600,000 Shares
(plus 90,000 Shares to cover over-allotments, if any)
XXXXXXX MERCHANTS BANCSHARES, INC.
Common Stock, $1.00 Par Value
UNDERWRITING AGREEMENT
ADVEST, INC.
As Representative (the "Representative")
of the Several Underwriters
Named in Schedule I hereto
Xxx Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs and Madames:
Xxxxxxx Merchants Bancshares, Inc., a Maine corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 600,000 shares (the "Firm Shares") of the Company's Common Stock,
par value $1.00 per share (the "Common Stock").
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably in proportion to the
amounts set forth opposite their respective names in Schedule I hereto, up to
90,000 additional shares of Common Stock from the Company (such additional
shares of Common Stock, the "Optional Shares"). The Firm Shares and the Optional
Shares are referred to collectively as the "Shares."
[As part of the offering of [ ] Firm Shares contemplated by this
Agreement, Advest, Inc. ("Advest") has agreed to reserve out of the Firm Shares
set forth opposite its name on Schedule I hereto, up to [ ] Shares, for sale to
the Company's employees, officers and directors [and other parties associated
with the Company] (collectively, the "Participants"), as set forth in the
Prospectus in the section entitled "Underwriting" (the "Directed Share
Program"). The Shares to be sold by Advest pursuant to the Directed Share
Program (the "Directed Shares") will be sold by Advest pursuant to this
Agreement at the public offering price. Any Directed Shares not orally confirmed
for purchase by any Participants by the end of the first business day after the
date on which this Agreement is executed will be offered to the public by Advest
as set forth in the Prospectus.]
The Company, intending to be legally bound, hereby confirms its
agreement with the Underwriters as follows:
1. Representations and Warranties of the Company and the Bank. Each of
the Company and Xxxxxxx Merchants Bank, a wholly-owned subsidiary of the Company
(the "Bank"), jointly and severally represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form SB-2 (File No. [ ]) with respect
to the Shares, including a prospectus subject to completion, has been filed by
the Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), and one or more amendments
to such registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if such
registration statement, as it may have been amended, has become effective under
the Act and information has been omitted therefrom in accordance with Rule 430A
under the Act, a prospectus in the form most recently included in an amendment
to such registration statement (or, if no such amendment shall have been filed,
in such registration statement) with such changes or insertions as are required
by Rule 430A or permitted by Rule 424(b) under the Act and as have been provided
to and approved by the Representative, or (ii) if such registration statement,
as it may have been amended, has not become effective under the Act, an
amendment to such registration statement, including a form of prospectus, a copy
of which amendment has been provided to and approved by the Representative prior
to the execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at the
time when it was or is declared effective, including (A) all financial
statements, schedules and exhibits thereto, (B) all documents (or portions
thereof) incorporated by reference therein, and (C) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each prospectus
subject to completion included in such registration statement or any amendment
or post-effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at the time it was or
is declared effective), including all documents (or portions thereof)
incorporated by reference therein; and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b) under the Act
or, if no prospectus is required to be so filed, such term means the prospectus
included in the Registration Statement, in either case, including all documents
(or portions thereof) incorporated by reference therein. As used herein, any
reference to any statement or information as being "made," "included,"
"contained," "disclosed" or "set forth" in any Preliminary Prospectus, a
Prospectus or any amendment or supplement thereto, or the Registration Statement
or any amendment thereto (or other similar references) shall refer both to
information and statements actually appearing in such document as well as
information and statements incorporated by reference therein.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority of any
state or other jurisdiction. If the Registration Statement has become effective
under the Act, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that purpose
has been instituted or threatened or, to the knowledge of the Company,
contemplated by the Commission or the securities authority of any state or other
jurisdiction.
(c) When any Preliminary Prospectus was filed with the Commission it
contained all statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder. Each
2
document, if any, filed or to be filed pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in the
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder. When the Registration Statement or any amendment thereto was or is
declared effective, and at each Time of Delivery (as hereinafter defined), it
(i) contained and will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not and will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared effective) and at
each Time of Delivery, the Prospectus, as amended or supplemented at any such
time, (i) contained and will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material respects
with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not and will not include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (c) do not
apply to statements or omissions made in the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you specifically for use therein. It is
understood that the statements set forth in the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto (W)
in the last paragraph of the cover page of the Prospectus, (X) on the inside
cover page with respect to stabilization and passive market making, and (Y) in
the third, eighth and tenth paragraphs and the list of Underwriters under the
section entitled "Underwriting," constitute the only written information
furnished to the Company by or on behalf of any Underwriter through you
specifically for use in the Registration Statement or any amendment thereto or
the Prospectus and any amendment or supplement thereto, as the case may be.
(d) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries listed on Exhibit A
hereto is a party or to which any of the properties of the Company or any
subsidiary is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(e) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has full power and authority
(corporate and other) to own or lease its properties and conduct its business as
described in the Prospectus. Each of the Company and the Bank has full power and
authority (corporate and other) to enter into this Agreement and to perform its
obligations hereunder. Each of the Company and its subsidiaries is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse
3
effect on the financial position, results of operations or business of the
Company and its subsidiaries taken as a whole.
(f) The Company's authorized, issued and outstanding capital stock is
as disclosed in the Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the descriptions of the Common Stock contained in
the Prospectus. None of the issued shares of capital stock of the Company or any
of its subsidiaries has been issued or is owned or held in violation of any
statutory (or to the knowledge of the Company, any other) preemptive rights of
shareholders, and no person or entity (including any holder of outstanding
shares of capital stock of the Company or its subsidiaries) has any statutory
(or to the knowledge of the Company, any other) preemptive or other rights to
subscribe for any of the Shares. None of the capital stock of the Company has
been issued in violation of applicable federal or state securities laws.
