SEACOAST FINANCIAL SERVICES CORPORATION
21,160,000 (Anticipated Maximum) Shares
of Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
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September __, 1998
Xxxx, Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
XxXxxxxxx, Xxxx & Xxxxxx, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Seacoast Financial Services Corporation, a Massachusetts mutual holding
company (the "Company"), and Compass Bank for Savings, a Massachusetts-chartered
stock savings bank (the "Bank"), hereby confirm their agreement with Xxxx, Xxxx
& Co., Inc. ("Xxxx, Xxxx") and XxXxxxxxx, Xxxx and Xxxxxx ("XxXxxxxxx Xxxx" and,
together with Xxxx Xxxx, the "Selling Agents") to serve as agents of the Company
to assist the Company in the sale of Common Stock (as defined below) of the
Company (the "Shares" or "Conversion Stock") in the Offering, as defined below,
as follows:
Introductory. The Company is converting (the "Conversion") from a
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Massachusetts-chartered mutual holding company to a Massachusetts corporation in
accordance with the laws of the Commonwealth of Massachusetts and the United
States and applicable regulations of the Massachusetts Division of Banks (the
"Division"), (such laws and the regulations of the Division are referred to
herein as the "Conversion Regulations"). The Conversion is to be conducted in
accordance with a Plan of Conversion (the "Plan") adopted by the Company's Board
of Trustees on April 23, 1998. Upon consummation of the Conversion, the Company
will acquire Sandwich Bancorp, Inc. ("Sandwich Bancorp"), in a stock-for-stock
exchange (the "Merger") pursuant to the Amended and Restated Affiliation and
Merger Agreement dated as of March 23, 1998 (the "Merger Agreement"). Sandwich
Bancorp is the holding company of Sandwich Co-operative Bank ("Sandwich Bank").
The Merger will be accomplished in accordance with the laws of the Commonwealth
of Massachusetts and the United States and applicable regulations of the
Division, the Massachusetts Board of Bank Incorporation (the "Bank Board"), the
Federal Deposit Insurance Corporation (the "FDIC") and the Board of Governors of
the Federal Reserve System (the "FRB") (such laws and the regulations of the
Division, the Bank Board, the FDIC, and the FRB collectively, the "Merger
Regulations", and together with the Conversion Regulations, the "Reorganization
Regulations"). XxXxxxxxx Xxxx has and will serve as financial advisor to the
Company in connection with the Merger under agreement dated _________, 1998.
Pursuant to the terms of the Merger Agreement, upon consummation of the Merger
each outstanding share of common stock, par value $1.00 per share, of Sandwich
Bancorp ("Sandwich Bancorp Common Stock") and each outstanding option to
purchase Sandwich Bancorp Common Stock will automatically convert into and
become exchangeable for a number of shares of Seacoast Financial's common stock
determined according to a ratio (the "Exchange Ratio") set forth in the Merger
Agreement. The Merger is expected to close on the tenth trading day following
the consummation of the Conversion. The Conversion and the Merger are separate,
distinct transactions, but one will not occur without the other. The Conversion
will not be consummated until all conditions to the consummation of both the
Conversion and the Merger have been satisfied or waived. The Conversion and the
Merger are sometimes collectively referred to herein as the "Reorganization."
The Company, the Bank, Sandwich Bancorp and Sandwich Bank are sometimes
hereinafter collectively referred to as the "Constituent Institutions."
The following applications have been filed in connection with the
Conversion and the Merger: (i) an Application for Conversion (the "Conversion
Application") and an Application for Merger (the "Merger Application") have been
filed with the Division; (ii) a Bank Holding Company Application (the "Bank
Board Application") has been filed with the Bank Board; (iii) a Bank Merger Act
Application (the "BMA Application") has been filed with the FDIC; (iv) a Bank
Holding Company Application on Form FR Y-3 (the "Holding Company Application")
and a Notice of Conversion have been filed with the FRB; and (v) Requests for
Notification to the Commissioner that satisfactory arrangements have been made,
have been filed with the Depositors Insurance Fund of Massachusetts (the "DIFM
Application") and with the Cooperative Central Bank of Massachusetts (the "CCB
Application") and all amendments to the foregoing applications required to the
date hereof have also been filed. The Conversion Application, the Merger
Application, the Bank Board Application, the BMA Application, the Holding
Company Application, the DIFM Application and the CCB Application are referred
to herein collectively as, the "Reorganization Applications." The Conversion
Application includes, among other things, the Company's Plan of Conversion From
a Mutual Holding Company to a stock holding company (the "Plan").
Upon consummation of the Conversion, the Company will be authorized to
issue 110,000,000 shares of capital stock, of which 100,000,000 shares shall be
common stock having a par value of $.01 per share (the "Common Stock"), and
10,000,000 shares shall be preferred stock having a par value of $.01 per share.
Seacoast Financial, in accordance with the Plan, is offering, in a subscription
offering by way of nontransferable subscription rights, Common Stock (the
"Shares") for a purchase price of $10.00 per share (the "Purchase Price") in
descending order of priority to (i) the Bank's Eligible Account Holders (defined
as holders of deposit accounts totaling $50 or more as of December 31, 1996);
(ii) the Bank's Supplemental Eligible Account Holders (defined as holders of
deposit accounts totaling $50 or more as of ______, 1998); (iii) the Bank's
Employee Stock Ownership Plan and Trust (the "ESOP") (for a total of up to__% of
the shares issued in the Offering, as defined below); and (iv) the employees,
officers , trustees and directors of Seacoast Financial and the Bank (the
"Subscription Offering"). Concurrently with or at any time during or after the
subscription offering, the Company may offer the shares of Common Stock not
subscribed for in the Subscription Offering for sale in a direct community
offering to certain members of the general public (the "Community Offering").
Shares not subscribed for in the Subscription and Community Offerings may be
offered for sale to certain members of the general public in a syndicated
community offering (the "Syndicated Community Offering"). It is acknowledged
that the Company reserves the right, in its absolute discretion, to accept or
reject, in whole or in part, any or all orders in the Community Offering and
Syndicated Community Offering. The Subscription Offering, the Community Offering
and the Syndicated Community Offering are referred to collectively herein as the
"Offering." Except for the ESOP, generally no person may purchase in the
Offering more than $750,000 of Conversion Stock; no person, together with
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associates and persons acting in concert with such person, may purchase in the
aggregate more than $1.5 million of Conversion Stock in the Offering; provided
that the Company may, in its sole discretion and without further notice to or
solicitation of subscribers or other prospective purchasers, increase or
decrease such maximum purchase limitation.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-52889) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed such amendments thereto and such amended prospectuses
as may have been required to the date hereof. The prospectus, as amended, on
file with the Commission at the time the Registration Statement becomes
effective is hereinafter called the "Prospectus," except that if the Prospectus
filed by the Company pursuant to Rule 424(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") differs from the
prospectus on file at the time the Registration Statement becomes effective, the
term "Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b)
from and after the time such prospectus is filed with or mailed to the
Commission for filing.
SECTION 1. Appointment of the Selling Agents; Compensation to the Selling
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Agents. Subject to the terms and conditions set forth below, the Company hereby
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appoints Xxxx, Xxxx and XxXxxxxxx Xxxx as its agents to consult with and advise
the Company and the Bank, and to solicit subscriptions and purchase orders for
Shares on behalf of the Company, in connection with the Company's offering of
Common Stock in the Conversion. On the basis of the representations, warranties
and agreements herein contained, and subject to the terms and conditions herein
set forth, Xxxx, Xxxx and XxXxxxxxx Xxxx accept such appointment and agree to
consult with and advise the Company and the Bank as to the matters set forth in
Section 3 of the Engagement Letter between the Selling Agents, the Company and
the Bank dated February 9, 1998, included as Exhibit A attached hereto, and to
use their best efforts to solicit subscriptions and purchase orders for Shares
in accordance with this Agreement; provided, however, that the Selling Agents
shall not be responsible for obtaining subscriptions or purchase orders for any
specific number of Shares, shall not be required to purchase any Shares and
shall not be obligated to take any action which is inconsistent with any
applicable law, regulation, decision or order.
Subject to the prior approval of the Company and the Bank, the Selling
Agents may also assemble and manage a selling group of broker dealers ("Selling
Group") that are members of the National Association of Securities Dealers, Inc.
("NASD"), to participate in the solicitation of purchase orders for the Shares
under a selected dealers' agreement (the "Selected Dealers' Agreement"), the
form of which is set forth as Exhibit B to this Agreement.
In addition to the reimbursement of the expenses specified in Sections 6, 7
and 8 hereof, the Selling Agents shall receive and the Company and the Bank
shall pay (i) an advisory and management fee of $50,000 (the "Management Fee")
and (ii) a fee of one percent (1.0%) of the dollar amount of the Shares sold in
the Subscription Offering and Community Offering (the "Marketing Fee"),
excluding shares purchased by officers, trustees, directors, employees (and
immediate family thereof) and employee benefit plans of the Company and the
Bank. Should a Selling Group (which may include the Selling Agents) under a
Selected Dealers' Agreement be implemented, the Bank shall pay a fee to selected
dealers ("Selected Dealers' Fee") of 5.0% of the dollar amount of the Shares
sold by such dealers, no more than 1% of which shall be attributable to selling
group management services. The Management Fee, Marketing Fee and Selected
Dealers' Fee are hereinafter collectively referred to as the "Sales
Compensation." It is acknowledged that
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the Bank paid the Selling Agents $50,000 of the Sales Compensation upon
execution of the Engagement Letter.
If (i) the Plan is abandoned or terminated by the Company; (ii) the
Offering is not consummated by February 28, 1999; (iii) the Selling Agents
terminate this Agreement because there has been a material adverse change in the
financial condition or operations of the Bank since September 30, 1997; or (iv)
immediately prior to the commencement of the Offering, the Selling Agents
terminate this Agreement because, in their reasonable judgment, the Company and
the Bank have failed to satisfactorily disclose all relevant information in the
Registration Statement, the Prospectus and the Reorganization Applications or
the Selling Agents determine that market conditions exist which might render the
sale of the Shares by the Company inadvisable, the Selling Agents shall receive
a fee of $50,000 for their advisory and administrative services as set forth in
Exhibit A hereto in lieu of the Sales Compensation (offset by the $50,000 fee
previously paid by the Company), in addition to reimbursement of their
reasonable out-of-pocket expenses as set forth in Section 6 hereof. If there is
a resolicitation of subscriptions for any reason, and the Selling Agents are
required to provide significant additional services or expend significant
additional time, the parties agree to negotiate in good faith an agreement to
cover the Selling Agents's additional fees and expenses in connection therewith,
including attorneys' fees and expenses.
The compensation specified above shall be payable (to the extent not
already paid) to the Selling Agents in next day clearinghouse funds on the
earlier of the Closing Date (as hereinafter defined), a determination by the
Company and the Bank to terminate or abandon the Plan or the termination of this
Agreement by the Selling Agents or the Company and the Bank in accordance with
the preceding paragraph. The Bank and the Company agree to reimburse the Selling
Agents from time to time for the costs and expenses specified in Sections 6, 7
and 8 hereof, to the extent such costs and expenses are reasonably incurred by
the Selling Agents, promptly upon receiving a reasonable accounting of such
costs and expenses.
SECTION 2. Closing Date; Release of Funds and Delivery of Certificates. If
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all conditions precedent to the consummation of the Conversion and the Offering,
including, without limitation, the sale of all the Shares required by the Plan
to be sold and the satisfaction or waiver of all conditions of the Merger are
satisfied, the Company agrees to issue or have issued the Shares sold in the
Offering and to release for delivery certificates evidencing such Shares on the
Closing Date against payment therefor by release of funds from the special,
interest-bearing account referred to in Section 5(p) hereof and by the
authorized withdrawal of funds from deposit accounts at the Bank in accordance
with the Plan; provided, however, that no such funds shall be released to the
Company or withdrawn until the conditions specified in Section 9 hereof shall
have been complied with to the reasonable satisfaction of the Selling Agents and
their counsel. Such release, withdrawal and payment shall be made on the Closing
Date, on a business day and at a time and place selected by the Selling Agents,
which date and place shall be acceptable to the Bank and the Company, on at
least two business days prior notice to the Bank and the Company (it being
understood that such business day shall not be more than fifteen business days
after the final approval of the stock issuance by the Division), or such other
time or place as shall be agreed upon by the Selling Agents, the Bank and the
Company. Certificates evidencing the Shares sold in the Offering shall be
delivered directly to the purchasers thereof or in accordance with their
directions. The hour and date upon which the Company shall release or deliver
the Shares sold in the Offering in accordance with the terms hereof are called
the "Closing Date."
