Exhibit 1.2
8,314,500 Shares
(subject to increase up to 9,561,675 shares
in the event of an oversubscription)
BERKSHIRE HILLS BANCORP, INC.
(a Delaware corporation)
Common Stock
(par value $10 per share)
AGENCY AGREEMENT
May ___, ▇▇▇▇
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & Partners, L.P.
Two World Trade Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Berkshire Bancorp, Inc., a Massachusetts-chartered mutual holding company
(the "Mutual Holding Company"), and Berkshire Bank, a Massachusetts-chartered
savings bank (the "Bank"), hereby confirm their agreement with Sandler ▇'▇▇▇▇▇ &
Partners, L.P. ("Sandler ▇'▇▇▇▇▇" or the "Agent") with respect to the offer and
sale by Berkshire Hills Bancorp, Inc. (the "Company") of 8,314,500 shares
(subject to increase up to 9,561,675 shares in the event of an oversubscription)
of the Company's Common Stock, par value $.01 per share (the "Common Stock").
The shares of Common Stock to be sold by the Company are hereinafter called the
"Securities." In addition, as described herein, the Company expects to
contribute shares of Common Stock in an amount equal to 8% of the shares of
Common Stock sold in the Offerings (as hereinafter defined) to the Berkshire
Hills Foundation (the "Foundation"), such shares hereinafter being referred to
as the "Foundation Shares."
The Securities are being offered for sale and the Foundation Shares are
being contributed in accordance with the plan of conversion (the "Plan") adopted
by the Board of Directors of the Company pursuant to which the Mutual Holding
Company will cease to exist and the newly formed Company will offer for sale
certain shares of its common stock to the Bank's eligible account holders in a
Subscription Offering, to members of the Bank's community in a Direct Community
Offering and, under certain circumstances, to the general public in a Syndicated
Community Offering (collectively, the "Offerings"). Pursuant to the Plan, the
Company is offering to the Bank's tax qualified employee benefit plan, the
Employee Stock Ownership Plan (the "ESOP") and to certain of the Bank's
depositors rights to subscribe for the Securities in a subscription offering
(the
"Subscription Offering"). To the extent Securities are not subscribed for in the
Subscription Offering, such Securities may be offered to certain members of the
general public, with preference given to residents of Berkshire County,
Massachusetts, in a direct community offering (the "Community Offering" and
together with the Subscription Offering, as each may be extended or reopened
from time to time, the "Subscription and Community Offering") to be commenced
concurrently with the Subscription Offering. It is currently anticipated by the
Bank and the Company that any Securities not subscribed for in the Subscription
and Community Offering will be offered, subject to Section 2 hereof, in a
syndicated community offering (the "Syndicated Community Offering"). The
Subscription Offering and the Syndicated Community Offering are hereinafter
referred to collectively as the "Offerings," and the acquisition of the capital
stock of the Bank by the Company and the Offerings are hereinafter referred to
collectively as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Conversion may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to the
approval of the establishment of the Foundation by the Corporators of the Bank
and compliance with certain conditions as may be imposed by regulatory
authorities, the Company will contribute newly issued shares of Common Stock in
an amount equal to 8% of the Securities sold in the Offering, or between 491,640
and 665,160 shares of Common Stock (subject to increase in certain circumstances
to 764,934 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-____), including a
related prospectus, for the registration of the Securities and the Foundation
Shares under the Securities Act of 1933, as amended (the "Securities Act"), has
filed such amendments thereto, if any, and such amended prospectuses as may have
been required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) or (c) of the Securities Act
Regulations), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Agent for such use.
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Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company and the Common Stock.
SECTION 1. Representations and Warranties.
(a) The Company and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by
the Commission, no stop order has been issued with respect
thereto and no proceedings therefor have been initiated or, to
the knowledge of the Company and the Bank, threatened by the
Commission. At the time the Registration Statement became
effective and at the Closing Time referred to in Section 2
hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities
Act and the Securities Act Regulations and did not and will not
contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, at
the date hereof does not and at the Closing Time referred to in
Section 2 hereof will not, include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the
Agent furnished to the Company in writing by the Agent
expressly for use in the Registration Statement or Prospectus
(the "Agent Information," which the Company and the Bank
acknowledge appears only in the sections captioned "Market for
Common Stock" and the first three paragraphs of the section
"The Conversion-Plan of Distribution for the Subscription,
Direct Community and Syndicated Community Offerings" of the
Prospectus).
(ii) The Company has filed with the Department of the Treasury,
Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the
"Holding Company Application") on Form H-(e)1-S promulgated
under the savings and loan holding company provisions of the
Home Owners' Loan Act, as amended ("HOLA") and the regulations
promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank,
such approval remains in full force and effect and no order has
been issued by the OTS suspending or revoking such approval and
no proceedings therefor have been initiated or, to the
knowledge of the Company or the Bank, threatened by the OTS. At
the date of such approval and at the Closing Time referred
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to in Section 2, the Holding Company Application complied and will
comply in all material respects with the applicable provisions of HOLA
and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the Massachusetts
Division of Banks (the "Division") governing the conversion of
Massachusetts chartered mutual savings banks to stock form (the
"Conversion Regulations"), the Bank has filed with the Division an
application for conversion, and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof
(such application, as amended to date, if applicable, and as from time
to time amended or supplemented hereafter, is hereinafter referred to
as the "Conversion Application"), including copies of the Bank's
Notice and Information Statement, dated _________, 2000, relating to
the Conversion (the "Information Statement"), and the Prospectus. The
Division has, by letter dated _______, 2000, approved the Conversion
Application, such approval remains in full force and effect and no
order has been issued by the Division suspending or revoking such
approval and no proceedings therefor have been initiated or, to the
knowledge of the Company or the Bank, threatened by the Division. At
the date of such approval and at the Closing Time referred to in
Section 2, the Conversion Application complied and will comply in all
material respects with the applicable provisions of the Conversion
Regulations.
(iv) At the time of their use, the Information Statement will
comply in all material respects with the applicable provisions of the
Conversion Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Company and the Bank will
promptly file the Prospectus and any supplemental sales literature
with the Commission, the Division and the Federal Deposit Insurance
Corporation (the "FDIC"), as requested by the Commission, Division,
and FDIC. The Prospectus and all supplemental sales literature, as of
the date the Registration Statement became effective and at the
Closing Time referred to in Section 2, complied and will comply in all
material respects with the applicable requirements of the Conversion
Regulations and, at or prior to the time of their first use, will have
received all required authorizations of the Division and the FDIC for
use in final form.