(g) All of the issued shares of capital stock of each subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned beneficially by the Company or one of its subsidiaries, free and clear
of all liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting agreements, proxies, voting trusts, equities or
claims of any nature whatsoever. Other than the subsidiaries listed on Exhibit
21 to the Registration Statement and on Exhibit A hereto and the equity
securities held in the investment portfolios of the Company and such
subsidiaries (the composition of which is not materially different than the
disclosures in the Prospectus as of specific dates) and except as otherwise
disclosed in the Prospectus, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association.
(h) Except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of its subsidiaries convertible
into or exchangeable for any capital stock of the Company or any of its
subsidiaries, (ii) warrants, rights or options to subscribe for or purchase from
the Company or any of its subsidiaries any such capital stock or any such
convertible or exchangeable securities or obligations or (iii) obligations of
the Company or any of its subsidiaries to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any of
its subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries, (ii) the
Company has not purchased any of its outstanding capital stock or declared, paid
or otherwise made any dividend or distribution of any kind on its capital stock,
(iii) there has not been any change in the capital stock, long-term debt or
short-term debt of the Company or any of its subsidiaries, and (iv) there has
not been any material adverse change, or any development involving a prospective
material adverse change, in or affecting the financial position, results of
operations or business of the Company and its subsidiaries, in each case other
than as disclosed in or contemplated by the Prospectus.
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(j) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or requiring the Company to
include such securities in the securities registered pursuant to the
Registration Statement (or any such right has been effectively waived) or
requiring the registration of any securities pursuant to any other registration
statement filed by the Company under the Act. Neither the filing of the
Registration Statement nor the offering or sale of Shares as contemplated by
this Agreement gives any security holder of the Company any rights for or
relating to the registration of any shares of Common Stock or any other capital
stock of the Company, except such as have been satisfied or waived.
(k) Neither the Company nor any of its subsidiaries is, or with the
giving of notice or passage of time or both would be, in violation of its
Articles of Incorporation or Bylaws or in default under any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or to which any of their
respective properties or assets are subject.
(l) The Company and its subsidiaries have good and marketable title in
fee simple to all real property, if any, and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as would not have a material adverse effect
on the financial position, results of operations or business of the Company and
its subsidiaries taken as a whole and do not interfere with the use made or
proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company or any of its
subsidiaries are held under valid, subsisting and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or any subsidiary.
(m) The Company does not require any consent, approval, authorization,
order or declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body in connection with the sale of the
Shares or the consummation of the transactions contemplated by this Agreement,
except the registration of the Shares under the Act (which, if the Registration
Statement is not effective as of the time of execution hereof, shall be obtained
as provided in this Agreement) and of the Common Stock under the Exchange Act
and such as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the Underwriters.
(n) Other than as disclosed in the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation (including
without limitation, any bank or bank holding company regulatory proceeding)
pending or, to the Company's knowledge, threatened in which the Company or any
of its subsidiaries is a party or of which any of their respective properties or
assets are the subject which, if determined adversely to the Company or any
subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, results of operations or business of the
Company and its subsidiaries taken as a whole. Neither the Company nor any
subsidiary is in violation of, or in default with respect to, any law, statute,
rule, regulation, order, judgment or decree, except as described in the
Prospectus or such as do not and will not individually or in the aggregate have
5
a material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries taken as a whole, and neither the
Company nor any subsidiary is required to take any action in order to avoid any
such violation or default.
(o) Berry, Dunn, XxXxxx & Xxxxxx, which has certified certain financial
statements of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus, are independent public accountants as
required by the Act, the Exchange Act and the respective rules and regulations
of the Commission thereunder.
(p) The consolidated financial statements and schedules (including the
related notes) of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement, the Prospectus and/or
any Preliminary Prospectus were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
fairly present the financial position and results of operations of the Company
and its subsidiaries, on a consolidated basis, at the dates and for the periods
presented. The selected financial data set forth under the captions "Summary
Consolidated Financial Data," "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Prospectus fairly present, on the basis stated in the
Prospectus, the information included therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The supporting notes and schedules included in the
Registration Statement, the Prospectus and/or any Preliminary Prospectus fairly
state in all material respects the information required to be stated therein in
relation to the financial statements taken as a whole. The unaudited interim
consolidated financial statements included or incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Rule 10-01 of Regulation S-X under the
Act.
(q) This Agreement has been duly authorized, executed and delivered by
each of the Company and the Bank and, assuming due execution by the
Representative of the Underwriters, constitutes the valid and binding agreement
of each of the Company and the Bank, enforceable against the Company and the
Bank in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(r) The sale of the Shares and the performance of this Agreement and
the consummation of the transactions herein contemplated will not (with or
without the giving of notice or the passage of time or both) (i) conflict with
or violate any term or provision of the articles of incorporation or bylaws or
other organizational documents of the Company or any subsidiary, (ii) result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any subsidiary is a party
or to which any of their respective properties or assets is subject, (iii)
conflict with or violate any law, statute, rule or regulation or any order,
judgment or decree of any court or governmental agency or body having
jurisdiction over the Company or any subsidiary or any of their respective
properties or assets or (iv) result in a breach, termination or lapse of the
corporate power and authority of the
6
Company or any subsidiary to own or lease and operate their respective assets
and properties and conduct their respective business as described in the
Prospectus.
(s) When the Shares to be sold by the Company hereunder have been duly
delivered against payment therefor as contemplated by this Agreement, the Shares
will be validly issued, fully paid and nonassessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The certificates representing the Shares are in proper legal form
under, and conform in all respects to the requirements of, the Maine Business
Corporation Act and the requirements of the NASDAQ-National Market System.
(t) The Company has not distributed and will not distribute any
offering material in connection with the offering and sale of the Shares other
than the Registration Statement, a Preliminary Prospectus, the Prospectus and
other material, if any, permitted by the Act.
