BROOKLINE BANCORP, INC.
(A MASSACHUSETTS CORPORATION)
11,891,000 (Anticipated Maximum) Shares
of Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
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_____________ __, 1998
Xxxx, Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
Brookline Bancorp, Inc., a Massachusetts corporation (the "Company"), and
Brookline Savings Bank, a Massachusetts-chartered mutual savings bank (the
"Bank"), hereby confirm their agreement with Xxxx, Xxxx & Co., Inc. ("Xxxx,
Xxxx"), as follows:
Introductory. The Bank is reorganizing from a Massachusetts-chartered
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mutual savings bank to a Massachusetts-chartered stock savings bank (the
"Reorganization") in accordance with the laws of the Commonwealth of
Massachusetts and the regulations of the Massachusetts Division of Banks (the
"Division"), the Massachusetts Board of Bank Incorporation (the "Bank Board"),
the Federal Deposit Insurance Corporation (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 "Reorganization Regulations"). A Combined Application for Mutual Holding
Company Reorganization and Merger and Stock Issuance (the "MHC Application") has
been filed with the Division; a Combined Application to Establish De Novo Mutual
and Stock Savings Banks/Bank Holding Company Application (the "Bank Board
Application") has been filed with the Bank Board; a Notice of Intent to Convert
(the "Conversion Notice"), a Bank Merger Act Application (the "BMA
Application"), an Application for Interim Deposit Insurance (the "Insurance
Application") and a Request for Waiver of Depositor Vote (the "Waiver Request")
have been filed with the FDIC; and a Bank Holding Company Application on Form FR
Y-3 (the "Holding Company Application") has been filed with the FRB (the MHC
Application, the Bank Board Application, the Conversion Notice, the BMA
Application, the Insurance Application, the Waiver Request and the Holding
Company Application, collectively, the "Reorganization Applications"); and all
amendments to the Reorganization Applications required to the date hereof have
also been filed. The MHC Application includes, among other things, the Bank's
Plan of Reorganization From a Mutual Savings Bank to a Mutual Holding Company
and Stock Issuance Plan (the "Plan"). As part of the Reorganization and the
Plan, the Bank will establish (i) Brookline Savings
Bank, a Massachusetts-chartered stock savings bank that will succeed to all of
the rights and obligations of the Bank as set forth in the Plan, (ii) Brookline
Bancorp, MHC, a Massachusetts-chartered mutual holding company (the "Mutual
Company"), and (iii) the Company. The Mutual Company will own at least 51% of
the voting shares of the Company for so long as the Mutual Company remains in
existence. The Bank will be a wholly-owned subsidiary of the Company. References
herein to the Bank shall include the Bank in its current mutual form or its
post-Reorganization stock form as indicated by the context.
Upon consummation of the Reorganization, the Company will be authorized to
issue 50,000,000 shares of capital stock, of which 45,000,000 shares shall be
common stock having a par value of $.01 per share (the "Common Stock"), and
5,000,000 shares shall be preferred stock having a par value of $.01 per share.
The Company, 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 September 30, 1996);
(ii) the Bank's Employee Stock Ownership Plan and Trust (the "ESOP") (for a
total of up to 4% of the shares issued in the Offering, as defined below); (iii)
the Bank's Supplemental Eligible Account Holders (defined as holders of deposit
accounts totaling $50 or more as of December 31, 1997); and (iv) the Bank's
employees, officers and trustees (the "Subscription Offering"). Concurrently,
and subject to the prior rights of holders of subscriptions in categories (i)
through (iv) above, the Company is offering 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, no Eligible Account Holder,
Supplemental Eligible Account Holder or employee, officer or trustee, in their
respective capacities as such, may purchase in the Subscription Offering more
than $300,000 of Common Stock; no person, together with associates and persons
acting in concert with such person, may purchase in the Community Offering and
Syndicated Community Offering more than $300,000 of Common Stock; and no person,
together with associates and persons acting in concert with such person, may
purchase in the aggregate more than $1.0 million of Common Stock in the
Offering; provided that the Bank 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-______) (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"),
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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 Xxxx, Xxxx; Compensation to Xxxx, Xxxx. Subject
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to the terms and conditions set forth below, the Bank and the Company hereby
appoint Xxxx, Xxxx as their agent to consult with and advise the Bank and the
Company, and to solicit subscriptions and purchase orders for Shares on behalf
of the Bank and the Company, in connection with the Company's offering of Common
Stock in the Offering. On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, Xxxx, Xxxx accepts such appointment and agrees to consult with and advise
the Bank and the Company as to the matters set forth in Section 3 of the
Engagement Letter between Xxxx, Xxxx and the Bank dated July 29, 1997, included
as Exhibit A attached hereto, and to use its best efforts to solicit
subscriptions and purchase orders for Shares in accordance with this Agreement;
provided, however, that Xxxx, Xxxx 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, Xxxx, Xxxx 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, Xxxx, Xxxx shall receive and the Company and the Bank shall pay an
advisory and marketing fee of $1,000,000 (the "Advisory and Marketing Fee").