(v) Neither the Commission, the Division nor the FDIC has, by
order or otherwise, prevented or suspended the use of the Prospectus
or any supplemental sales literature authorized by the Company or the
Bank for use in connection with the Offerings.
(vi) At the Closing Time referred to in Section 2, the Company
and the Bank will have completed the conditions precedent to the
Conversion and
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the establishment of the Foundation in accordance with the Plan, the
applicable Conversion Regulations and all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Conversion
imposed upon the Company or the Bank by the OTS, the Division, the
FDIC, or any other regulatory authority, other than those which the
regulatory authority permits to be completed after the Conversion.
(vii) FinPro, Inc., which prepared the valuation of the Bank as
part of the Conversion, has advised the Company and the Bank in
writing that it satisfies all requirements for an appraiser set forth
in the Conversion Regulations and any interpretations or guidelines
issued by the Division and the FDIC with respect thereto.
(viii) The accountants who certified the consolidated financial
statements and supporting schedules of the Bank included in the
Registration Statement have advised the Company and the Bank in
writing that they are independent public accountants within the
meaning of the Code of Ethics of the American Institute of Certified
Public Accountants (the "AICPA"), and such accountants are, with
respect to the Company, the Bank and each subsidiary of the Bank,
independent certified public accountants as required by the Securities
Act and the Securities Act Regulations.
(ix) The only subsidiaries of the Bank are G.B.S.B., Inc. and
North Street Securities Corporation.
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus
present fairly the financial position of the Company, the Bank and its
consolidated subsidiaries at the dates indicated and the results of
operations, retained earnings and cash flows for the periods
specified, and comply as to form in all material respects with the
applicable accounting requirements of the Securities Act Regulations
and the Conversion Regulations; except as otherwise stated in the
Registration Statement, said financial statements have been prepared
in conformity with generally accepted accounting principles applied on
a consistent basis; and the supporting schedules and tables included
in the Registration Statement present fairly the information required
to be stated therein.
(xi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations or business affairs of the
Company, the Bank and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and (B)
except for transactions specifically referred to or contemplated in
the Prospectus, there have been no transactions
5
entered into by the Company, the Bank or any of its subsidiaries,
other than those in the ordinary course of business, which are
material with respect to the Company, the Bank and its subsidiaries,
considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of Delaware
and in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and its
subsidiaries, considered as one enterprise.
(xiii) Upon consummation of the Conversion and the contribution
of the Foundation Shares as described in the Prospectus, the
authorized, issued and outstanding capital stock of the Company will
be as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus); no shares of
Common Stock have been or will be issued and outstanding prior to the
Closing Time referred to in Section 2; at the time of Conversion, the
Securities will have been duly authorized for issuance and, when
issued and delivered by the Company pursuant to the Plan against
payment of the consideration calculated as set forth in the Plan and
stated on the cover page of the Prospectus, will be duly and validly
issued and fully paid and non-assessable; the terms and provisions of
the Common Stock and the capital stock of the Company conform to all
statements relating thereto contained in the Prospectus; the
certificates representing the shares of Common Stock conform to the
requirements of applicable law and regulations; and the issuance of
the Securities is not subject to preemptive or other similar rights.
(xiv) The Bank, as of the date hereof, is a Massachusetts chartered
savings bank in stock form with full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Company, the Bank and its
subsidiaries have obtained all licenses, permits and other
governmental authorizations currently required for the conduct of
their respective businesses or required for the conduct of their
respective businesses as contemplated by the Holding Company
Application and the Conversion Application, except where the failure
to obtain such licenses, permits or other governmental authorizations
would not have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, the Bank and
its subsidiaries considered as
6
one enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the Bank
and its subsidiaries are in all material respects in compliance
therewith; none of the Company, the Bank nor any of the Bank's
subsidiaries has received notice of any proceeding or action relating
to the revocation or modification of any such license, permit or other
governmental authorization which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, might have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and its
subsidiaries considered as one enterprise; and the Bank is in good
standing under the laws of the Commonwealth of Massachusetts and is
qualified as a foreign corporation to transact business in any
jurisdiction in which the failure to so qualify would have a material
adverse effect on the financial condition, results of operations or
business affairs of the Company, the Bank and its subsidiaries
considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC up
to the applicable limits and upon consummation of the Conversion, the
liquidation account for the benefit of eligible account holders and
supplemental eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations. The
Bank is a "qualified thrift lender" within the meaning of 12 U.S.C.
Section 1467a(m).
(xvi) The authorized capital stock of the Bank is ________
shares of common stock, par value $___ per share (the "Bank Common
Stock") and ________ shares of preferred stock, par value $____ per
share (the "Bank Preferred Stock"), and the issued and outstanding
capital stock of the Bank is ____________ shares of Bank Common Stock
and no shares of the Bank Preferred Stock, and no additional shares of
Bank Common Stock or Bank Preferred Stock have been or will be issued
prior to the Closing time referred to in Section 2; and as of Closing
Time referred to in Section 2, all of the issued and outstanding
capital stock of the Bank will be duly authorized, validly issued and
fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws. The shares of Bank Common
Stock to be issued to the Company will have been duly authorized for
issuance and, when issued and delivered by the Bank pursuant to the
Plan against payment of the consideration calculated as set forth in
the Plan and as described in the Prospectus, will be ▇▇▇▇▇ and validly
issued and fully paid and nonassessable, and all such Bank Common
Stock will be owned beneficially and of record by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance or
legal or equitable claim; the terms and provisions of the Bank Common
Stock and the Bank Preferred Stock conform to all statements relating
thereto contained in the Prospectus, and the certificates representing
the shares of the Bank Common Stock will conform with the requirements
of applicable laws and regulations; and the
7
issuance of the Bank Common Stock is not subject to preemptive or
similar rights.
