grant of a subscription in whole or in part.
(p) The Company, the Bank and the MHC will take such actions and
furnish such information as are reasonably requested by Trident in order
for Trident to ensure compliance with the NASD's "Interpretation Relating
to Free-Riding and Withholding."
(q) At the Closing Date, the Company and the Bank will have
completed all conditions precedent to, and shall have conducted the
Conversion in all material respects in accordance with, the Plan, Division
Regulations and all other applicable laws, regulations, published
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed by the Division.
(r) The Company will use its best efforts to obtain approval for and
maintain quotation of its shares of common stock on the NASDAQ National
Market, the approval for which shall be obtained and be effective on or
prior to the Closing Date.
(s) The Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date,
without Trident's prior written consent, any shares of common stock other
than as described in the Prospectus.
(t) The Company and the Bank will maintain appropriate arrangements
for depositing all funds received from persons mailing subscriptions for
or orders to purchase Common Stock in the Subscription and Community
Offerings on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all conditions
precedent to the delivery of certificates for the Shares to subscribers or
until refunds of such funds have been made to the persons entitled thereto
in accordance with the Plan and as described in the Prospectus.
6. PAYMENT OF EXPENSES. Whether or not the Reorganization and Offering are
consummated, the Company and the Bank shall pay all expenses of the
Reorganization and Offering,
Trident Securities, Inc.
Sales Agency Agreement
Page 23
including but not limited to, the following expenses: (a) all regulatory filing
fees, including but not limited to those payable to the Commission, the
Division, state blue sky authorities and the NASD Corporate Finance Rule), (b)
all stock issue and transfer taxes which may be payable with respect to the sale
of the Shares, (c) attorneys' fees of the Company and the Bank, (d) attorneys'
fees relating to any required state blue sky laws research and filings, (e)
telephone charges, (f) air freight, (g) rental equipment, (h) supplies, (i)
transfer agent and registrar fees and expenses, (j) auditing and accounting fees
and expenses, (k) fees for appraisals and business plans, (l) conversion agent
charges, (m) costs of printing and mailing all documents necessary in connection
with the Reorganization and Offering, and (n) slide production expenses in
connection with any community investor meetings to be held in connection with
the Reorganization and Offering.
7. CONDITIONS OF TRIDENT'S OBLIGATIONS. Except as may be waived by
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2(a) hereof
as of the date hereof and as of the Closing Date, to the performance by the
Company and the Bank of their obligations hereunder and to the following
conditions:
(a) At the Closing Date, Trident shall receive the favorable
opinions of Xxxxxxx Xxxxxxxx & Xxxx, special counsel for the Company and
the Bank, and Xxxxxxxx, Xxxxxxxxx & Xxxxxxxxx, counsel to the Bank, dated
the Closing Date, addressed to Trident, substantially as set forth in
Exhibits B and C, respectively, hereto.
In rendering such opinions, such counsel may rely as to matters of
fact on certificates of officers and directors of the Company, the Bank
and the Subsidiaries and certificates of public officials delivered
pursuant hereto. Such counsel may assume that any agreement is the valid
and binding obligation of any parties to such agreement other than the
MHC, the Company and the Bank. Such opinions may be governed by, and
interpreted in accordance with, the Legal Opinion Accord (the "Accord") of
the ABA Section of Business Law (1991), and, as a consequence, such
opinion is subject to the qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more particularly
described in the Accord, and it should be read in conjunction therewith.
In addition, the General Qualification set forth in the Accord apply to
the opinions set forth in such opinion. Such opinions may be limited to
present statutes, regulations and judicial interpretations and to facts as
they presently exist; in rendering such opinions, such counsel need assume
no obligation to revise or supplement them should the present laws be
changed by legislative or regulatory action, judicial decision or
otherwise; and such counsel need express no view, opinion or belief with
respect to whether any proposed or pending legislation, if enacted, or any
regulations or any policy statements issued by any regulatory agency,
whether or not promulgated pursuant to any such legislation, would affect
the validity of the execution and delivery by the Company and the Bank of
this Agreement or the issuance of the Shares.
Trident Securities, Inc.
Sales Agency Agreement
Page 24
(b) At the Closing Date, Trident shall receive the letter of Xxxxxxx
Xxxxxxxx & Wood, special counsel for the Company and the Bank, dated the
Closing Date, addressed to Trident, substantially as set forth in Exhibit
D, hereto.