SECTION 3. Prospectus; Offering. The Shares are to be offered in the
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Offering at $10.00 per share, as set forth on the cover page of the Prospectus.
There will be a maximum and minimum number of Shares
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offered. The number of Shares offered may be changed by the Company after
consultation with the Selling Agents, subject to the provisions of the Plan,
depending on market and financial conditions.
SECTION 4. Representations and Warranties; Certain Covenants.
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A. The Company and the Bank jointly and severally represent and warrant to
and covenant with the Selling Agents as follows:
(a) The Registration Statement was declared effective by the
Commission on __________, 1998. At the time the Registration Statement,
including the Prospectus contained therein, became effective, the
Registration Statement complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, any preliminary or final Prospectus, any Blue Sky
Application (as defined in Section 7 hereof) or any Sales Information (as
defined in Section 7 hereof) authorized by the Company or the Bank for use
in connection with the Offering did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and at the time
any Rule 424(b) Prospectus is filed with or mailed to the Commission for
filing and at the Closing Date referred to in Section 2, the Registration
Statement, any preliminary or final Prospectus, any Blue Sky Application or
any Sales Information authorized by the Company or the Bank for use in
connection with the Offering will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this Section 4(a) shall not apply to statements in or
omissions from the Registration Statement, any preliminary or final
Prospectus, any Blue Sky Application or any Sales Information made in
reliance upon and in conformity with information furnished in writing to
the Company or the Bank by the Selling Agents expressly regarding the
Selling Agents for use under the captions "Summary of Prospectus-Marketing
Agent" and "The Offerings-Plan of Distribution and Selling Commissions" in
the Prospectus.
(b) The Company has filed with the Division the Conversion
Application, including the Plan, the Registration Statement, the Prospectus
and exhibits and supplemental material, and the Merger Application, and an
amendment or amendments thereto, as required, and has published notice of
such filings, as required, which Applications have been or prior to the
Closing Date will be approved by the Division; and the Plan has been
adopted by the Board of Trustees and the corporators of the Company (by a
vote of at least two-thirds of the corporators, including a majority of the
Company's "independent corporators" constituting at least 60% of all
corporators, at a meeting specially called to consider the Plan).
(c) The Bank has filed with the Bank Board the Bank Board Application,
including exhibits and supplemental material, and an amendment or
amendments thereto, as required, and has published notice of such filing,
as required, which Application has been or prior to the Closing Date will
be approved by the Bank Board.
(d) The Bank and the Company have filed with the FDIC the BMA
Application, including exhibits and supplemental material, and an amendment
or amendments thereto, as
5
required, and have published notice of the filing of the BMA Application,
as required, and the FDIC has approved the BMA Application.
(e) The Company has filed with the FRB the Holding Company
Application, including exhibits and supplemental material, and an amendment
or amendments thereto, as required, and have published notice of such
filing, as required, which Application has been approved by the FRB.
(f) The Bank has filed with the Depositors Insurance Fund of
Massachusetts (the "DIFM") the DIFM Application, including exhibits and
supplemental material, and an amendment or amendments thereto, as required,
which Application has been approved by the DIFM. The Bank has filed with
the Cooperative Central Bank of Massachusetts (the "CCB") the CCB
Application, including exhibits and supplemental material, and an amendment
or amendments thereto, as required, which Application has been approved by
the CCB.
(g) At the Closing Date, the Conversion and the Offering will have
been effected in the manner described in the Prospectus and in accordance
with the Plan, the Conversion Regulations and all other applicable material
laws, regulations, decisions and orders, including in compliance with all
terms, conditions, requirements and provisions precedent to the Conversion
and the Offering imposed upon the Company or the Bank by the Commission,
the Division, the Bank Board, the FDIC, the FRB, any state regulatory or
Blue Sky authority or any other regulatory authority. At the Closing Date,
the Company, the Bank, Sandwich Bancorp and Sandwich Bank will have
completed the conditions precedent to the Merger in accordance with the
Merger Agreement (other than the delivery of the Exchange Shares), and all
applicable laws, regulations, decisions and orders, including all material
terms, conditions, requirements and provisions precedent to the Merger
imposed upon the Company, the Bank, Sandwich Bancorp or Sandwich Bank, by
the BBI, the Division, the FDIC or any other regulatory authority, other
than those which the regulatory authority permits to be completed after the
effective time of the Merger ("Effective Time").
(h) No order has been issued by the Commission, the Division, the Bank
Board, the FDIC, the FRB or any state regulatory or Blue Sky authority
preventing or suspending the use of the Prospectus, and no action by or
before any such governmental entity to revoke any approval, authorization
or order of effectiveness related to the Conversion or the Offering is
pending or threatened.
(i) At the time of the approval of the Reorganization Applications by
the applicable regulatory authorities (including any amendment or
supplement thereto) and at all times subsequent thereto until the Closing
Date, the Reorganization Applications complied and will comply in all
material respects with the Reorganization Regulations. The prospectus
contained in the Reorganization Applications (including any amendment or
supplement thereto), at the time of the approval of the Reorganization
Applications by the applicable regulatory authorities and at all times
subsequent thereto until the Closing Date and the Effective Time, complied
and will comply in all material respects with the Reorganization
Regulations.
(j) RP Financial, LC. ("RP Financial"), which prepared the Independent
Valuation dated as of August 7, 1998, described in the Prospectus, is
independent with respect to the Company and the Bank within the meaning of
the Plan and the Conversion Regulations and is believed by the Company and
the Bank to be experienced and expert in the valuation and the appraisal of
business
6
entities, including savings institutions, and the Company and the Bank
believe that RP Financial has prepared the pricing information set forth in
the Prospectus in accordance with the requirements of the Conversion
Regulations.
(k) Xxxxxx Xxxxxxxx LLP("Xxxxxx Xxxxxxxx"), the firm which certified
the financial statements of the Company filed as part of the Registration
Statement, is, with respect to the Company and the Bank, an independent
certified public accountant as required by the 1933 Act and the 1933 Act
Regulations. KPMG Peat Marwick LLP("Peat Marwick"), the firm which
certified the financial statements of Sandwich Bancorp filed as part of the
Registration Statement, is, with respect to Sandwich Bancorp and Sandwich
Bank, an independent certified public accountant as required by the 1933
Act and the 1933 Act Regulations.
(l) The consolidated financial statements, together with the related
schedules and notes thereto, included in the Registration Statement and
which are part of the Prospectus present fairly the financial condition,
results of operations, changes in retained earnings and cash flows of each
of (i) the Company and its consolidated subsidiaries and (ii) Sandwich
Bancorp and its consolidated subsidiaries, at and for the dates indicated
and the periods specified and comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act Regulations.
Such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved, present fairly in all material respects the information
required to be stated therein and are consistent with financial statements
and other reports filed by the Company and/or Sandwich Bancorp with the
Division, the FDIC and the SEC except to the extent that accounting
principles employed in such filings conform to the requirements of such
authorities and not necessarily to generally accepted accounting
principles. The other financial, statistical and pro forma information and
related notes thereto included in the Prospectus present fairly the
information shown therein on a basis consistent with the audited financial
statements of the Company and/or Sandwich Bancorp included in the
Registration Statement and which are part of the Prospectus, and as to the
pro forma adjustments, such adjustments have been properly applied on the
basis described therein.
(m) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, except as may otherwise be stated
therein: (i) there has not been any material adverse change in the
financial condition, net income, capital, properties, affairs or prospects
of the Company, the Bank, Sandwich Bancorp, Sandwich Bank, or their
respective subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, (ii) there has not been any material increase
in the long-term debt of the Company, the Bank, Sandwich Bancorp, Sandwich
Bank or their respective subsidiaries, nor has the Company, the Bank,
Sandwich Bancorp, Sandwich Bank or their respective subsidiaries issued any
securities or incurred any liability or obligations for borrowing other
than in the ordinary course of business, (iii) there have not been any
material transactions entered into by the Company, the Bank, Sandwich
Bancorp, Sandwich Bank or their respective subsidiaries, except those
transactions entered into in the ordinary course of business and those
specifically described in or contemplated by the Prospectus, including the
execution of loan documents pertaining to the ESOP, and (iv) the
capitalization, liabilities, assets, properties and business of the
Company, the Bank, Sandwich Bancorp, Sandwich Bank and their respective
subsidiaries conform in all material respects to the descriptions thereof
contained in the Prospectus. The Company, the Bank, Sandwich Bancorp,
Sandwich Bank and their subsidiaries have no material liability of any
kind, contingent or otherwise, except as reflected in
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the financial statements filed as part of the Registration Statement or
otherwise set forth in the Prospectus.
(n) The Bank is now a Massachusetts-chartered stock savings bank and
upon consummation of the Conversion will continue as such, and is duly
authorized to conduct its business and own its property as described in the
Registration Statement and Prospectus. The Company is now a Massachusetts
chartered mutual holding company and upon consummation of the Conversion
will become a Massachusetts-chartered business corporation and stock
holding company, in both instances duly organized and validly existing and
in good standing under the laws of the Commonwealth of Massachusetts with
the corporate power and authority to conduct its business and own its
property as described in the Registration Statement and Prospectus.
Sandwich Bancorp has been duly organized as a Massachusetts corporation and
is validly existing and in good standing under the laws of the Commonwealth
of Massachusetts with the corporate power and authority to conduct its
business and own its property as described in the Registration Statement
and Prospectus. Sandwich Bank has been duly organized as a Massachusetts
chartered cooperative bank and is validly existing under the laws of the
Commonwealth of Massachusetts with the corporate power and authority to
conduct its business and own its property as described in the Registration
Statement and Prospectus. The Company, the Bank, Sandwich Bancorp, Sandwich
Bank and their subsidiaries have obtained all material licenses, permits
and other governmental authorizations currently required for the conduct of
their respective businesses; all such licenses, permits and governmental
authorizations are in full force and effect; the Company, the Bank,
Sandwich Bancorp, Sandwich Bank and their subsidiaries are in all material
respects complying with all laws, rules, regulations and orders applicable
to the operation of their respective businesses; and none of the Company,
the Bank, Sandwich Bancorp, Sandwich Bank or their subsidiaries has
received notice of any proceeding or action relating to the revocation or
modification of any such license, permit or governmental authorization
which, singly or in the aggregate, if subject to an unfavorable decision,
ruling or finding, might materially and adversely affect the conduct of the
business, the financial condition or the net income, affairs or prospects
of the combined institution taken as a whole. The articles of organization,
certificate of incorporation, charter or similar instruments of the
Company, the Bank, Sandwich Bancorp and Sandwich Bank are in full force and
effect; no conservator or receiver has been appointed for any of the
Company, the Bank, Sandwich Bancorp and Sandwich Bank; and the Bank and
Sandwich Bank are each operating as an insured depository institution. Each
of the Company, the Bank, Sandwich Bancorp and Sandwich Bank is duly
qualified to transact business and is in good standing in each jurisdiction
in which its ownership or leasing of property or the conduct of its
business requires such qualification, unless the failure to be so qualified
in one or more of such jurisdictions would not have a material adverse
effect on the financial condition or the business, operations, net income
or prospects of the combined institution, taken as a whole. Upon
consummation of the Conversion and the Reorganization, all of the
outstanding capital stock of the Bank will be duly authorized and validly
issued and fully paid and nonassessable; and all such stock will be owned
directly by the Company, free and clear of all liens, encumbrances, claims
or other restrictions. Each of the Company, the Bank, Sandwich Bancorp and
Sandwich Bank does not own equity securities or any equity interest in any
other business enterprise except as described in the Prospectus; each of
the subsidiaries has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of organization with the
authority to conduct its business and own its property as described in the
Registration Statement and the Prospectus; all of the outstanding stock of
each subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; all such stock is owned directly by the Bank or
Sandwich Bank, as the case may
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be, free and clear of all liens, encumbrances, claims or other
restrictions; and each of the subsidiaries is duly qualified to transact
business and is in good standing in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires
such qualification, unless the failure to be so qualified would not have a
material adverse effect on the operations of the combined institution,
taken as a whole. The activities of the subsidiaries are permitted to
subsidiaries of a Massachusetts-chartered savings bank or co-operative
bank, as the case may be, by the rules, regulations, policies and practices
of the Division, the FDIC and any other state or federal authority having
jurisdiction over such matters.