(xvii) The Foundation has been duly authorized and incorporated and
is validly existing as a non stock corporation in good standing under
the laws of the State of Delaware with corporate power and authority
to own, lease and operate its properties and to conduct its business
as described in the Prospectus; the Foundation will not be a savings
and loan holding company withing the meaning of 12 C.F.R. Section
574.2(q) as a result of the issuance of shares of Common Stock to it
in accordance with the terms of the Plan and in the amounts as
described in the Prospectus; no approvals are required to establish
the Foundation and to contribute the shares of Common Stock thereto as
described in the Prospectus other than those imposed by the Division
and the FDIC; except as specifically disclosed in the Prospectus and
the Proxy Statement, there are no agreements and/or understandings,
written or oral, between the Company and/or the Bank and the
Foundation with respect to the control, directly or indirectly, over
the voting and the acquisition or disposition of the Foundation
Shares; at the time of the Conversion, the Foundation Shares will have
been duly authorized for issuance and, when issued and contributed by
the Company pursuant to the Plan, will be duly and validly issued and
fully paid and non-assessable; and the issuance of the Foundation
Shares is not subject to preemptive or similar rights.
(xviii) Each direct and indirect subsidiary of the Bank has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the financial condition, results of operations or business
affairs of the Company, the Bank and its subsidiaries considered as
one enterprise; the activities of each such subsidiary are permitted
to subsidiaries of a Massachusetts chartered savings bank; all of the
issued and outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is fully paid and nonassessable
and is owned by the Bank, directly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim.
(xix) The Company and the Bank have taken all corporate action
necessary for them to execute, deliver and perform this Agreement, and
this Agreement has been duly executed and delivered by, and is the
valid and binding agreement of, the Company and the Bank, enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other laws
8
affecting the enforceability of the rights of creditors generally and
judicial limitations on the right of specific performance and except
as the enforceability of indemnification and contribution provisions
may be limited by applicable securities laws.
(xx) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to
the Closing Time, except as otherwise may be indicated or contemplated
therein, none of the Company, the Bank or any subsidiary of the Bank
will have (A) issued any securities or incurred any liability or
obligation, direct or contingent, or borrowed money, except borrowings
in the ordinary course of business from the same or similar sources
and in similar amounts as indicated in the Prospectus, or (B) entered
into any transaction or series of transactions which is material in
light of the business of the Company, the Bank and its subsidiaries,
taken as a whole, excluding the origination, purchase and sale of
loans or the purchase or sale of investment securities or mortgaged-
backed securities in the ordinary course of business.
(xxi) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Securities and the
Foundation Shares that has not been obtained and a copy of which has
been delivered to the Agent, except as may be required under the
securities laws of various jurisdictions.
(xxii) None of the Company, the Bank nor any of the Bank's
subsidiaries is in violation of its certificate of incorporation,
organization certificate, articles of incorporation or charter, as the
case may be, or bylaws (and the Bank will not be in violation of its
charter or bylaws in stock form upon consummation of the Conversion);
and neither the Company, the Bank nor any of the Bank's subsidiaries
is in default (nor has any event occurred which, with notice or lapse
of time or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, the Bank or any of its
subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company, the Bank or any
of its subsidiaries is subject, except for such defaults that would
not, individually or in the aggregate, have a material adverse effect
on the financial condition, results of operations or business of the
Company, the Bank and its subsidiaries considered as one enterprise;
and there are no contracts or documents of the Company, the Bank or
any of the Bank's subsidiaries which are required to be filed as
exhibits to the Registration Statement or the Conversion Application
which have not been so filed.
(xxiii) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein
have been duly
9
authorized by all necessary corporate action and do not and will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Bank or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
Bank or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such
defaults that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank and its
subsidiaries considered as one enterprise; nor will such action result
in any violation of the provisions of the certificate of
incorporation, organization certificate, articles of incorporation or
charter or by-laws of the Company, the Bank or any of its
subsidiaries, or any applicable law, administrative regulation or
administrative or court decree.
(xxiv) No labor dispute with the employees of the Company, the
Bank or any of its subsidiaries exists or, to the knowledge of the
Company or the Bank, is imminent or threatened; and the Company and
the Bank are not aware of any existing or threatened labor disturbance
by the employees of any of its principal suppliers or contractors
which might be expected to result in any material adverse change in
the financial condition, results of operations or business affairs of
the Company, the Bank and its subsidiaries considered as one
enterprise.
(xxv) Each of the Company, the Bank and its subsidiaries have
good and marketable title to all properties and assets for which
ownership is material to the business of the Company, the Bank or its
subsidiaries and to those properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or are not material in relation to the business of the
Company, the Bank or its subsidiaries considered as one enterprise;
and all of the leases and subleases material to the business of the
Company, the Bank or its subsidiaries under which the Company, the
Bank or its subsidiaries hold properties, including those described in
the Prospectus, are valid and binding agreements of the Company, the
Bank and its subsidiaries, enforceable in accordance with their terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general applicability
relating to or affecting creditors' rights or general principles of
equity).
(xxvi) None of the Company, the Bank nor its subsidiaries are in
violation of any directive from the OTS, the Division or the FDIC to
make any material change in the method of conducting their respective
businesses; the Bank and its subsidiaries have conducted and are
conducting their business so as to comply in all material respects
with all applicable statutes, regulations and
10
administrative and court decrees (including, without limitation, all
regulations, decisions, directives and orders of the OTS, the Division
or the FDIC).
(xxvii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Bank, threatened,
against or affecting the Company, the Bank or any of its subsidiaries
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which might result in any material
adverse change in the financial condition, results of operations or
business affairs of the Company, the Bank and its subsidiaries
considered as one enterprise, or which might materially and adversely
affect the properties or assets thereof or which might materially and
adversely affect the consummation of the Conversion; all pending legal
or governmental proceedings to which the Company, the Bank or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are considered in the aggregate not material; and there are
no contracts or documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registration
Statement or the Conversion Application which have not been so filed.
(xxviii) The Bank has obtained an opinion of its counsel, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, with respect to the legality of the Securities
to be issued and the federal income tax consequences of the
Conversion, copies of which are filed as exhibits to the Registration
Statement. The federal income tax consequences of the Foundation and
the Commonwealth of Massachusetts income tax consequences will be
passed upon by Wolf & Company, P.C. ("Wolf"), all material aspects of
the aforesaid opinions are accurately summarized in the Prospectus;
the facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects; and neither
the Bank nor the Company has taken or will take any action
inconsistent therewith.
