EXHIBIT 1.2
WESTFIELD FINANCIAL, INC.
_______ Shares
COMMON SHARES
(Par Value $.01 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
November __, 2001
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Westfield Mutual Savings Bank Holding Company, a Massachusetts-chartered
mutual savings bank holding company (the "MHC"), Westfield Financial, Inc., a
Massachusetts-chartered stock corporation (the "Company"), and Westfield
[Savings] Bank, a Massachusetts-chartered stock savings bank (the "Bank"),
hereby confirm, jointly and severally, their agreement with Xxxxx, Xxxxxxxx &
Xxxxx, Inc. ("KBW" or the "Agent"), as follows:
Section 1. The Offering. The MHC, in accordance with its Plan of
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Reorganization and Minority Stock Issuance adopted by its Board of Trustees (as
amended, the "Plan"), intends to form the Company as its subsidiary and exchange
100% of the common stock of the Bank for a majority interest in the Company. In
addition, pursuant to the Plan, the Company will offer and sell up to ___ of its
common shares, par value $.01 per share ("Common Shares"), in a subscription
offering (the "Subscription Offering") to (1) depositors of the Bank with
Qualifying Deposits (as defined in the Plan) as of December 31, 1999 ("Eligible
Account Holders"), (2) depositors of the Bank with Qualifying Deposits as of
December 31, 2000 ("Supplemental Eligible Account Holders"), and (3)
Tax-Qualified Employee Stock Benefit Plans of the Bank (as defined in the Plan).
The Common Shares to be sold by the Company in the Offering (as defined below)
are hereinafter called the "Shares." Subject to the prior subscription rights of
the above-listed parties, the Company is offering for sale in a community
offering (the "Community Offering," or "Direct Community Offering," and when
referred to together with the Subscription Offering, the "Subscription and
Community Offering") which may be commenced concurrently with, during, or after
the Subscription Offering, the Shares not subscribed for or ordered in the
Subscription Offering to members of the general public to whom a copy of the
Prospectus (as hereinafter defined) is delivered
with a preference given to natural persons residing in the Bank's Local
Community, as defined in the Plan. It is anticipated that shares not subscribed
for in the Subscription and Community Offering will be offered to certain
members of the general public on a best efforts basis through a selected dealers
agreement (the "Syndicated Community Offering") (the Subscription Offering,
Community Offering and Syndicated Community Offering are collectively referred
to as the "Offering"). It is acknowledged that the purchase of Shares in the
Offering is subject to the maximum and minimum purchase limitations as described
in the Plan and that the Company and the Bank may reject, in whole or in part,
any orders received in the Community Offering or Syndicated Community Offering.
Collectively, these transactions are referred to herein as the "Reorganization."
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-1 (File No. 333-68550) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof and such amended prospectuses as
may have been required to the date hereof. The term "Registration Statement"
shall include any documents incorporated by reference therein and all financial
schedules and exhibits thereto, as amended, including post-effective amendments.
The prospectus, as amended, on file with the SEC at the time the Registration
Statement initially became effective is hereinafter called the "Prospectus,"
except that if any Prospectus is filed by the Company pursuant to Rule 424(b) or
(c) of the rules and regulations of the SEC under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the SEC.
In accordance with Title 209, Section 33.21, et seq., of the Code of
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Massachusetts Regulations (the "Reorganization Regulations"), the Bank and MHC
have filed with the Office of the Commissioner of Banks of the Commonwealth of
Massachusetts (the "Commissioner") an Application for Reorganization and
Minority Stock Issuance (the "Reorganization Application"), including the
Prospectus and the Independent Appraisal prepared by RP Financial, Inc. ("RP
Financial") and has filed such amendments thereto as may have been required by
the Commissioner. The Reorganization Application has been approved by the
Commissioner and the related Prospectus has been authorized for use by the
Commissioner. In addition, the Company, the Bank and the MHC have filed with the
Board of Governors of the Federal Reserve System (the "FRB") an Application to
Establish a Subsidiary Mid-Tier Bank Holding Company and to Become a Bank
Holding Company on Form FRY-3 (the "Holding Company Application") to become a
bank holding company under the Bank Holding Company Act of 1956, as amended
("BHCA"), and the regulations promulgated thereunder, which has been approved.
Finally, the MHC, the Company and the Bank have received (1) either a private
letter ruling from the Internal Revenue Service or an opinion of counsel as to
the federal income tax consequences of the Reorganization and (2) either a
private letter ruling of the Massachusetts Department of Revenue or the MHC's
independent public accountants as to the Massachusetts income tax consequences
of the Reorganization.
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Section 2. Retention of Agent; Compensation; Sale and Delivery of the
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Shares. Subject to the terms and conditions herein set forth, the MHC, the
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Company and the Bank hereby appoint the Agent as their exclusive financial
advisor and marketing agent to utilize its best efforts to solicit subscriptions
for Shares and to advise and assist the MHC, the Company and the Bank with
respect to the Company's sale of the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the MHC, the
Company and the Bank as to the matters set forth in the letter agreement, dated
June 15, 2001, between the Bank and KBW. It is acknowledged by the MHC, the
Company and the Bank that the Agent shall not be required to purchase any Shares
or be obligated to take any action that is inconsistent with all applicable
laws, regulations, decisions or orders.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion or termination or abandonment of the Plan by the MHC or the
Company or upon termination of the Offering, but in no event later than 45 days
after the completion of the Subscription Offering (the "End Date"). All fees or
expenses due to the Agent but unpaid will be payable to the Agent in next day
funds at the earlier of the Closing Date (as hereinafter defined) or the End
Date. In the event the Offering is extended beyond the End Date, the MHC, the
Company, the Bank and the Agent may agree to renew this Agreement under mutually
acceptable terms and subject to the approval of the Commissioner and any other
governmental agency or regulatory authority having jurisdiction over such
matters.
In the event the Company is unable to sell a minimum of _____ Shares by
the End Date, this Agreement shall terminate and the Company shall refund to any
persons who have subscribed for any of the Shares the full amount that it may
have received from them plus accrued interest, as set forth in the Prospectus,
and none of the parties to this Agreement shall have any obligation to the other
parties hereunder, except as set forth in this Section 2 and in Sections 6, 8
and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Reorganization,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and its counsel.
The release of Shares against payment therefor shall be made on a date and at a
place acceptable to the MHC, the Company, the Bank and the Agent. Certificates
for shares shall be delivered directly to the purchasers in accordance with
their
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directions. The date upon which the Company shall release or deliver the Shares
sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $25,000, payable in four consecutive
monthly installments of $6,250, of which $___ has been paid.
Such fees shall be deemed to have been earned when due. Should
the Reorganization be terminated for any reason not
attributable to the action or inaction of the Agent, the Agent
shall have earned and be entitled to be paid fees accruing
through the stage at which the termination occurred, including
any accrued legal fees expended by the Agent.
(b) A Success Fee upon completion of the Offering of 1.5% of the
aggregate purchase price of the Shares sold in the
Subscription Offering and Community Offering excluding shares
purchased by the officers, directors, corporators, or
employees (or members of their immediate families) of the MHC
or the Bank plus any ESOP, tax-qualified or stock based
compensation plans (except IRAs) or similar plan created by
the Bank for some or all of its directors or employees. The
management fee described in subparagraph 2(a) shall be applied
against the Success Fee described in this subparagraph 2(b).
(c) If any of the Shares remain available after the Subscription
Offering, at the request of the Bank, KBW will seek to form a
syndicate of registered broker-dealers ("Selected Dealers") to
assist in the sale of such Shares on a best efforts basis,
subject to the terms and conditions set forth in the selected
dealers agreement. KBW will endeavor to distribute the Shares
among the Selected Dealers in a fashion which best meets the
distribution objectives of the MHC, the Company, the Bank and
the Plan. KBW will be paid a fee not to exceed 5.5% of the
aggregate purchase price of the shares sold by the Selected
Dealers. From this fee, KBW will pass onto the Selected
Dealers who assist in the Syndicated Community Offering an
amount competitive with gross underwriting discounts charged
at such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment.
Fees with respect to purchases affected with the assistance of
Selected Dealers other than KBW shall be transmitted by KBW to
such Selected Dealers. The decision to utilize Selected
Dealers will be made by the MHC, the Company and the Bank upon
consultation with KBW. In the event, with respect to any stock
purchases, fees are paid pursuant to this subparagraph 2(c),
such fees shall be in lieu of, and not in addition to, payment
pursuant to subparagraphs 2(a) and 2(b).
(d) The Agent shall be reimbursed for reasonable out-of-pocket
expenses, including costs of travel, meals and lodging,
photocopying, telephone, facsimile and couriers. Reimbursement
of the Agent's total out-of-pocket expenses shall not exceed
$15,000 without the prior consent of the Bank. In addition,
the Bank will reimburse KBW for
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the fees and expenses of its counsel, which will not exceed $35,000.
The MHC, the Company and the Bank will bear the expenses of the
Offering customarily borne by issuers including, without limitation,
regulatory filing fees, SEC, "Blue Sky," and NASD filing and
registration fees; the fees of the MHC's, Company's and Bank's
accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing and syndicate expenses associated with
the Reorganization; the fees set forth under this Section 2; and fees
for "Blue Sky" legal work. The MHC, the Company and the Bank will
reimburse KBW for such expenses incurred by KBW on their behalf.
Full payment of Agent's fees and expenses, as described above, shall be
made in next day funds on the earlier of the Closing Date or a determination by
the MHC or the Bank to terminate or abandon the Plan.
Section 3. Prospectus; Offering. The Shares are to be initially offered in
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the Offering at the purchase price set forth on the cover page of the
Prospectus.
Section 4. Representations and Warranties.