(o) The deposit accounts of the Bank are, and following the Closing
Date of the Conversion the deposit accounts of the Bank will be, insured by
the Bank Insurance Fund (the "BIF"), or the Savings Association Insurance
Fund (the "SAIF"), each as administered by the FDIC, and the DIFM, as
administered by the Mutual Savings Central Fund, Inc., up to the maximum
amounts allowed by law. The deposit accounts of Sandwich Bank are, and
following the Closing Date of the Conversion the deposit accounts of
Sandwich Bank will be, insured by the BIF or the SAIF, as administered by
the FDIC, and the Share Insurance Fund, as administered by the CCB, up to
the maximum amounts allowed by law. Upon consummation of the Conversion,
the liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders ("Liquidation Account") will be duly
established in accordance with the requirements of the Conversion
Regulations.
(p) Upon consummation of the Conversion and the Merger, the
authorized, issued and outstanding equity capital of the Company will be as
set forth in the Prospectus under the caption "Capitalization"; no shares
of Common Stock, or securities exercisable into or exchangeable for Common
Stock, will have been issued prior to the Closing Date; the Shares will
have been duly and validly authorized for issuance and, when issued and
delivered by the Company pursuant to the Plan, will be duly and validly
issued and fully paid and nonassessable, the issuance of the Shares is not
subject to any preemptive rights; and the terms and provisions of the
Common Stock will conform in all material respects to the description
thereof contained in the Prospectus. Upon the issuance of the Shares, good
title to the Shares will be transferred from the Company to the purchasers
thereof against payment therefor, subject to such claims as may be asserted
against the purchasers thereof by third-party claimants.
(q) As of the date hereof and as of the Closing Date, none of the
Company, the Bank, Sandwich Bancorp, Sandwich Bank, or any subsidiary is or
will be in violation of its charter or By-Laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any material contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it or any
of its property may be bound; the consummation of the Conversion and the
Merger, the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the
Company and the Bank, and this Agreement has been validly executed and
delivered by the Company and the Bank and is the valid, legal and binding
obligation of the Company and the Bank enforceable in accordance with its
terms, except to the extent that rights to indemnity hereunder may be
limited under applicable law and subject to bankruptcy, insolvency,
reorganization or other laws related to or affecting the enforcement of
creditors' rights generally and equitable principles limiting the right to
obtain specific enforcement or similar equitable relief. The execution and
delivery of this Agreement, the fulfillment of the
9
terms herein set forth and the consummation of the transactions herein
contemplated will not (i) conflict with or constitute a breach of, or
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, the charter or By-Laws of the Company (in
either mutual or stock form), the Bank, Sandwich Bancorp, Sandwich Bank, or
any subsidiary, or any material contract, lease or other instrument to
which the Company, the Bank, Sandwich Bancorp, Sandwich Bank, or any
subsidiary is a party or in which the Company, the Bank, Sandwich Bancorp,
Sandwich Bank, or any subsidiary has a beneficial interest, or any
applicable law, rule, regulation or order; (ii) violate any authorization,
approval, judgment, decree, order, statute, rule or regulation applicable
to the Company, the Bank, Sandwich Bancorp, Sandwich Bank, or any
subsidiary; or (iii) result in the creation of any lien, charge or
encumbrance upon any property of the Company, the Bank, Sandwich Bancorp,
Sandwich Bank, or any subsidiary.
(r) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement and to carry out the provisions and conditions hereof, and the
Company has all such power, authority, authorizations and orders as may be
required to issue and sell the Shares as provided in the Plan and described
in the Prospectus, subject to the approval of the applicable regulatory
authorities and the satisfaction of any conditions of such approval.
(s) The Company, the Bank, Sandwich Bancorp, Sandwich Bank and their
respective subsidiaries have good and marketable title to all properties
and assets which are material to the business of the combined entity taken
as a whole, including those properties and assets described in the
Prospectus as owned by them, free and clear of all liens, except such liens
as are described in the Prospectus or are not materially significant or
important in relation to the business of the combined entity and its
subsidiaries on a consolidated basis; and all leases and subleases which
are material to the business of the combined entity taken as a whole under
which the Company, the Bank, Sandwich Bancorp, Sandwich Bank or any
subsidiary holds properties, including those leases and subleases described
in the Prospectus, are in full force and effect.
(t) As of the date hereof and as of the Closing Date and the Effective
Date, the Company, the Bank, Sandwich Bancorp and Sandwich Bank are not and
will not be in violation of any directive from the Commission, the
Division, the Bank Board, the FDIC, the FRB or any other agency to make any
material change in the method of conducting their respective businesses so
as to comply in all material respects with all applicable statutes and
regulations (including, without limitation, regulations, decisions,
directives and orders of the Commission, the Division, the Bank Board, the
FDIC and the FRB), and no suit or proceeding, charge, investigation or
action before or by any court, regulatory authority or governmental agency
or body is or will be pending or, to the knowledge of the Company or the
Bank, threatened, which might materially and adversely affect the
Conversion or the Merger, the performance of this Agreement or the
consummation of the transactions contemplated in the Plan and as described
in the Prospectus, or which might result in any material adverse change in
the financial condition, net income, capital, properties, affairs or
prospects of the Company and the Bank taken as a whole, or Sandwich Bancorp
and Sandwich Bank taken as a whole, as applicable, or which would
materially affect their respective properties and assets.
(u) The Company and the Bank have received an opinion of their
counsel, Xxxxx, Xxxx and Xxxxx LLP, Boston, Massachusetts with respect to
the federal income tax consequences of the
10
Conversion and the Merger, and an opinion of Xxxxx, Xxxx & Xxxxx, LLP,
Boston, Massachusetts, with respect to the Massachusetts state income tax
consequences of the Conversion and the Merger; the federal tax opinion of
Xxxxx, Xxxx and Xxxxx LLP, Boston, Massachusetts, is accurately summarized
in the Conversion Application and the Prospectus. The facts and
representations upon which such opinions are based are truthful, accurate
and complete, and neither the Bank nor the Company will take any action
inconsistent therewith.
(v) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, on the part of the
Company, the Bank or any subsidiary in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of
trust, note, bank loan or credit agreement or any other instrument or
agreement to which the Company, the Bank and their subsidiaries taken as a
whole is a party or by which any of them or any of their respective
property is bound or affected which, in any such case, is material to the
Company and the Bank and its subsidiaries taken as a whole; such agreements
are in full force and effect and no other party to any such agreement has
instituted or, to the knowledge of the Company or the Bank, threatened any
action or proceeding wherein the Company, the Bank or any subsidiary would
or might be alleged to be in default thereunder. No default exists, and no
event has occurred which with notice or lapse of time, or both, would
constitute a default, on the part of Sandwich Bancorp, Sandwich Bank or any
subsidiary in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to which Sandwich
Bancorp, Sandwich Bank and their subsidiaries taken as a whole is a party
or by which any of them or any of their respective property is bound or
affected which, in any such case, is material to Sandwich Bancorp, Sandwich
Bank and its subsidiaries, taken as a whole; such agreements are in full
force and effect and no other party to any such agreement has instituted
or, to the knowledge of Sandwich Bancorp or Sandwich Bank, threatened any
action or proceeding wherein Sandwich Bancorp, Sandwich Bank or any
subsidiary would or might be alleged to be in default thereunder.
(w) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date, except as
otherwise may be indicated or contemplated therein, none of the Company,
the Bank or any subsidiary has or will have: (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed
money, except borrowings from the same or similar sources indicated in the
Prospectus in the ordinary course of its business, or (ii) entered into any
transaction which is material in light of the business and properties of
the Company and the Bank taken as a whole. Subsequent to the date the
Registration Statement is declared effective by the Commission and prior to
the Closing Date, except as otherwise may be indicated or contemplated
therein, none of Sandwich Bancorp, Sandwich Bank or any subsidiary has or
will have: (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except borrowings
from the same or similar sources indicated in the Prospectus in the
ordinary course of its business, or (ii) entered into any transaction which
is material in light of the business and properties of Sandwich Bancorp and
Sandwich Bank taken as a whole. For purposes of this Section 4(w),
obligations for borrowed money do not include deposits.
(x) The Company, the Bank, Sandwich Bancorp, Sandwich Bank and their
subsidiaries have filed all federal, state and local tax returns required
to be filed and have made timely payment of all taxes due and payable in
respect of such returns and no deficiency has been asserted with respect
thereto by any taxing authority.
11
(y) Except as disclosed in the Prospectus with respect to the ESOP,
none of the Company, the Bank, Sandwich Bancorp, Sandwich Bank or any
subsidiary has made any payment of funds of the Company, the Bank, Sandwich
Bancorp, Sandwich Bank or any subsidiary as a loan for the purchase of the
Shares or made any other payment of funds prohibited by law, and no funds
have been set aside to be used for any payment prohibited by law.
(z) Prior to the Conversion, the Bank had _______ shares of authorized
capital stock, of which ___ shares were issued and outstanding, and the
Company was not authorized to issue shares. Neither the Bank nor the
Company has: (i) other than described in the Prospectus issued any
securities within the last 18 months (except for notes to evidence other
bank loans and reverse repurchase agreements); (ii) had any material
dealings within the 12 months prior to the date hereof with any member of
the NASD, or any person related to or associated with such member, other
than discussions and meetings relating to the Offering and the Merger and
routine purchases and sales of securities for or from its portfolio; (iii)
entered into a financial or management consulting agreement relating to the
sale of stock, except as contemplated hereunder and in connection with the
Merger; or (iv) engaged any intermediary between the Selling Agents and the
Company or the Bank in connection with any offering of shares of its
capital stock, and no person is being compensated in any manner for such
service.
(aa) Neither the Company, the Bank, Sandwich Bancorp, Sandwich Bank is
required to be registered under the Investment Company Act of 1940, as
amended.
(bb) To the knowledge of the Company and the Bank, the Company has
taken all necessary action to make such filings and/or to qualify or
register the Shares for offer and sale in the Conversion and the Merger
under the securities or Blue Sky laws of all jurisdictions wherein such
Shares will be offered which require such filings and/or qualification or
registration.
(cc) All Sales Information used by the Company in connection with the
Offering that is required by the Conversion Regulations to be filed has
been filed with and approved by the applicable regulatory authority.
(dd) Except for information provided in writing to the Company or the
Bank by the Selling Agents for use in the Prospectus, the Company and the
Bank have not relied upon the Selling Agents or its legal or other advisors
for any legal, tax or accounting advice in connection with the Conversion.
(ee) To the knowledge of the Company and the Bank on the one hand and
to the knowledge of Sandwich Bancorp and Sandwich Bank on the other hand,
each of the Company, the Bank, Sandwich Bancorp and Sandwich Bank and their
respective subsidiaries is in compliance with all laws, rules and
regulations relating to environmental
12
protection, except where such failure would not have a material adverse
effect on the financial condition of the combined entity taken as a whole,
and none of the Company, the Bank, Sandwich Bancorp, Sandwich Bank or any
subsidiary has been notified or is otherwise aware that any of them is
potentially liable, or is considered potentially liable, under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, or any similar state law. No actions, suits, regulatory
investigations or other proceedings are pending, or, to the knowledge of
the Company and the Bank, threatened against the Company, the Bank,
Sandwich Bancorp, Sandwich Bank or any subsidiary relating to environmental
protection, nor does the Company or the Bank have any reason to believe any
such proceedings may be brought against any of such entities. To the
knowledge of the Company and the Bank on the one hand and to the knowledge
of Sandwich Bancorp and Sandwich Bank, on the other hand, no disposal,
release or discharge of hazardous or toxic substances, pollutants or
contaminants, including petroleum and gas products, as any of such terms
may be defined under federal, state or local law, has occurred on, in, at
or about any of the facilities or properties owned, operated or leased by,
or pledged to, the Company, the Bank, Sandwich Bancorp, Sandwich Bank or
any subsidiary, except such disposal, release or discharge which would not
have a material adverse effect on the combined entity taken as a whole.