Should a Selling Group (which may include Xxxx, Xxxx) under a Selected Dealers'
Agreement be implemented, the Bank shall pay a fee to selected dealers
("Selected Dealers' Fee") of 5.5% of the dollar amount of the Shares sold by
such dealers. The Advisory and Marketing Fee and the Selected Dealers' Fee are
hereinafter collectively referred to as the "Sales Compensation." It is
acknowledged that the Bank paid Xxxx, Xxxx $25,000 of the Advisory and Marketing
Fee upon execution of the Engagement Letter.
If (i) the Plan is abandoned or terminated by the Company and the Bank;
(ii) the Offering is not consummated by June 30, 1998; (iii) Xxxx, Xxxx
terminates this Agreement because there has been a material adverse change in
the financial condition or operations
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of the Bank since June 30, 1997; (iv) immediately prior to the commencement of
the Offering, Xxxx, Xxxx terminates this Agreement because, in its 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 Xxxx, Xxxx determines that market conditions
exist which might render the sale of the Shares by the Company inadvisable; or
(v) the Company and the Bank terminate this Agreement because, in their
reasonable judgment, they determine that an event has occurred that materially
and adversely impacts the ability of Xxxx, Xxxx to perform its obligations
hereunder, Xxxx, Xxxx shall receive a fee of $25,000 for its advisory and
administrative services as set forth in Exhibit A hereto in lieu of the Sales
Compensation, in addition to reimbursement of its reasonable out-of-pocket
expenses as set forth in Section 6 hereof; [provided, however, if the Company
abandons or terminates the Offering prior to the filing of the MHC Application,
Xxxx, Xxxx shall not be entitled to receive a fee of $25,000 for its advisory
and administrative services]. If there is (i) a resolicitation of subscriptions
for any reason or (ii) a material delay in the Offering or other unforeseen
developments, and Xxxx, Xxxx is required to provide significant additional
services or expend significant additional time, the parties agree to negotiate
in good faith an agreement to cover Xxxx, Xxxx'x 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 Xxxx, Xxxx 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 Xxxx, Xxxx or the Company and the Bank in accordance with the preceding
paragraph. The Bank and the Company agree to reimburse Xxxx, Xxxx 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 Ryan, Beck, promptly
upon receiving a reasonable accounting of such costs and expenses.
SECTION 2. Closing Date; Release of Funds and Delivery of Certificates.
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If all conditions precedent to the consummation of the Reorganization and the
Offering, including, without limitation, the sale of all the Shares required by
the Plan to be sold, are satisfied, the Company agrees to issue or have issued
the Shares sold in the Offering and to release for delivery certificates
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(q)
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 Xxxx,
Xxxx and its 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 Ryan, Beck,
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 ten business days after
the termination of the Offering), or such other time or place as shall be agreed
upon by Ryan, Beck, the Bank and the Company. Certificates evidencing
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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 offered. The number of
Shares offered may be changed by the Company after consultation with Ryan, Beck,
subject to the provisions of the Plan, depending on market and financial
conditions.
SECTION 4. Representations and Warranties. The Company and the Bank
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jointly and severally represent and warrant to Xxxx, Xxxx as follows:
(a) The Registration Statement was declared effective by the
Commission on _______________, 1997. 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 Xxxx, Xxxx expressly regarding Xxxx, Xxxx for
use under the captions "Summary of Reorganization and Offering-Marketing
Agent" and "The Reorganization and Offering-Plan of Distribution and
Selling Commissions" in the Prospectus.
(b) The Bank has filed with the Division the MHC Application,
including the Plan, the Registration Statement, the Prospectus and exhibits
and supplemental material, and an amendment or amendments thereto, as
required, and has published notice of such filing, as required, which
Application has been or prior to the Closing Date will be approved by the
Division; and the Plan has been adopted by the Board of Directors of the
Company, the Board of Trustees of the
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Bank and the corporators of the Bank (by a vote of at least two-thirds of
the corporators, including a majority of the Bank's "independent
corporators" constituting at least 60% of all corporators, at a meeting
specially called to consider the Plan).
(c) The Bank has filed with the Bank Board the Bank Board Application,
including the stock charter and By-Laws of the Bank and exhibits and
supplemental material, and an amendment or amendments thereto, as required,
and has published notice of such filing, as required, which Application has
been or prior to the Closing Date will be approved by the Bank Board.
(d) The Bank and the Company have filed with the FDIC the Conversion
Notice, the BMA Application, the Insurance Application and the Waiver
Request, including the Registration Statement, the Prospectus and exhibits
and supplemental material, and an amendment or amendments thereto, as
required, and have published notice of the filing of the BMA Application
and the Insurance Application, as required, and the FDIC has or prior to
the Closing Date will have issued a notice of non-objection to the
Conversion Notice and has or prior to the Closing Date will have approved
the BMA Application, the Insurance Application and the Waiver Request.