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(a) The MHC, the Company and the Bank jointly and severally represent and
warrant to and agree with the Agent as follows:
(i) The Registration Statement, which was prepared by the MHC,
the Company and the Bank and filed with the SEC, was
declared effective by the SEC on _____, 2001. At the time
the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement),
became effective, the Registration Statement contained all
statements that were required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations,
complied in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations, and the
Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto),
and any information regarding the MHC, the Company or the
Bank contained in Sales Information (as such term is
defined in Section 8 hereof) authorized by the MHC, the
Company or the Bank for use in connection with the
Offering, did 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 at the time any Rule 424(b) or (c)
Prospectus was filed with the SEC and at the Closing Date
referred to in Section 2, the Registration Statement,
including the Prospectus contained therein (including any
amendment or supplement thereto), and any information
regarding the MHC, the Company or the Bank contained in
Sales
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Information (as such term is defined in Section 8 hereof)
authorized by the MHC, the Company or the Bank for use in
connection with the Offering, did 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 at the time any
Rule 424(b) or (c) Prospectus was filed with the SEC and at
the Closing Date referred to in Section 2, the Registration
Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any
information regarding the MHC, the Company or the Bank
contained in Sales Information (as such term is defined in
Section 8 hereof) authorized by the MHC, the Company or the
Bank for use in connection with the Offering will contain
all statements that are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations
and will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this Section
4(a)(i) shall not apply to statements or omissions made in
reliance upon and in conformity with written information
furnished to the MHC, the Company or the Bank by the Agent
or its counsel expressly regarding the Agent for use in the
Prospectus under the caption "The Reorganization and The
Stock Offering - Direct Community Offering and Syndicated
Community Offering - Syndicated Community Offering" and "-
Marketing Arrangements" or in any Sales Information.
(ii) The Reorganization Application, including the Prospectus and
Information Statement (the "Information Statement"), which
was prepared by the MHC, the Company and the Bank and filed
with the Commissioner, was approved on _____, 2001 and the
related Prospectus and Information Statement has been
authorized for use by the Commissioner. At the time of the
approval of the Reorganization Application, including the
Prospectus and InformationStatement (including any amendment
or supplement thereto), by the Commissioner, and at all
times subsequent thereto until the Closing Date, the
Reorganization Application, including the Prospectus and
Information Statement (including any amendment or supplement
thereto), will comply in all material respects with the
Reorganization Regulations, except to the extent waived in
writing by the Commissioner. The Reorganization Application,
including the Prospectus and Information Statement
(including any amendment or supplement thereto), does not
include any 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;
provided, however, that the representations and warranties
in this Section 4(a)(ii) shall not apply to statements or
omissions made in reliance upon and in conformity with
written information furnished to the MHC, the Company or the
Bank by the Agent or its counsel expressly regarding the
Agent for use in the Prospectus contained in the
Reorganization Application under the caption "The
Reorganization and The Stock Offering - Direct Community
Offering and Syndicated Community Offering - Syndicated
Community Offering" and "- Marketing Arrangements" or in any
Sales Information.
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(iii) The Holding Company Application has been prepared by the
MHC, the Bank and the Company in material conformity with
the requirements of all applicable regulations and has been
filed with and approved by the FRB. A conformed copy of the
Holding Company Application has been delivered to the Agent
and its counsel.
(iv) No order has been issued by the Commissioner, the SEC, the
FRB, any state securities administrator or the Federal
Deposit Insurance Corporation (the "FDIC") preventing or
suspending the use of the Prospectus, and no action by or
before any such government entity to revoke any approval,
authorization or order of effectiveness related to the
Reorganization is pending or, to the best knowledge of the
MHC, the Company or the Bank, threatened.
(v) Pursuant to the Reorganization Regulations, the Plan has
been approved by the MHC's Board of Corporators and adopted
by the Board of Trustees of the MHC and the Boards of
Directors of the Company and the Bank; at the Closing Date,
the offer and sale of the Shares will have been conducted in
all material respects in accordance with the Plan, the
Reorganization Regulations, and all other applicable laws,
regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Reorganization imposed upon the MHC, the Company or the Bank
by the Commissioner, the FRB, the SEC or any other
regulatory authority and in the manner described in the
Prospectus. No person has sought to obtain review of the
final action of the Commissioner, or the FRB in approving
the Plan or in approving the Reorganization or the Holding
Company Application pursuant to the BHCA or any other
statute or regulation.
(vi) Since the formation of MHC, MHC and the Bank have been, and
at the Closing Date, will be in material compliance with the
terms and conditions described in (A) the Decision of the
Commissioner dated December 5, 1995 relative to the
Application of the Bank to become a Mutual Holding Company,
(B) the letter dated November 2, 1995 from Xxxxxx X. Xxxxxx,
Xx., Senior Vice President, Federal Reserve Bank of Boston,
approving the application of MHC to acquire the Bank and (C)
the letter dated December 21, 1995 from A. Xxxxx Xxxxxxx,
Associate Director, FDIC, issuing a non-objection to the
Bank's Notice of Mutual Holding Company Reorganization and
the attached "Order and Basis for Corporation Approval."
(vii) The Bank has been organized and is a validly existing
Massachusetts-chartered savings bank in stock form of
organization and upon the
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Reorganization will become a wholly-owned subsidiary of the
Company, in both instances duly authorized to conduct its
business and own its property as described in the
Registration Statement and the Prospectus; the Bank has
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its
business, except those that individually or in the aggregate
would not materially adversely affect the financial
condition, earnings, capital, assets, properties or business
of the MHC, the Company and the Bank, taken as a whole; all
such licenses, permits and governmental authorizations are
in full force and effect, and the Bank is in compliance with
all material laws, rules, regulations and orders applicable
to the operation of its business; the Bank is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which its ownership of
property 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 individually or in the aggregate have a material adverse
effect on the financial condition, earnings, capital,
assets, properties or business of the Bank. The Bank does
not own equity securities or any equity interest in any
other active business enterprise except as described in the
Prospectus or as would not be material to the operations of
the Bank. Upon completion of the Reorganization, (i) all of
the authorized and outstanding capital stock of the Bank
will be owned by the Company and (ii) the Company will have
no direct subsidiaries other than the Bank and Westfield
Securities Corp., a Massachusetts corporation. At the
Closing Date, the Reorganization will have been effected in
all material respects in accordance with all applicable
statutes, regulations, decisions and orders; and, except
with respect to the filing of certain post-sale,
post-Reorganization reports, and documents in compliance
with the 1933 Act Regulations, all terms, conditions,
requirements and provisions with respect to the
Reorganization imposed by the Commissioner, the SEC, the
FRB, and the FDIC, if any, will have been complied with by
the MHC, the Company and the Bank in all material respects
or appropriate waivers will have been obtained and all
material notice and waiting periods will have been
satisfied, waived or elapsed.
(viii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the Commonwealth of Massachusetts with corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus; the Company is qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business requires such would
qualification, except where the failure to so qualify
not have a material adverse effect on the financial
condition,
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earnings, capital, assets, properties or business of the Company. The
Company has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business
except those that individually or in the aggregate would not
materially adversely affect the financial condition, earnings,
capital, assets, properties or business of the MHC, the Company and
the Bank, taken as a whole; all such licenses, permits and
governmental authorizations are in full force and effect, and the
Company is in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its business.
(ix) The MHC has been duly chartered and is validly existing as a mutual
holding company in good standing under the laws of the Commonwealth of
Massachusetts with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus; the MHC is qualified to do
business as a foreign corporation in each jurisdiction in which the
conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, earnings, capital, assets, properties or business
of the MHC. The MHC has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business except those that individually or in the aggregate would not
materially adversely affect the financial condition, earnings capital,
assets, properties or business of the MHC, the Company and the Bank,
taken as a whole; all such licenses, permits and governmental
authorizations are in full force and effect, and the MHC is in all
material respects complying with all laws, rules, regulations and
orders applicable to the operation of its business.
(x) The Bank is a member of the Federal Home Loan Bank of Boston
("FHLB-Boston"). The deposit accounts of the Bank are insured by the
FDIC up to the applicable limits and the Depositors Insurance Fund
("DIF"), and no proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the MHC, the
Company or the Bank, threatened. Upon consummation of the
Reorganization, the liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders will be duly
established in accordance with the requirements of the Reorganization
Regulations.
(xi) The only active subsidiary of the Bank is Elm Street Real Estate
Investments, Inc., ("Elm Street") and the only subsidiary of the
Company, other than the Bank, is Westfield Securities Corp. ("WSC")
(Elm Street and WSC are sometimes collectively referred to as, the
"Subsidiary"). The Subsidiary is organized, validly existing and in
good standing under
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the laws of the Commonwealth of Massachusetts; with full power and
authority to own its property and conduct its business; the
Subsidiary is duly qualified as a foreign corporation to transact
business in each jurisdiction in which failure to so qualify would
have a material adverse effect on the financial condition,
earnings, capital, assets or properties of the Company, the Bank
and the Subsidiary, taken as a whole; the Subsidiary holds all
licenses, certificates and permits from governmental authorities
necessary for the conduct of its business, except where failure to
hold such licences, permit or authorizations would not have a
material adverse effect on the financial condition, earnings,
capital, assets or properties of the Company, the Bank and the
Subsidiary, taken as a whole; all of the outstanding capital stock
of the Subsidiary has been duly authorized and is fully paid and
non-assessable, and is owned directly or indirectly by the Company
(in the case of WSC) and the Bank (in the case of Elm Street), free
and clear of any liens or encumbrances; the activities of the
Subsidiary are permitted to be conducted by subsidiaries of a
Massachusetts corporation (in the case of WSC) and of a
Massachusetts-chartered savings bank (in the case of Elm Street)
pursuant to Massachusetts law and regulations.
(xii) The MHC, the Company and the Bank have good and marketable title to
all real property and good title to all other assets material to
the business of the MHC, the Company and the Bank, taken as a
whole, and to those properties and assets described in the
Registration Statement and Prospectus as owned by them, in each
case free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration
Statement and Prospectus, or are not material to the business of
the MHC, the Company and the Bank, taken as a whole; and all of the
leases and subleases material to the business of the MHC, the
Company and the Bank, taken as a whole, under which the MHC, the
Company or the Bank hold properties, including those described in
the Registration Statement and Prospectus, are in full force and
effect.