(c) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or
pass upon the matters required by Trident, including the sale of the
Shares, as herein contemplated and for the purpose of evidencing the
accuracy, completeness or satisfaction of any of the representations,
warranties, or the fulfillment of any of the conditions, herein contained,
including but not limited to, resolutions of the Board of Directors of the
Company and the Bank regarding the authorization of this Agreement and the
transactions contemplated hereby; and all proceedings taken by the Company
or the Bank in connection with the Reorganization and the sale of the
Shares as herein contemplated, which shall be satisfactory in form and
substance to Trident and counsel to Trident.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material change in the condition,
financial or otherwise, business or results of operations of the Company
and the Bank independently or of the Company and the Bank, taken as a
whole, since the latest date as of which such condition is set forth in
the Prospectus, except as referred to therein; (ii) there shall have been
no transaction entered into by the Company or the Bank after the latest
date as of which the financial condition of the Company or the Bank is set
forth in the Prospectus, other than transactions referred to or
contemplated therein, transactions in the ordinary course of business, and
transactions which are not material to the Company and the Bank, taken as
a whole; (iii) neither the Company, the Bank nor any Subsidiary shall have
received from the Division, the Bank Board, the FDIC, or the FRB any
direction (oral or written) to make any change in the method of conducting
their respective businesses which is material to the business of the
Company, the Bank and any Subsidiary, taken as a whole, with which they
have not complied (which direction, if any, shall have been disclosed to
Trident) or which would materially and adversely affect its business,
operations, financial condition or income; (iv) neither the Company nor
the Bank shall have been in default, (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a default)
under any provision of any agreement or instrument relating to any
outstanding indebtedness; (v) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or threatened against the Company,
the Bank or any Subsidiary, or affecting any of their respective assets,
wherein an unfavorable decision, ruling or finding would have a material
adverse effect on the business, operations, financial condition or income
of the Company and the Bank, taken as a whole; and (vi) the Shares shall
have been qualified or registered for offering and sale by the Company
under
Trident Securities, Inc.
Sales Agency Agreement
Page 25
the securities or Blue Sky laws of such jurisdictions as Trident and the
Company shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company and the Bank, dated the Closing Date, to the effect that: (i)
they have examined the Prospectus and, at the time the Prospectus became
authorized by the Company for use, the Prospectus did not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading with respect to
the Company or the Bank; (ii) since the date the Prospectus became
authorized by the Company for use, no event has occurred which should have
been set forth in an amendment or supplement to the Prospectus which has
not been so set forth, including specifically, but without limitation, any
material change in the business, condition (financial or otherwise) or
results of operations of the Company or the Bank and, the conditions set
forth in clauses (ii) through (v) inclusive of subsection (d) of this
Section 7 have been satisfied; (iii) to the best knowledge of such
officers, no order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission or any state securities or Blue
Sky authority; (v) no order suspending the Offering, the Reorganization or
the effectiveness of the Registration Statement or Prospectus has been
issued and no proceedings for that purpose have been issued and no
proceedings for that purpose have been initiated or threatened by the
Division, the Bank Board, the FDIC or the FRB; (vi) to the best knowledge
of such officers, no person has sought to obtain review of the final
action of the Division, the Bank Board, the FDIC or the FRB approving the
Plan; and (vii) all of the representations and warranties contained in
Section 2 of this Agreement are true and correct, with the same force and
effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident shall receive, among other
documents, (i) copies of the letters from the applicable regulatory
authority authorizing the use of the Prospectus, (ii) copies of the
letters from the applicable regulatory authorities evidencing the
corporate existence and insured status of the Bank, the Company and the
MHC; (iii) if available, a copy of the letter(s) from the applicable
regulatory authorities approving the respective charters of the Bank, the
Company and the MHC; (iv) a copy of the order of the Commission declaring
the Registration Statement Effective; and (v) copies of the Charters and
Articles of Organization of the Company, the MHC, the Bank and each
Subsidiary, each certified by the appropriate regulatory authority.
(g) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Wolf & Co., P.C., independent
certified public accountants, addressed to Trident, the Company and the
Bank, in substance and form satisfactory to counsel for
Trident Securities, Inc.
Sales Agency Agreement
Page 26
Trident, with respect to the financial statements and certain financial
information contained in the Prospectus.