(u) Neither the Company nor any of its officers, directors or
affiliates has (i) taken, directly or indirectly, any action designed to cause
or result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares or (ii) since the
filing of the Registration Statement (A) sold, bid for, purchased or paid anyone
any compensation for soliciting purchases of, the Shares or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(v) The operations of the Company and its subsidiaries with respect to
any real property currently leased or owned or by any means controlled by the
Company or any subsidiary (the "Real Property") are in compliance in all
material respects with all federal, state, and local laws, ordinances, rules,
and regulations relating to occupational health and safety and the environment
(collectively, "Laws"), and the Company and its subsidiaries have not violated
any Laws in a way which would have a material adverse effect on the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole. Except as disclosed in the Prospectus, there is no pending or,
to the Company's knowledge, threatened claim, litigation or any administrative
agency proceeding, nor has the Company or any subsidiary received any written or
oral notice from any governmental entity or third party, that: (i) alleges a
violation of any Laws by the Company or any subsidiary or (ii) alleges the
Company or any subsidiary is a liable party under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et
seq. or any state superfund law.
(w) Neither the Company nor any subsidiary owns or has the right to use
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, franchises, trade secrets, proprietary or other
confidential information and intangible properties and assets (collectively,
"Intangibles"), the loss of any of which would have a material adverse effect on
the financial position, results of operations or business of the Company and its
subsidiaries taken as a whole; and, to the best knowledge of the Company,
neither the Company nor any subsidiary has infringed or is infringing, and
neither the Company nor any subsidiary has received notice of infringement with
respect to, asserted Intangibles of others.
7
(x) Each of the Company and its subsidiaries makes and keeps accurate
books and records reflecting its assets and maintains internal accounting
controls which provide reasonable assurance that (i) transactions are executed
in accordance with management's authorization, (ii) transactions are recorded as
necessary to permit preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting principles and to
maintain accountability for the assets of the Company, (iii) access to the
assets of the Company and each of its subsidiaries is permitted only in
accordance with management's authorization and (iv) the recorded accountability
for assets of the Company and each of its subsidiaries is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(y) The Company and its subsidiaries have filed all foreign, federal,
state and local tax returns that are required to be filed by them and have paid
all taxes shown as due on such returns as well as all other taxes, assessments
and governmental charges that are due and payable; and no material deficiency
with respect to any such return has been assessed or proposed.
(z) Except for such plans that are expressly disclosed in the
Prospectus, the Company and its subsidiaries do not maintain, contribute to or
have any material liability with respect to any employee benefit plan, profit
sharing plan, employee pension benefit plan, employee welfare benefit plan,
equity- based plan or deferred compensation plan or arrangement ("Plans") that
are subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder ("ERISA"). All Plans
are in compliance in all material respects with all applicable laws, including
but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the
"Code"), and have been operated and administered in all material respects in
accordance with their terms. No Plan is a defined benefit plan or multi employer
plan. The Company does not provide retiree life and/or retiree health benefits
or coverage for any employee or any beneficiary of any employee after such
employee's termination of employment, except as required by Section 4980B of the
Code or under a Plan which is intended to be "qualified" under Section 401(a) of
the Code. No material liability has been, or could reasonably be expected to be,
incurred under Title IV of ERISA or Section 412 of the Code by any entity
required to be aggregated with the Company or any of the Subsidiaries pursuant
to Section 4001(b) of ERISA and/or Section 414(b) or (c) of the Code (and the
regulations promulgated thereunder) with respect to any "employee pension
benefit plan" which is not a Plan. As used in this subsection, the terms
"defined benefit plan," "employee benefit plan," "employee pension benefit
plan," "employee welfare benefit plan" and "multiemployer plan" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
(aa) No material labor dispute exists with the Company's or any
subsidiary's employees, and no such labor dispute is threatened. The Company has
no knowledge of any existing or threatened labor disturbance by the employees of
any of its principal agents, suppliers, contractors or customers that would have
a material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries taken as a whole.
(bb) The Company and its subsidiaries have received all permits,
licenses, franchises, authorizations, registrations, qualifications and
approvals (collectively, "Permits") of governmental or regulatory authorities
(including, without limitation, all state and federal bank and bank holding
company regulatory authorities) as may be required of them to own their
properties and conduct their
8
businesses in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus; and the Company and its
subsidiaries have fulfilled and performed all of their material obligations with
respect to such Permits, and no event has occurred which allows or, after notice
or lapse of time or both, would allow revocation or termination thereof or
result in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such Permits contain no
restrictions that materially affect the ability of the Company and its
subsidiaries to conduct their businesses and no bank or bank holding company
regulatory agency or body has issued any order or decree impairing, restricting
or prohibiting the payment of dividends by any of its subsidiaries to the
Company.
(cc) The Company and each of its subsidiaries has filed, or has had
filed on its behalf, on a timely basis, all materials, reports, documents and
information, including but not limited to annual reports and reports of
examination with each applicable bank and bank holding company regulatory
authority, board or agency, which are required to be filed by it, except where
the failure to have timely filed such materials, reports, documents and
information would not have a material adverse effect on the financial position,
results of operations or business of the Company and its subsidiaries taken as a
whole.
(dd) Neither the Company, nor any subsidiary is an "investment company"
or a company "controlled" by an investment company as such terms are defined in
Sections 3(a) and 2(a)(9), respectively, of the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and, if the Company or any subsidiary
conducts its business as set forth in the Registration Statement and the
Prospectus, will not become an "investment company" and will not be required to
register under the Investment Company Act.
[(ee) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.]