(xiii) The MHC, the Company and the Bank have received an opinion of their
special counsel, Xxxxxxx Xxxxxxxx & Xxxx, with respect to the
federal income tax consequences of the Reorganization and an
opinion from Deloitte & Touche LLP with respect to the
Massachusetts income tax consequences of the Reorganization; all
material aspects of the opinions of Xxxxxxx Xxxxxxxx & Wood and
Deloitte & Touche LLP are accurately summarized in the Registration
Statement and Prospectus; the facts upon which such opinions are
based are truthful, accurate and complete.
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(xiv) The MHC, the Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter
into this Agreement, to carry out the provisions and conditions
hereof and to issue and sell the Shares to be sold by the Company
as provided herein and as described in the Prospectus, except
approval or confirmation by the Commissioner of the final appraisal
of the Bank. The consummation of the Reorganization, the execution,
delivery and performance of this Agreement and the consummation of
the transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of the
MHC, the Company and the Bank and this Agreement has been validly
executed and delivered by the MHC, the Company and the Bank and is
the valid, legal and binding agreement of the MHC, the Company and
the Bank 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 bank 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, if
any, that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy).
(xv) None of the MHC, the Company or the Bank is in violation of any
directive received from the Commissioner, the FRB, the FDIC, or any
other agency to make any material change in the method of
conducting their 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 Commissioner, the FRB and the FDIC) and, except as set forth
in the Registration Statement and the Prospectus, there is no suit,
proceeding, charge or action before or by any court, regulatory
authority or governmental agency or body, pending or, to the best
knowledge of the MHC, the Company or the Bank, threatened, which
might materially and adversely affect the Reorganization, the
performance of this Agreement or the consummation of the
transactions contemplated in the Plan and as described in the
Registration Statement and the Prospectus or which might result in
any material adverse change in the financial condition, earnings,
capital, assets, properties or business of the MHC, the Company and
the Bank, taken as a whole.
(xvi) The financial statements, schedules and notes related thereto that
are included in the Prospectus fairly present the financial
condition, results of operations, equity and cash flows of the MHC
and the Bank at the respective dates indicated and for the
respective periods covered thereby
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and comply as to form in all material respects with the applicable
accounting requirements of Regulation S-X of the SEC and generally
accepted accounting principles (including those requiring the
recording of certain assets at their current market value). Such
financial statements, schedules and notes related thereto have been
prepared in accordance with generally accepted accounting
principles consistently applied through the periods involved,
present fairly in all material respects the information required to
be stated therein and are consistent with the most recent financial
statements and other reports filed by the MHC and the Bank with the
Commissioner, the FRB, and any other applicable regulatory
authority, except that accounting principles employed in such
regulatory filings conform to the requirements of the Commissioner
and the FRB and not necessarily to GAAP. The other financial,
statistical and pro forma information and related notes included in
the Prospectus present fairly the information shown therein on a
basis consistent with the audited and unaudited financial
statements of the MHC and the Bank included in the Prospectus, and
as to the pro forma adjustments, the adjustments made therein have
been properly applied on the basis described therein.
(xvii) Since the respective dates as of which information is given in the
Registration Statement including the Prospectus: (i) there has not
been any material adverse change in the financial condition,
earnings, capital, assets, properties or business of the MHC, the
Company and the Bank, taken as a whole, whether or not arising in
the ordinary course of business; (ii) there has not been any
material increase in the long-term debt of the Bank or in the
principal amount of the Bank's assets that are classified by the
Bank as substandard, doubtful or loss or in loans past due 90 days
or more or real estate acquired by foreclosure, by deed-in-lieu of
foreclosure or deemed in-substance foreclosure or any material
decrease in equity capital or total assets of the Bank, nor has the
MHC, the Company or the Bank issued any securities or incurred any
liability or obligation for borrowing other than in the ordinary
course of business; (iii) there have not been any material
transactions entered into by the MHC, the Company or the Bank; (iv)
there has not been any material adverse change in the aggregate
dollar amount of the Bank's deposits or its consolidated net worth;
(v) there has been no material adverse change in the MHC, the
Company's or the Bank's relationship with its insurance carriers,
including, without limitation, cancellation or other termination of
the MHC's, the Company's or the Bank's fidelity bond or any other
type of insurance coverage; (vi) except as disclosed in the
Prospectus, there has been no material change in management of the
MHC, the Company or the Bank, neither of which has any material
undisclosed liability of any kind, contingent or otherwise; (vii)
none of the MHC, the Company, or the Bank has sustained any
material
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loss or interference with its respective business or properties
from fire, flood, windstorm, earthquake, accident or other
calamity, whether or not covered by insurance; (viii) none of the
MHC, the Company, or the Bank is in default in the payment of
principal or interest on any outstanding debt obligations; (ix)
the capitalization, liabilities, assets, properties and business
of the MHC, the Company and the Bank conform in all material
respects to the descriptions thereof contained in the Prospectus;
and (x) none of the MHC, the Company, or the Bank has any material
contingent liabilities, except as set forth in the Prospectus.
(xviii) All documents made available to or delivered or to be made
available to or delivered by the MHC, the Bank or the Company or
their representatives in connection with the issuance and sale of
the Shares, including records of account holders, depositors and
borrowers of the Bank, or in connection with the Agent's exercise
of due diligence, except for those documents which were prepared
by parties other than the MHC, the Bank, the Company or their
representatives, to the best knowledge of the MHC, the Bank and
the Company, were on the dates on which they were delivered, or
will be on the dates on which they are to be delivered, true,
complete and correct in all material respects.
(xix) None of the MHC, the Company, or the Bank is (i) in violation of
its articles of incorporation, organization or charter or bylaws,
as applicable, (and the MHC will not be in violation of its
Amended and Restated Charter and Bylaws upon consummation of the
Reorganization), or (ii) in default in the performance or
observance of any material obligation, agreement, covenant, or
condition contained in any material contract, lease, loan
agreement, indenture or other instrument to which it is a party or
by which it or any of its property may be bound. The execution and
delivery of this Agreement and the consummation of the
transactions herein contemplated will not: (i) conflict with or
constitute a breach of, or default under, or result in the
creation of any material lien, charge or encumbrance (with the
exception of the liquidation account established in the
Reorganization) upon any of the assets of the MHC, the Company or
the Bank pursuant to their articles of incorporation,
organization, charter or bylaws, as applicable, or any material
contract, lease or other instrument in which the MHC, the Company
or the Bank has a beneficial interest, or any applicable law,
rule, regulation or order; (ii) violate any authorization,
approval, judgement, decree, order, statute, rule or regulation
applicable to the MHC, the Company or the Bank, except for such
violations which would not have a material adverse effect on the
financial condition and results of operations of the MHC, the
Company and the Bank on a consolidated basis; or (iii) with the
exception of the liquidation account established in the
-13-
Reorganization, result in the creation of any material lien, charge
or encumbrance upon any property of the MHC, the Company or the
Bank.
(xx) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of
the MHC, the Company or the Bank in the due performance and
observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, note, bank loan or credit agreement or any
other instrument or agreement to which the MHC, the Company or the
Bank is a party or by which any of them or any of their property is
bound or affected, except such defaults which would not have a
material adverse effect on the financial condition or results of
operations of the MHC, the Company and the Bank on a consolidated
basis; such agreements are in full force and effect; and no other
party to any such agreements has instituted or, to the best
knowledge of the MHC, the Company and the Bank, threatened any
action or proceeding wherein the MHC, the Company or the Bank would
or might be alleged to be in default thereunder, where such action
or proceeding, if determined adversely to the MHC, the Company or
the Bank, would have a material adverse effect on the financial
condition, earnings, capital, assets, properties or business of the
MHC, the Company and the Bank, taken as a whole.
(xxi) Upon consummation of the Reorganization, the authorized, issued and
outstanding equity capital of the Company will be within the range
set forth in the Prospectus under the caption "Capitalization,"
and, except for the issuance of 100 Common Shares to the MHC as
necessary to organize the Company, no Common Shares have been or
will be issued and outstanding prior to the Closing Date; the
Shares will have been duly and validly authorized for issuance and,
when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the
Plan and in the Prospectus, will be duly and validly issued, fully
paid and non-assessable, except for shares purchased by the
Tax-Qualified Employee Stock Benefit Plans with funds borrowed from
the Company to the extent payment therefor in cash has not been
received by the Company; except to the extent that subscription
rights and priorities pursuant thereto exist pursuant to the Plan,
no preemptive rights exist with respect to the Shares; and the
terms and provisions of the Common Shares conform in all material
respects to the description thereof contained in the Registration
Statement and the Prospectus. To the best knowledge of the MHC, the
Company and the Bank, upon the issuance of the Shares, good title
to the Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such claims
as may be asserted against the purchasers thereof by third-party
claimants.
-14-
(xxii) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares,
except for the approval of the Commissioner, the SEC and the
FRB, and any necessary qualification, notification,
registration or exemption under the securities or blue sky
laws of the various states in which the Shares are to be
offered, and except as may be required under the rules and
regulations of the National Association of Securities
Dealers, Inc. ("NASD") and the American Stock Exchange.
(xxiii) Deloitte & Touche LLP, which has certified the audited
financial statements and schedules of the MHC and the Bank
included in the Prospectus, has advised the MHC, the Company
and the Bank in writing that they are, with respect to the
MHC, the Company and the Bank, independent public
accountants within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the SEC and the
Commissioner.
(xxiv) RP Financial, which has prepared the Bank's Independent
Appraisal as of August 3, 2001 (as amended or supplemented,
if so amended or supplemented) (the "Appraisal"), has
advised the Company in writing that it is independent of the
MHC, the Company and the Bank within the meaning of the
Reorganization Regulations.
(xxv) The MHC, the Company and the Bank have timely filed all
required federal, state and local tax returns; the MHC, the
Company and the Bank have paid all taxes that have become
due and payable in respect of such returns, except where
permitted to be extended, have made adequate reserves for
similar future tax liabilities and no deficiency has been
asserted with respect thereto by any taxing authority.