(h) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Wolf & Co., P.C.,
independent certified public accountants, dated the Closing Date and
addressed to Trident, the Company and the Bank, confirming the statements
made by them in the letter delivered by them pursuant to the preceding
subsection as of a specified date not more than five (5) days prior to the
Closing Date.
(i) At the Closing Date, Trident shall have received a letter from
RP Financial, LC., dated as of the Closing Date, confirming the
independent valuation.
(j) As soon as practical after the Closing Date, Trident shall
receive a copy of the Bank's Stock Charter, as executed by the appropriate
regulatory authority.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and the
Bank to Trident as to the statements made therein. If any condition to Trident's
obligations hereunder to be fulfilled prior to or at the Closing Date is not so
fulfilled, Trident may terminate this Agreement or, if Trident so elects, may
waive any such conditions which have not been fulfilled, or may extend the time
of their fulfillment. If Trident terminates this Agreement as aforesaid, the
Company and the Bank shall reimburse Trident for its expenses as provided in
Section 3 hereof.
8. INDEMNIFICATION.
(a) The Company, the Bank and the MHC jointly and severally agree to
indemnify and hold harmless Trident, its officers, directors and employees
and each person, if any, who controls Trident within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any
and all loss, liability, claim, damage and expense whatsoever and shall
further promptly reimburse such persons for any legal or other expenses
reasonably incurred by each or any of them in investigating, preparing to
defend or defending against any such action, proceeding or claim (whether
commenced or threatened) arising out of or based upon (A) any
misrepresentation by the Company or the Bank in this Agreement or any
breach of warranty by the Company or the Bank with respect to this
Agreement or arising out of or based upon any untrue or alleged untrue
statement of a material fact or the omission or alleged omission of a
material fact required to be stated or necessary to make not
Trident Securities, Inc.
Sales Agency Agreement
Page 27
misleading any statements contained in (i) any Reorganization Application,
the Registration Statement or the Prospectus or (ii) any application
(including the MHC Application) or other document or communication (in
this Section 8 collectively called "Application") prepared or executed by
or on behalf of the Company, the Bank or the Subsidiaries or based upon
written information furnished by or on behalf of the Company, the Bank or
the Subsidiaries, whether or not filed in any jurisdiction, to effect the
Reorganization and Offering or qualify the Shares under the securities
laws thereof or filed with the Division, FDIC, FRB, Bank Board or such
other applicable regulatory authority, unless such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company, the Bank or the Subsidiaries with respect to
Trident by or on behalf of Trident expressly for use in the Prospectus or
any amendment or supplement thereof or in any Application, as the case may
be, (B) any written or unwritten statement made to a purchaser of the
Shares by any director, officer or employee of the Company or Bank, (C)
the inaccuracy of any representation or warranty set forth in Section 2(a)
above or the breach of any covenant or agreement of the Company or the
Bank set forth herein, and (D) the participation by Trident in the
Reorganization and Offering. This indemnity shall be in addition to any
liability the Company and the Bank may otherwise have to Trident.
(b) The Company and the Bank shall indemnify and hold Trident
harmless for any liability whatsoever arising out of (i) the Allocation
Instructions or (ii) any records of account holders, depositors, and other
members of the Bank delivered to Trident by the Bank, the Company or their
agents for use during the Reorganization and Offering.
(c) Trident agrees to indemnify and hold harmless, the Company, the
Bank and the Subsidiaries, their officers, directors and employees and
each person, if any, who controls, the Company and the Bank and the
Subsidiaries within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Bank to Trident, but only with respect to (A)
statements or omissions, if any, made in the Prospectus or any amendment
or supplement thereof, in any Application or to a purchaser of the Shares
in reliance upon, and in conformity with, written information furnished to
the Company, the Bank or the Subsidiaries with respect to Trident by or on
behalf of Trident expressly for use in the Prospectus or in any
Application; (B) any misrepresentation by Trident in Section 2(b) of this
Agreement or the breach of any covenant or agreement of Trident set forth
herein; or (C) any liability of the Company or the Bank which is found in
a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have principally and directly resulted from gross
negligence or willful misconduct of Trident.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action (whether commenced
or threatened), such indemnified
Trident Securities, Inc.