2. Purchase and Sale of Shares.
(a) Subject to the terms and conditions herein set forth, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
[ ] Dollars and [ ] cents ($[ ]) per share (the "Per Share Price"), the
number of Firm Shares (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying the aggregate number of Firm Shares to be sold
by the Company as set forth in the first paragraph of this Agreement by a
fraction, the numerator of which is the aggregate number of Firm Shares to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto, and the denominator of which is the aggregate number of
Firm Shares to be purchased by the several Underwriters hereunder.
(b) The Company hereby grants to the Underwriters the right to purchase
at their election in whole or in part from time to time up to 90,000 Optional
Shares, at the Per Share Price, for the sole
9
purpose of covering over-allotments in the sale of the Firm Shares. Any such
election to purchase Optional Shares may be exercised by written notice from the
Representative to the Company, given from time to time within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as hereinafter defined) or, unless the
Representative otherwise agrees in writing, earlier than two or later than ten
business days after the date of such notice. In the event the Underwriters elect
to purchase all or a portion of the Optional Shares, the Company agrees to
furnish or cause to be furnished to the Representative the certificates, letters
and opinions, and to satisfy all conditions, set forth in Section 7 hereof at
each Subsequent Time of Delivery (as hereinafter defined).
(c) In making this Agreement, each Underwriter is contracting
severally, and not jointly, and except as provided in Section 2(b) and 9 hereof,
the agreement of each Underwriter is to purchase only that number of shares
specified with respect to that Underwriter in Schedule I hereto. No Underwriter
shall be under any obligation to purchase any Optional Shares prior to an
exercise of the option with respect to such Shares granted pursuant to Section
2(b) hereof.(33)
3. Offering by the Underwriters. Upon the authorization by the
Representative of the release of the Shares, the several Underwriters propose to
offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. Delivery of Shares; Closing. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as the Representative may request upon at least 48
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company, to the Representative for the account of such Underwriter, against
payment by such Underwriter on its behalf of the purchase price therefor by wire
transfer of immediately available funds to such accounts as the Company shall
designate in writing. The closing of the sale and purchase of the Shares shall
be held at the offices of Xxxxx Xxxxxx & Xxxxxx, LLP, CityPlace - 00xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000-0000, except that physical delivery of such
certificates shall be made at the office of The Depository Trust Company, 00
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The time and date of such delivery
and payment shall be, with respect to the Firm Shares, at 10:00 a.m., New York,
New York time, on the third (3rd) full business day after this Agreement is
executed or at such other time and date as the Representative and the Company
may agree upon in writing, and, with respect to the Optional Shares, at 10:00
a.m., New York, New York time, on the date specified by the Representative in
the written notice given by the Representative of the Underwriters' election to
purchase all or part of such Optional Shares, or at such other time and date as
the Representative and the Company may agree upon in writing. Such time and date
for delivery of the Firm Shares is herein called the "First Time of Delivery,"
such time and date for delivery of any Optional Shares, if not the First Time of
Delivery, is herein called a "Subsequent Time of Delivery," and each such time
and date for delivery is herein called a "Time of Delivery." The Company will
make such certificates available for checking and packaging at least 24 hours
prior to each Time of Delivery at the office of The Depository Trust Company, 00
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location specified
by you in writing at least 48 hours prior to such Time of Delivery.
10
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective prior to the execution and delivery of this
Agreement, to become effective. If the Registration Statement has been declared
effective prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by you, subparagraph
(4)) of Rule 424(b) within the time period required under Rule 424(b) under the
Act. The Company will advise you promptly of any such filing pursuant to Rule
424(b). The Company will file timely all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(b) The Company will not file with the Commission the prospectus or the
amendment referred to in Section 1(a) hereof, any amendment or supplement to the
Prospectus or any amendment to the Registration Statement unless you have
received a reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its best efforts to
cause any such amendment to the Registration Statement to be declared effective
as promptly as possible. Upon the request of the Representative or counsel for
the Underwriters, the Company will promptly prepare and file with the
Commission, in accordance with the rules and regulations of the Commission, any
amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by the several Underwriters and will use its best
efforts to cause any such amendment to the Registration Statement to be declared
effective as promptly as possible. If required, the Company will file any
amendment or supplement to the Prospectus with the Commission in the manner and
within the time period required by Rule 424(b) under the Act. The Company will
advise the Representative, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence to the Representative of each such filing
or effectiveness.
(c) The Company will advise the Representative promptly after receiving
notice or obtaining knowledge of (i) when any post-effective amendment to the
Registration Statement is filed with the Commission, (ii) the receipt of any
comments from the Commission concerning the Registration Statement, (iii) when
any post-effective amendment to the Registration Statement becomes effective, or
when any supplement to the Prospectus or any amended Prospectus has been filed,
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any part thereof or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, (v) the suspension of the qualification
of the Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, (vi) any request made by the
Commission or any securities authority of any other jurisdiction for amending
the Registration Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order or suspension and, if any such stop order or
suspension is issued, to obtain the withdrawal thereof as promptly as possible.
11
(d) If the delivery of a prospectus relating to the Shares is required
under the Act at any time prior to the expiration of nine months after the date
of the Prospectus and if at such time any events have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any reason it is necessary
during such same period to amend or supplement the Prospectus, the Company will
promptly notify the Representative and upon its request (but at the Company's
expense) prepare and file with the Commission an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance
and will furnish without charge to each Underwriter and to any dealer in
securities as many copies of such amended or supplemented Prospectus as the
Representative may from time to time reasonably request.
(e) The Company promptly from time to time will take such action as the
Representative may reasonably request to qualify the Shares for offering and
sale under the securities or blue sky laws of such jurisdictions as the
Representative may request and will continue such qualifications in effect for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Shares have been
qualified as above provided.