(ff) No labor dispute with the employees of the Company, the Bank,
Sandwich Bancorp, Sandwich Bank or any subsidiary exists or, to the
knowledge of the Company or the Bank, is imminent.
(gg) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Company and
Sandwich Bancorp included in the Prospectus meet or are exempt from all
requirements of federal, state and local law pertaining to lending,
including, without limitation, truth in lending (including the requirements
of Regulation Z and 12 C.F.R. Part 226), real estate settlement procedures,
consumer credit protection, equal credit opportunity and all disclosure
laws applicable to such loans, except for violations which, if asserted,
would not result in a material adverse effect on the financial condition,
results of operations or business of the combined entity taken as a whole.
Any certificate signed by an officer of the Bank or of the Company and
delivered to the Selling Agents or their counsel that refers to this Agreement
shall be deemed to be a representation and warranty by the Bank or the Company
to the Selling Agents as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
B. The Selling Agents represent and warrant to the Company and the
Bank as follows:
(a) The Selling Agents are registered as broker-dealers with the
Commission and the NASD.
(b) The Selling Agents are validly existing and in good standing
as corporations under the laws of the State of New Jersey with the
corporate power and authority to provide the services to be furnished
to the Company and the Bank hereunder.
(c) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated have been duly
and validly authorized by all necessary corporate action on the part
of the Selling Agents, and this Agreement is a legal, valid and
binding obligation of the Selling Agents, enforceable in accordance
with its terms, except to the extent that rights to indemnity
hereunder may be limited under applicable law and subject to
bankruptcy, insolvency, reorganization or other laws related to or
affecting the enforcement of creditors' rights generally and equitable
principles limiting the right to obtain specific enforcement or
similar equitable relief.
(d) The Selling Agents and, to the Selling Agents' knowledge,
their employees, agents and representatives who shall perform any of
the services required hereunder to be performed by the
13
Selling Agents shall be duly authorized and shall have all licenses,
approvals and permits necessary to perform such services, and Xxxx
Xxxx and/or XxXxxxxxx Xxxx are registered selling agents in the
jurisdictions listed in Exhibit C hereto and will remain registered in
such jurisdictions in which the Company is relying on such
registration for the sale of the Shares, until the Conversion is
consummated or terminated.
(e) The execution and delivery of this Agreement by the Selling
Agents, the fulfillment of the terms set forth herein and the
consummation of the transactions herein contemplated shall not violate
or conflict with the corporate charter or By-Laws of the Selling
Agents or violate, conflict with or constitute a breach of, or default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, any material agreement, indenture or
other instrument by which the Selling Agents are bound or under any
governmental license or permit or any law, administrative regulation,
authorization, approval or order or court decree, injunction or order
applicable to it.
(f) Any funds received by the Selling Agents to purchase Shares
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934 (the "1934 Act"), if applicable.
(g) There is not now pending or, to the Selling Agents'
knowledge, threatened against the Selling Agents any material action
or proceeding before the Commission, the NASD, any state securities
commission or any state or federal court concerning the Selling
Agents' activities as a broker-dealer.
SECTION 5. Additional Covenants of the Company and the Bank. The Company
-------------------------------------------------
and the Bank hereby jointly and severally covenant with the Selling Agents as
follows:
(a) Neither the Company or the Bank will file any amendment or
supplement to the Registration Statement or any Reorganization
Application without notifying the Selling Agents of its intention to
do so and providing the Selling Agents and their counsel an
opportunity to review such amendment or supplement, nor will the
Company or the Bank file any such amendment or supplement to which the
Selling Agents or their counsel shall reasonably object.
(b) The Company and the Bank will use their best efforts to cause
each Reorganization Application not heretofore approved to be approved
by the applicable regulatory authority and will promptly upon receipt
of any information concerning the events listed below notify the
Selling Agents: (i) of the approval of any Reorganization Application
not heretofore approved; (ii) of the receipt of any comments from the
Commission, the Division, the Bank Board, the FDIC, the FRB or any
other governmental entity with respect to the Conversion, the Merger
or the transactions contemplated by this Agreement; (iii) of the
request by the Commission, the Division, the Bank Board, the FDIC, the
FRB or any other governmental entity for any amendment or supplement
to the Registration Statement, the Prospectus or any Reorganization
Application or for additional information; (iv) of the issuance by the
Commission, the Division, the Bank Board, the FDIC, the FRB or any
other governmental entity of any order or other action suspending the
Conversion or the Merger or the use of the Registration Statement or
the Prospectus or any other filing of the Company and the Bank under
the Conversion Regulations, the 1933 Act, 1933 Act Regulations or
other applicable law, or the threat of any such action; (v) of the
issuance by the Commission, the Division, the Bank Board, the FDIC,
the FRB or any other state governmental authority of any stop order
14
suspending the effectiveness of the Registration Statement or any
Reorganization Application or of the initiation or threat of any
proceedings for such purpose; or (vi) of the occurrence of any event
mentioned in paragraph (f) below. The Company and the Bank will make
every reasonable effort to prevent the issuance by the Commission, the
Division, the Bank Board, the FDIC, the FRB or any other governmental
authority of any such order and, if any such order shall at any time
be issued, to obtain the lifting thereof at the earliest possible
time. The Company and the Bank will provide copies of the foregoing
comments, requests and orders to the Selling Agents upon receipt of
such items.
(c) The Company and the Bank will deliver to the Selling Agents
and to their counsel two conformed copies of each of the following
documents, with all exhibits: each Reorganization Application as
originally filed and each amendment or supplement thereto and the
Registration Statement as originally filed and each amendment thereto.
In addition, the Company and the Bank will also deliver to the Selling
Agents such number of copies of the closing documents with respect to
the Conversion and the Offering as the Selling Agents may reasonably
request.
(d) The Company will furnish to the Selling Agents, from time to
time during the period when the Prospectus is required to be delivered
under federal or state securities laws or regulations or the
applicable rules and regulations of any other governmental entity,
such number of copies of the Prospectus (as amended or supplemented)
as the Selling Agents may reasonably request for the purposes
contemplated by such federal or state securities laws or regulations
or the applicable rules and regulations of any other governmental
entity. The Company authorizes the Selling Agents to use the
Prospectus (as amended or supplemented) for any lawful manner in
connection with the sale of the Shares.
(e) The Company and the Bank will comply with any and all terms,
conditions, requirements and provisions with respect to the
Reorganization and the transactions contemplated thereby imposed by
the Commission, the Division, the Bank Board, the FDIC, the FRB, any
state regulatory or Blue Sky authority or any other governmental
entity, including the terms, conditions, requirements and provisions
contained in the Reorganization Regulations, the 1933 Act, the 1933
Act Regulations, the 1934 Act and the rules and regulations of the
Commission promulgated under the 1934 Act (the "1934 Act
Regulations").
(f) If, at any time during the period when the Prospectus is
required to be delivered, any event relating to or affecting the
Company or the Bank shall occur, as a result of which it is necessary
or appropriate, in the opinion of counsel for the Company and the
Bank, to amend or supplement the Registration Statement or the
Prospectus in order to make the Registration Statement or Prospectus
not misleading in light of the circumstances existing at the time it
is delivered to a purchaser, the Company and the Bank will, at their
expense, forthwith prepare, file with the Commission and furnish to
the Selling Agents a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration
Statement or Prospectus (in form and substance reasonably satisfactory
to the Selling Agents and their counsel after a reasonable time for
review) which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading.
15
(g) The Company and the Bank will take all necessary actions, in
cooperation with the Selling Agents, and furnish to whomever the
Selling Agents may direct such information as may be required to
qualify or register the Shares for the Offering and sale by the
Company under the applicable securities or Blue Sky laws of such
jurisdictions as the Selling Agents may reasonably designate;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify to do business in
any jurisdiction in which it is not otherwise required to be so
qualified. In each jurisdiction where any of the Shares shall have
been so qualified or registered, the Company will make and file such
statements and reports as are or may be required by the laws of such
jurisdiction.
(h) The Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date,
without the prior written consent of the Selling Agents, any shares
of, or any securities convertible into or exercisable for shares of,
Common Stock other than in connection with the Merger or any other
plan or arrangement described in the Prospectus.
(i) During the period in which the Company's Common Stock is
registered under the 1934 Act, the Company will furnish to its
stockholders as soon as practicable after the end of each fiscal year
an annual report (including a consolidated balance sheet and
consolidated statements of income, stockholders' equity and cash flows
of the Company and the Bank as at the end of and for such year,
certified by independent public accountants in accordance with
Regulation S-X under the 0000 Xxx) and make available as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the first fiscal quarter ending after the
Closing Date) financial information of the Company and the Bank for
such quarter in reasonable detail.
(j) During the period of three years from the date hereof, the
Company will furnish to the Selling Agents: (i) promptly after it
becomes available, a copy of each report of the Company furnished
generally to stockholders of the Company or furnished to or filed with
the Commission under the 1934 Act or any national securities exchange
or system on which any class of securities of the Company is listed or
quoted (including, but not limited to, reports of Forms 10-K, 10-Q and
8-K and all proxy statements and annual reports to stockholders), a
copy of each other report of the Company mailed to its stockholders or
filed with the Commission or any other supervisory or regulatory
authority or any national securities exchange or system on which any
class of securities of the Company is listed or quoted and each press
release and material news item and article released by the Company or
the Bank, and (ii) from time to time, such other public information
concerning the Company and the Bank as the Selling Agents may
reasonably request.
(k) The Company and the Bank will use the net proceeds from the
sale of the Shares substantially in the manner set forth in the
Prospectus under the caption "Use of Proceeds."
(l) Other than as permitted by the Reorganization Regulations,
the laws of the Commonwealth of Massachusetts, the 1933 Act, the 1933
Act Regulations and the laws of any jurisdiction in which the Shares
are qualified for sale, neither the Company nor the Bank will
distribute any Prospectus or other Sales Information in connection
with the offer and sale of the Shares.
(m) 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
16
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 such Rule 158) of the
Registration Statement.
(n) The Company will register the Common Stock under Section
12(g) of the 1934 Act effective on or prior to the Closing Date.
(o) The Company will use its best efforts to obtain approval for,
effective on or prior to the Closing Date, and maintain quotation of
the Common Stock on the Nasdaq National Market System.
(p) The Company will maintain appropriate arrangements for
depositing all funds received from persons delivering orders to
purchase Shares in the Subscription and Community Offerings on an
interest-bearing basis at the rate described in the Prospectus until
the Closing Date or until the Offering is terminated in accordance
with the Plan and as described in the Prospectus. The Company will
maintain such records of all funds received to permit the funds of
each subscriber to be separately insured by the BIF and the DIFM (to
the maximum extent allowable) and to enable the Company to make
appropriate refunds of such funds in the event that such refunds are
required to be made in accordance with the Plan and as described in
the Prospectus.
(q) The Company will take such actions and furnish such
information as are reasonably requested by the Selling Agents in order
for the Selling Agents to ensure compliance with Article III, Section
1, of the NASD's Rules of Fair Practice and the NASD's "Interpretation
to Free Riding and Withholding."
(r) The Company and the Bank will conduct their respective
businesses in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and
orders including, all decisions, directives and orders of the
Division, the FDIC and the FRB.
(s) The Bank will not amend the Plan without the Selling Agents'
prior written consent in any manner that, in the opinion of the
Selling Agents, would affect the sale of the Shares or the terms of
this Agreement, which approval shall not be unreasonably withheld.