Sales Agency Agreement
Page 28
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with the other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section 8
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than the reasonable
cost of investigation except as otherwise provided herein. In the event
the indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified party
may retain additional counsel, but shall bear the fees and expenses of
such counsel unless (i) the indemnifying party shall have specifically
authorized the indemnified party to retain such counsel or (ii) the
parties to such suit include such indemnifying party and the indemnified
party, and such indemnified party shall have been advised by counsel that
one or more material legal defenses may be available to the indemnified
party which may not be available to the indemnifying party, in which case
the indemnifying party shall not be entitled to assume the defense of such
suit notwithstanding the indemnifying party's obligation to bear the fees
and expenses of such counsel. An indemnifying party against whom indemnity
may be sought shall not be liable to indemnify an indemnified party under
this Section 8 if any settlement of any such action is effected without
such indemnifying party's consent. To the extent required by law, this
Section 9 is subject to and limited by the provisions of Section 23A.
9. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the Company or the
Bank other than in accordance with its terms, the Company or the Bank and
Trident shall contribute to the aggregate losses, liabilities, claims, damages,
and expenses of the nature contemplated by said indemnity agreement incurred by
the Company or the Bank and Trident (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Bank on the one
hand and Trident on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the Company or
the Bank on the one hand and Trident on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Bank on
the one hand and
Trident Securities, Inc.
Sales Agency Agreement
Page 29
Trident on the other shall be deemed to be in the same proportions as the total
net proceeds from the Offering received by the Company and the Bank bear to the
total fees received by Trident under this Agreement. The relative fault of the
Company or the Bank on the one hand and Trident on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Bank or by Trident and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Bank and Trident agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. To the extent required by law, this Section 9 is subject to
and limited by the provisions of Section 23A.
10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Company, the Bank and Trident and the
representations and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident, the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. TERMINATION. The parties may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) Trident may terminate this Agreement if any domestic or
international event or act or occurrence has materially disrupted the
United States securities markets such as to make it, in Trident's
reasonable opinion, impracticable to proceed with the offering of the
Shares; or if trading on the New York Stock Exchange shall have suspended;
or if the United
Trident Securities, Inc.
Sales Agency Agreement
Page 30
States shall have become involved in a war or major hostilities; or if a
general banking moratorium has been declared by a state or federal
authority which has material effect on the Bank or the Reorganization and
Offering; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have
been a material change in the capitalization, financial condition or
business of the Company, the Bank and any Subsidiary taken as a whole, or
if the Company, the Bank or any Subsidiary, taken as a whole, shall have
sustained a material or substantial loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act,
whether or not said loss shall have been insured; or if there shall have
been a material adverse change in the condition or prospects of the
Company, the Bank or the Subsidiaries.
(b) Trident may terminate this Agreement in the event of a material
breach of this Agreement by the Company or the Bank at any time after this
Agreement becomes effective if such breach is not cured within five (5)
days after Trident delivers written notice thereof to the Company and the
Bank, and the Company and the Bank may terminate this Agreement in the
event of a material breach of this Agreement by Trident at any time after
this Agreement becomes effective if such breach is not cured within five
(5) days after the Company or the Bank delivers written notice thereof to
Trident.
(c) If this Agreement is terminated as provided in this Section, the
party terminating this Agreement shall notify the non-terminating party
promptly by telephone or telegram, confirmed by letter.
(d) If this Agreement is terminated by Trident for any of the
reasons set forth in subsection (a) above, and to fulfill its obligations,
if any, pursuant to Sections 3, 6, 8 and 9 of this Agreement and upon
demand, the Company and the Bank shall pay Trident the full amount so
owing thereunder.
(e) The Bank may terminate the Reorganization and Offering in
accordance with the terms of the Plan. Such termination shall be without
liability to any party, except that the Company, the MHC and the Bank
shall be required to fulfill their obligations pursuant to Sections 3, 6,
8 and 9 of this Agreement.
(f) The Company or the Bank may terminate this Agreement if there
shall have been a material breach of this Agreement by Trident. All monies
paid to Trident shall be returned to the Bank, except for Trident's
reimbursable expenses payable pursuant to Sections 3 and 6, hereof.
12. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and
Trident Securities, Inc.
Sales Agency Agreement
Page 31
confirmed to Trident Securities, Inc., 0000 Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxxxx (with a copy to Housley
Kantarian & Xxxxxxxxx, P.C., 0000 00xx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X.