(xxvi) The Bank is in compliance in all material respects with the
applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, and the regulations and
rules thereunder.
(xxvii) To the knowledge of the MHC, the Company and the Bank, none
of the MHC, the Company, the Bank or employees of the MHC,
the Company or the Bank has made any payment of funds of the
MHC, the Company or the Bank as a loan for the purchase of
the Shares or made any other payment of funds prohibited by
law, and no funds have been set aside to be used for any
payment prohibited by law.
-15-
(xxviii) None of the MHC, the Company or the Bank has: (i) issued any
securities within the last 18 months (except for 100 Common
Shares issued by the Company to the MHC and except for notes to
evidence bank loans and reverse repurchase agreements or other
liabilities in the ordinary course of business or as described in
the Prospectus); (ii) had any material dealings within the 12
months prior to the date hereof with any member of the NASD, or
any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering and
routine purchases and sales of United States government and
agency and other securities in the ordinary course of business;
(iii) entered into a financial or management consulting agreement
except as contemplated hereunder; and (iv) engaged any
intermediary between the Agent and the MHC, the Company and the
Bank in connection with the offering of the Shares, and no person
is being compensated in any manner for such service. Appropriate
arrangements have been made for placing the funds received from
subscriptions for Shares in a special interest-bearing account
with the Bank until all Shares are sold and paid for, with
provision for refund to the purchasers in the event that the
Reorganization is not completed for whatever reason or for
delivery to the Company if all Shares are sold.
(xxix) The MHC, the Company and the Bank have not relied upon the Agent
or its legal counsel or other advisors for any legal, tax or
accounting advice in connection with the Reorganization.
(xxx) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
(xxxi) Any certificates signed by an officer of the MHC, the Company or
the Bank pursuant to the conditions of this Agreement and
delivered to the Agent or their counsel that refers to this
Agreement shall be deemed to be a representation and warranty by
the MHC, the Company or the Bank to the Agent as to the matters
covered thereby with the same effect as if such representation
and warranty were set forth herein.
(b) The Agent represents and warrants to the Company that:
(i) KBW is a corporation validly existing in good standing under the
laws of the State of New York and licensed to conduct business in
the Commonwealth of Massachusetts with full power and authority to
provide the services to be furnished to the Bank and the Company
hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by
-16-
all necessary action on the part of the Agent, and this Agreement
has been duly and validly executed and delivered by the Agent and
is a legal, valid and binding agreement of the Agent, 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 by general equity
principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law, and except to the extent, if
any, that the provisions of Sections 8 and 9 hereof may, with
respect to the Agent, be unenforceable as against public policy).
(iii) Each of the Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses, approvals
and permits necessary to perform such services; and the Agent is a
registered selling agent in each of the jurisdictions in which the
Shares are to be offered by the Company in reliance upon the Agent
as a registered selling agent as set forth in the blue sky
memorandum prepared with respect to the Offering.
(iv) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance
with the terms and provisions hereof will not conflict with, or
result in a breach of, any of the terms, provisions or conditions
of, or constitute a default (or an event which with notice or lapse
of time or both would constitute a default) under, the Articles of
Incorporation or Bylaws of the Agent or any material agreement,
indenture or other instrument to which the Agent is a party or by
which it or its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and
delivery of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by any
court, regulatory authority or government agency or body or, to the
knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this
Agreement.
Section 5. Covenants of the MHC, the Company and the Bank. The MHC, the
----------------------------------------------
Company and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Company will not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel
an opportunity to review such amendment or supplement or file any
amendment or supplement
-17-
to which amendment or supplement the Agent or its counsel
shall reasonably object.
(b) Neither the Bank, the MHC nor the Company will file any
amendment or supplement to the Reorganization Application
without providing the Agent and its counsel an opportunity to
review such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(c) Neither the Bank, the MHC nor the Company will file any
amendment or supplement to the Holding Company Application
without providing the Agent and its counsel an opportunity to
review the nonconfidential portions of such amendment or
supplement or file any amendment or supplement to which
amendment or supplement the Agent or its counsel shall
reasonably object.
(d) The MHC, the Company and the Bank will use their best efforts
to cause any post-effective amendment to the Registration
Statement to be declared effective by the SEC and any
post-approval amendment to the Reorganization Application to
be approved by the Commissioner and the FRB and will
immediately upon receipt of any information concerning the
events listed below notify the Agent: (i) when the
Registration Statement, as amended, has become effective; (ii)
when the Reorganization Application, as amended, has been
approved by the Commissioner and the FRB; (iii) when the MHC,
the Company or the Bank receives any comments from the SEC,
the Commissioner, the FRB, or any other governmental entity
with respect to the Reorganization or the transactions
contemplated by this Agreement; (iv) when the SEC, the
Commissioner, the FRB, or any other governmental entity
requests any amendment or supplement to the Registration
Statement, the Reorganization Application or any additional
information; (v) the issuance by the Commissioner, the FRB, or
any other governmental entity of any order or other action
suspending the Offering or the use of the Registration
Statement or the Prospectus or any other filing of the MHC,
the Company or the Bank under the Reorganization Regulations,
or other applicable law, or the threat of any such action;
(vi) the issuance by the SEC, the Commissioner, the FRB, or
any authority of any stop order suspending the effectiveness
of the Registration Statement or of the initiation or threat
of initiation or threat of any proceedings for that purpose;
or (vii) the occurrence of any event mentioned in paragraph
(h) below. The MHC, the Company and the Bank will make every
reasonable effort (i) to prevent the issuance by the SEC, the
Commissioner, the FRB, or any other regulatory authority of
any such order and, if any such order shall at any time be
issued, (ii) to obtain the lifting thereof at the earliest
possible time.
-18-
(e) The MHC, the Company and the Bank will deliver to the Agent and
to its counsel two conformed copies of the Registration
Statement, the Reorganization Application and the Holding Company
Application, as originally filed and of each amendment or
supplement thereto, including all exhibits. Further, the MHC, the
Company and the Bank will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required
for any NASD filings.
(f) The MHC, the Company and the Bank will furnish to the Agent, from
time to time during the period when the Prospectus (or any later
prospectus related to this offering) is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the
"1934 Act"), such number of copies of such Prospectus (as amended
or supplemented) as the Agent may reasonably request for the
purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the rules and regulations promulgated under the
1934 Act (the "1934 Act Regulations"). The Company authorizes the
Agent to use the Prospectus (as amended or supplemented, if
amended or supplemented) in any lawful manner contemplated by the
Plan in connection with the sale of the Shares by the Agent.
(g) The MHC, the Company and the Bank will comply with any and all
material terms, conditions, requirements and provisions with
respect to the Reorganization and the transactions contemplated
thereby imposed by the SEC, the Commissioner, the FRB or the
Reorganization Regulations, and by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and when
the Prospectus is required to be delivered, and during such time
period, the MHC, the Company and the Bank will comply, at their
own expense, with all material requirements imposed upon them by
the SEC, the Commissioner, the FRB or the Reorganization
Regulations, and by the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations, including, without
limitation, Rule 10b-5 under the 1934 Act, in each case as from
time to time in force, so far as necessary to permit the
continuance of sales or dealing in the Common Shares during such
period in accordance with the provisions hereof and the
Prospectus.
(h) If, at any time during the period when the Prospectus is required
to be delivered, any event relating to or affecting the MHC, the
Company or the Bank shall occur, as a result of which it is
necessary or appropriate, in the reasonable opinion of the
Agent's counsel, to amend or supplement the Registration
Statement or Prospectus in order to make the Registration
Statement or Prospectus not misleading in light of the
circumstances existing at the time the Prospectus is delivered,
the MHC, the Company and the Bank
-19-
will at their own expense, prepare and file with the SEC, the
Commissioner and the FRB and furnish to the Agent a reasonable
number of copies of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement or
Prospectus (in form and substance reasonably satisfactory to
the Agent and its counsel after a reasonable time for review)
which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not
misleading. For the purpose of this Agreement, the MHC, the
Company and the Bank each will timely furnish to the Agent
such information with respect to itself as the Agent may from
time to time reasonably request.
(i) The MHC, the Company and the Bank will take all necessary
actions in cooperating with the Agent and furnish to whomever
the Agent may direct such information as may be required to
qualify or register the Shares for offering and sale by the
Company or to exempt such Shares from registration, or to
exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the
applicable securities or blue sky laws of such jurisdictions
in which the Shares are required under the Reorganization
Regulations to be sold or as the Agent and the MHC, the
Company and the Bank may reasonably agree upon; provided,
however, that the Company shall not be obligated to file any
general consent to service of process, to qualify to do
business in any jurisdiction in which it is not so qualified,
or to register its directors or officers as brokers, dealers,
salesmen or agents in any jurisdiction. In each jurisdiction
where any of the Shares shall have been qualified or
registered as above provided, the Company will make and file
such statements and reports in each fiscal period as are or
may be required by the laws of such jurisdiction.
(j) The MHC, the Company and the Bank shall duly establish and
maintain the liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders in
accordance with the requirements of the Reorganization
Regulations and such Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain their
savings accounts in the Bank will have an inchoate interest in
their pro rata portion of the liquidation account, which shall
have a priority superior to that of the holders of the Common
Shares in the event of a complete liquidation of the Company
or the Bank.
-20-
(k) The MHC, the Company and the Bank will not sell or issue, contract to
sell or otherwise dispose of, for a period of 180 days after the
Closing Date, without the Agent's prior written consent, any of their
capital stock, other than in connection with any plan or arrangement
described in the Prospectus.
(l) The Company shall register its Common Shares under Section 12(b) of
the 1934 Act concurrently with the Offering and shall request that
such registration be effective prior to or upon completion of the
Reorganization. The Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as
may be required by applicable law.
(m) During the period during which the Common Shares are registered under
the 1934 Act or for three (3) years from the date hereof, whichever
period is greater, the Company will furnish to its shareholders as
soon as practicable after the end of each fiscal year an annual report
of the Company in accordance with the 1934 Act Regulations (including
a consolidated balance sheet and statements of consolidated income,
shareholders' equity and cash flows of the Company and its
subsidiaries as at the end of and for such year, certified by
independent public accountants in accordance with Regulation S-X under
the 1933 Act and the 1934 Act).