(xxix) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxx) All of the loans represented as assets on the most recent
consolidated financial statements or consolidated selected financial
information of the Bank included in the Prospectus meet or are exempt
from all requirements of federal, state or local law pertaining to
lending, including without limitation truth in lending (including the
requirements of Regulations Z and 12 C.F.R. Part 226 and Section
563.99), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws
applicable to such loans, except for violations which, if asserted,
would not result in a material adverse effect on the financial
condition, results of operations or
11
business of the Company, the Bank and its subsidiaries considered as
one enterprise.
(xxxi) To the knowledge of the Company and the Bank, with the
exception of the intended loan to the Bank's ESOP by the Company to
enable the ESOP to purchase shares of Common Stock in an amount of up
to 8% of the Common Stock issued in the Conversion, none of the
Company, the Bank or employees of the Bank has made any payment of
funds of the Company or the Bank as a loan for the purchase of the
Common Stock or made any other payment of funds prohibited by law, and
no funds have been set aside to be used for any payment prohibited by
law.
(xxxii) The Company, the Bank and its subsidiaries are in compliance
in all material respects with the applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, and the rules and regulations
thereunder.
(xxxiii) None of the Company, the Bank nor its subsidiaries nor
any properties owned or operated by the Company, the Bank or its
subsidiaries is in violation of or liable under any Environmental Law
(as defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a material adverse
effect on the financial condition, results of operations or business
affairs of the Company, the Bank and the subsidiaries considered as
one enterprise. There are no actions, suits or proceedings, or
demands, claims, notices or investigations (including, without
limitation, notices, demand letters or requests for information from
any environmental agency) instituted or pending, or to the knowledge
of the Company or the Bank threatened, relating to the liability of
any property owned or operated by the Company, the Bank or the
subsidiaries thereof, under any Environmental Law. For purposes of
this subsection, the term "Environmental Law" means any federal,
state, local or foreign law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any regulatory
authority relating to (i) the protection, preservation or restoration
of the environment (including, without limitation, air, water, vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of any substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
12
(xxxiv) The Company, the Bank and its subsidiaries have filed
all federal income and state and local franchise tax returns required
to be filed and have made timely payments of all taxes shown as due
and payable in respect of such returns, and no deficiency has been
asserted with respect thereto by any taxing authority.
(xxxv) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the
Securities quoted on the National Market System of the National
Association of Securities Dealers' Automated Quotation System ("Nasdaq
National Market") effective as of the Closing Time referred to in
Section 2 hereof.
(xxxvi) The Company has filed a registration statement for the Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and such registration statement was
declared effective concurrent with the effectiveness of the
Registration Statement.
(b) Any certificate signed by any officer of the Company or the Bank and
delivered to either of the Agent to counsel for the Agent shall be deemed a
representation and warranty by the Company or the Bank to each Agent as to the
matters covered thereby.
SECTION 2. Appointment of Sandler ▇'▇▇▇▇▇; Sale and Delivery of the
Securities; Closing.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler ▇'▇▇▇▇▇ as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription and Community Offering and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler ▇'▇▇▇▇▇ accepts such
appointment and agrees to use its best efforts to assist the Company with the
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action which is inconsistent with any applicable laws, regulations,
decisions or orders. The services to be rendered by Sandler ▇'▇▇▇▇▇ pursuant to
this appointment include the following: (i) consulting as to the securities
marketing implications of any aspect of the Plan of Conversion or related
corporate documents; (ii) reviewing with the Board of Directors the independent
appraiser's appraisal of the common stock; (iii) reviewing all offering
documents, including the Prospectus, stock order form and related offering
materials (it being understood that preparation and filing of such documents is
the sole responsibility of the Company and the Bank and their counsel); (iv)
assisting in the design and implementation of a marketing strategy for the
Offerings; (v) assisting the Company and the Bank in obtaining all requisite
regulatory approvals; (vi) assisting Bank management in preparing for meetings
with potential investors and broker-dealers; and (vii) providing such other
general advice and assistance as may be requested to promote the successful
completion of the Offerings.
13
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the Shares
may be sold, or (b) the receipt and acceptance of subscriptions and purchase
orders for all of the Securities, or (c) the completion of the Syndicated
Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler ▇'▇▇▇▇▇ will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
▇'▇▇▇▇▇ will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to ▇▇▇▇▇▇
▇'▇▇▇▇▇ and Selected Dealers shall not exceed 7% of the aggregate Purchase Price
of the Securities sold by such Selected Dealers. ▇▇▇▇▇▇ ▇'▇▇▇▇▇ will endeavor
to distribute the Securities among the Selected Dealers in a fashion which best
meets the distribution objective of the Company and the requirements of the
Plan, which may result in limiting the allocation of stock to certain Selected
Dealers. It is understood that in no event shall Sandler ▇'▇▇▇▇▇ be obligated
to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing
the funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, at 10:00 a.m., local time, or at
such other place and time as shall be agreed upon by the parties hereto, on a
business day to be agreed upon by the parties hereto. The Company shall notify
the Agent by telephone, confirmed in writing, when funds shall have been
received for all the Securities. Certificates for Securities shall be delivered
directly to the purchasers thereof in accordance with their directions.
Notwithstanding the foregoing, certificates for Securities purchased through
Selected Dealers shall be made available to the Agent for inspection at least 48
hours prior to the Closing Time at such office as the Agent shall designate.
The hour and date upon
14
which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) One and one-half percent (1.5%) of the aggregate Purchase Price of
the Securities sold in the Subscription and Community Offering, excluding
in each case shares purchased by (i) any employee benefit plan of the
Company or the Bank established for the benefit of their respective
directors, officers and employees, (ii) by any charitable foundation formed
by the Bank or the Company in connection with the Conversion, and (iii) any
director, officer or employee of the Company or the Bank or members of
their immediate families (which term shall mean parents, grandparents,
spouse, siblings, children and grandchildren); and
(b) with respect to any Securities sold by an NASD member firm (other
than Sandler ▇'▇▇▇▇▇) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the compensation payable to Selected
Dealers under any Selected Dealers' Agreement, (ii) any sponsoring dealer's
fees; and (iii) a management fee to Sandler ▇'▇▇▇▇▇ of one and one-half
percent (1.5%).
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler ▇'▇▇▇▇▇; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $50,000, $25,000 of which has been previously paid and the
remaining $25,000 of which shall be payable upon execution hereof, which shall
be credited against any fees or reimbursement of expenses payable hereunder.