(e) The Company and the Mutual Company have filed with the FRB the
Holding Company Application, including exhibits and supplemental material,
and an amendment or amendments thereto, as required, and have published
notice of such filing, as required, which Application has been or prior to
the Closing Date will be approved by the FRB.
(f) At the Closing Date, the Reorganization and the Offering will have
been effected in the manner described in the Prospectus and in accordance
with the Plan, the Reorganization Regulations and all other applicable
material laws, regulations, decisions and orders, including in compliance
with all terms, conditions, requirements and provisions precedent to the
Reorganization and the Offering imposed upon the Company or the Bank by the
Commission, the Division, the Bank Board, the FDIC, the FRB, any state
regulatory or Blue Sky authority or any other regulatory authority.
(g) No order has been issued by the Commission, the Division, the Bank
Board, the FDIC, the FRB or any state regulatory or Blue Sky authority
preventing or suspending the use of the Prospectus, and no action by or
before any such governmental entity to revoke any approval, authorization
or order of effectiveness related to the Reorganization or the Offering is
pending or threatened.
(h) 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
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Reorganization Regulations. The prospectus contained in the Reorganization
Applications (including any amendment or supplement thereto), at the time
of the approval of the Reorganization Applications by the applicable
regulatory authorities and at all times subsequent thereto until the
Closing Date, complied and will comply in all material respects with the
Reorganization Regulations.
(i) Xxxxxxx Financial Advisors, Inc. ("Xxxxxxx Financial"), which
prepared the Independent Valuation dated as of November 7, 1997, described
in the Prospectus, is independent with respect to the Company and the Bank
within the meaning of the Plan and the Reorganization Regulations and is
believed by the Company and the Bank to be experienced and expert in the
valuation and the appraisal of business entities, including savings
institutions, and the Company and the Bank believe that Xxxxxxx Financial
has prepared the pricing information set forth in the Prospectus in
accordance with the requirements of the Reorganization Regulations.
(j) Xxxxx Xxxxxxxx LLP ("Xxxxx Xxxxxxxx"), the firm which certified
the financial statements 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.
(k) The 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 the Bank 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
1993 Act Regulations and the Reorganization 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 Bank with the Division and the FDIC 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 Bank 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.
(l) 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, financial or
otherwise, in the condition of the Company the Bank, BBS Investment
Corporation ("BBS"), 160 Associates, Inc. ("Associates"), or Brookline
Preferred Capital Corporation
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("BPCC"; BBS, Associates and BPCC also individually, a "Subsidiary" and
collectively, the "Subsidiaries") or of the Company, the Bank and the
Subsidiaries considered as one enterprise, or in the earnings, capital,
properties, affairs or prospects of the Company, the Bank or any Subsidiary
whether or not arising in the ordinary course of business, (ii) there has
not been any material increase in the long-term debt of the Bank, nor has
the Bank 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 or
any Subsidiary, except those transactions entered into in the ordinary
course of business and those specifically 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 and the Subsidiaries conform in all material respects to
the descriptions thereof contained in the Prospectus. None of the Company,
the Bank or any Subsidiary has any material liability of any kind,
contingent or otherwise, except as set forth in the Prospectus.
(m) The Bank is now a Massachusetts-chartered mutual savings bank and
upon consummation of the Reorganization will become a Massachusetts-
chartered stock savings bank, in both instances duly authorized to conduct
its business and own its property as described in the Registration
Statement and Prospectus. The Company has been duly organized and is
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts with the corporate authority to conduct its business and own
its property as described in the Registration Statement and Prospectus.
The Company, the Bank and the Subsidiaries have obtained all 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 and the Subsidiaries are in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of their
respective businesses; and none of the Company, the Bank or any Subsidiary
has received notice of any proceeding or action relating to the revocation
or modification of any such license, permit or governmental authorization
which, singly or in the aggregate, if subject to an unfavorable decision,
ruling or finding, might materially and adversely affect the conduct of the
business, or the condition, financial or otherwise, or the income, affairs
or prospects of the Company, the Bank or any Subsidiary. The Bank is in
good standing with the Division; the Bank's charter is in full force and
effect; no conservator or receiver has been appointed for the Company, the
Bank or any Subsidiary; and the Bank is operating as an insured depository
institution. Each of the Company and the 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
condition, financial or otherwise, or the business, operations, income or
prospects of the Company and the Bank taken as a whole. Upon consummation
of the Reorganization and the Offering, all of the outstanding
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capital stock of the Bank will be duly authorized and validly issued and
fully paid and nonassessable; all such stock will be owned directly by the
Company, free and clear of all liens, encumbrances, claims or other
restrictions; and the Company will have no direct subsidiaries other than
the Bank. The Bank does not own equity securities or any equity interest in
any other business enterprise except as described in the Prospectus; each
of the Subsidiaries has been duly organized 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; in the case of BBS and Associates, all such stock,
and in the case of BPCC, 99.9% of such stock, is owned directly by the Bank
free and clear of all liens, encumbrances, claims or other restrictions;
and each of the Subsidiaries is duly qualified to transact business and is
in good standing in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification, unless
the failure to be so qualified would not have a material adverse effect on
the operations of the Bank. The activities of the Subsidiaries are
permitted to subsidiaries of a Massachusetts-chartered mutual savings bank
by the rules, regulations, policies and practices of the Division, the FDIC
and any other state or federal authority having jurisdiction over such
matters, and such activities are permitted to subsidiaries of a
Massachusetts-chartered stock savings bank by the rules, regulations,
policies and practices of the Division, the FRB and any other state or
federal authority having jurisdiction over such matters.