(n) During the period of three years from the date hereof, the Company
will furnish to the Agent: (i) as soon as practicable after such
information is publicly available, a copy of each report of the
Company furnished to or filed with the SEC under the 1934 Act or any
national securities exchange or system on which any class of
securities of the Company is listed or quoted (including, but not
limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy
statements and annual reports to stockholders), (ii) a copy of each
other non-confidential report of the Company mailed to its
shareholders or filed with the SEC, the Commissioner, the FRB or any
other supervisory or regulatory authority or any national securities
exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and
additional documents and information with respect to the MHC, the
Company or the Bank as the Agent may reasonably request; and (iii)
from time to time, such other nonconfidential information concerning
the MHC, the Company or the Bank as the Agent may reasonably request.
(o) The MHC, the Company and the Bank will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus under the
caption "How We Intend to Use the Proceeds from the Stock Offering."
-21-
(p) Other than as permitted by the Reorganization Regulations, the BHCA,
the 1933 Act, the 1933 Act Regulations and its rules and regulations
and the laws of any state in which the Shares are registered or
qualified for sale or exempt from registration, none of the MHC, the
Company or the Bank will distribute any prospectus, offering circular
or other offering material in connection with the offer and sale of
the Shares.
(q) The Company will use its best efforts to list and maintain its listing
of the Shares on a national securities exchange effective on or prior
to the Closing Date.
(r) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to
purchase Shares in the Offering on an interest-bearing basis at the
rate described in the Prospectus until the Closing Date and
satisfaction of all conditions precedent to the release of the Bank's
obligation to refund payments received from persons subscribing for or
ordering Shares in the Offering in accordance with the Plan and as
described in the Prospectus or until refunds of such funds have been
made to the persons entitled thereto or withdrawal authorizations
canceled in accordance with the Plan and as described in the
Prospectus. The Bank will maintain such records of all funds received
to permit the funds of each subscriber to be separately insured by the
FDIC (to the maximum extent allowable) and to enable the Bank to make
the appropriate refunds of such funds in the event that such refunds
are required to be made in accordance with the Plan and as described
in the Prospectus.
(s) The Company will promptly take all necessary action to register as a
bank holding company under the BHCA.
(t) The MHC, the Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in order for
the Agent to ensure compliance with the NASD's "Interpretation
Relating to Free Riding and Withholding."
(u) None of the MHC, the Company or the Bank will amend the Plann of
Reorganization without notifying the Agent prior thereto.
(v) The Company shall assist the Agent, if necessary, in connection with
the allocation of the Shares in the event of an oversubscription and
shall provide the Agent with any information necessary to assist the
Company in allocating the Shares in such event and such information
shall be accurate and reliable in all material respects.
-22-
(w) Prior to the Closing Date, the MHC, the Company and the Bank
will inform the Agent of any event or circumstances of which
it is aware as a result of which the Registration Statement
and/or Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein not misleading.
(x) Subsequent to the date the Registration Statement is declared
effective by the SEC and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein or set
forth in an amendment or supplement thereto, none of the MHC,
the Company or the Bank will have: (i) issued any securities
or incurred any liability or obligation, direct or contingent,
for borrowed money, except borrowings from the same or similar
sources indicated in the Prospectus in the ordinary course of
its business, or (ii) entered into any transaction which is
material in light of the business and properties of the MHC,
the Company and the Bank, taken as a whole.
Section 6. Payment of Expenses. Whether or not the Reorganization is
-------------------
completed or the sale of the Shares by the Company is consummated, the MHC, the
Company and the Bank jointly and severally agree to pay or reimburse the Agent
for: (a) all filing fees in connection with all filings related to the Offering
with the NASD; (b) any stock issue or transfer taxes which may be payable with
respect to the sale of the Shares; (c) all reasonable expenses of the
Reorganization, including but not limited to the MHC's, the Company's and the
Bank's and the Agent's attorneys' fees (subject to Section 2 of this Agreement)
and expenses, blue sky fees, transfer agent, registrar and other agent charges,
fees relating to auditing and accounting or other advisors and costs of printing
all documents necessary in connection with the Reorganization. In the event the
Company is unable to sell a minimum of ______ Shares or the Reorganization is
terminated or otherwise abandoned, the MHC, the Company and the Bank shall
promptly reimburse the Agent in accordance with Section 2(d) hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of
-------------------------------------
the Agent hereunder are subject, to the extent not waived in writing by the
Agent, to the condition that all representations and warranties of the MHC, the
Company and the Bank herein are, at and as of the commencement of the Offering
and at and as of the Closing Date, true and correct in all material respects,
the condition that the MHC, the Company and the Bank shall have performed all of
their obligations hereunder to be performed on or before such dates, and to the
following further conditions:
(a) At the Closing Date, the MHC, the Company and the Bank shall
have conducted the Reorganization in all material respects in
accordance with the Plan, the Reorganization Regulations and
all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Reorganization imposed upon them by the SEC,
the Commissioner, the FRB and any state securities agency.
-23-
(b) The Registration Statement shall have been declared effective by
the SEC and the Reorganization Application approved by the
Commissioner not later than 5:30 p.m. on the date of this
Agreement, or with the Agent's consent at a later time and date;
and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the SEC or any state authority, and no order or
other action suspending the authorization of the Prospectus or
the consummation of the Reorganization shall have been issued or
proceedings therefor initiated or, to the MHC's, the Company's or
the Bank's knowledge, threatened by the SEC, the Commissioner, or
any other governmental authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Xxxxxxx Xxxxxxxx &
Wood, special counsel for the MHC, the Company and the Bank, in
form and substance to the effect that:
(i) The Company has been duly incorporated and is
validly existing in good standing as a corporation under the
laws of the Commonwealth of Massachusetts; the MHC has been
duly organized and is validly existing in good standing as a
mutual holding company under the laws of the Commonwealth of
Massachusetts.
(ii) Both of the MHC and the Company have full
corporate power and authority to own, lease and operate
their respective properties and to conduct their business as
described in the Registration Statement and the Prospectus;
and both of the MHC and Company are qualified to transact
business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have a material
adverse effect upon the financial condition, results of
operations or business affairs of the MHC, Company and Bank,
considered as one enterprise.
(iii) The Bank is a validly existing
Massachusetts-chartered savings bank in stock form duly
authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus.
All of the capital stock of the Bank outstanding upon
completion of the Reorganization will be duly authorized and
will be validly issued, fully paid and non-assessable and
will be owned by the Company, to such counsel's Actual
Knowledge, free and clear of any liens, encumbrances, claims
or other restrictions.
-24-
(iv) The Bank is a member in good standing of the
FHLB-Boston. The deposit accounts of the Bank are insured by the
FDIC up to the maximum amount allowed under law and no
proceedings for the termination or revocation of such insurance
are pending or, to such counsel's Actual Knowledge, threatened;
the description of the liquidation account as set forth in the
Prospectus under the captions "The Reorganization and the Stock
Offering - Effects of the Reorganization - Liquidation Rights,"
to the extent that such information constitutes matters of law
and legal conclusions, has been reviewed by such counsel and is
accurately described in all material respects.
(v) Immediately following the consummation of the
Reorganization, the authorized, issued and outstanding Common
Shares of the Company will be within the range set forth in the
Prospectus under the caption "Capitalization" and, except for the
issuance of 100 Common Shares to the MHC as necessary to organize
the Company, no Common Shares have been issued prior to the
Closing Date; the Shares subscribed for pursuant to the Offering
have been duly and validly authorized for issuance, and when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan
and the Prospectus, will be duly and validly issued and fully
paid and non-assessable, except for Shares purchased by the
Tax-Qualified Employee Stock Benefit Plans with funds borrowed
from the Company to the extent payment therefor in cash has not
been received by the Company; except to the extent that
subscription rights and priorities pursuant thereto exist
pursuant to the Plan, the issuance of the Shares is not subject
to preemptive rights and the terms and provisions of the Common
Shares conform in all material respects to the description
thereof contained in the Prospectus. The form of certificate used
to evidence the Common Shares complies with applicable laws. To
such counsel's Actual Knowledge, upon the issuance of the Shares,
good title to the Shares will be transferred from the Company to
the purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by
third-party claimants.
(vi) The MHC, the Bank and the Company have full corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and by the Plan.
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 the
MHC, the Company and the Bank; and this Agreement is a valid and
binding obligation of the MHC, the Company and the Bank,
enforceable against the MHC, the Company and the Bank in
accordance with its terms, except as the enforceability thereof
may be limited
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by (i) bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of
Massachusetts-chartered savings institutions, (ii) general
equitable principles, (iii) laws relating to the safety and
soundness of insured depository institutions, and (iv) applicable
law or public policy with respect to the indemnification and/or
contribution provisions contained herein, including without
limitation the provisions of Sections 23A and 23B of the Federal
Reserve Act and except that no opinion need be expressed as to
the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(vii) The Company's subsidiary (WSC) and the Bank's
subsidiary (Elm Street) (collectively, the "Subsidiary") has been
duly incorporated and is validly existing as a corporation under
the laws of the jurisdiction of its incorporation, has full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus and is duly qualified
as a foreign corporation to transact business in each
jurisdiction in which the failure to so qualify would have a
material adverse effect upon the financial condition, results of
operations or business of the Company, the MHC, the Bank and its
subsidiaries, considered as one enterprise; the activities of the
Subsidiary, as described in the Registration Statement and the
Prospectus, are permitted to subsidiaries of a bank holding
company (in the case of WSC) and of a Massachusetts-chartered
stock savings bank (in the case of Elm Street) by the general
corporate law of Massachusetts and the rules, regulations,
policies and practices of the Commissioner, the FDIC and all
other federal banking or non-federal governmental agencies and
regulatory authorities having jurisdiction thereover; all of the
issued and outstanding capital stock of the Subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company (in the case of WSC)
and the Bank (in the case of Elm Street), to the best of such
counsel's Actual Knowledge, free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(viii) The Reorganization Application has been approved by
the Commissioner and the Prospectus and Information Statement has
been authorized for use by the Commissioner. The FRB has approved
the Holding Company Application and the exchange by the MHC of
all of the issued and outstanding capital stock of the Bank for a
majority interest in the Company, and no action has been taken
and, to such counsel's Actual Knowledge, none is pending or
threatened to revoke any such authorization or approval.