(f) The Company will promptly provide the Representative, without
charge, (i) two manually executed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto, including
all exhibits and all documents or information incorporated by reference therein,
(ii) for each other Underwriter, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto, without exhibits but
including all documents or information incorporated by reference therein and
(iii) so long as a prospectus relating to the Shares is required to be delivered
under the Act, as many copies of each Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto as the Representative may reasonably
request. The terms "amendment" and "supplement" as used in this Agreement, shall
include all documents subsequently filed by the Company with the Commission
pursuant to the Exchange Act that are deemed to be incorporated by reference in
the Prospectus.
(g) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its security
holders an earnings statement of the Company and its subsidiaries, if any,
covering a period of at least 12 months beginning after the effective date of
the Registration Statement (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations thereunder. "Availability Date"
means the forty-fifth (45th) day after the end of the fourth fiscal quarter
following the fiscal quarter in which the Registration Statement went effective,
except that if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the ninetieth (90th) day after the end of
such fourth fiscal quarter.
(h) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, the Company
will not, and will cause its officers and directors not to, without the prior
written consent of Advest, Inc., as representative of the Underwriters,
12
directly or indirectly (i) offer, sell, contract to sell or otherwise dispose
of, any shares of Common Stock or securities convertible into or exercisable or
exchangeable for shares of Common Stock or (ii) enter into any swap or other
agreement or any transaction that transfers, in whole or in part, the economic
consequences of ownership of shares of Common Stock whether any such swap or
other agreement is to be settled by delivery of shares of Common Stock, other
securities, cash or otherwise; except for the sale of the Shares hereunder and
except for the issuance of Common Stock upon the exercise of stock options or
warrants or the conversion of convertible securities outstanding on the date of
this Agreement to the extent that such stock options, warrants and convertible
securities are disclosed in the Prospectus or except for the grant to employees
of stock options to purchase Common Stock which are not exercisable within such
180 days.
(i) During the period of three years after the effective date of the
Registration Statement, the Company will furnish to the Representative and, upon
request, to each of the other Underwriters, without charge, (i) copies of all
reports or other communications (financial or other) furnished to shareholders
and (ii) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission, the NASD or any national
securities exchange.
(j) Prior to the termination of the underwriting syndicate contemplated
by this Agreement, neither the Company nor any of its officers, directors or
affiliates will (i) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company or
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares.
(k) In case of any event, at any time within the period during which a
prospectus is required to be delivered under the Act, as a result of which any
Preliminary Prospectus or the Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact, or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, if it is necessary
at any time to amend any Preliminary Prospectus or the Prospectus to comply with
the Act or any applicable securities or blue sky laws, the Company promptly will
prepare and file with the Commission, and any applicable state securities
commission, an amendment, supplement or document that will correct such
statement or omission or effect such compliance and will furnish to the several
Underwriters such number of copies of such amendment(s), supplement(s) or
document(s) as the Representative may reasonably request. For purposes of this
subsection (k), the Company will provide such information to the Representative,
the Underwriters' counsel and counsel to the Company as shall be necessary to
enable such persons to consult with the Company with respect to the need to
amend or supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or file any document, and shall furnish to the Representative and
the Underwriters' counsel such further information as each may from time to time
reasonably request.
(l) The Company will use its best efforts to obtain, and thereafter
maintain, the qualification or listing of the shares of Common Stock (including,
without limitation, the Shares) on NASDAQ-National Market System.
[(m) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted, to the extent required by
the NASD or the NASD rules and
13
regulations, including but not limited to, the "Free-Riding and Withholding"
Interpretation, from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement. Advest will notify the Company as to which Participants
will need to be so restricted. At the request of Advest, the Company will direct
the transfer agent to place stop transfer restrictions upon such securities for
such period of time.]
[(n) The Company will pay (i) all fees and disbursements incurred by
counsel for the Underwriters and (ii) all stamp duties, similar taxes or duties
or other taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program.]
6. Expenses. The Company will pay all costs and expenses incident to
the performance of the obligations of the Company under this Agreement, whether
or not the transactions contemplated hereby are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including, without limitation, all
costs and expenses incident to (i) the printing of and mailing expenses
associated with the Registration Statement, the Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto, this Agreement, the
Agreement among Underwriters, the Underwriters' Questionnaire submitted to each
of the Underwriters by the Representative(s) in connection herewith, the power
of attorney executed by each of the Underwriters in favor of Advest, Inc. in
connection herewith, the Dealer Agreement and related documents (collectively,
the "Underwriting Documents") and the preliminary Blue Sky memorandum relating
to the offering prepared by Xxxxx Xxxxxx & Xxxxxx, LLP, counsel to the
Underwriters (collectively with any supplement thereto, the "Preliminary Blue
Sky Memorandum"); (ii) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation and, if
applicable, filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus, the Prospectus and any amendments and
supplements thereto, the Underwriting Documents and the Preliminary Blue Sky
Memorandum; (iii) the delivery of copies of the foregoing documents to the
Underwriters; (iv) the filing fees of the Commission and the NASD relating to
the Shares; (v) the preparation, issuance and delivery to the Underwriters of
any certificates evidencing the Shares, including transfer agent's and
registrar's fees; (vi) the qualification of the Shares for offering and sale
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters (and local counsel therefor)
relating thereto; (vii) any listing of the Shares on the NASDAQ-National Market
System; (viii) any expenses for travel, lodging and meals incurred by the
Company and any of its officers, directors and employees in connection with any
meetings with prospective investors in the Shares; (ix) the costs of advertising
the offering, including, without limitation, with respect to the placement of
"tombstone" advertisements in publications selected by the Representative; (x)
all other costs and expenses reasonably incident to the performance of the
Company's obligations hereunder that are not otherwise specifically provided for
in this Section 6; [and (xi) any fees and disbursements incurred by counsel for
the Underwriters and all stamp duties, similar tax or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share
Program.]
7. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of each of the Company and the Bank contained
herein as of the date hereof and as of such Time of Delivery, to the accuracy of
the
14
statements of the Company's officers made pursuant to the provisions hereof, to
the performance by the Company of its covenants and agreements hereunder, and to
the following additional conditions precedent:
(a) If the registration statement as amended to date has not become
effective prior to the execution of this Agreement, such registration statement
shall have been declared effective not later than 11:00 a.m., Hartford,
Connecticut time, on the date of this Agreement or such later date and/or time
as shall have been consented to by you in writing. If required, the Prospectus
and any amendment or supplement thereto shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing and in accordance with Section 5(a) of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceedings for that purpose shall have
been instituted, threatened or, to the knowledge of the Company and the
Representative, contemplated by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction.
(b) The Representative shall have received a copy of an executed
lock-up agreement from the Company and each of the Company's officers and
directors and certain shareholders of Common Stock.
(c) You shall have received an opinion, dated such Time of Delivery, of
Xxxxxxxx, Xxxxxxx & Xxxxxxx, counsel for the Company, in form and substance
satisfactory to you and your counsel, to the effect that:
(1) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the State of Maine and has the corporate power and authority
to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and
to enter into this Agreement and perform its obligations
hereunder. The Company is duly qualified to transact business
as a foreign corporation and is in good standing under the
laws of each other jurisdiction in which it owns or leases
property, or conducts any business, so as to require such
qualification, except where the failure to so qualify would
not have a material adverse effect on the financial position,
results of operations or business of the Company and its
subsidiaries taken as a whole.
(2) Each of the Company's subsidiaries is validly existing as
a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement and the
Prospectus. Each subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing
under the laws of each other jurisdiction in which it owns or
leases property, or conducts any business, so as to require
such qualification, except where the failure to so qualify
would not have a material adverse effect on the financial
position, results of operations or business of the Company and
its subsidiaries taken as a whole.
15
(3) The Company's authorized, issued and outstanding capital
stock is as disclosed in the Prospectus. All of the issued
shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Common
Stock contained in the Prospectus. None of the issued shares
of Common Stock of the Company or capital stock of any of its
subsidiaries has been issued or is owned or held in violation
of any statutory (or, to the knowledge of such counsel, any
other) preemptive rights of shareholders, and no person or
entity (including any holder of outstanding shares of Common
Stock of the Company or capital stock of its subsidiaries) has
any statutory (or, to the knowledge of such counsel, any
other) preemptive or other rights to subscribe for any of the
Shares.
(4) All of the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and, to such
counsel's knowledge, are owned beneficially by the Company or
its subsidiaries, free and clear of all liens, security
interests, pledges, charges, encumbrances, shareholders'
agreements, voting agreements, proxies, voting trusts,
defects, equities or claims of any nature whatsoever
(collectively, "Encumbrances"), including, without limitation,
any Encumbrance arising or resulting from any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement of or entered into by the Company or its
subsidiaries. To such counsel's knowledge, other than the
subsidiaries listed on Exhibit 21 to the Registration
Statement and on Exhibit A hereto and the equity securities
held in the investment portfolios of the Company and such
subsidiaries and except as otherwise disclosed in the
Prospectus, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other
corporation or any ownership interest in any partnership,
joint venture or other association.
(5) Except as disclosed in the Prospectus, there are, to such
counsel's knowledge, no outstanding (A) securities or
obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the
Company or any subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any of its
subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations or (C) obligations of
the Company or any of its subsidiaries to issue any shares of
capital stock, any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options.
(6) When the Shares to be sold by the Company have been duly
delivered against payment therefor as contemplated by this
Agreement, the Shares will be duly authorized, validly issued
and fully paid and nonassessable, the holders thereof will not
be subject to personal liability solely by reason of being
such holders and the Shares will conform to the description of
the Common Stock contained in the Prospectus; the certificates
evidencing the Shares will comply with all applicable
requirements of Maine law.
(7) There are no contracts, agreements or understandings known
to such counsel between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Act with respect to any
securities of
16
the Company owned or to be owned by such person or, requiring
the Company to include such securities in the securities
registered pursuant to the Registration Statement (or any such
right has been effectively waived) or requiring the
registration of any securities pursuant to any other
registration statement filed by the Company under the Act.
(8) To such counsel's knowledge, neither the Company nor any
of its subsidiaries is, or with the giving of notice or
passage of time or both, would be, in violation of its
articles of incorporation or bylaws, in each case as amended
to date, or, in default in any material respect under any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or to which
any of their respective properties or assets is subject.
(9) The sale of the Shares being sold at such Time of Delivery
and the performance of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or
violate any provision of the articles of incorporation or
bylaws of the Company or any of its subsidiaries, in each case
as amended to date, or to such counsel's knowledge, any
existing law, statute, rule or regulation, or in any material
respect, conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries
is a party or to which any of their respective properties or
assets is subject, or, conflict with or violate any order,
judgment or decree known to such counsel, of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective
properties or assets.
(10) To such counsel's knowledge, no consent, approval,
authorization, order or declaration of or from, or
registration, qualification or filing with, any court or
governmental agency or body is required for the sale of the
Shares or the consummation of the transactions contemplated by
this Agreement, except such as have been or will have been
obtained and are or will be in effect, and except the
registration of the Shares under the Act, of Common Stock
under the Exchange Act and such as may be required by the NASD
or under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the
Underwriters.
(11) To such counsel's knowledge and other than as disclosed
in or contemplated by the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened, in which the Company or
any of its subsidiaries is a party or of which any of their
respective properties or assets is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the financial position, results of
operations or business of the Company and its subsidiaries
taken as a whole; and, to such counsel's knowledge, neither
the Company nor any of its subsidiaries is in violation of,
17
or in default with respect to, any law, statute, rule,
regulation, order, judgment or decree, except as described in
the Prospectus or such as do not and will not individually or
in the aggregate have a material adverse effect on the
financial position, results of operations or business of the
Company and its subsidiaries taken as a whole, nor is the
Company or any of its subsidiaries required to take any action
in order to avoid any such violation or default.