(n) The deposit accounts of the Bank in mutual form are, and the
deposit accounts of the Bank in stock form will be, insured by the Bank
Insurance Fund (the "BIF"), as administered by the FDIC, and the Depositors
Insurance Fund (the "DIF"), as administered by the Mutual Savings Central
Fund, Inc., up to the maximum amounts allowed by law. Upon consummation of
the Reorganization, 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 Reorganization Regulations.
(o) Upon consummation of the Reorganization and the Offering, the
authorized, issued and outstanding equity capital of the Company will be as
set forth in the Prospectus under the caption "Capitalization"; other than
in the Reorganization, 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 and the shares of Common Stock to be issued to the
Mutual Company will have been duly and validly authorized for issuance and,
when issued and delivered by the Company pursuant to the Plan against
payment of the consideration therefor calculated as set forth in the Plan
and the Prospectus, will be duly and validly issued and fully paid and
nonassessable, and all such shares of Common Stock owned by the Mutual
Company will be owned directly by the Mutual Company free and clear of all
liens, encumbrances, claims or other restrictions; neither the issuance of
the Shares nor the issuance of the shares of Common Stock
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to the Mutual Company is 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.
(p) As of the date hereof and as of the Closing Date, none of the
Company, the Bank or any Subsidiary is or will be in violation of its
charter or By-Laws (and the Bank will not be in violation of its charter or
By-Laws in capital stock form upon consummation of the Reorganization) 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
Reorganization, the execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated have been duly
and validly authorized by all necessary corporate action on the part of the
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
agreement 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 and the consummation of the transactions herein
contemplated will not (i) conflict with or constitute a breach of, or
default under, the charter or By-Laws of the Company, the Bank (in either
mutual or stock form) or any Subsidiary, or any material contract, lease or
other instrument to which the Company, the Bank or any Subsidiary is a
party or in which the Company, the 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 or any Subsidiary; or (iii)
result in the creation of any lien, charge or encumbrance upon any property
of the Company, the Bank or any Subsidiary.
(q) 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.
(r) The Company, the Bank and the Subsidiaries have good and
marketable title to all properties and assets which are material to the
business of
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the Company and the Bank 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
Company, the Bank and the Subsidiaries on a consolidated basis; and all
leases and subleases which are material to the business of the Company and
the Bank taken as a whole under which the Company, the Bank or any
Subsidiary holds properties, including those leases and subleases described
in the Prospectus, are in full force and effect.
(s) As of the date hereof and as of the Closing Date, the Company and
the Bank are not and will not be in violation of any directive from the
Commission, the Division, the Bank Board, the FDIC, the FRB or any other
agency to make any material change in the method of conducting their
respective businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation,
regulations, decisions, directives and orders of the Commission, the
Division, the Bank Board, the FDIC and the FRB) and no suit or proceeding,
charge, investigation or action before or by any court, regulatory
authority or governmental agency or body is or will be pending or, to the
knowledge of the Company or the Bank, threatened, which might materially
and adversely affect the Reorganization, the performance of this Agreement
or the consummation of the transactions contemplated in the Plan and as
described in the Prospectus, or which might result in any material adverse
change in the condition (financial or otherwise), earnings, capital,
properties, affairs or prospects of the Company and the Bank taken as a
whole or which would materially affect their respective properties and
assets.
(t) The Bank is in compliance in all material respects with the
applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(u) The Bank has received an opinion of its counsel, Xxxx Xxxxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C., Washington, D.C., with respect to the
federal income tax consequences of the Reorganization and the Offering, and
an opinion of Xxxxx, Xxxx & Xxxxx, LLP, Boston, Massachusetts, with respect
to the Massachusetts state income tax consequences of the Reorganization
and the Offering; the opinion of Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx,
P.C., is accurately summarized in the MHC 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
-11-
credit agreement or any other instrument or agreement to which the Company,
the Bank or any Subsidiary 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, the Bank or any Subsidiary; 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.
(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. For purposes of this Section
4(w), obligations for borrowed money do not include deposits.
(x) The Company, the Bank and the 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.