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(ix) Pursuant to the Reorganization Regulations, the
Plan has been approved by the MHC's corporators and duly
adopted by the required vote of the trustees of the MHC and
the directors of the Company and Bank.
(x) Subject to the satisfaction of the conditions to
the Commissioner's and the FRB's approval of the
Reorganization, no further approval, registration,
authorization, consent or other order of any federal or
state regulatory agency is required in connection with the
execution and delivery of this Agreement, the issuance of
the Common Shares and the consummation of the
Reorganization, except as may be required under the
securities or blue sky laws of various jurisdictions (as to
which no opinion need be rendered) and except as may be
required under the rules and regulations of the NASD and the
American Stock Exchange (as to which no opinion need by
rendered).
(xi) The Registration Statement is effective under
the 1933 Act and no stop order suspending the effectiveness
has been issued under the 1933 Act or proceedings therefor
initiated or, to such counsel's Actual Knowledge, threatened
by the SEC.
(xii) At the time the Reorganization Application,
including the Prospectus and Information Statement contained
therein, was approved by the Commissioner, the
Reorganization Application, including the Prospectus and
Information Statement contained therein, complied as to form
in all material respects with the requirements of the
Reorganization Regulations, federal and state law and all
applicable rules and regulations promulgated thereunder
(other than the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be rendered).
(xiii) At the time that the Registration Statement
became effective, (i) the Registration Statement (as amended
or supplemented, if so amended or supplemented) (other than
the financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data included
therein, as to which no opinion need be rendered), complied
as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations, and (ii) the
Prospectus (other than the financial statements, the notes
thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need
be rendered) complied as to form in all material respects
with the requirements of the 1933 Act, the 1933 Act
Regulations, the Reorganization Regulations and federal law.
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(xiv) To such counsel's Actual Knowledge, there are
no legal or governmental proceedings pending or threatened
which are required to be disclosed in the Registration
Statement and Prospectus, other than those disclosed
therein.
(xv) To such counsel's Actual Knowledge, there are
no material contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to
be described or referred to in the Reorganization
Application, the Registration Statement or the Prospectus or
required to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits
thereto in the Reorganization Application, the Registration
Statement or the Prospectus. The description in the
Reorganization Application, the Registration Statement and
the Prospectus of such documents and exhibits is accurate in
all material respects and fairly presents the information
required to be shown.
(xvi) The Plan complies in all material respects with
all applicable laws, rules, regulations, decisions and
orders including, but not limited to, the Reorganization
Regulations; no order has been issued by the SEC, the
Commissioner, the FRB, or any other governmental authority
to suspend the Offering or the use of the Prospectus, and no
action for such purposes has been instituted, or to such
counsel's Actual Knowledge, threatened by the SEC, the
Commissioner, the FRB, or any other governmental authority
and, to such counsel's Actual Knowledge, no person has
sought to obtain regulatory or judicial review of the final
action of the Commissioner or the FRB approving the Plan,
the Reorganization Application, the Holding Company
Application or the Prospectus.
(xvii) To such counsel's Actual Knowledge, the MHC,
the Company and the Bank have obtained all material
licenses, permits and other governmental authorizations
currently required for the conduct of their businesses and
all such licenses, permits and other governmental
authorizations are in full force and effect, and the MHC,
the Company and the Bank are in all material respects
complying therewith.
(xviii) To such counsel's Actual Knowledge, none of the
MHC, the Company, the Bank or the Subsidiary is in violation
of its Articles of Organization and Bylaws or its Charter
and Bylaws, as appropriate or, to such counsel's Actual
Knowledge, in default or violation of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its
property may be bound, except for such defaults or
violations which would not have a material adverse impact on
the financial
-28-
condition or results of operations of the MHC, the Company and
the Bank on a consolidated basis; the execution and delivery of
this Agreement, the incurrence of the obligations herein set
forth and the consummation of the transactions contemplated
herein do not (a), to such counsel's Actual Knowledge, conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the MHC, the Company or the Bank
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the MHC, the
Company or the Bank is a party or by which any of them may be
bound, or to which any of the property or assets of the MHC, the
Company or the Bank are subject (other than the establishment of
the liquidation account), (b) result in any violation of the
provisions of the Articles of Organization or Bylaws of the
Company or the Charter or the Bylaws of the MHC or the Bank or,
(c) result in any violation of any applicable federal or state
law, act, regulation (except that no opinion with respect to the
securities and blue sky laws of various jurisdictions or the
rules or regulations of the NASD and the American Stock Exchange
need be rendered) or order or court order, writ, injunction or
decree.
(xix) The Company's Articles of Organization and Bylaws
comply in all material respects with the laws of the Commonwealth
of Massachusetts. The MHC's and the Bank's respective Charter and
Bylaws and the MHC's proposed Amended and Restated Charter and
Bylaws comply in all material respects with Massachusetts law.
(xx) To such counsel's Actual Knowledge, none of the MHC,
the Company or the Bank is in violation of any directive from the
Commissioner, the FRB or the FDIC to make any material change in
the method of conducting its respective business.
(xxi) The information in the Prospectus under the captions
"Our Policy Regarding Dividends," "Regulation of Westfield Bank,
Westfield Financial and Westfield Mutual Holding Company,"
"Taxation," "The Reorganization and The Stock Offering,"
"Restrictions on Transfer of Subscription Rights and Shares of
Common Stock," "Restrictions on Acquisition of Westfield
Financial and Westfield Bank," "Description of Capital Stock of
Westfield Financial" and "Registration Requirements" to the
extent that such information 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. The description of the Reorganization
process in the Prospectus under the caption "The Reorganization
and The Stock Offering" to the extent that such information
constitutes matters of law, summaries of legal matters, documents
or
-29-
proceedings, or legal conclusions, has been reviewed by such counsel
and fairly describes such process in all material respects. The
descriptions in the Prospectus of statutes or regulations are accurate
summaries and fairly present the information required to be shown. The
information under the caption "The Reorganization and The Stock
Offering - Effects of the Reorganization - Tax Aspects" has been
reviewed by such counsel and fairly describes the opinions rendered by
them to the MHC, the Company and the Bank with respect to such
matters.
(xxii) The information in the Prospectus under "Risk Factors - Our
articles of organization and bylaws may prevent transaction you might
favor, including a sale or merger of Westfield Financial" and
"-Because Westfield Mutual Holding Company will own a majority of
Westfield Financial's common stock, Westfield Mutual Holding Company
may prevent transactions you may like" to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by counsel and is
complete and accurate in all material respects.
In addition, such counsel shall state that during the preparation
of the Reorganization Application, the Registration Statement, the
Prospectus and the Information Statement, they participated in
conferences with certain officers of, the independent public and
internal accountants for, and other representatives of, the MHC, the
Company and the Bank, at which conferences the contents of the
Reorganization Application, the Registration Statement, the Prospectus
and the Information Statement, and related matters were discussed and,
while such counsel have not confirmed the accuracy or completeness of
or otherwise verified the information contained in the Reorganization
Application, the Registration Statement, the Prospectus or and the
Information Statement, and do not assume any responsibility for such
information, based upon such conferences and a review of documents
deemed relevant for the purpose of rendering their opinion (relying as
to materiality as to factual matters on certificates of officers and
other factual representations by the MHC, the Company and the Bank),
nothing has come to their attention that would lead them to believe
that the Reorganization Application, the Registration Statement, the
Prospectus or the Information Statement, or any amendment or
supplement thereto (other than the financial statements, the notes
thereto, and other tabular, financial, statistical and appraisal data
included therein as to which no view need be rendered) contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or trustees or
directors of the MHC, the Company and the Bank and certificates of
public officials. Such counsel's opinion shall be limited to
matters governed by federal laws and by the laws of the
Commonwealth of Massachusetts. The term "Actual Knowledge" as used
herein shall have the meaning set forth in the Legal Opinion
Accord of the American Bar Association Section of Business Law.
For purposes of such opinion, no proceedings shall be deemed to be
pending, no order or stop order shall be deemed to be issued, and
no action shall be deemed to be instituted unless, in each case, a
trustee, director or executive officer of either of the MHC, the
Company or the Bank shall have received a copy of such
proceedings, order, stop order or action. In addition, such
opinion may be limited to present statutes, regulations and
judicial interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no obligation to
revise or supplement it 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 proposed or pending regulations or policy
statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the
validity of the Reorganization or any aspect thereof. Such counsel
may assume that any agreement is the valid and binding obligation
of any parties to such agreement other than each of the MHC, the
Company or the Bank.