(t) The Company and the Bank will use all reasonable efforts to
comply with, or cause to be complied with, the conditions precedent to
the several obligations of the Selling Agents specified in Section 9
hereof.
(u) Prior to the Closing Date, the Company shall have received
approval of each Reorganization Application required to consummate the
Merger, and all applicable waiting periods shall have expired.
SECTION 6. Payment of Expenses. The Company and the Bank jointly and
--------------------
severally agree to pay all expenses incident to the performance of the
obligations of the Company and the Bank under this Agreement, including the
following: (i) the preparation, printing, issuance and delivery of the
certificates evidencing the Shares sold to the purchasers in the Offering and
the printing and delivery of all other documents applicable to the Conversion
and the Merger; (ii) the fees and disbursements of the Company's
17
and the Bank's counsel, accountants and other advisors; (iii) the qualification
of the Shares under all applicable securities or Blue Sky laws, including filing
fees and the reasonable fees and disbursements of counsel in connection
therewith and in connection with the preparation of a Blue Sky Survey concerning
such jurisdictions as the Selling Agents may reasonably designate; (iv) the
printing and delivery to the Selling Agents in such quantities as the Selling
Agents shall reasonably request of copies of the Registration Statement, the
Prospectus and the Reorganization Applications as originally filed and as
amended or supplemented and all other documents in connection with the
Conversion and this Agreement; (v) the filing fees incurred in connection with
the review of the Registration Statement, the Reorganization Applications and
any other application, form or filing by the Commission, the Division, the Bank
Board, the FDIC and the FRB; (vi) the filing fees and the fees and disbursements
of counsel incurred in connection with the review of the Offering by the NASD;
(vii) the fees for listing the Shares on the Nasdaq National Market System;
(viii) the fees and expenses relating to the Independent Valuation; (ix) the
fees and expenses relating to advertising expenses, temporary personnel
expenses, expenses related to the Stock Information Center to be established,
investor meeting expenses and other miscellaneous expenses relating to the
marketing by the Selling Agents of the Shares; and (x) the fees and charges of
any transfer agent, registrar or other agent. In the event that the Selling
Agents incur any such expenses on behalf of the Company or the Bank, the Company
or the Bank will pay or reimburse the Selling Agents for such expenses
regardless of whether the Conversion is successfully completed, and such
reimbursements will not be included in the expense limitations set forth in the
following paragraph. the Selling Agents will not incur any single expense of
more than $1,000 pursuant to this paragraph without the prior approval of the
Company or the Bank.
In addition, the Company and the Bank will reimburse the Selling Agents for
all reasonable out-of-pocket expenses, including legal fees and expenses,
incurred by the Selling Agents in connection with the services provided by the
Selling Agents to the Company and the Bank pursuant to this Agreement. Such
legal fees shall not exceed $55,000 and such other out-of-pocket expenses
incurred by Xxxx Xxxx shall not exceed $15,000. The Selling Agents will provide
the Company and the Bank with a detailed accounting of the out-of-pocket
expenses referred to in this paragraph, which will be paid by the Company and
the Bank on the Closing Date. The parties hereto acknowledge that the expense
limitations set forth in this paragraph may be exceeded in the event of a
material delay in the Offering that requires an update of financial information
contained in the Registration Statement.
SECTION 7. Indemnification.
----------------
(a) The Bank and the Company jointly and severally agree to
indemnify and hold harmless the Selling Agents, their officers,
directors, agents and employees and each person, if any, who controls
the Selling Agents within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to
settlement expenses, subject to the limitation in the last sentence of
paragraph (c) below), joint or several, that the Selling Agents or any
of such persons may suffer or to which the Selling Agents or any such
persons may become subject under all applicable federal and state laws
or otherwise, and to promptly reimburse the Selling Agents and any of
such persons upon written demand for any expenses (including
reasonable fees and disbursements of counsel) reasonably incurred by
the Selling Agents or any of such persons in connection with
investigating, preparing or defending any actions, proceedings or
claims (whether commenced or threatened) to the extent such losses,
claims, damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement, or alleged untrue statement, of any
material fact contained in any Reorganization
18
Application (or any amendment or supplement thereto), the Registration
Statement (or any amendment or supplement thereto), the Prospectus (or
any amendment or supplement thereto), any Blue Sky application or
other instrument or document prepared, made or executed by or on
behalf of the Company or the Bank or based upon written information or
statements furnished or made by the Company or the Bank or their
respective representatives (including counsel) which is filed in any
jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (or any amendment or supplement thereto)
(collectively, the "Blue Sky Application") or any application or other
document, advertisement or communication prepared, made or executed by
or on behalf of the Company or the Bank or based upon written
information or statements furnished or made by the Bank or the Company
or their respective representatives (including counsel) whether or not
filed in any jurisdiction in order to register or qualify any or all
of the Shares under the securities law thereof (the "Sales
Information"); (ii) arise out of or are based upon the omission or
alleged omission to state in any of the foregoing documents or
information a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) arise from any theory
of liability whatsoever relating to or arising from or based upon any
Reorganization Application (or any amendment or supplement thereto),
the Registration Statement (or any amendment or supplement thereto),
the Prospectus (or any amendment or supplement thereto), the Blue Sky
Application, the Sales Information or other documentation prepared by
the Bank or the Company and distributed in connection with the
Offering; except to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact in, or
omission or alleged omission of a material fact from, any
Reorganization Application (or any amendment or supplement thereto),
the Registration Statement (or any amendment or supplement thereto),
the Prospectus (or any amendment or supplement thereto), the Blue Sky
Application, the Sales Information or other documentation prepared by
the Company or the Bank and distributed in connection with the
Offering made in reliance upon and in conformity with information
furnished in writing to the Company or the Bank by the Selling Agents
or their representatives (including counsel) regarding the Selling
Agents expressly for use in the Prospectus, which the Bank and the
Company acknowledge includes only the information contained in the
Prospectus under the captions "Summary of Prospectus-Marketing Agent"
and "The Offerings-Plan of Distribution and Selling Commissions"; nor
shall indemnification be required for material oral misstatements to a
purchaser of Shares made by the Selling Agents which are not based
upon information provided by the Company or the Bank in writing or
based upon information contained in any Reorganization Application (or
any amendment or supplement thereto), the Registration Statement (or
any amendment or supplement thereto), the Prospectus (or any amendment
or supplement thereto), the Blue Sky Application or the Sales
Information or other documentation prepared by the Company or the Bank
and distributed in connection with the Reorganization. In addition,
neither the Company nor the Bank will be liable under the foregoing
indemnification provisions to the extent that any loss, claim, damage,
liability or action is found in a final judgment by a court to have
resulted from the Selling Agents' bad faith or negligence in
performing the services to be performed by the Selling Agents under
this Agreement. 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. For
purposes of this Section 7, the term "expense" shall include, but not
be limited to, counsel fees and costs, court costs and out-of-pocket
costs. The foregoing agreement to indemnify shall be in addition to
any liability the Company or the Bank may otherwise have to the
Selling Agents or the persons entitled to the benefit of these
indemnification provisions.
19
(b) The Selling Agents agree to indemnify and hold harmless the
Company and the Bank, their respective officers, directors, agents and
employees and each person, if any, who controls the Bank or the
Company within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act against any and all loss liability, claim,
damage or expense whatsoever (including but not limited to settlement
expenses, subject to the limitation in the last sentence of paragraph
(c) below), joint or several, that they or any of such persons may
suffer or to which they or any such persons may become subject under
all applicable federal and state laws or otherwise, and to promptly
reimburse the Bank and the Company and any of such persons upon
written demand for any expenses (including reasonable fees and
disbursements of counsel) reasonably incurred by them or any of such
persons in connection with investigating, preparing or defending any
actions, proceedings or claims (whether commenced or threatened) to
the extent such losses, claims, damages, liabilities or actions: (i)
arise out of or are based upon any untrue statement, or alleged untrue
statement, of a material fact contained in any Reorganization
Application (or any amendment or supplement thereto), the Registration
Statement (or any amendment or supplement thereto), the Prospectus (or
any amendment or supplement thereto), the Blue Sky Application, the
Sales Information or other documentation prepared by the Company or
the Bank and distributed in connection with the Offering; or (ii)
arise out of or which are based upon the omission or alleged omission
to state in any of the foregoing documents or information a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that obligations of the Selling Agents
under this paragraph shall exist only if and to the extent that such
untrue statement or alleged untrue statement was made in, or such
omission or alleged omission was from, any Reorganization Application
(or any amendment or supplement thereto), the Registration Statement
(or any amendment or supplement thereto), the Prospectus (or any
amendment or supplement thereto), the Blue Sky Application, the Sales
Information or other documentation prepared by the Bank or the Company
and distributed in connection with the Offering in reliance upon and
in conformity with information furnished in writing to the Company or
the Bank by the Selling Agents or their representatives (including
counsel) regarding the Selling Agents expressly for use in the
Prospectus, which the Bank and the Company acknowledge includes only
the information contained in the Prospectus under the captions
"Summary of Prospectus-Marketing Agent" and "The Offerings-Plan of
Distribution and Selling Commissions." In addition, the Selling Agents
will not be liable under the foregoing indemnification provisions to
the extent that any loss, claim, damage, liability or action is found
in a final judgment by a court to have resulted from the Bank's or the
Company's bad faith or negligence. The foregoing agreement to
indemnify shall be in addition to any liability the Selling Agents may
otherwise have to the Company and the Bank or the persons entitled to
the benefit of these indemnification provisions.
(c) Each indemnified party shall give prompt written notice to
each indemnifying party of any action, proceeding, claim (whether
commenced or threatened) or suit instituted against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability which it
may have on account of this Section 7 and Section 8 herein. An
indemnifying party may participate at its own expense in the defense
of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any
other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably
acceptable to the indemnified parties that are defendants in such
action, unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available to
them that are different from or in addition
20
to those available to such indemnifying party. If an indemnifying
party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such
action, proceeding or claim, other than reasonable costs of
investigation. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one firm of attorneys for the
indemnified parties (unless an indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them which are different from or additional to those of the other
indemnified parties) in connection with any one action, proceeding or
claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall be liable
for any settlement of any action, proceeding or suit effected without
its prior written consent.
(d) The agreement contained in this Section 7 and in Section 8
hereof and the representations and warranties of the Bank and the
Company set forth in this Agreement shall remain operative and in full
force and effect regardless of: (i) any investigation made by or on
behalf of the Selling Agents or their directors, officers, agents,
employees or controlling persons or by or on behalf of the Bank or the
Company or their respective directors, officers, agents, employees or
controlling persons; (ii) delivery of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
SECTION 8. Contribution. If the indemnification of an indemnified party
-------------
provided for in Section 7 of this Agreement is for any reason held
unenforceable, the Bank and the Company, on the one hand, and the Selling
Agents, on the other, agree to contribute to the losses, liabilities, claims,
damages and expenses for which such indemnification is held unenforceable: (i)
in such proportion as is appropriate to reflect the relative benefits to the
Bank and the Company, on the one hand, and the Selling Agents, on the other, of
the Reorganization as contemplated (whether or not the Reorganization is
consummated), or (ii) if the application provided for in clause (i) is for any
reason held unenforceable, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) but also the relative fault
of the Bank and the Company, on the one hand, and the Selling Agents, on the
other, as well as other equitable considerations. The Bank and the Company agree
that for the purposes of this Section 8, the relative benefits to the Bank and
the Company and the Selling Agents of the Conversion as contemplated shall be
deemed to be in the same proportion that the total net proceeds from the
Conversion and the Offering received by the Bank and the Company in connection
with the Conversion bear to the total fees paid or to be paid to the Selling
Agents under this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each of the
Selling Agents' officers and directors and each person, if any, who controls the
Selling Agents within the meaning of the 1933 Act and the 1934 Act shall have
the same rights to contribution as the Selling Agents, and each of the Company's
and the Bank's officers and directors and each person, if any, who controls the
Bank or the Company within the meaning of the 1933 Act and the 1934 Act shall
have the same rights to contribution as the Bank and the Company. Any party
entitled to contribution shall, promptly after receipt of notice of commencement
of any action, suit, claim or proceeding against such party in respect to which
a claim for contribution may be made against another party, notify such other
party, but the omission to so notify such party shall not relieve the party from
whom contribution may be sought from any other obligation it may have hereunder
or otherwise than under this Section 8. The Bank, the Company and the Selling
Agents agree that it would not be just and equitable if contribution pursuant to
this Section 8 were determined by pro rata
--- ----
21
allocation or by other method of allocation that does not take into account the
equitable considerations referred to in this Section 8.