(12) The statements in the Prospectus under "Business -- Legal
Proceedings," "Description of Securities", "Supervision and
Regulation" and "Shares Eligible for Future Sale" have been
reviewed by such counsel, and insofar as they refer to
statements of law, descriptions of statutes, licenses, rules
or regulations, or legal conclusions, are correct in all
material respects.
(13) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Bank and, assuming
due execution by the Representative of the Underwriters,
constitutes the valid and binding agreement of each of the
Company and the Bank, enforceable against each of the Company
and the Bank in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to
or affecting the enforcement of creditors' rights generally
and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities laws
or the public policy underlying such laws.
(14) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an
investment company as such terms are defined in Sections 3(a)
and 2(a)(9), respectively, of the Investment Company Act.
(15) To such counsel's knowledge, the Company and its
subsidiaries have received all permits, licenses, franchises,
authorizations, registrations, qualifications and approvals
(collectively, "permits") of governmental or regulatory
authorities (including, without limitation, state and federal
bank and bank holding company regulatory authorities) as may
be required of them to own their properties and to conduct
their businesses in the manner described in the Prospectus,
subject to such qualification as may be set forth in the
Prospectus; to such counsel's knowledge, the Company and its
subsidiaries have fulfilled and performed all of their
material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time or
both would allow, revocation or termination thereof or result
in any other material impairment of the rights of the holder
of any such permits, subject in each case to such
qualifications as may be set forth in the Prospectus; and
other than as described in the Prospectus, such permits
contain no restrictions that materially affect the ability of
the Company and its subsidiaries to conduct their businesses.
(16) The Registration Statement and the Prospectus and each
amendment or supplement thereto (other than the financial
statements, the notes and schedules thereto and other
financial data included therein, to which such counsel need
express no
18
opinion), as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act and the respective rules and
regulations thereunder. The descriptions in the Registration
Statement and the Prospectus of contracts and other documents
are accurate and fairly present the information required to be
shown; and such counsel do not know of any contracts or
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described
and filed as required.
Such counsel shall also state that they have participated in the
preparation of the Registration Statement and the Prospectus and in conferences
with officers and other representatives of the Company, representatives of the
independent public accountants for the Company, and representatives of and
counsel to the Underwriters at which the contents of the Registration Statement,
the Prospectus and related matters were discussed and, although such counsel has
not passed upon or assumed any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, and although such counsel has not undertaken to verify independently
the accuracy or completeness of the statements in the Registration Statement or
the Prospectus, nothing has come to such counsel's attention to lead them to
believe that the Registration Statement, or any further amendment thereto made
prior to such Time of Delivery, on its effective date and as of such Time of
Delivery, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading, or that the
Prospectus, or any amendment or supplement thereto made prior to such Time of
Delivery, as of its issue date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (provided that such
counsel need express no belief regarding the financial statements, the notes and
schedules thereto and other financial data contained in the Registration
Statement, any amendment thereto, or the Prospectus, or any amendment or
supplement thereto).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of officers of
the Company, public officials and letters from officials of the NASD and such
counsel may rely as to matters governed by the laws of Maine on the opinion of
Xxxxxx & Xxxxxxxx, LLC, counsel to the Company. Copies of such certificates of
officers of the Company and other opinions shall be addressed and furnished to
the Underwriters and furnished to counsel for the Underwriters.
(d) Xxxxx Xxxxxx & Xxxxxx, LLP, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to the incorporation of the Company, the validity of the Shares
being delivered at such Time of Delivery, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters. Such opinion or opinions
may be rendered in reliance upon the opinion of Xxxxxx & Xxxxxxxx, LLC as to
matters governed by Maine law.
19
(e) The Representative shall have received, on each of the date hereof
and the Closing Date, as the case may be, in form and substance satisfactory to
the Representative, from Berry, Dunn, XxXxxx & Xxxxxx, independent public
accountants, a letter or letters, as the case may be, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and Prospectus; provided
that the letter or letters, as the case may be, delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) Since the date of the latest audited financial statements included
in the Prospectus, neither the Company nor any of the Subsidiaries shall have
sustained any change, or any development involving a prospective change
(including, without limitation, a change in management or control of the
Company), in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and its subsidiaries,
otherwise than as disclosed in or contemplated by the Prospectus, the effect of
which, in either such case, in your sole judgment makes it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the Shares being
delivered at such Time of Delivery as contemplated by the Registration
Statement, as amended as of the date hereof.
(g) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) any suspension or limitation in trading in securities
generally on the New York Stock Exchange, and/or the American Stock Exchange or
any setting of minimum prices for trading on such exchange, or in the Common
Stock of the Company by the Commission or; (ii) a moratorium on commercial
banking activities in New York, Maine or Connecticut declared by either federal
or state authorities; or (iii) any outbreak or escalation of hostilities
involving the United States, declaration by the United States of a national
emergency or war or any other national or international calamity or emergency if
the effect of any such event specified in this clause (iii) in your sole
judgment makes it impracticable or inadvisable to proceed with the purchase,
sale and delivery of the Shares being delivered at such Time of Delivery as
contemplated by the Registration Statement, as amended as of the date hereof.
(h) The Company shall have furnished to you at such Time of Delivery
certificates of the chief executive and chief financial officers of the Company
satisfactory to you, as to the accuracy of the respective representations and
warranties of the Company herein at and as of such Time of Delivery with the
same effect as if made at such Time of Delivery, as to the performance by the
Company of all of its respective obligations hereunder to be performed at or
prior to such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates of such officers as to such matters as you may reasonably
request.