(d) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the principal accounting officer of
each of the MHC, the Company and the Bank in form and substance
reasonably satisfactory to the Agent's Counsel, dated as of such
Closing Date, to the effect that: (i) they have carefully examined
the Prospectus and the Information Statement, and, in their
opinion, at the time the Prospectus and the Information Statement
became authorized for final use, the Prospectus and the
Information Statement did not contain any 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; (ii) since the date
the Prospectus became authorized for final 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
adverse change in the condition, financial or otherwise, or in the
earnings, capital, properties or business of the MHC, the Company
or the Bank and the conditions set forth in this Section 7 have
been satisfied; (iii) since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has been no material adverse change in the
condition, financial or otherwise, or in the earnings,
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capital or properties of the MHC, the Company or the Bank
independently, or of the MHC, the Company and the Bank considered
as one enterprise, whether or not arising in the ordinary course
of business; (iv) the representations and warranties in Section 4
are true and correct with the same force and effect as though
expressly made at and as of the Closing Date; (v) the MHC, the
Company and the Bank have complied in all material respects with
all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Date and will
comply in all material respects with all obligations to be
satisfied by them after the Reorganization; (vi) no stop order
suspending the effectiveness of the Registration Statement has
been initiated or, to the best knowledge of the MHC, the Company
or the Bank, threatened by the SEC or any state authority; (vii)
no order suspending the Offering, the Reorganization, the
acquisition of all of the outstanding capital stock of the Bank
by the Company or the effectiveness of the Prospectus has been
issued and no proceedings for that purpose are pending or, to the
best knowledge of the MHC, the Company or the Bank, threatened by
the SEC, the Commissioner, the FRB, or any governmental
authority; and (viii) to the best knowledge of the MHC, the
Company and the Bank, no person has sought to obtain review of
the final action of the Commissioner or the FRB approving the
Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion
of the Agent, there shall have been no material adverse change in
the condition, financial or otherwise, or in the earnings or
business of the MHC, the Company or the Bank independently, or of
the MHC, the Company and the Bank considered as one enterprise,
from that as of the latest dates as of which such condition is
set forth in the Prospectus, other than transactions referred to
or contemplated therein; (ii) the MHC, the Company or the Bank
shall not have received from the Commissioner, the FRB or the
FDIC any direction (oral or written) to make any material change
in the method of conducting their business with which it has not
complied (which direction, if any, shall have been disclosed to
the Agent) or which materially and adversely would affect the
business, operations or financial condition or income of the MHC,
the Company and the Bank taken as a whole; (iii) none of the MHC,
the Company or 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; (iv) 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, to the knowledge of the MHC, the
Company or the Bank, threatened against the MHC, the Company or
the Bank or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and
adversely affect the business,
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operations, financial condition or income of the MHC, the Company
and the Bank taken as a whole; and (v) the Shares shall have been
qualified or registered for offering and sale or exempted
therefrom under the securities or blue sky laws of the
jurisdictions as the Agent shall have reasonably requested and as
agreed to by the MHC, the Company and the Bank.
(f) Concurrently with the execution of this Agreement, the Agent
shall receive a letter from Deloitte & Touche LLP dated as of the
date of the Prospectus and addressed to the Agent: (i) confirming
that Deloitte & Touche LLP is a firm of independent public
accountants within the meaning of Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the SEC and stating in
effect that in their opinion the financial statements, schedules
and related notes of the MHC and the Bank as of December 31, 2000
and 1999, and for each of the three years in the period ended
December 31, 2000, included in the Prospectus and covered by
their opinion included therein, comply as to form in all material
respects with the applicable accounting requirements and related
published rules and regulations of the 1933 Act; (ii) stating in
effect that, on the basis of certain agreed upon procedures (but
not an audit in accordance with generally accepted auditing
standards) consisting of a reading of the latest available
unaudited interim financial statements of the MHC and the Bank
prepared by the MHC and the Bank, a reading of the minutes of the
meetings of the Board of Trustees of the MHC and the Board of
Directors of the Bank and consultations with officers of the MHC
and the Bank responsible for financial and accounting matters,
nothing came to their attention which caused them to believe
that: (A) the unaudited financial statements included in the
Prospectus are not in conformity with the 1933 Act, and generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included
in the Prospectus; or (B) during the period from the date of the
latest unaudited financial statements included in the Prospectus
to a specified date not more than three business days prior to
the date of the Prospectus, except as has been described in the
Prospectus, there was any increase in borrowings, other than
normal deposit fluctuations, by the MHC and the Bank; or (C)
there was any decrease in the net assets or retained earnings of
the MHC and the Bank at the date of such letter as compared with
amounts shown in the latest unaudited balance sheets included in
the Prospectus or there was any decrease in net income or net
interest income of the MHC and the Bank for the number of full
months commencing immediately after the period covered by the
latest audited income statement included in the Prospectus and
ended on the latest month end prior to the date of the Prospectus
as compared to the corresponding period in the preceding year;
and (iii) stating that, in addition to the audit referred to in
their opinion
-33-
included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the MHC and the
Bank, which are subject to the internal controls of the MHC and
the Bank, the accounting system and other data prepared by the MHC
and the Bank, directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set
forth in the Prospectus as the Agent may reasonably request, and
they have found such amounts and percentages to be in agreement
therewith.
(g) At the Closing Date, the Agent shall receive a letter dated the
Closing Date, addressed to the Agent, confirming the statements
made by Deloitte & Touche LLP in the letter delivered by it
pursuant to subsection (f) of this Section 7, the "specified date"
referred to in clause (ii) of subsection (f) to be a date
specified in the letter required by this subsection (g) which for
purposes of such letter shall not be more than three business days
prior to the Closing Date.
(h) At the Closing Date, the Agent shall receive a letter from RP
Financial, dated the Closing Date and addressed to the Agent (i)
confirming that said firm is independent of the MHC, the Company
and the Bank and is experienced and expert in the area of
corporate appraisals within the meaning of the Reorganization
Regulations stating in effect that the Appraisal prepared by such
firm complies in all material respects with the applicable
requirements of the Reorganization Regulations, and (iii) further
stating that its opinion of the aggregate pro forma market value
of the MHC, the Company and the Bank expressed in its Appraisal,
as most recently updated, remains in effect.
(i) The MHC, the Company and the Bank shall not have sustained since
the date of the latest financial statements included in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Registration Statement and Prospectus and
since the respective dates as of which information is given in the
Registration Statement and Prospectus, there shall not have been
any change in the long-term debt of the MHC, the Company or the
Bank other than debt incurred in relation to the purchase of
Shares by the Bank's eligible plans, or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders'
equity or results of operations of the MHC, the Company or the
Bank, otherwise than as set forth or contemplated in the
Registration Statement and Prospectus, the effect of which, in any
such case described above, is in KBW's reasonable judgment
-34-
sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Subscription Offering or the
delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(j) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the letters from the Commissioner approving the
Reorganization Application and authorizing the use of the
Prospectus and Information Statement; (ii) a copy of the order
from the SEC declaring the Registration Statement effective;
(iii) a certificate from the Commissioner evidencing the
existence of the Bank; (iv) a certificate of good standing from
the Commonwealth of Massachusetts evidencing the good standing of
the MHC and the Company; (v) a certificate from the FDIC
evidencing the Bank's insurance of accounts; (vi) a certificate
from the FHLB-Boston evidencing the Bank's membership in good
standing therein; (vii) a copy of the letter from the FRB
approving the Company's Holding Company Application; (viii) a
certified copy of the MHC's and the Bank's Charter and Bylaws and
(ix) any other documents that the Agent shall reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange, American
Stock Exchange or in the over-the-counter market, or quotations
halted generally on The Nasdaq Stock Market, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required by either of such
exchanges or the NASD or by order of the SEC or any other
governmental authority; (ii) a general moratorium on the
operations of commercial banks, or Massachusetts savings banks or
a general moratorium on the withdrawal of deposits from
commercial banks or Massachusetts savings banks declared by
federal or state authorities; (iii) the engagement by the United
States in hostilities which have resulted in the declaration, on
or after the date hereof, of a national emergency or war; or (iv)
a material decline in the price of equity or debt securities if
the effect of such a declaration or decline, in the Agent's
reasonable judgement, makes it impracticable or inadvisable to
proceed with the Offering or the delivery of the Shares on the
terms and in the manner contemplated in the Registration
Statement and the Prospectus.
(l) At or prior to the Closing Date, counsel to the Agent shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the sale of the Shares as herein contemplated and related
proceedings or in order to evidence the occurrence or
completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the MHC, the Company or the Bank in
connection with the Reorganization and
-35-
the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to KBW and its counsel.
Section 8. Indemnification.
---------------
(a) The MHC, the Company and the Bank jointly and severally
agree to indemnify and hold harmless the Agent, its officers
and directors, employees and agents, and each person, if
any, who controls the Agent within the meaning of Section 15
of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all loss, liability, claim, damage or expense
whatsoever (including, but not limited to, settlement
expenses), joint or several, that the Agent or any of them
may suffer or to which the Agent and any such persons may
become subject under all applicable federal or state laws or
otherwise, and to promptly reimburse the Agent and any such
persons upon written demand for any expenses (including
reasonable fees and disbursements of counsel) incurred by
the Agent or any of them in connection with investigating,
preparing to defend or defending any actions, proceedings or
claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise
out of or are related to the Reorganization or any action
taken by the Agent where acting as agent of the MHC, the
Company and the Bank; (ii) arise out of or are based upon
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or
any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Reorganization Application (or any amendment or supplement
thereto), the Holding Company Application or any instrument
or document executed by the MHC, the Company or the Bank or
based upon written information supplied by the MHC, the
Company or the Bank filed in any state or jurisdiction to
register or qualify any or all of the Shares or to claim an
exemption therefrom or provided to any state or jurisdiction
to exempt the Company as a broker-dealer or its officers,
directors and employees as broker-dealers or agent, under
the securities laws thereof (collectively, the "Blue Sky
Application"), or any document, advertisement, oral
statement or communication ("Sales Information") prepared,
made or executed by or on behalf of the MHC, the Company or
the Bank with their consent or based upon written or oral
information furnished by or on behalf of the MHC, the
Company or the Bank, whether or not filed in any
jurisdiction, in order to qualify or register the Shares or
to claim an exemption therefrom under the securities laws
thereof; (iii) arise out of or are based upon the omission
or alleged omission to state in any of the foregoing
documents or information 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; or (iv) arise from any theory of liability
whatsoever relating
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to or arising from or based upon the Registration Statement (or
any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Reorganization Application, including the Information Statement,
(or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation
distributed in connection with the Reorganization; provided,
however, that no indemnification is required under this paragraph
(a) to the extent such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue material
statement or alleged untrue material statement in, or material
omission or alleged material omission from, the Registration
Statement (or any amendment or supplement thereto), preliminary
or final Prospectus (or any amendment or supplement thereto), the
Reorganization Application, any Blue Sky Application or Sales
Information made in reliance upon and in conformity with
information furnished in writing to the MHC, the Company or the
Bank by the Agent or its counsel regarding the Agent, provided,
that it is agreed and understood that the only information
furnished in writing to the MHC, the Company or the Bank by the
Agent regarding the Agent is set forth in the Prospectus under
the caption "The Reorganization and The Stock Offering - Direct
Community Offering and Syndicated Community Offering" and "-
Marketing Arrangements"; and, provided further, that the MHC, the
Company and the Bank shall not be liable under clause (i) of the
foregoing indemnification provision to the extent that any loss,
claim, damage, liability or action is found in a final judgment
by a court of competent jurisdiction to have resulted from the
Agent's bad faith or gross negligence. Notwithstanding anything
to the contrary in this Agreement, the MHC, the Company and/or
the Bank shall not provide any indemnification under this
Agreement to the extent prohibited by applicable law, rule, order
or directive by the SEC, the Commissioner, the FRB or the FDIC.