(y) Except as disclosed in the Prospectus with respect to the ESOP,
none of the Company, the Bank, any Subsidiary or, to the knowledge of the
Company and the Bank, any employee of the Bank has made any payment of
funds of the Company, the 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 Reorganization, the Bank was not authorized to issue
shares of capital stock; neither the Bank nor the Company has: (i) 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 November __, 1997 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 routine
purchases and sales of securities for or from its portfolio; (iii) entered
into a financial or management consulting agreement, except as contemplated
hereunder; or (iv) engaged any intermediary between Xxxx, Xxxx 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 nor the Bank is required to be registered
under the Investment Company Act of 1940, as amended.
-12-
(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 Offering under the securities
or Blue Sky laws of all jurisdictions wherein such Shares will be offered
which require such filings and/or qualification or registration.
(cc) All Sales Information used by the Company in connection with the
Offering that is required by the Reorganization 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 Xxxx, Xxxx for use in the Prospectus, the Company and the Bank have
not relied upon Xxxx, Xxxx or its legal or other advisors for any legal,
tax or accounting advice in connection with the Reorganization.
(ee) To the knowledge of the Company and the Bank, each of the
Company, the Bank and the Subsidiaries is in compliance with all laws,
rules and regulations relating to environmental protection, except where
such failure would not have a material adverse effect on the financial
condition of the Company and the Bank taken as a whole, and none of the
Company, the 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 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, 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 or any
Subsidiary.
(ff) No labor dispute with the employees of the Company, the 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 Bank 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 Company and the Bank taken as a whole.
-13-
Any certificate signed by an officer of the Bank or of the Company and
delivered to Xxxx, Xxxx or its counsel that refers to this Agreement shall be
deemed to be a representation and warranty by the Bank or the Company to Xxxx,
Xxxx as to the matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
SECTION 5. Covenants of the Company and the Bank. The Company and the
-------------------------------------
Bank hereby jointly and severally covenant with Xxxx, Xxxx as follows:
(a) None of the Company, the Bank and the Mutual Company will file any
amendment or supplement to the Registration Statement or any Reorganization
Application without notifying Xxxx, Xxxx of its intention to do so and
providing Xxxx, Xxxx and its counsel an opportunity to review such
amendment or supplement, nor will any of the Company, the Bank and the
Mutual Company file any such amendment or supplement to which Xxxx, Xxxx or
its 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 immediately upon receipt of any
information concerning the events listed below notify Xxxx, Xxxx: (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 Reorganization 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 Reorganization or the use of the Registration Statement or the
Prospectus or any other filing of the Company and the Bank under the
Reorganization Regulations, the 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 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 Xxxx, Xxxx upon receipt
of such items.
-14-
(c) The Company and the Bank will deliver to Xxxx, Xxxx and to its
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 Xxxx, Xxxx such number of copies of the
closing documents with respect to the Reorganization and the Offering as
Xxxx, Xxxx may reasonably request.
(d) The Company will furnish to Ryan, Beck, 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 Xxxx, Xxxx 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 Xxxx, Xxxx to use the
Prospectus (as amended or supplemented) for any lawful manner in connection
with the sale of the Shares.
(e) The Company, the Bank and the Mutual Company 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 Registration Regulations, the 1933 Act, the 1933 Act Regulations, the
Securities Exchange Act of 1934 (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 Xxxx, Xxxx 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 satisfactory to Xxxx, Xxxx
and its counsel after a reasonable time for review) which will amend or
supplement the Registration Statement or Prospectus so that as amended or
supplemented it will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading.
(g) The Company and the Bank will take all necessary actions, in
cooperation with Ryan, Beck, and furnish to whomever Xxxx, Xxxx may direct
such
-15-
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 Xxxx, Xxxx 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 Ryan, Beck, any shares of, or any securities
convertible into or exercisable for shares of, Common Stock other than in
connection with any 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 statements of consolidated
income, stockholders' equity and cash flow 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. In addition, the Company's
annual results and quarterly results shall be made public through the
issuance of appropriate press releases.
(j) During the period of five years from the date hereof, the Company
will furnish to Xxxx, Xxxx: (i) as soon as 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 Xxxx, Xxxx 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."
-16-
(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 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 file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the 1933 Act Regulations and the
Company, the Bank and the Mutual Company will file with the applicable
regulatory authorities such post-Reorganization reports as may be required
pursuant to the Reorganization Regulations or such authorities' approval of
the Reorganization Applications.
(o) The Company will register the Common Stock under Section 12(g) of
the 1934 Act effective on or prior to the Closing Date.
(p) 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.
(q) 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 DIF (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.
(r) The Company will take such actions and furnish such information as
are reasonably requested by Xxxx, Xxxx in order for Xxxx, Xxxx 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."
(s) The Company and the Bank will conduct their respective businesses
in compliance in all material respects with all applicable federal and
state laws,
-17-
rules, regulations, decisions, directives and orders including, all
decisions, directives and orders of the Division, the FDIC and the FRB.
(t) The Bank will not amend the Plan without Xxxx, Xxxx'x prior
written consent in any manner that, in the opinion of Ryan, Beck, would
affect the sale of the Shares or the terms of this Agreement, which
approval shall not be unreasonably withheld.