00000, Attention: Xxxxxx X. Xxxxxx, Esquire) and if sent to the MHC, Company or
the Bank, shall be mailed, delivered or telegraphed and confirmed to Westborough
Financial Services, Inc., Westborough Bancorp, MHC, Westborough Savings Bank,
000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx. Xxxxxx X.
XxxXxxxxxx, President (with a copy to Xxxxxxx Xxxxxxxx & Wood, 0000 Xxxxxxxxxxxx
Xxxxxx X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esquire).
13. PARTIES. The Company and the Bank shall be entitled to act and rely on
any request, notice, consent, waiver or agreement purportedly given on behalf of
Trident when the same shall have been given by the undersigned or any other
officer of Trident. Trident shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the Company
or the Bank, when the same shall have been given by the undersigned or any other
officer of the Company or the Bank.
14. CONSTRUCTION. Unless governed by preemptive federal law, this
Agreement shall be governed by and construed in accordance with the substantive
laws of North Carolina.
15. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 32
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
WESTBOROUGH SAVINGS BANK
By: _______________________________
Xxxxxx X. XxxXxxxxxx
President and Chief Executive Officer
Date:
WESTBOROUGH FINANCIAL SERVICES, INC.
(In organization)
By: _______________________________
Xxxxxx X. XxxXxxxxxx
President and Chief Executive Officer
Date:
Agreed to and accepted:
TRIDENT SECURITIES, INC.,
a division of McDonald Investments Inc.
By: _______________________________
Xxxxxxx X. Xxxxxxx
Managing Director
Date:
EXHIBIT A
Jurisdictions where Trident is a Registered Selling Agent
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below:
Alabama Missouri
Alaska Montana
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only,
no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Utah
Maryland Vermont
Massachusetts Virginia
Michigan Washington
Minnesota West Virginia
Mississippi Wisconsin
Wyoming
Trident Securities, Inc. is NOT a registered selling agent in the jurisdictions
listed below:
Hawaii
South Dakota
A - 1
EXHIBIT B
(i) Upon closing, the Company and the MHC have been duly
incorporated; the Company is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
the MHC is validly existing as a mutual holding company in good
standing under the laws of its jurisdiction of incorporation; the
Bank is validly existing and is in good standing with the Division;
and each of the Subsidiaries is validly existing and in good
standing under the laws of their respective jurisdictions of
organization, each with full corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) The deposit accounts of the Bank in mutual form were, and
the deposit accounts of the Bank in stock form are, insured by the
Bank Insurance Fund administered by the FDIC up to the maximum
amounts allowed by law; and, to such counsel's knowledge, no
proceeding for the termination or revocation of such insurance is
pending or threatened;
(iii) The Bank is a Massachusetts-chartered mutual savings
bank, and, at the Closing Date, will become a validly existing
Massachusetts-chartered stock savings bank, with corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus;
(iv) The activities of each Subsidiary were permitted to
subsidiaries of a Massachusetts-chartered mutual savings bank, and
such activities are permitted to subsidiaries of a
Massachusetts-chartered stock savings bank, by the rules,
regulations, policies and practices of the Division, the FDIC, the
FRB and any other federal or state authority having jurisdiction
over such matters. All of the outstanding stock of each Subsidiary
has been duly authorized and validly issued and is fully paid and
nonassessable; is owned of record and beneficially by the Bank free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(v) The Company and the Bank have authorized Common Stock as
set forth in the Prospectus, and the description of such Common
Stock in the Registration Statement and the Prospectus is accurate
in all material respects;
(vi) Upon consummation of the Reorganization and the Offering,
the authorized, issued and outstanding equity capital of the Company
will be as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization" and, other than in the
Reorganization, no shares of Common Stock, or securities
B - 1
exercisable into or exchangeable for Common Stock, will have been
issued prior to the Closing Date; at the time of the Reorganization
the Shares and the shares of Common Stock to be issued to the MHC
will have been duly and validly authorized for issuance, and when
issued and delivered by the Company pursuant to the Plan against
payment therefor as set forth in the Plan and the Prospectus, will
be duly authorized and validly issued and fully paid and
nonassessable, and at such time all such shares of Common Stock
owned by the MHC will be owned of record and beneficially by the MHC
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and neither the issuance of the Shares
nor the issuance of the shares of Common Stock to the MHC is subject
to any preemptive rights;
(vii) The form of certificate used to evidence the Shares is
in proper form and complies in all material respects with applicable
Massachusetts and Federal laws and regulations;
(viii)Upon consummation of the Reorganization and the
Offering, all of the issued and outstanding capital stock of the
Bank will be duly authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned of record
and beneficially by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(ix) Each Reorganization Application has been approved by the