(b) The Agent agrees to indemnify and hold harmless, the Company and
the Bank, their directors and officers and each person, if any,
who controls the Company or the Bank within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act
against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement expenses),
joint or several, which they, or any of them, may suffer or to
which they, or any of them may become subject under all
applicable federal and state laws or otherwise, and to promptly
reimburse the Company, the Bank, and any such persons upon
written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any of them, in
connection with investigating, preparing to defend or defending
any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or
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are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or
any amendment or supplement thereto), the Reorganization
Application (or any amendment or supplement thereto), the
preliminary or final Prospectus (or any amendment or supplement
thereto), any Blue Sky Application or Sales Information, (ii) are
based upon the omission or alleged omission to state in any of
the foregoing documents a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
or (iii) arise from any theory of liability whatsoever relating
to or arising from or based upon the Registration Statement (or
any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the
Reorganization Application (or any amendment or supplement
thereto), or any Blue Sky Application or Sales Information or
other documentation distributed in connection with the
Reorganization; provided, however, that the Agent's obligations
under this Section 8(b) shall exist only if and only to the
extent that such untrue statement or alleged untrue statement was
made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or
supplement thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), the Reorganization Application
(or any amendment or supplement thereto), any Blue Sky
Application or Sales Information in reliance upon and in
conformity with information furnished in writing to the MHC, the
Company or the Bank by the Agent or its counsel regarding the
Agent, provided, that it is agreed and understood that the only
information furnished in writing to the MHC, the Company or the
Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "The Reorganization and The Stock
Offering - Direct Community Offering and Syndicated Community
Offering" and "- Marketing Arrangements."
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether
commenced or threatened), or suit instituted against it in
respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve it from any
liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own
expense in the defense of such action. In addition, if it so
elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume defense of such action with
counsel chosen by it and approved by the indemnified parties that
are defendants in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may
be legal defenses available to them that are different from or in
addition to those available to
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such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding
or claim, other than reasonable costs of
investigation. In no event shall the indemnifying
parties be liable for the fees and expenses of more
than one separate firm of attorneys (and any special
counsel that said firm may retain) for each
indemnified party in connection with any one action,
proceeding or claim or separate but similar or
related actions, proceedings or claims in the same
jurisdiction arising out of the same general
allegations or circumstances.
(d) The agreements contained in this Section 8 and in
Section 9 hereof and the representations and
warranties of the MHC, the Company and the Bank set
forth in this Agreement shall remain operative and in
full force and effect regardless of: (i) any
investigation made by or on behalf of the Agent or
its officers, directors or controlling persons, agent
or employees or by or on behalf of the MHC, the
Company or the Bank or any officers, directors,
trustees or controlling persons, agent or employees
of the MHC, the Company or the Bank; (ii) delivery of
and payment hereunder for the Shares; or (iii) any
termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the MHC, the Company, the Bank or the Agent, the
MHC, the Company, the Bank and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding, but after deducting any contribution
received by the MHC, the Company, the Bank or the Agent from persons other than
the other parties thereto, who may also be liable for contribution) in such
proportion so that the Agent is responsible for that portion represented by the
percentage that the fees paid to the Agent pursuant to Section 2 of this
Agreement (not including expenses) bears to the gross proceeds received by the
Company from the sale of the Shares in the Offering, and the MHC, the Company
and the Bank shall be responsible for the balance. If, however, the allocation
provided above is not permitted by applicable law, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative fault of the
MHC, the Company and the Bank on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the MHC, the Company and
the Bank on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault 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 MHC, the Company and/or the Bank on the one hand or
the Agent on the other and the parties' relative intent, good faith,
-39-
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The MHC, the Company, the Bank and the Agent 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 into account the equitable considerations referred to above
in this Section 9. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions, proceedings or
claims in respect thereof) referred to above in this Section 9 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, proceeding
or claim. It is expressly agreed that the Agent shall not be liable for any
loss, liability, claim, damage or expense or be required to contribute any
amount pursuant to Section 8(b) or this Section 9 which in the aggregate exceeds
the amount paid (excluding reimbursable expenses) to the Agent under this
Agreement. It is understood that the above stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation. The obligations of the MHC, the Company, the Bank and the
Agent under this Section 9 and under Section 8 shall be in addition to any
liability which the MHC, the Company, the Bank and the Agent may otherwise have.
For purposes of this Section 9, each of the Agent's, the MHC's, the Company's or
the Bank's officers, trustees and directors and each person, if any, who
controls the Agent or the MHC, the Company or the Bank within the meaning of the
1933 Act and the 1934 Act shall have the same rights to contribution as the
Agent, the MHC, the Company or the Bank. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action, suit, claim or
proceeding against such party in respect of which a claim for contribution may
be made against another party under this Section 9, will notify such party from
whom contribution may be sought, but the omission to so notify such party shall
not relieve the party from whom contribution may be sought from any other
obligation it may have hereunder or otherwise than under this Section 9.
Notwithstanding anything to the contrary in this Agreement, the MHC, the Company
and/or the Bank shall not provide any contribution under this Agreement to the
extent prohibited by applicable law, rule, order or directive by the SEC,
Commissioner, the FRB or the FDIC.
Section 10. Survival of Agreements, Representations and Indemnities.
-------------------------------------------------------
The respective indemnities of the MHC, the Company, the Bank and the Agent and
the representations and warranties and other statements of the MHC, the Company,
the Bank and the Agent 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 the Agent, the
MHC, the Company, the Bank or any controlling person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any successor or
assign of the Agent, the MHC, the Company, the Bank, and any such controlling
person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
Section 11. Termination. The Agent may terminate this Agreement by
-----------
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
-40-
(a) In the event the Company fails to sell the required minimum
number of the Shares by _____, 2001, and in accordance with the
provisions of the Plan or as required by the Reorganization
Regulations, and applicable law, this Agreement shall terminate
upon refund by the Company to each person who has subscribed for
or ordered any of the Shares the full amount which it may have
received from such person, together with interest as provided in
the Prospectus, and no party to this Agreement shall have any
obligation to the other hereunder, except as set forth in
Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have
been fulfilled when and as required by this Agreement, unless
waived in writing, or by the Closing Date, this Agreement and all
of the Agent's obligations hereunder may be canceled by the Agent
by notifying the MHC, the Company and the Bank of such
cancellation in writing or by telegram at any time at or prior to
the Closing Date, and any such cancellation shall be without
liability of any party to any other party except as otherwise
provided in Sections 2(a), 6, 8 and 9 hereof.
(c) In the event one of the MHC, the Company or the Bank is in
material breach of the representations and warranties or
covenants contained in Sections 4 and 5 and such breach has not
been cured after the Agent has provided the MHC, the Company and
the Bank with notice of such breach.
If the Agent elects to terminate this Agreement as provided in this
Section, the MHC, the Company and the Bank shall be notified promptly by
telephone or telegram, confirmed by letter.
The MHC, the Company and the Bank may terminate this Agreement in the event
the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
MHC, the Company and the Bank have provided the Agent with notice of such
breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
-------
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Xxxxx, Xxxxxxxx
& Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xx.
Xxxxxxxx X. XxXxxxx (with a copy to Xxxxxxx Xxxxxx & Xxxxxxxx LLP, Attention:
Xxxxxxx X. Xxxxxxxx, Esq.), and, if sent to the MHC, the Company and the Bank,
shall be mailed, delivered or telegraphed and confirmed to the MHC, the Company
and the Bank at 000 Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention:
Xxxxxx X. Xxxxxxxx, President and CEO (with a copy to Xxxxxxx Xxxxxxxx & Wood,
Attention: Xxxxxxx X. Xxxxxxxx, Esq.).
-41-
Section 13. Parties. The MHC, 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 the Agent when the same shall have been given by the
undersigned. The Agent shall be entitled to act and rely on any request, notice,
consent, waiver or agreement purportedly given on behalf of the MHC, the Company
or the Bank, when the same shall have been given by the undersigned or any other
officer of the MHC, the Company or the Bank. This Agreement shall inure solely
to the benefit of, and shall be binding upon, the Agent, the MHC, the Company,
the Bank, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. It is understood and agreed that this Agreement is the exclusive
agreement among the parties hereto, and supersedes any prior agreement among the
parties (except for specific references to the letter agreement with the Agent)
and may not be varied except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
-------
place on the Closing Date at such location as mutually agreed upon by the Agent
and the MHC, the Company and the Bank. At the closing, the MHC, the Company and
the Bank shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and
the opinions and certificates required hereby and other documents deemed
reasonably necessary by the Agent shall be executed and delivered to effect the
sale of the Shares as contemplated hereby and pursuant to the terms of the
Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision or
------------------
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in accordance
------------
with the laws of the State of New York.
Section 17. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
-42-
If the foregoing correctly sets forth the arrangement among the MHC,
the Company, the Bank and the Agent, please indicate acceptance thereof in the
space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
Westfield Mutual Savings Bank Westfield Financial, Inc.
Holding Company
By Its Authorized By Its Authorized
Representative: Representative:
_____________________________________ _____________________________________
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer President and Chief Executive Officer
Westfield Savings Bank
By Its Authorized
Representative:
_____________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Accepted as of the date first above written
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
By Its Authorized
Representative:
_____________________________________
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