SECTION 3. Covenants of the Company. The Company and the Bank covenant
with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may
hereafter be requested by the Agent. Following completion of the
Subscription and Community Offering, in the event of a Syndicated Community
Offering, the Company and the Bank will (i) promptly prepare and file with
the
15
Commission a post-effective amendment to the Registration Statement
relating to the results of the Subscription and Community Offering, any
additional information with respect to the proposed plan of distribution
and any revised pricing information or (ii) if no such post-effective
amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information
relating to the results of the Subscription and Community Offering and
pricing information pursuant to Rule 424 of the Securities Act Regulations,
in either case in a form acceptable to the Agent. The Company and the Bank
will notify the Agent immediately, and confirm the notice in writing, (i)
of the effectiveness of any post-effective amendment of the Registration
Statement, the filing of any supplement to the Prospectus and the filing of
any amendment to the Conversion Application, (ii) of the receipt of any
comments from the Division, the FDIC or the Commission with respect to the
transactions contemplated by this Agreement or the Plan, (iii) of any
request by the Commission, the Division or the FDIC for any amendment to
the Registration Statement or the Conversion Application or any amendment
or supplement to the Prospectus or for additional information, (iv) of the
issuance by the Division or the FDIC of any order suspending the Offerings
or the use of the Prospectus or the initiation of any proceedings for that
purpose, (v) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, and (vi) of the receipt of any notice with
respect to the suspension of any qualification of the Securities for
offering or sale in any jurisdiction. The Company and the Bank will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the Securities Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
as the Agent may reasonably request, and from time to time such number of
copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the FDIC, the Division and by the
applicable Conversion Regulations, as from time to time in force, and by
the Securities Act, the Securities Act Regulations, the Securities
16
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission promulgated thereunder, including, without
limitation, Regulation M under the Exchange Act, so far as necessary to
permit the continuance of sales or dealing in shares of Common Stock during
such period in accordance with the provisions hereof and the Prospectus.
(e) If any event or circumstance shall occur as a result of which it
is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Company and the Bank will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company and the Bank will furnish to the Agent a
reasonable number of copies of such amendment or supplement. For the
purpose of this subsection, the Company and the Bank will each furnish such
information with respect to itself as the Agent may from time to time
reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States
and other jurisdictions as the Conversion Regulations may require and as
the Agent and the Company have agreed; provided, however, that the Company
and the Bank shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. In each jurisdiction in which the Securities
have been so qualified, the Company and the Bank will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(g) The Company authorizes Sandler ▇'▇▇▇▇▇ and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth
in a survey of the securities or "blue sky" laws of the various
jurisdictions in which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as
soon as practicable after the end of each such
17
fiscal year an annual report (including consolidated statements of
financial condition and consolidated statements of income, stockholders'
equity and cash flows, certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company, the Bank and its subsidiaries for
such quarter in reasonable detail. In addition, such annual report and
quarterly consolidated summary financial information shall be made public
through the issuance of appropriate press releases at the same time or
prior to the time of the furnishing thereof to stockholders of the Company.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as
soon as publicly available, a copy of each report or other document of the
Company furnished generally to stockholders of the Company or furnished to
or filed with the Commission under the Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company and the Bank will conduct the Conversion including the
formation and operation of the Foundation in all material respects in
accordance with the Plan, the Conversion Regulations and all other
applicable regulations, decisions and orders, including all applicable
terms, requirements and conditions precedent to the Conversion imposed upon
the Company or the Bank by the Division or the FDIC.
(l) The Company and the Bank will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(m) The Company will file with the Commission a report on the use of
proceeds as required pursuant to Rule 463 of the Securities Act
Regulations.
(n) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company will
file with the Nasdaq Stock Market all documents and notices required by the
Nasdaq Stock Market of companies that have issued securities that are
traded in the over-the-counter market and quotations for which are reported
by the Nasdaq National Market.
(o) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the National Association of Securities Dealers,
Inc.'s "Interpretation Relating to Free-Riding and Withholding."
(p) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock other than the Securities
for a period of 180 days following the Closing Time.
18
(q) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant to
Sections 6 or 7, respectively, neither the Company nor the Bank shall,
without the prior written consent of the Agent, take or permit to be taken
any action that could result in the Bank Common Stock becoming subject to
any security interest, mortgage, pledge, lien or encumbrance; provided,
however, that this covenant shall be null and void if the Board of
Governors of the Federal Reserve System, by regulation, policy statement or
interpretive release, or by written order or written advice addressed to
the Bank or the Agent specifically addressing the provisions of Section
6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
(r) The Company and the Bank will comply with the conditions imposed
by or agreed to with the OTS in connection with its approval of the Holding
Company Application and with the FDIC and the Division in connection with
their approval or non-objection of, or non-objection to, the Conversion
Application, including those conditions relating to the establishment and
the operation of the Foundation; the Company and the Bank shall use their
best efforts to ensure that the Foundation submits within the time frames
required by applicable law a request to the Internal Revenue Service to be
recognized as a tax-exempt organization under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"); the Company and the
Bank will take no action which will result in the possible loss of the
Foundation's tax exempt status; and neither the Company nor the Bank will
contribute any additional assets to the Foundation until such time that
such additional contributions will be deductible for federal and state
income tax purposes.
(s) During the period ending on the first anniversary of the Closing
Time, the Bank will comply with all applicable law and regulation necessary
for the Bank to continue to be a "qualified thrift lender" within the
meaning of 12 U.S.C. Section 1467a(m).
(t) The Company shall not deliver the Securities until the Company and
the Bank have satisfied each condition set forth in Section 5 hereof,
unless such condition is waived by the Agent.
(u) The Company or the Bank will furnish to Sandler ▇'▇▇▇▇▇ as early
as practicable prior to the Closing Date, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Bank and the Subsidiaries
which have been read by Wolf, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
SECTION 4. Payment of Expenses. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement as originally filed and of each amendment
thereto, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the purchasers in the Offerings, (iv) the fees and
disbursements of the Company's and the Bank's counsel, accountants, appraiser
and other advisors, (v) the qualification of the Securities under
19
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fees and disbursements of counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the Agent of copies of the Registration Statement
as originally filed and of each amendment thereto and the printing and delivery
of the Prospectus and any amendments or supplements thereto to the purchasers in
the Offerings and the Agent, (vii) the printing and delivery to the Agent of
copies of a Blue Sky Survey, and (viii) the fees and expenses incurred in
connection with the listing of the Securities on the Nasdaq National Market. In
the event the Agent incurs any such fees and expenses on behalf of the Bank or
the Company, the Bank will reimburse the Agent for such fees and expenses
whether or not the Conversion is consummated; provided, however, that the Agent
shall not incur any substantial expenses on behalf of the Bank or the Company
pursuant to this Section without the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph of
this Section 4 shall be due and payable upon receipt by the Company or the Bank
of a written accounting therefor setting forth in reasonable detail the expenses
incurred by the Agent.