SECTION 9. Conditions of the Selling Agents' Obligations. The obligations
----------------------------------------------
of the Selling Agents hereunder as to the Shares to be delivered at the Closing
Date are subject, in the discretion of the Selling Agents, to the condition that
all representations and warranties and other statements of the Bank and the
Company herein are, at and as of the commencement of the Offering and at and as
of the Closing Date, true and correct in all material respects, the condition
that the Bank and the Company shall have performed in all material respects all
of their respective obligations hereunder to be performed on or before such
dates and to the following conditions:
(a) The Registration Statement shall have been declared effective by
the Commission not later than 5:30 p.m. on the date of this Agreement, or
with the consent of the Selling Agents at a later time and date; and at the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or the consummation of the Conversion shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission or any state securities or Blue Sky authority, and no order or
other action suspending the effectiveness of the Prospectus or the
consummation of the Conversion shall have been issued or proceedings
therefore initiated or threatened by the Division, the Bank Board, the FDIC
or the FRB.
(b) At the Closing Date, the Selling Agents shall have received:
(1) The favorable opinion, dated as of the Closing Date addressed
to the Selling Agents and for their and their counsel's benefit, of
Xxxxx, Xxxx & Xxxxx, LLP ("Xxxxx Xxxx"), as to issues of federal and
Massachusetts law set forth below. The opinion of Xxxxx Xxxx shall be
in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a mutual holding company under the laws of the
Commonwealth of Massachusetts and upon the Conversion will become
a duly organized and validly existing corporation in good
standing under the laws of Massachusetts. The Bank has been duly
organized and is validly existing under the laws of the
Commonwealth of Massachusetts. Each of the subsidiaries has been
duly organized and is validly existing and in good standing under
the laws of its jurisdiction of organization.
(ii) Each of the Company, the Bank and their subsidiaries
has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and Prospectus; and each of the Company,
the Bank and their subsidiaries is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, unless the
failure to be so qualified in one or more of such jurisdictions
would not have a material adverse effect on the financial
condition or the business, operations, net income or prospects of
the Company and the Bank taken as a whole.
22
(iii) The Company is a Massachusetts-chartered mutual
holding company, and, at the Closing Date, will become a
Massachusetts-chartered business corporation, with corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus. The Bank
is a Massachusetts-chartered stock savings bank, with corporate
power and authority to own, lease and operate its property and to
conduct its business as described in the Prospectus. All of the
outstanding capital stock of the Bank is duly authorized and
validly issued, fully paid and non-assessable and owned by the
Company, free and clear of any liens, encumbrances, claims or
other restrictions.
(iv) The activities of each subsidiary of the Company and
the Bank as described in the Registration Statement and
Prospectus are permitted to subsidiaries of a
Massachusetts-chartered savings bank and of a bank holding
company, by the rules, regulations, policies and practices of the
Division, the FDIC, the FRB and any other federal or state
authority having jurisdiction over such matters. All of the
outstanding stock of each subsidiary of the Company and the Bank
has been duly authorized and validly issued and is fully paid and
nonassessable; and all such stock is owned of record and
beneficially by the Bank, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(v) Upon consummation of the Conversion and the Merger, the
authorized, issued and outstanding equity capital of the Company
will be as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization" and, other than in
the Conversion, no shares of Common Stock, or securities
exercisable into or exchangeable for Common Stock, will have been
issued prior to the Closing Date and the Effective Date; at the
time of the Conversion the Shares will have been duly and validly
authorized for issuance, and when issued and delivered by the
Company pursuant to the Plan, will be duly authorized and validly
issued and fully paid and nonassessable; the issuance of the
Shares is not subject to any preemptive rights. To such counsel's
knowledge, upon the issuance of the Shares, good title to the
Shares will be transferred from the Company to the purchasers
thereof against payment therefor, subject to such claims as may
be asserted against the purchasers thereof by third-party
claimants.
(vi) Each Conversion Application has been approved by the
applicable regulatory authority pursuant to the Conversion
Regulations, and, to such counsel's knowledge, no action has been
taken or is pending or threatened to revoke any such approval.
(vii) Each Conversion Application, as amended or
supplemented, if amended or supplemented, as filed with the
applicable regulatory authority complied as to form in all
material respects with the requirements of the Conversion
Regulations.
(viii) The Division's approval of the Plan remains in full
force and effect; the Company has duly adopted a Massachusetts
stock charter and By-Laws effective upon consummation of the
Conversion; the Company and the Bank have
23
conducted the Conversion in all material respects in accordance
with the requirements of the Conversion Regulations, federal law,
all other applicable regulations, decisions and orders and the
Plan, including all material applicable terms, conditions,
requirements and conditions precedent to the Conversion imposed
upon the Company and the Bank by the Division, the Bank Board,
the FDIC and the FRB; no order has been issued by the Division,
the Bank Board, the FDIC or the FRB to suspend the Conversion or
the Merger and no action for such purpose has been instituted or,
to such counsel's knowledge, threatened by the Division, the Bank
Board, the FDIC or the FRB; and, to such counsel's knowledge, no
person has sought to obtain review of the final action of the
Division in approving the Conversion Application or the Plan.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company and the Bank and is the legal, valid and
binding agreement of the Company and the Bank, subject, as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership and other laws of
general applicability relating to or affecting creditors' rights
or the rights of creditors of depository institutions the
deposits of which are insured by the BIF or the DIFM, to general
principles of equity (whether considered in an action at law or
in equity) and to the extent that rights to indemnity and
contribution thereunder may be limited under applicable laws or
under considerations of public policy.
(x) The Registration Statement is effective under the 1933
Act and no stop order suspending effectiveness has been issued
under the 1933 Act and, to such counsel's knowledge, no
proceedings therefor have been initiated or threatened by the
Commission or any state securities or Blue Sky authority.
(xi) All conditions imposed by regulatory authorities in
connection with their respective approvals of the Conversion
Applications have been satisfied, and no further approval,
authorization, consent or other order of any federal or state
board or body is required in connection with the execution and
delivery of this Agreement, the issuance of the Shares and the
consummation of the Conversion, except as may be required under
the securities or Blue Sky laws of various jurisdictions.
(xii) At the time the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, stock valuation information and other
financial and statistical data included therein, as to which no
opinion need be rendered), complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and (ii) the Prospectus (other than the financial
statements, stock valuation information and other financial and
statistical data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the Conversion Regulations.
(xiii) The information in the Registration Statement and
Prospectus under the captions "Risk Factors-Regulatory Oversight
and Legislation" and "-Certain
24
Anti-Takeover Provisions," "Regulation of Seacoast Financial and
Subsidiaries," "Restrictions on Acquisition of Seacoast Financial
and Subsidiaries" and "Description of Capital Stock of Seacoast
Financial" to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects.
(xiv) The terms and provisions of the Common Stock conform
in all material respects to the description thereof contained in
the Prospectus, and the form of certificate used to evidence the
Shares is in due and proper form.
(xv) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the
Company, the Bank or any subsidiary which are required to be
disclosed in the Registration Statement and Prospectus other than
those disclosed therein, and all pending legal and governmental
proceedings to which the Company, the Bank or any subsidiary is
the subject which are not disclosed in the Registration
Statement, including ordinary routine litigation, are, considered
in the aggregate, not material.
(xvi) To such counsel's knowledge, there are no material
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement and Prospectus or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, and the description thereof
or references thereto are correct in all material respects.
(xvii) To such counsel's knowledge, the Company, the Bank
and the subsidiaries have obtained all material licenses, permits
and other governmental authorizations currently required for the
conduct of their respective businesses taken as a whole, as
described in the Registration Statement and Prospectus, all such
licenses, permits and other governmental authorizations are in
full force and effect, and the Company, the Bank and the
subsidiaries are in all material respects complying therewith.
(xviii) The Plan has been duly adopted by the required votes
of the Board of Trustees and the corporators, including the
"independent corporators," of the Company.
(xix) The Company is not in violation of its mutual Articles
of Organization or By-Laws (and the Company will not be in
violation of its Massachusetts stock Articles of Organization
upon consummation of the Conversion); the execution and delivery
of this Agreement, the incurrence of the obligations herein set
forth and the consummation of the transactions contemplated
herein will not result in any violation of the provisions of the
Articles of Organization or By-Laws of the Company.
25
(xx) The Bank is not in violation of its Massachusetts stock
charter or By-Laws; the execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
result in any violation of the provisions of the charter or
By-Laws of the Bank.
(xxi) To such counsel's knowledge, none of the subsidiaries
is in violation of its charter or By-Laws; to such counsel's
knowledge, the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
result in any violation of the provisions of the charter or
By-Laws of such subsidiary.
(xxii) To such counsel's knowledge, neither the Company nor
the Bank is in violation of any directive from the Division, the
Bank Board, the FDIC or the FRB to make any material change in
the method of conducting its business, and the Company and the
Bank have conducted and are conducting their respective
businesses so as to comply in all material respect with all
applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the
Division, the Bank Board, the FDIC and the FRB).
(xxiii) Neither the Company nor the Bank is required to be
registered as an investment company under the Investment Company
Act of 1940.
(xxiv) The Company and the Bank have the power and authority
to consummate the transactions contemplated by the Merger
Agreement.
(xxv) The Merger Agreement has been duly authorized,
executed and delivered by the Company and the Bank and
constitutes the valid and binding obligation of the Company and
the Bank enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, whether applied
in a court of law or a court of equity.
(xxvi) To such counsel's knowledge, all corporate acts and
other proceedings required to be taken by or on the part of the
Company and the Bank to consummate the transactions contemplated
by the Merger Agreement have been properly taken; neither the
execution and delivery of the Merger Agreement, nor the
consummation of the transactions contemplated thereby, with and
without the giving of notice or the lapse of time, or both, will
violate any provision of the Articles, Charter or Bylaws of the
Company and the Bank.
(xxvii) Except as disclosed in such opinion, to such
counsel's knowledge, there are no actions, suits, proceedings or
investigations (public
26
or private) of any nature pending or threatened that challenge
the validity or propriety of the transactions contemplated by the
Merger Agreement or which seek or threaten to restrain, enjoin or
prohibit or to obtain substantial damages in connection with the
consummation of such transactions.
(xxviii) All regulatory and governmental approvals and
consents which are necessary to be obtained by the Company and
the Bank and its subsidiaries to permit the execution, delivery
and performance of the Merger Agreement have been obtained.
(xxix) All conditions precedent to consummation of the
Merger have been satisfied or waived, including but not limited
to those referenced in the Merger Agreement other than the
delivery of the Exchange Shares, all statutory waiting periods
with respect to all regulatory and governmental approvals of the
Acquisition have expired and there are no facts or circumstances
which would preclude the consummation of the Merger immediately
after determination of the Exchange Ratio.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Commonwealth of Massachusetts or the United States, to the extent such counsel
deems proper and specifies in such opinion, upon the opinion of other counsel of
good standing (providing that such counsel states that the Selling Agents and
its counsel are justified in relying upon such specified opinion or opinions),
and (B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and the Bank and public
officials; provided copies of any such opinion(s) or certificates are delivered
to the Selling Agents together with the opinion to be rendered hereunder by such
counsel.
(2) The favorable opinion, dated as of the Closing Time, of Xxxxxxx,
Kantarian & Xxxxxxxxx, counsel to Sandwich Bancorp and Sandwich Bank, concerning
the following matters:
(i) Sandwich Bancorp is a corporation duly organized, validly
existing and in good standing under the laws of the State of ______,
and Sandwich Bank is a Massachusetts chartered cooperative bank duly
organized, validly existing and in good standing under the laws of the
Massachusetts.