(u) In each quarter in which the Company determines to pay a dividend
on the Common Stock and the Mutual Company determines to waive the receipt
of such dividend, the Mutual Company will notify the appropriate regulatory
authorities of its intention to waive such receipt.
(v) 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 Xxxx, Xxxx specified in Section 9 hereof.
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
Reorganization; (ii) the fees and disbursements of the Company's 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 Xxxx, Xxxx may reasonably designate; (iv) the printing and
delivery to Xxxx, Xxxx in such quantities as Xxxx, Xxxx 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 Reorganization 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 at the Bank's main office,
investor meeting expenses and other miscellaneous expenses relating to the
marketing by Xxxx, Xxxx of the Shares; and (x) the fees and charges of any
transfer agent, registrar or other agent. In the event that Xxxx, Xxxx incurs
any such expenses on behalf of the Company or the Bank, the Company or the Bank
will pay or reimburse Xxxx, Xxxx for such expenses regardless of whether the
Reorganization is successfully completed, and such reimbursements will not be
included in the expense limitations set forth in the following paragraph. Xxxx,
Xxxx
-18-
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 Xxxx, Xxxx for all
reasonable out-of-pocket expenses, including legal fees and expenses, incurred
by Xxxx, Xxxx in connection with the services provided by Xxxx, Xxxx 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 shall not exceed $15,000.
Xxxx, Xxxx 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 to a period later than
August 31, 1997.
SECTION 7. Indemnification.
---------------
(a) The Bank and the Company jointly and severally agree to indemnify
and hold harmless Ryan, Beck, its officers, directors, agents and employees
and each person, if any, who controls Xxxx, Xxxx 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 Xxxx, Xxxx or any
of such persons may suffer or to which Xxxx, Xxxx or any such persons may
become subject under all applicable federal and state laws or otherwise,
and to promptly reimburse Xxxx, Xxxx and any of such persons upon written
demand for any expenses (including reasonable fees and disbursements of
counsel) incurred by Xxxx, Xxxx 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 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
-19-
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 Xxxx, Xxxx or its representatives (including
counsel) regarding Xxxx, Xxxx 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 Reorganization
and Offering-Marketing Agent" and "The Reorganization-Plan of Distribution
and Selling Commissions"; nor shall indemnification be required for
material oral misstatements to a purchaser of Shares made by Xxxx, Xxxx
which are not based upon information provided by the Company or the Bank
orally or 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 Xxxx, Xxxx'x bad faith or negligence in performing the
services to be performed by Xxxx, Xxxx 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, out-of-pocket costs and compensation for the time spent
by Xxxx, Xxxx'x directors, officers, employees and counsel at their normal
hourly billing rates. The indemnification provided in this paragraph shall
also extend to all affiliates of Xxxx, Xxxx and their respective officers,
directors, agents, employees and controlling persons within the meaning of
the federal securities laws. The foregoing agreement to indemnify shall be
in addition to any liability of the Company or the Bank may otherwise have
to Xxxx, Xxxx or the persons entitled to the benefit of these
indemnification provisions.
-20-
(b) Xxxx, Xxxx agrees 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) 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
Xxxx, Xxxx 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 Xxxx, Xxxx
or its representatives (including counsel) regarding Xxxx, Xxxx 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 Reorganization and Offering-Marketing Agent" and "The
Reorganization-Plan of Distribution and Selling Commissions." In addition,
Xxxx, Xxxx 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.
(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
-21-
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 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 Xxxx, Xxxx or
its 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 Ryan, Beck, 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 Ryan, Beck, 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 Ryan, Beck, 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 Xxxx, Xxxx of the Reorganization as contemplated shall be deemed to
be in the same proportion that the total net proceeds from the Reorganization
and the Offering received by the Bank and the Company in connection with the
Reorganization bear to the total fees paid or to be paid to Xxxx, Xxxx under
this Agreement. No person found guilty of any
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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
Xxxx, Xxxx'x officers and directors and each person, if any, who controls Xxxx,
Xxxx within the meaning of the 1933 Act and the 1934 Act shall have the same
rights to contribution as Ryan, Beck, 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 Xxxx, Xxxx agree
that it would not be just and equitable if contribution pursuant to this Section
8 were determined by pro rata allocation or by other method of allocation that
does not take into account the equitable considerations referred to in this
Section 8. It is expressly agreed that Xxxx, Xxxx shall not be required to
contribute to any loss, liability, claim, damage or expense in an amount that in
the aggregate exceeds the amount paid to Xxxx, Xxxx under this Agreement.