SECTION 5. Conditions of Agent's Obligations. The Company, the Bank and
the Agent agree that the issuance and the sale of Securities and all obligations
of the Agent hereunder are subject to the accuracy of the representations and
warranties of the Company and the Bank herein contained as of the date hereof
and the Closing Time, to the accuracy of the statements of officers and
directors of the Company and the Bank made pursuant to the provisions hereof, to
the performance by the Company and the Bank of their obligations hereunder, and
to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the Division or
the FDIC and no order suspending the sale of the Securities in any
jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company and the Bank, in form
and substance satisfactory to counsel for the Agent, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
20
(ii) The Company has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus and to
enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the Commonwealth of
Massachusetts and in each other jurisdiction in which such
qualification is required whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect
upon the financial condition, results of operations or business
affairs of the Company, the Bank and its subsidiaries, considered
as one enterprise.
(iv) Upon consummation of the Conversion, and the issuance of
the Foundation Shares to the Foundation immediately upon
completion thereof, in compliance with all conditions imposed
upon the contribution thereof by the FDIC under the terms of the
Intent Not to Object in an amount described in the Prospectus,
the authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under
"Capitalization" and, no shares of Common Stock have been or will
be issued and outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been duly
and validly authorized for issuance and sale and, when issued and
delivered by the Company pursuant to the Plan against payment of
the consideration calculated as set forth in the Plan, will be
duly and validly issued and fully paid and non-assessable.
(vi) The issuance of the Securities and the Foundation Shares
is not subject to preemptive or other similar rights arising by
operation of law or, to the best of their knowledge and
information, otherwise.
(vii) The Bank has been at all times since the date hereof and
prior to the Closing Time duly organized, and is validly existing
and in good standing under the laws of the Commonwealth of
Massachusetts as a Massachusetts chartered savings bank in stock
form, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus; and the Bank is
duly qualified as a foreign corporation in each jurisdiction in
which the failure to so qualify would have a material adverse
effect upon the financial condition, results of operations or
business affairs of the Bank.
(viii) The Bank is a member in good standing of the Federal Home
Loan Bank of Boston and the deposit accounts of the Bank are
insured by the FDIC up to the applicable limits.
21
(ix) Each direct and indirect subsidiary of the Bank has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and is duly qualified as
a foreign corporation to transact business and is in good
standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect upon the financial
condition, results of operations or business of the Company, the
Bank and its subsidiaries, taken as a whole; the activities of
each such subsidiary are permitted to subsidiaries of a savings
association holding company and of a Massachusetts chartered
savings bank by the rules, regulations, resolutions and practices
of the Division and the FDIC; all of the issued and outstanding
capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned
by the Bank, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(x) The Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under the
laws of the State of Delaware with corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus; the Foundation is not a
savings and loan holding company within the meaning of 12 C.F.R.
Section 574.2(q) as a result of the issuance of shares of Common
Stock to it in accordance with the terms of the Plan and in the
amounts as described in the Prospectus; no approvals are required
to establish the Foundation and to contribute the shares of
Common Stock thereto as described in the Prospectus other than
those set forth in any written notice or order of approval or
non-objection of the Conversion, the Conversion Application or
the Holding Company Application, copies of which were provided to
the Agent prior to the Closing Time.
(xi) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank when issued and delivered
pursuant to the Plan against payment of consideration calculated
as set forth in the Plan and set forth in the Prospectus, will be
duly authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned
beneficially and of record by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xii) The OTS has approved the Holding Company Application, the
Division has approved the Conversion Application and the FDIC has
issued its non-objection to the Plan, and no action is pending,
or to the best of such counsel's knowledge, threatened respecting
the Holding Company Application or the Conversion Application or
the acquisition by the Company of all of the Bank's issued and
outstanding capital stock; the Holding Company Application and
the Conversion Application comply with the
22
applicable requirements of the OTS, the Division and the FDIC,
respectively, except as compliance therewith has been
specifically waived in writing by the provisions of the approvals
by the OTS, the Division and the FDIC as the case may be,
includes all documents required to be filed as exhibits thereto,
and is, to the best of such counsel's knowledge and information,
truthful, accurate and complete; and the Company is duly
authorized to become a savings association holding company and is
duly authorized to own all of the issued and outstanding capital
stock of the Bank to be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including
the establishment of the Foundation and the contribution thereto
of the Foundation Shares, (A) have been duly and validly
authorized by all necessary action on the part of each of the
Company and the Bank, and this Agreement constitutes the legal,
valid and binding agreement of each of the Company and the Bank,
enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited under
applicable law (it being understood that such counsel may avail
itself of customary exceptions concerning the effect of
bankruptcy, insolvency or similar laws and the availability of
equitable remedies); (B) will not result in any violation of the
provisions of the charter or by-laws of the Company, the Bank or
any of its subsidiaries; and, (C) will not conflict with or
constitute a breach of, or default under, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance, that, individually
or in the aggregate, would have a material adverse effect on the
financial condition, results of operations or business affairs of
the Company, the Bank and its subsidiaries considered as one
enterprise, upon any property or assets of the Company, the Bank
or its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company, the Bank or its subsidiaries is a party or by
which any of them may be bound, or to which any of the property
or assets of the Company, the Bank or its subsidiaries is
subject.
(xiv) The Prospectus has been duly authorized by the Division
for final use pursuant to the Conversion Regulations and no
action is pending, or to the best of such counsel's knowledge, is
threatened, by the OTS to revoke such authorization.
(xv) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities
Act or, to the best of such counsel's knowledge, proceedings
therefor initiated or threatened by the Commission.
23
(xvi) No further approval, authorization, consent or other
order of any public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the
Securities and the consummation of the Conversion, except as may
be required under the securities or Blue Sky laws of various
jurisdictions as to which no opinion need be rendered.