(ii) Sandwich Bancorp and Sandwich Bank have the power and
authority to carry on their business as described in the Prospectus
and to consummate the transactions contemplated by the Merger
Agreement.
(iii) The Merger Agreement has been duly authorized and approved
by Sandwich Bancorp and the Merger Agreement and the transactions
contemplated thereby have been approved by the requisite vote of
Sandwich Bancorp's shareholders and duly authorized, executed and
delivered by Sandwich Bancorp and the Merger Agreement constitutes the
valid and binding obligation of Sandwich Bancorp enforceable in
accordance with its terms subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies generally
and
27
subject, as to enforceability, to general principles of equity,
whether applied in a court of law or a court of equity.
(iv) To such counsel's knowledge, all acts and other proceedings
required to be taken by or on the part of Sandwich Bancorp, including
the adoption of the Merger Agreement by the shareholders of Sandwich
Bancorp, and the necessary approvals, consents, authorizations or
notifications required to be taken to consummate the transactions
contemplated by the Merger Agreement, have been properly taken or
obtained; neither the execution and delivery of the Merger Agreement
nor the consummation of the transactions contemplated hereby and
thereby, with or without the giving of notice or the lapse of time, or
both, will (i) violate any provision of the Articles of Incorporation,
Charter or Bylaws; or (ii) to the knowledge of such counsel, violate,
conflict with, result in the material breach or termination of,
constitute a material default under, accelerate the performance
required by, or result in the creation of any material lien, charge or
encumbrance upon any of the properties or assets of Sandwich Bancorp
and Sandwich Bank pursuant to any indenture, mortgage, deed of trust,
or other agreement or instrument to which Sandwich Bancorp and
Sandwich Bank are a party or by which it or any of their properties or
assets may be bound, or violate any statute, rule or regulation
applicable to Sandwich Bancorp and Sandwich Bank, which would have a
material adverse effect on the financial condition, assets,
liabilities, or business of Sandwich Bancorp and Sandwich Bank; to the
knowledge of such counsel, no consent, approval, authorization, order,
registration or qualification of or with any court, regulatory
authority or other governmental body other than as specifically
contemplated by the Merger Agreement is required for the consummation
by Sandwich Bancorp and Sandwich Bank of the transactions contemplated
by the Merger Agreement.
(v) To such counsel's knowledge, there are no actions, suits,
proceedings, or investigations of any nature pending or threatened
that challenge the validity or legality of the transactions
contemplated by the Merger Agreement which seek or threaten to
restrain, enjoin or prohibit (or obtain substantial damages in
connection with) the consummation of such transactions.
(vi) To such counsel's knowledge, there is no litigation,
appraisal or other proceeding or governmental investigation pending or
threatened against or relating to the business or property of Sandwich
Bancorp or Sandwich Bank which would have a materially adverse effect
on the consolidated financial condition of Sandwich Bancorp, or any
legal impediment to the continued operation of the properties and
business of Sandwich Bancorp and Sandwich Bank in the ordinary course
after the consummation of the transactions contemplated by the Merger
Agreement.
(vii) All conditions precedent to consummation of the Merger have
been satisfied, including but not limited to those referenced in
Article ___ of the Merger Agreement, all statutory waiting periods
with respect to all regulatory and governmental approvals of the
Merger have expired and there are no facts or
28
circumstances which would preclude the immediate consummation of the
Merger.
(3) The letter of Xxxxx Xxxx addressed to the Selling Agents, dated the
Closing Date, in form and substance to the effect that:
During the preparation of the Conversion Applications, the Registration
Statement and the Prospectus, such counsel participated in conferences with
management of and the independent certified public accountants for the Company
and the Bank. Based upon such conferences and such review of corporate records
of the Company and the Bank as such counsel conducted in connection with the
preparation of the Registration Statement and Conversion Applications, nothing
has come to their attention that would lead them to believe that any Conversion
Application, the Registration Statement, the Prospectus or any amendment or
supplement thereto (other than financial statements, stock valuation information
and other financial and statistical data included therein, as to which such
counsel need express no view), contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(4) The favorable opinion, dated as of the Closing Date, of Xxxx Xxxxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C, counsel for the Selling Agents, with respect to
such matters as the Selling Agents may reasonably require. Such opinion may rely
upon certificates of officers and directors of the Company and the Bank
delivered pursuant hereto or as such counsel shall reasonably request.
(c) At the Closing Date, the Selling Agents shall receive a
certificate of the Chief Executive Officer and the Chief Financial Officer
of the Company and of the Chief Executive Officer and Chief Financial
Officer of the Bank, dated the Closing Date, to the effect that: (i) since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has been no material adverse change in
the financial condition or in the net income, capital, properties, affairs
or prospects of the Company and the Bank taken as a whole, whether or not
arising in the ordinary course of business; (ii) the representations and
warranties in Section 4 of this Agreement are true and correct with the
same force and effect as though expressly made at and as of the Closing
Date; (iii) 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 the Closing Date and will comply with all obligations to be
satisfied by them after the Conversion; (iv) 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 or any state securities or Blue Sky authority; and (v) no order
suspending the Offering, the Conversion or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose have been
issued and no proceedings for that purpose have been initiated or
threatened by the Division, the Bank Board, the FDIC or the FRB.
(d) Prior to and at the Closing Date: (i) there shall have been no
material adverse change in the financial condition or in the net income,
affairs or prospects of the Company or the Bank taken as a whole since the
respective dates as of which information is given in the Prospectus, except
as referred to therein; (ii) there shall have been no material transaction
entered into by the Company or the Bank taken as a whole since the latest
dates as of which the financial condition of
29
the Company and the Bank is set forth in the Prospectus, other than
transactions referred to or contemplated therein; (iii) neither the Company
nor the Bank shall have received from the Division, the Bank Board, the
FDIC or the FRB 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 Selling Agents)
or which would materially and adversely affect its business, operations,
financial condition or net income; (iv) neither the Company nor the Bank
shall have been in default (nor shall an event have occurred which, with
notice or lapse of time or both, would constitute a default) under any
provision of any agreement or instrument relating to any outstanding
indebtedness; (v) no action, suit or proceeding, at law or in equity or
before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of the Company or the Bank,
threatened against the Company or the Bank or affecting any of their
respective properties wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, operations, financial
condition or net income of the Company and the Bank taken as a whole; and
(vi) the Shares shall have been qualified or registered for offering and
sale under the securities or Blue Sky laws of the jurisdictions set forth
in the Blue Sky Survey of __________.
(e) (1)Concurrently with the execution of this Agreement, the Selling
Agents, the Company and the Bank shall receive a letter from Xxxxxx
Xxxxxxxx dated the date hereof and addressed to the Selling Agents: (i)
confirming that Xxxxxx Xxxxxxxx is a firm of independent certified public
accountants with respect to the Company and the Bank within the meaning of
the 1933 Act and the 1933 Act Regulations and the Code of Ethics of the
American Institute of Certified Public Accountants and no information
concerning its relationship with or interests in the Bank or the Company is
required to be disclosed in the Prospectus, and stating in effect that in
its opinion the consolidated financial statements of the Company included
in the Prospectus and covered by its opinion included therein comply as to
form in all material respects with the applicable accounting requirements
of the 1933 Act, the 1934 Act, the 1933 Act Regulations, the 1934 Act
Regulations and generally accepted accounting principles; (ii) stating in
effect that, on the basis of certain agreed upon procedures (but not an
examination in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim
consolidated financial statements of the Company prepared by the Company, a
reading of the minutes of the meetings of the Board of Trustees and
corporators of the Company and Board of Directors of the Bank and
consultations with officers of the Company responsible for financial and
accounting matters, nothing has come to its attention which causes it to
believe that: (A) the unaudited consolidated financial statements of the
Company included in the Prospectus do not comply as to form in all material
respects with applicable accounting requirements; (B) such unaudited
consolidated financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements included in the
Prospectus; (C) during the period from the date of the latest audited
consolidated financial statements included in the Prospectus to a specified
date not more than five business days prior to the date hereof, there was
any material increase in borrowings by the Company or the Bank; or (D)
there was any material decrease in retained earnings of the Company at the
date of such letter as compared with amounts shown in the latest audited
consolidated balance sheet included in the Prospectus or any material
decrease in net income or net interest income of the Company for the number
of full months commencing immediately after the period covered by the
latest audited consolidated income statement included in the Prospectus and
ended on the latest month end prior to the date of the Prospectus as
compared to the corresponding period in the preceding year; and (iii)
stating that, in
30
addition to the examination referred to in its opinion included in the
Prospectus and the performance of the procedures referred to in clause (ii)
of this paragraph (e), it has compared with the general accounting records
of the Company's and/or the Bank's, as applicable, accounting system and
other data prepared by the Company and/or the Bank, as applicable, directly
from such accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as the Selling
Agents may reasonably request; and they have found such amounts and
percentages to be in agreement therewith (subject to rounding).
(2)Concurrently with the execution of this Agreement, the Selling
Agents, the Company and the Bank shall receive a letter from Peat Marwick
dated the date hereof and addressed to the Selling Agents: (i) confirming
that Peat Marwick is a firm of independent certified public accountants
with respect to Sandwich Bancorp and Sandwich Bank within the meaning of
the 1933 Act and the 1933 Act Regulations and the Code of Ethics of the
American Institute of Certified Public Accountants and no information
concerning its relationship with or interests in Sandwich Bank or Sandwich
Bancorp is required to be disclosed in the Prospectus, and stating in
effect that in its opinion the consolidated financial statements of
Sandwich Bancorp included in the Prospectus and covered by its opinion
included therein comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act, the 1934 Act, the 1933
Act Regulations, the 1934 Act Regulations and generally accepted accounting
principles; (ii) stating in effect that, on the basis of certain agreed
upon procedures (but not an examination in accordance with generally
accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of Sandwich
Bancorp prepared by Sandwich Bancorp, a reading of the minutes of the
meetings of the Board of Directors and stockholders of Sandwich Bancorp and
consultations with officers of Sandwich Bancorp responsible for financial
and accounting matters, nothing has come to its attention which causes it
to believe that: (A) the unaudited consolidated financial statements of
Sandwich Bancorp included in the Prospectus do not comply as to form in all
material respects with applicable accounting requirements; (B) such
unaudited consolidated financial statements are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements
included in the Prospectus; (C) during the period from the date of the
latest audited consolidated financial statements included in the Prospectus
to a specified date not more than five business days prior to the date
hereof, there was any material increase in borrowings by Sandwich Bancorp
or Sandwich Bank; or (D) there was any material decrease in retained
earnings of Sandwich Bancorp at the date of such letter as compared with
amounts shown in the latest audited consolidated balance sheet included in
the Prospectus or any material decrease in net income or net interest
income of Sandwich Bancorp for the number of full months commencing
immediately after the period covered by the latest audited consolidated
income statement included in the Prospectus and ended on the latest month
end prior to the date of the Prospectus as compared to the corresponding
period in the preceding year; and (iii) stating that, in addition to the
examination referred to in its opinion included in the Prospectus and the
performance of the procedures referred to in clause (ii) of this paragraph
(e), it has compared with the general accounting records of Sandwich
Bancorp and/or Sandwich Bank, as applicable, accounting system and other
data prepared by Sandwich Bancorp and/or Sandwich Bank, as applicable,
directly from such accounting records, to the extent specified in such
letter, such amounts and/or percentages set forth in the Prospectus as the
Selling Agents may reasonably request; and they have found such amounts and
percentages to be in agreement therewith (subject to rounding).
31
(f) At the Closing Date, the Selling Agents shall receive a letter
from Xxxxxx Xxxxxxxx and Peat Marwick, dated the Closing Date, addressed to
the Selling Agents, confirming the statements made by them in the letter
delivered by it pursuant to paragraph (e) of this Section 9, the "specified
date" referred to in clause (ii) (C) thereof to be a date specified in such
letter, which shall not be more than five business days prior to the
Closing Date.