(i) The representations and warranties of each of the Company and the
Bank in this Agreement and in the certificates delivered by the Company pursuant
to this Agreement shall be true and correct in all material respects when made
and on and as of each Time of Delivery as if made at such time, and each of the
Company and the Bank shall have performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be performed or
satisfied by each of the Company and the Bank at or before such Time of
Delivery.
20
8. Indemnification and Contribution.
(a) Each of the Company and the Bank agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement made by the Company or the Bank in Section 1 of this
Agreement; (ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or (B) any application or other document, or amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Shares
under the securities or blue sky laws thereof or filed with the Commission or
any securities association or securities exchange (each an "Application"); or
(iii) the omission of or alleged omission to state in the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or any Application of a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither the Company nor the
Bank shall be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use therein (which information is solely
as set forth in Section 1(c) hereof). Neither the Company nor the Bank will,
without the prior written consent of the Representative, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in respect of
which indemnification may be sought hereunder (whether or not any Underwriter is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
[(b) The Company agrees to indemnify and hold harmless Advest and each
person, if any, who controls Advest within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act ("Advest Entities"), against any and
all losses, claims, damages or liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim): (i) that arises out of or is based upon
any untrue statement or alleged untrue statement of any material fact contained
in the prospectus wrapper material prepared by or with the consent of the
Company for distribution in foreign jurisdictions in connection with the
Directed Share Program attached to the Prospectus or Preliminary Prospectus or
any amendment or supplement thereto or caused by any omission of or alleged
omission to state in the Prospectus or Preliminary Prospectus or any amendment
or supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of the Shares which,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase; or (iii) related to,
arising out of, or in connection with the Directed Share Program, provided that
the Company shall not be
21
responsible under this subsection 8(b) for any losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of Advest
Entities.]
(c) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company and the Bank against any losses, claims, damages
or liabilities to which the Company and/or the Bank may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, or any Application or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company and/or the Bank by such Underwriter through you expressly for use
therein (which information is solely as set forth in Section 1(c) hereof); and
will reimburse the Company and the Bank for any legal or other expenses
reasonably incurred by the Company and/or the Bank in connection with
investigating or defending any such loss, claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than under such subsection
(a), (b) or (c). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party); provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party and such
indemnified party shall have the right to select separate counsel to defend such
action on behalf of such indemnified party. After such notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. Nothing in this
Section 8(c) shall preclude an indemnified party from participating at its own
expense in the defense of any such action so assumed by the indemnifying party.
[Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to section 8(b) hereof in respect of such action or proceeding,
then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of
counsel for Advest for the defense of any losses,
22
claims, damages and liabilities arising out of the Directed Share Program, and
all persons, if any, who control Advest within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act.]
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (d) above, 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 benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. 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 Company on the one hand
or the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) 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 or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and employee of
the Underwriters and to each person, if any, who controls any Underwriter within
the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise
23
have and shall extend, upon the same terms and conditions, to each officer,
trustee and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
9. Default of Underwriters.
(a) If any Underwriter defaults in its obligation to purchase Shares at
a Time of Delivery, you may in your discretion arrange for you or another party
or other parties to purchase such Shares on the terms contained herein within
thirty-six (36) hours after such default by any Underwriter. In the event that,
within the respective prescribed period, you notify the Company that you have so
arranged for the purchase of such Shares, you shall have the right to postpone a
Time of Delivery for a period of not more than seven (7) days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in your opinion may thereby be made necessary. The cost of
preparing, printing and filing any such amendments shall be paid for by the
Underwriters. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you as provided in
subsection (a) above, if any, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh (1/11) of the aggregate number of
Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
10. Termination.
(a) This Agreement may be terminated in the sole discretion of the
Representative by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that (i)
any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused or
been unable to deliver the Shares or the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior to such Time of Delivery, in
either case other than by reason of a default by any of the Underwriters. If
this Agreement is terminated pursuant to this Section 10(a), the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you as provided in Section
9(a), the aggregate number of such Shares
24
which remains unpurchased exceeds one-eleventh (1/11) of the aggregate number of
Shares to be purchased at such Time of Delivery, then this Agreement (or, with
respect to a Subsequent Time of Delivery, the obligations of the Underwriters to
purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company, and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. Survival. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers, the Bank and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person
referred to in Section 8(f) or the Company, or any officer, trustee or director
or controlling person of the Company referred to in Section 8(f), and shall
survive delivery of and payment for the Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
12. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to you in care of Advest, Inc., Xxx Xxxxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx X. Xxxxxx (with a
copy to Xxxxx Xxxxxx & Xxxxxx, LLP, CityPlace I - 00xx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxx, III, Esq.; if to the
Company, shall be sufficient in all respects if mailed, delivered or telegraphed
and confirmed in writing to Xxxxxxx Merchants Bancshares, Inc., 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxx (with a copy to Xxxxxxxx, Xxxxxxx
& Xxxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxx, III, Esq.).
13. Binding Effect. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and the Bank and to the
extent provided in Sections 8 and 10 hereof, the officers, trustees, directors
and employees and controlling persons referred to therein and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to any
provisions regarding conflicts of laws.
15. Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereof by Advest, Inc., on behalf of each of the Underwriters,
this letter will constitute a binding agreement among the Underwriters, the
Company and the Bank. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in the
Agreement among Underwriters, a copy of which shall be submitted to the Company
and the Bank for examination, upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
XXXXXXX MERCHANTS BANCSHARES, INC.
By: ______________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
New York, New York.
ADVEST, INC.
By: _____________________________________
Name:
Title:
On behalf of each of the Undewriters.
26
SCHEDULE I
Underwriter Total Number of Firm Shares Number of Optional
----------- to be Purchased Shares to be Purchased if
--------------------------- Maximum Option
Exercised
-------------------------
Advest, Inc.
27
EXHIBIT A
SUBSIDIARIES
------------
1. Xxxxxxx Merchants Bank
28