(xvii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements
and statistical data included therein, as to which no opinion
need be rendered) complied as to form in all material respects
with the requirements of the Securities Act and the Securities
Act Regulations and the Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements.
(xix) There are no legal or governmental proceedings pending
or threatened against or affecting the Mutual Holding Company,
the Company, the Bank or its subsidiaries which are required,
individually or in the aggregate, to be disclosed in the
Registration Statement and Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to
which the Mutual Holding Company, the Company, the Bank or any of
its subsidiaries is a party or to which any of their property is
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
are, considered in the aggregate, not material.
(xx) The information in the Prospectus under "Risk Factors -
Establishment of Berkshire Hills Foundation" and "-Anti-Takeover
Provisions and Statutory Provisions," "Dividend Policy,"
"Business of the Bank - Legal Proceedings," "Federal and State
Taxation of Income," "Regulation and Supervision," "The
Conversion," "Restrictions on Acquisitions of Berkshire Hills and
Berkshire Bank," and "Description of Capital Stock," to the
extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been
reviewed by them and is complete and accurate in all material
respects.
(xxi) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto, the descriptions thereof or references thereto
are correct, and no default exists, and no event has occurred
which, with notice or lapse of time or both, would constitute a
default, in the due performance
24
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred
to or filed.
(xxii) The Plan and the establishment and funding of the
Foundation have been duly authorized by the Board of Directors of
the Company and the Board of Directors of the Bank and, the
Division's approval of the Plan and the FDIC's non-objection to
the Plan remain in full force and effect; the Company and the
Bank have conducted the Conversion and the establishment and
funding of the Foundation in all material respects in accordance
with applicable requirements of the Conversion Regulations,
except to the extent that the requirement to comply therewith was
specifically waived in writing by the terms of the approval or
non- objection of the Division or the FDIC, as the case may be,
the Plan and all other applicable regulations, decisions and
orders thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to the
Conversion imposed upon the Company or the Bank by the Division
or the FDIC and, no order has been issued by the Division or the
FDIC to suspend the Conversion or the Offerings and no action for
such purpose has been instituted or threatened by the Division or
the FDIC; and, to the best of such counsel's knowledge, no person
has sought to obtain review of the final action of the Division
or the FDIC in approving the Conversion Application (which
includes the Plan which provides for the establishment of the
Foundation) or the Holding Company Application.
(xxiii) To the best of such counsel's knowledge, the Company and
the Bank and its subsidiaries have obtained all licenses, permits
and other governmental authorizations currently required for the
conduct of their respective businesses as described in the
Registration Statement and Prospectus, and all such licenses,
permits and other governmental authorizations are in full force
and effect, and the Company and the Bank and its subsidiaries are
in all material respects complying therewith.
(xxiv) Neither the Company, the Bank nor any of its subsidiaries
is in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case
may be, or bylaws (and the Bank will not be in violation of its
charter in stock form upon consummation of the Conversion) or, to
the best of such counsel's knowledge, in default (nor has any
event occurred which, with notice or lapse of time or both, would
constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the Bank or any of its
subsidiaries is a party or by which the Company, the Bank or any
of its subsidiaries or any of their property may be bound.
25
(xxv) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Silver,
▇▇▇▇▇▇▇▇ & Taff, LLP, counsel for the Agent, with respect to the
matters set forth in Section 5(b)(1)(i), (iv), (v), (vi) (solely as to
preemptive rights arising by operation of law), (xii), (xiv), (xvi)
and (xvii) and such other matters as the Agent may reasonably require.
(3) In addition to giving their opinions required by
subsections (b)(l) and (b)(2), respectively, of this Section, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Silver, ▇▇▇▇▇▇▇▇ & Taff LLP shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement (except for
financial statements and schedules and other financial or statistical
data included therein, as to which counsel need make no statement), at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for financial statements and
schedules and other financial or statistical data included therein, as
to which counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving their opinions, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and
Silver, ▇▇▇▇▇▇▇▇ & Taff LLP may rely as to matters of fact on
certificates of officers and directors of the Company and the Bank and
certificates of public officials, and as to certain matters of
Delaware law upon the opinion of Morris, Nichols, Arsnt & ▇▇▇▇▇▇▇,
which opinions shall be in form and substance satisfactory to counsel
for the Agent, and Silver, ▇▇▇▇▇▇▇▇ & Taff LLP may also rely on the
opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Morris, Nichols, Arsnt &
▇▇▇▇▇▇▇.
(c) At Closing Time referred to in Section 2, the Company and the
Bank shall have completed in all material respects the conditions precedent
to the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company or the Bank by the
Division or the FDIC, or any other regulatory authority other than those
which the Division or the FDIC permits to be completed after the
Conversion.
(d) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the financial condition, results of operations or business affairs of the
Company, the Bank and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Agent
shall have received a certificate of the Chief Executive Officer of the
Company and of the Bank, the President
26
of the Company and the Bank and the chief financial or chief accounting
officer of the Company and of the Bank, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) there
shall have been no material transaction entered into by the Company or the
Bank from the latest date as of which the financial condition of the
Company or the Bank as set forth in the Registration Statement and the
Prospectus other than transactions referred to or contemplated therein and
transactions in the ordinary cause of business, (iii) neither the Company
nor the Bank shall have received from the Division or the FDIC any
direction (oral or written) to make any material change in the method of
conducting its business with which it has not complied (which direction, if
any, shall have been disclosed to the Agent) or which materially and
adversely would affect the business, financial condition or results of
operations of the Company, the Bank or its subsidiaries, (iv) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (v) the Company and the Bank have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to Closing Time, (vi) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission and (vii) no order suspending the Syndicated Community Offering
or the authorization for final use of the Prospectus has been issued and no
proceedings for that purpose have been initiated or threatened by the OTS,
the Division or the FDIC and no person has sought to obtain regulatory or
judicial review of the action of the Division or the FDIC in approving the
Plan in accordance with the Conversion Regulations nor has any person
sought to obtain regulatory or judicial review of the action of the OTS in
approving the Holding Company Application.