applicable regulatory authority pursuant to the Reorganization
Regulations, and, to such counsel's knowledge, no action has been
taken or is pending or threatened to revoke any such approval;
(x) The execution and delivery of the Agreement and the
consummation of the Reorganization have been duly and validly
authorized by all necessary corporate action on the part of each of
the Company and the Bank; and the Agreement is a legal, valid and
binding obligation of each of the Company and the Bank, enforceable
in accordance with its terms (except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium,
reorganization, receivership, conservatorship or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of depository institutions
whose accounts are insured by the FDIC or savings and loan holding
companies the accounts of whose subsidiaries are insured by the FDIC
or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law,
and except to the extent that the provisions of Sections 8 and 9
thereof may be unenforceable as against public policy or pursuant to
Section 23A, as to which no opinion need be rendered);
B - 2
(xi) The Bank is not in violation of its Massachusetts mutual
charter or bylaws (and the Bank will not be in violation of its
Massachusetts stock charter upon consummation of the Reorganization)
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Bank is a party as a borrower, a lessee or guarantor,
or by which the Bank or any of its property may be bound as a
borrower, a lessee or a guarantor; the execution and delivery of the
Agreement, the incurrence of the obligations therein set forth and
the consummation of the transactions contemplated therein, will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Bank pursuant to any
material contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Bank is a party as a borrower, a
lessee or a guarantor, or by which it may be bound as a borrower, a
lessee or a guarantor, or to which any of the property or assets of
the Bank is subject, nor will such action result in any violation of
the provisions of the charter or bylaws of the Bank;
(xii) The information is the Registration Statement and
Prospectus under the captions "Risk Factors", "Taxation,"
"Regulation of Westborough Savings Bank and Westborough Financial
Services, Inc.," "The Reorganization and Offering," "Restrictions on
Acquisition of Westborough Financial Services and Westborough
Savings" and "Description of Capital Stock of Westborough Financial
Services, Inc." to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects;
(xiii)Each Reorganization Application, as amended or
supplemented, if amended or supplemented, as filed with the
applicable regulatory authority complied as to form in all material
respects with the requirements of the Reorganization Regulations;
(xiv) The Division's approval of the Plan remains in full
force and effect; the Bank has duly adopted a Massachusetts stock
charter and bylaws effective upon consummation of the
Reorganization; the Company and the Bank have conducted the
Reorganization in all material respects in accordance with the
requirements of the Reorganization Regulations, federal law, all
other applicable regulations, decisions and orders and the Plan,
including all material applicable terms, conditions, requirements
and conditions precedent to the Reorganization imposed upon the
Company and the Bank by the Division, the Bank Board, the FDIC and
the FRB; no order has been issued by the Division, the Bank Board,
the FDIC or the FRB to suspend the Reorganization or the Offering
and no action for such purpose has been instituted or, to such
counsel's knowledge, threatened by the Division, the Bank
B - 3
Board, the FDIC or the FRB; and, to such counsel's knowledge, no
person has sought to obtain review of the final action of the
Division in approving the MHC Application or the Plan;
(xv) the Plan has been duly adopted by the required votes of
the Board of Directors of the Company and the Board of Trustees and
the corporators, including the "independent corporators", of the
Bank;
(xvi) The Registration Statement, including any amendments
thereto is effective under the Act and no stop order suspending
effectiveness has been issued under the Act and, to such counsel's
knowledge, no proceedings therefor have been initiated or threatened
by the Commission or any state securities or Blue Sky authority;
(xvii) All conditions imposed by regulatory authorities in
connection with their respective approvals of the Reorganization
Applications have been satisfied, and no further approval,
authorization, consent or other order of any federal or state board
or body is required in connection with the execution and delivery of
the Agreement, the issuance of the Shares and the consummation of
the Reorganization, except as may be required under the securities
or Blue Sky laws of various jurisdictions;
(xvii) At the time the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, stock valuation information and other
financial and statistical data included therein, as to which no
opinion need be rendered), complied as to form in all material
respects with the requirements of the Act and the SEC Regulations
and (ii) the Prospectus (other than the financial statements, stock
valuation information and other financial and statistical data
included therein, as to which no opinion need be rendered) complied
as to form in all material respects with the requirements of the
Reorganization Regulations and federal and Massachusetts law; and
(xviii) None of the Company, the MHC or the Bank, is required
to be registered as an investment company under the Investment
Company Act of 1940.