SECTION 9. Conditions of Xxxx, Xxxx'x Obligations. The obligations of
--------------------------------------
Xxxx, Xxxx hereunder as to the Shares to be delivered at the Closing Date are
subject, in the discretion of Ryan, Beck, 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 Xxxx, Xxxx 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 Reorganization 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 Reorganization 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, Xxxx, Xxxx shall have received:
(1) The favorable opinions, dated as of the Closing Date
addressed to Xxxx, Xxxx and for its and its counsel's benefit, of Xxxx
Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. ("Xxxx Xxxxxx"), as to issues of
federal law set forth below, and of Xxxxx, Xxxx & Xxxxx, LLP ("Xxxxx
Xxxx"), as to
-23-
matters of Massachusetts law set forth below. With respect to the
opinion of Xxxxx Xxxx, Xxxx Xxxxxx shall also provide a letter addressed
to Xxxx, Xxxx which states that, with respect to the opinion of Xxxxx
Xxxx, to Xxxx Xxxxxx'x knowledge, nothing has come to the attention of
Xxxx Xxxxxx that would lead Xxxx Xxxxxx to believe that Xxxx, Xxxx and
its counsel are not reasonably justified in relying upon such opinion.
The opinions of Xxxx Xxxxxx and 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 corporation in good standing under the laws of the
Commonwealth of Massachusetts. The Bank validly exists and is in
good standing with the Division. 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 the Subsidiaries has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and Prospectus; and each of the Company, the
Bank and the Subsidiaries is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, unless the failure to be so
qualified in one or more of such jurisdictions would not have a
material adverse effect on the condition, financial or otherwise, or
the business, operations, income or prospects of the Company and the
Bank taken as a whole.
(iii) The Bank is a Massachusetts-chartered mutual savings
bank, and, at the Closing Date, will become a validly existing
Massachusetts-chartered stock savings bank, with corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus.
(iv) The activities of each Subsidiary were permitted to
subsidiaries of a Massachusetts-chartered mutual savings bank, and
such activities are permitted to subsidiaries of a Massachusetts-
chartered stock savings bank, by the rules, regulations, policies
and practices of the Division, the FDIC, the FRB and any other
federal or state authority having jurisdiction over such matters.
All of the outstanding stock of each Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable;
in the case of BBS and Associates, all such stock, and in the case
of BPCC, 99.9% of 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.
-24-
(v) The deposit accounts of the Bank in mutual form were, and
the deposit accounts of the Board in stock form are, insured by the
BIF and the DIF up to the maximum amounts allowed by law; and, to
such counsel's knowledge, no proceeding for the termination or
revocation of such insurance is pending or threatened. The Bank is a
member of the Federal Home Loan Bank of Boston.
(vi) Upon consummation of the Reorganization and the
Offering, the authorized, issued and outstanding equity capital of
the Company will be as set forth in the Registration Statement and
the Prospectus under the caption "Capitalization" and, other than in
the Reorganization, no shares of Common Stock, or securities
exercisable into or exchangeable for Common Stock, will have been
issued prior to the Closing Date; at the time of the Reorganization
the Shares and the shares of Common Stock to be issued to the Mutual
Company will have been duly and validly authorized for issuance, and
when issued and delivered by the Company pursuant to the Plan
against payment therefor as set forth in the Plan and the
Prospectus, will be duly authorized and validly issued and fully
paid and nonassessable, and at such time all such shares of Common
Stock owned by the Mutual Company will be owned of record and
beneficially by the Mutual Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and
neither the issuance of the Shares nor the issuance of the shares of
Common Stock to the Mutual Company is subject to any preemptive
rights.
(vii) Upon consummation of the Reorganization and the
Offering, all of the issued and outstanding capital stock of the
Bank will be duly authorized and validly issued and fully paid and
nonassessable, and all such capital stock will be owned of record
and beneficially by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) Each Reorganization Application has been approved by
the applicable regulatory authority pursuant to the Reorganization
Regulations, and, to such counsel's knowledge, no action has been
taken or is pending or threatened to revoke any such approval.
(ix) Each Reorganization Application, as amended or
supplemented, if amended or supplemented, as filed with the
applicable regulatory authority complied as to form in all material
respects with the requirements of the Reorganization Regulations.
(x) The Division's approval of the Plan remains in full force
and effect; the Bank has duly adopted a Massachusetts stock charter
and By-Laws effective upon consummation of the Reorganization; the
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Company and the Bank have conducted the Reorganization in all
material respects in accordance with the requirements of the
Reorganization Regulations, federal law, all other applicable
regulations, decisions and orders and the Plan, including all
material applicable terms, conditions, requirements and conditions
precedent to the Reorganization imposed upon the Company and the
Bank by the Division, the Bank Board, the FDIC and the FRB; no order
has been issued by the Division, the Bank Board, the FDIC or the FRB
to suspend the Reorganization or the Offering and no action for such
purpose has been instituted or, to such counsel's knowledge,
threatened by the Division, the Bank Board, the FDIC or the FRB;
and, to such counsel's knowledge, no person has sought to obtain
review of the final action of the Division in approving the MHC
Application or the Plan.
(xi) 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 DIF, 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.
(xii) 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.