(e) At the time of the execution of this Agreement, the Agent shall
have received from Wolf a letter dated such date, in form and substance
satisfactory to the Agent, to the effect that (i) they are independent
public accountants with respect to the Company, the Bank and its
subsidiaries within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants, the Securities Act and the
Securities Act Regulations and the Conversion Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations; (iii) based upon limited procedures as agreed upon by the
Agent and Wolf set forth in detail in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited
financial statements and supporting schedules of the Bank and its
subsidiaries included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting requirements
of the Securities Act, the Securities Act Regulations and the Conversion
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement
and the Prospectus, (B) the unaudited amounts of net interest income and
net income set forth under "Selected Financial Information" in the
Registration Statement and Prospectus do not agree with the amounts set
forth in unaudited consolidated financial statements as of and for the
dates and periods presented under such captions or such amounts were not
determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial
27
statements included in the Registration Statement, (C) at a specified date
not more than five days prior to the date of this Agreement, there has been
any increase in the consolidated long term or short term debt of the Bank
and its subsidiaries or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or net worth of the Bank and its
subsidiaries, in each case as compared with the amounts shown in the
December 31, 1999 balance sheet included in the Registration Statement or,
(D) during the period from December 31, 1999 to a specified date not more
than five days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding year,
in total interest income, net interest income, net interest income after
provision for loan losses, income before income tax expense or net income
of the Bank and its subsidiaries, except in all instances for increases or
decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (iv) in addition to the examination referred to
in their opinions and the limited procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are included in the Registration Statement and Prospectus
and which are specified by the Agent, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company, the Bank and its
subsidiaries identified in such letter.
(e) At Closing Time, the Agent shall have received from FinPro, Inc. a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not
more than five days prior to Closing Time.
(f) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
(g) At Closing Time, the Agent shall have received a letter from
FinPro, Inc., dated as of the Closing Time, confirming its appraisal.
(h) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities and the
Foundation Shares as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities and Foundation Shares as herein contemplated shall be
satisfactory in form and substance to the Agent and counsel for the Agent.
(i) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent,
are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for
the sale of the Securities, and (ii) trading generally on either the
American Stock Exchange, the New York
28
Stock Exchange or the Nasdaq Stock Market shall not have been suspended,
and minimum or maximum prices for trading shall not have been fixed, or
maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, and a banking moratorium shall not have been declared by either
Federal or New York authorities.
SECTION 6. Indemnification.
(a) The Company and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and its respective partners, directors, officers, employees
and agents as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, related to or arising out of
the Conversion (including the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company) or any action
taken by the Agent where acting as agent of the Company or the Bank or
otherwise as described in Section 2 hereof.
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Statement or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(iii) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever described in clauses (i) or (ii) above, if such
settlement is effected with the written consent of the Company or the Bank,
which consent shall not be unreasonably withheld; and
(iv) from and against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably incurred in
investigating, preparing for or defending against any litigation, or any
investigation, proceeding or inquiry by any governmental agency or body,
commenced or threatened, or any claim pending or threatened whatsoever
described in clauses (i) or (ii) above, to the extent that any such expense
is not paid under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged
29
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading which was
made in reliance upon and in conformity with the Agent Information.
Notwithstanding the foregoing, the indemnification provided for in this
paragraph (a) shall not apply to the Bank to the extent that such
indemnification by the Bank would constitute a covered transaction under Section
23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company, the
Bank, their directors and trustees, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Bank, the Company, its security holders or the Bank's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the Bank, the Agent or any of its respective
affiliates or any participant in the transactions contemplated hereby in which
the Agent or such person or agent is not named as a defendant, the Company and
the Bank jointly and severally agree to reimburse the Agent for all reasonable
and necessary out-of-pocket expenses incurred by it in connection with preparing
or appearing as a
30
witness or otherwise giving testimony and to compensate the Agent in an amount
to be mutually agreed upon.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the Bank
and the Agent shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and the Agent, as incurred, in such
proportions (i) that the Agent is responsible for that portion represented by
the percentage that the maximum aggregate marketing fees appearing on the cover
page of the Prospectus bears to the maximum aggregate gross proceeds appearing
thereon and the Company and the Bank are jointly and severally responsible for
the balance or (ii) if, but only if, the allocation provided for in clause (i)
is for any reason held unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits to the Company and the Bank on the one
hand and the Agent on the other, as reflected in clause (i), but also the
relative fault of the Company and the Bank on the one hand and the Agent on the
other, as well as any other relevant equitable considerations; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, each trustee of the Bank, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company or the Bank within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and the Bank. Notwithstanding anything to the
contrary set forth herein, to the extent permitted by applicable law, in no
event shall the Agent be required to contribute an aggregate amount in excess of
the aggregate marketing fees to which the Agent is entitled and actually paid
pursuant to this Agreement.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or the Bank submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Agent or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities.
SECTION 9. Termination of Agreement.
(a) The Agent may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
financial condition, results of operations or business affairs of the Company or
the Bank, or the Company, the Bank and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which, in the judgment of the
Agent, are so material
31
and adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
(iii) if trading generally on the Nasdaq Stock Market, the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal or New York authorities, (iv) if any condition
specified in Section 5 shall not have been fulfilled when and as required to be
fulfilled; (v) if there shall have been such material adverse change in the
condition or prospects of the Company or the Bank or the prospective market for
the Company's securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by FinPro, Inc. is not reasonable or equitable under then prevailing
market conditions, or (vii) if the Conversion is not consummated on or prior to
____________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at Two World Trade Center, 104th Floor, New York,
New York 10048, attention of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Principal, facsimile number:
(▇▇▇) ▇▇▇-▇▇▇▇; notices to the Company and the Bank shall be directed to either
of them at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, President and Chief Executive Officer, with a copy to ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇,
attention of ▇▇▇▇▇ Spaccasi, facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and partners, officers and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and partners, officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. Entire Agreement; Amendment. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated October 26, 1999, by and
between the Agent and the Mutual Holding Company and the Bank, relating to the
Agent's providing conversion agent services to the Company and the Bank in
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connection with the Conversion. No waiver, amendment or other modification of
this Agreement shall be effective unless in writing and signed by the parties
hereto.
SECTION 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times
of day refer to Eastern time.
SECTION 14. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
SECTION 15. Headings. Sections headings are not to be considered part of
this Agreement, are for convenience and reference only, and are not to be deemed
to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
Berkshire Bancorp, Inc.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: President and Chief Executive Officer
Berkshire Bank
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
Sandler ▇'▇▇▇▇▇ & Partners, L.P.
By: Sandler ▇'▇▇▇▇▇ & Partners Corp.,
the sole general partner
By:
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Principal
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