(g) At the Closing Date, the Selling Agents shall have received a
letter from RP Financial, dated as of the Closing Date, confirming the
Independent Valuation.
(h) At the Closing Date, counsel to the Selling Agents shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the sale of the Shares as
herein contemplated and related proceedings or in order to evidence the
accuracy or completeness of any of the representations and warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company or the Bank in connection with the
Conversion and the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to the Selling Agents and counsel to the
Selling Agents.
(i) The Company and the Bank shall not have sustained since the date
of the latest audited consolidated financial statements included in the
Registration Statement and Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, other than as set forth or contemplated in the
Registration Statement, which is in the judgment of the Selling Agents
sufficiently material and adverse as to make it impracticable or
inadvisable to proceed with the Offering or the delivery of the Shares on
the terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or American Stock Exchange or in
the over-the-counter market, or quotations halted generally on the Nasdaq
Stock Market, or minimum or maximum prices for trading fixed, or maximum
ranges for prices for securities required by either of such exchanges or
the NASD or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operation of commercial banks, federal or
state savings and loan associations or savings banks in Massachusetts or a
general moratorium on the withdrawal of deposits from commercial banks,
federal or state savings and loan associations or savings banks in
Massachusetts declared by either federal or Massachusetts authorities;
(iii) the engagement by the United States in hostilities which have
resulted in the declaration, on or after the date hereof, a national
emergency or war; or (iv) a material decline in the price of equity or debt
securities, if the effect of such a decline, in the judgment or the Selling
Agents, makes it impracticable or inadvisable to proceed with the Offering
or the delivery of the Shares on the terms and in the manner contemplated
in the Prospectus.
If any of the conditions specified in this Section 9 shall not have been
fulfilled when and as required by this Agreement, or by ________, 1998, this
Agreement and all of the Selling Agents' obligations hereunder may be canceled
by the Selling Agents by notifying the Bank of such cancellation in writing or
by telegram at any time at or prior to the Closing Date, and any such
cancellation shall be without liability of any party to any other party except
as otherwise provided in Sections 1, 6, 7 and 8 hereof.
32
Notwithstanding the above, if this Agreement is canceled pursuant to this
paragraph, the Bank and the Company jointly and severally agree to reimburse the
Selling Agents for all of the Selling Agents' out-of-pocket expenses reasonably
incurred by the Selling Agents, including any legal fees (and out-of-pocket
expenses) to be paid to the Selling Agents' counsel, subject to the limits
expressed in Section 6 hereof, and an advisory and administrative services fee
of $______ in connection with the preparation of the Registration Statement and
the Prospectus and in contemplation of the proposed Offering.
SECTION 10. Termination.
------------
(a) In the event the Company fails to sell the minimum number of
Shares in the Offering as set forth in the Prospectus and does not modify
the Offering within the period specified in, and in accordance with the
provisions of, the Plan or as required by the Conversion Regulations, this
Agreement shall terminate upon refund by the Company to each person who has
subscribed for or ordered any of the Shares the full amount which it may
have received from such person, together with interest, as provided in the
Prospectus, and no party to this Agreement shall have any obligation to the
other hereunder, except for payment by the Bank and/or the Company as set
forth in Sections 1, 6, 7 and 8 hereof.
(b) This Agreement may be terminated by the Selling Agents, with
respect to the Selling Agents' obligations hereunder, by notifying the
Company at any time or prior to the Closing Date, if any of the conditions
specified in Section 9 hereof shall not have been fulfilled when and as
required by this Agreement or if the Conversion has not been completed by
______, 1998.
SECTION 11. Survival. The respective indemnities, agreements,
---------
representations, warranties and other statements of the Bank, the Company and
the Selling Agents, as set forth in this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Selling Agents or any of the Selling
Agents' officers or directors or any person controlling the Selling Agents, or
the Bank or the Company, or any of their respective officers or directors or any
person controlling the Bank or the Company, and shall survive termination of
this Agreement and receipt or delivery of any payment for the Shares.
SECTION 12. Miscellaneous. Notices hereunder, except as otherwise provided
--------------
herein, shall be given in writing or by telegraph, addressed (a) to Xxxx, Xxxx
at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000 (Attention: Xxx X.
Xxxxxxx, President), and to XxXxxxxxx Xxxx at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (attention: Xxxxxxx X. Xxxxxx, Managing Director), with a copy to
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx
000, Xxxxxxxxxx, X.X. 00000 (Attention: Xxxxxx Xxxxxxx, Esq.). and (b) to the
Bank and the Company at the Bank's principal office (Attention: Xxxxx X.
Xxxxxxxxx, President and Chief Executive Officer), with a copy to Xxxxx, Xxxx
and Xxxxx, LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (Attention:
Xxxxx Xxxxxxxxx Xxxxx, Esq.).
This Agreement is made solely for the benefit of and will be binding upon
the parties hereto and their respective successors and the directors, officers
and controlling persons referred to in Section 7 hereof, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of any of the Shares.
33
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
Time shall be of the essence of this Agreement.
This Agreement may be signed in various counterparts which together will
constitute one agreement.
If the foregoing correctly sets forth the arrangement among the Company,
the Bank and the Selling Agents, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement.
SEACOAST FINANCIAL SERVICES CORPORATION COMPASS BANK FOR SAVINGS
By: By:
---------------------------------------- -----------------------------
Xxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxxxxx, President
and Chief Executive Officer and Chief Executive Officer
Accepted as of the date first above written.
XXXX, XXXX & CO., INC. XXXXXXXXX, XXXX & XXXXXX, INC.
By: By:
---------------------------------------- -----------------------------
Xxx X. Xxxxxxx, President Xxxxxxx X. Xxxxxx,
Managing Director
34
EXHIBIT B
SEACOAST FINANCIAL SERVICES CORPORATION
21,160,000 (Anticipated Maximum) Shares of Common Stock
(par value $.01 per share)
Selected Dealers' Agreement
---------------------------
_________________, 1998
We have agreed to assist Seacoast Financial Services Corporation (the
"Company"), and Compass Savings Bank (the "Bank") in connection with the offer
and sale of up to___________ shares of the Company's common stock, $.01 par
value per share (the "Common Stock"), in connection with the mutual holding
company reorganization (the "Reorganization") of the Company. The total number
of shares of Common Stock to be offered may be increased to allow for the sale
of up to an additional 15% of the shares (or a total of 21,160,000 shares). The
price per share will be fixed at $10.00. The Common Stock, the number of shares
to be issued and certain of the terms on which they are being offered are more
fully described in the enclosed prospectus dated _____________, 1998 (the
"Prospectus").
In connection with the Reorganization, the Company has offered the Common
Stock in a Subscription Offering (to the Bank's Eligible Account Holders, the
Bank's Supplemental Eligible Account Holders , the Bank's Employee Stock
Ownership Plan, and the Bank's employees, officers and trustees) and in a
concurrent Community Offering to certain members of the general public
(capitalized terms not otherwise defined herein are as defined in the
Prospectus). The Common Stock is also being offered in accordance with the
Company's Plan of Reorganization From a Mutual Holding Company to a Stock
Holding Company (the "Plan") by a selling group of broker dealers in a
Syndicated Community Offering.
We are offering the selected dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Common Stock and we will
use our best efforts to cause the Company to pay you directly a fee in the
amount of 6.0% of the dollar amount of the Common Stock sold on behalf of the
Company by you. The dollar amount of shares sold on behalf of the Company by you
shall be evidenced (1) on the Stock Subscription Agreements supplied by the
Company executed by subscribers or executed by your firm on behalf of
subscribers, pursuant to authority previously given, or (2) on a summary record
as may be prepared by your firm (the "Purchase Record"). Subscribers who elect
to use Subscription Agreements must make checks payable to "The 1855 Bancorp".
It is understood that (i) Stock Subscription Agreements or the Purchase
Record must bear the authorized designation of your firm; (ii) Stock
Subscription Agreements or the Purchase Record executed by you shall indicate
the true and correct beneficial subscribers for the indicated shares; and
B-1
(iii) payment of your fee for the shares sold on behalf of the Company by you
will be made directly by the Company.
Each Stock Subscription Agreement or Purchase Record must precisely set
forth the Taxpayer Identification Number, number of shares, county, and state of
residence of the beneficial subscriber for each order and the name in which each
certificate for Common Stock should be issued and delivered.
Each order form for the purchase of Common Stock must set forth the
----
identity and address of each person to whom the certificates for such Common
-------- -------
Stock should be issued and delivered. Such order form should clearly identify
your firm. You shall instruct any subscriber who elects to send his or her order
form to you to make any accompanying check payable to "The 1855 Bancorp".
This offer is made subject to the terms and conditions herein set forth and
is made only to selected dealers who are (i) members in good standing of the
National Association of Securities Dealers, Inc. ("NASD"), who are to comply
with all applicable rules of the NASD, including, without limitation, the NASD's
Interpretation With Respect to Free-Riding and Withholding and Section 24 of
Article III of the NASD's Rules of Fair Practice, or (ii) foreign dealers not
eligible for membership in the NASD who agree (A) not to sell any Common Stock
within the United States, its territories or possessions or to persons who are
citizens thereof or residents therein and (B) in making other sales to comply
with the NASD Interpretation referred to above, Sections 8, 24 and 36 of the
above-referenced Article III and Section 25 of such Article III as if they were
NASD members, and Section 25 of such Article III as it applies to non-member
brokers or dealers in a foreign country.
Orders for Common Stock will be strictly subject to confirmation and we,
acting on behalf of the Company, reserve the right in our unfettered discretion
to reject any order in whole or in part, to accept or reject orders in the order
of their receipt or otherwise and to allot. Neither you nor any other person is
authorized by the Company or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Common Stock. No selected dealer is authorized to act as
agent for us when soliciting offers to buy the Common Stock from the public or
otherwise. No selected dealer shall engage in any stabilizing (as defined in
Rule 10b-7 promulgated under the Securities Exchange Act of 1934) (the "1934
Act") with respect to the Common Stock during the Reorganization.
We and each selected dealer assisting in selling the Common Stock pursuant
hereto agree to comply with the applicable requirements of the 1934 Act and
applicable state rules and regulations. In addition, we and each selected dealer
confirm that the Securities and Exchange Commission interprets Rule 15c2-8
promulgated under the 1934 Act as requiring that a Prospectus be supplied to
each person who is expected to receive a confirmation of sale 48 hours prior to
delivery of such person's order form.
We and each selected dealer further agree to the extent that our customers'
desire to pay for shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities and Exchange Commission of
Rule 15c2-4 promulgated under the 1934 Act, either (a) upon receipt of an
executed Subscription Agreement or direction to execute a Subscription Agreement
on behalf of a customer to forward the offering price of the Common Stock
ordered on or before 12 noon, Eastern time, of the next business day following
receipt or execution of a Subscription Agreement by us to the Company for
deposit in a segregated account or (b) to solicit indications of interest, in
which event (i) we will subsequently contact any customer indicating interest to
confirm the interest and give
B-2
instructions to execute and return a Subscription Agreement or to receive
authorization to execute the Subscription Agreement on the customer's behalf,
(ii) we will mail acknowledgments of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the third business day (the "Debit
Date") following receipt of the confirmation referred to in (i) and (iv) we will
forward completed Subscription Agreements together with such funds to the
Company on or before 12 noon, Eastern time, on the next business day following
the Debit Date for deposit in a segregated account. We and each selected dealer
acknowledge that if the procedure in (b) is adopted, our customers' funds are
not required to be in their accounts until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon the
Closing Date of the Reorganization. We may terminate this Agreement or any
provision hereof at any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Reorganization.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or is exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxx, Xxxx & Co., Inc.,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000. The enclosed
duplicate copy will evidence the agreement between us.
XXXX, XXXX & CO., INC.
By:___________________________________
Xxx X. Xxxxxxx, President
CONFIRMED AS OF:
_______________________________, 1998
_________________________________________
(Name of Dealer)
By:______________________________________
Its:_____________________________________
B-3
3
EXHIBIT C
Xxxx, Xxxx is registered in all U.S. jurisdictions except Arkansas.
C-1