B - 4
EXHIBIT C
(i) Each of the Company, the Bank and the Subsidiaries has the
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 each of the Company, the
Bank and the Subsidiaries is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations, income or prospects of the Company and the
Bank taken as a whole;
(ii) The Company, the Bank and the Subsidiaries have obtained
all material licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, all such
licenses, permits and other governmental authorizations are in full
force and effect, and the Company, the Bank and the Subsidiaries are
in all material respects complying therewith;
(iii) There are no material legal or governmental proceedings
pending or, to the actual knowledge of such counsel, threatened
against or involving the assets of the Company, the Bank or any
Subsidiary which are required to be disclosed in the Registration
Statement and Prospectus other than those disclosed therein
(provided that for this purpose such counsel need not regard any
litigation or governmental procedure to be "threatened" unless the
potential litigant or government authority has manifested to the
management of the Company or the Bank, or to such counsel, a present
intention to initiate such litigation or proceeding);
(iv) The Company is not in violation of its Articles of
Organization and bylaws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a
party as a borrower, a lessee or a guarantor, or by which the
Company or any of its property may be bound as a borrower, a lessee
or a guarantor; the execution and delivery of the Agreement, the
incurrence of the obligations therein set forth and the consummation
of the transactions contemplated therein will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any material lien, charge or encumbrance upon any
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company is a party as a borrower, a lessee or a
guarantor, or by which it may be bound as a borrower, a lessee or a
guarantor, or to which any of the property or assets of the Company
is subject, nor will such action result in any violation of the
provisions of the Articles of Organization or Bylaws of the Company;
(v) None of the Subsidiaries is in violation of its charter or
bylaws or in default in the performance or observance of any
obligation, agreement, covenant or
C - 1
condition contained in any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which such
Subsidiary is a party as a borrower, lessee or a guarantor, or by
which such Subsidiary or any of its property may be bound as a
borrower, a lessee or a guarantor; the execution and delivery of the
Agreement, the incurrence of the obligations therein set forth and
the consummation of the transactions contemplated therein will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of any Subsidiary pursuant
to any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which such Subsidiary is a party as a
borrower, a lessee or a guarantor, or by which it may be bound as a
borrower, a lessee or a guarantor, or to which any of the property
or assets of such Subsidiary is subject, nor will such action result
in any violation of the provisions of the charter or bylaws of such
Subsidiary;
(vi) To such counsel's knowledge, the Company, the Bank and
the Subsidiaries have good and marketable title to all properties
and assets which are material to the business of the Company, the
Bank and the Subsidiaries, respectively, and to those properties and
assets described in the Registration Statement as owned by them,
free and clear of all liens, charges, encumbrances or restrictions,
except as such as are described in the Registration Statement and
Prospectus (including the Liquidation Account) or are not material
in relation to the business of the Company and the Bank taken as a
whole.
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EXHIBIT D
Based on such counsel's participation in conferences with
representatives of the MHC, the Company, the Bank, its counsel, the
independent appraiser, the independent certified public accountants,
Trident and its counsel, review of documents and understanding of
applicable law (including the requirements of Form SB-2 and the character
of the Registration Statement contemplated thereby), nothing has come to
such counsel's attention that would lead it to believe that the
Reorganization Applications, the Registration Statement or the Prospectus,
or any amendment or supplement thereto (except as to information in
respect of Trident contained therein and except as to the financial
statements, notes to financial statements, stock valuation information,
financial tables and other financial and statistical data contained
therein, as to which such counsel need express no comment), at the time it
became effective and at the time any post-effective amendment thereto
became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, or that the
Prospectus, as amended (except as to information with respect of Trident
contained therein and except as to financial statements, notes to
financial statements, stock valuation information, financial tables and
other financial and statistical data contained therein as to which such
counsel need express no comment), as of the date of the Prospectus and at
the Closing Date, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(in making this statement such counsel may state that it has not
undertaken to verify independently the information in the Reorganization
Applications, the Registration Statement or Prospectus and, therefore,
does not assume any responsibility for the accuracy or completeness
thereof).
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