(xiii) All conditions imposed by regulatory authorities in
connection with their respective approvals of the Reorganization
Applications have been satisfied, and no further approval,
authorization, consent or other order of any federal or state board
or body is required in connection with the execution and delivery of
this Agreement, the issuance of the Shares and the consummation of
the Reorganization, except as may be required under the securities
or Blue Sky laws of various jurisdictions.
(xiv) 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
-26-
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
Reorganization Regulations and federal and Massachusetts law.
(xv) The information in the Registration Statement and
Prospectus under the captions "Risk Factors-Regulatory Oversight and
Legislation" and "-Certain Anti-Takeover Provisions," "Federal and
State Taxation," "Regulation," "The Reorganization and Offering,"
"Restrictions on Acquisition of the Company and the Bank" and
"Description of Capital Stock of the Company" 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.
(xvi) 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.
(xvii) There are no legal or governmental proceedings pending
or, to such counsel's knowledge, 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.
(xviii) 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.
(xix) The Company, the Bank and the Subsidiaries have
obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their
respective businesses as described in the Registration Statement and
Prospectus, all such licenses, permits and other governmental
-27-
authorizations are in full force and effect, and the Company, the
Bank and the Subsidiaries are in all material respects complying
therewith.
(xx) The Plan has been duly adopted by the required votes of
the Board of Directors of the Company and the Board of Trustees and
the corporators, including the "independent corporators," of the
Bank.
(xxi) The Company is not in violation of its Articles of
Organization or By-Laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a
party as a borrower, a lessee or a guarantor, or by which the
Company or any of its property may be bound as a borrower, a lessee
or a guarantor; the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the consummation
of the transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any material lien, charge or encumbrance upon any
property or assets of the Company pursuant to any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company is a party as a borrower, a lessee or a
guarantor, or by which it may be bound as a borrower, a lessee or a
guarantor, or to which any of the property or assets of the Company
is subject, nor will such action result in any violation of the
provisions of the Articles of Organization or By-Laws of the
Company.
(xxii) The Bank is not in violation of its Massachusetts
mutual charter or By-Laws (and the Bank will not be in violation of
its Massachusetts stock charter upon consummation of the
Reorganization) or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Bank is a party as a borrower, a
lessee or a guarantor, or by which the Bank or any of its property
may be bound as a borrower, a lessee or a guarantor; the execution
and delivery of this Agreement, the incurrence of the obligations
herein set forth and the consummation of the transactions
contemplated herein will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any property or assets of
the Bank pursuant to any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Bank is
a party as a borrower, a lessee or a guarantor, or by which it may
be bound as a borrower, a lessee or a guarantor, or to which any of
the
-28-
property or assets of the Bank is subject, nor will such action
result in any violation of the provisions of the charter or By-Laws
of the Bank.
(xxiii) None of the Subsidiaries is in violation of its
charter or By-Laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which such Subsidiary is a party as a
borrower, a lessee or a guarantor, or by which such Subsidiary or
any of its property may be bound as a borrower, a lessee or a
guarantor; the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the consummation
of the transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any material lien, charge or encumbrance upon any
property or assets of any Subsidiary pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which such Subsidiary is a party as a borrower, a
lessee or a guarantor, or by which it may be bound as a borrower, a
lessee or a guarantor, or to which any of the property or assets of
such Subsidiary is subject, nor will such action result in any
violation of the provisions of the charter or By-Laws of such
Subsidiary.
(xxiv) To such counsel's knowledge, the Company, the Bank and
the Subsidiaries have good and marketable title to all properties
and assets which are material to the business of the Company, the
Bank and the Subsidiaries, respectively, and to those properties and
assets described in the Registration Statement as owned by them,
free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Registration Statement and
Prospectus (including the Liquidation Account) or are not material
in relation to the business of the Company and the Bank taken as a
whole.
(xxv) 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).
(xxvi) Neither the Company nor the Bank is required to be
registered as an investment company under the Investment Company Act
of 1940.
-29-
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
Xxxx, Xxxx 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 Xxxx, Xxxx together with the
opinion to be rendered hereunder by such counsel.
(2) The letter of Xxxx Xxxxxx addressed to Ryan, Beck, dated
the Closing Date, in form and substance to the effect that:
During the preparation of the Reorganization Applications, the
Registration Statement and the Prospectus, such counsel participated in
conferences with management of and the independent 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 Reorganization Applications, nothing has come to their
attention that would lead them to believe that any Reorganization
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.
(3) The favorable opinion, dated as of the Closing Date, of
Peabody & Xxxxx, counsel for Ryan, Beck, with respect to such matters as
Xxxx, Xxxx may reasonably require. Such opinion may rely upon the
opinions of counsel to the Bank and the Company, and, as to matters of
fact, 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, Xxxx, Xxxx 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 condition,
financial or otherwise, or in the earnings, 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
-30-
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 Reorganization; (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 Reorganization 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 condition, financial other otherwise, or in
the earnings, affairs or prospects of the Company or the Bank
independently, or of the Company and 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 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 Xxxx, Xxxx) or which would materially and
adversely affect its business, operations, financial condition or income;
(iv) neither the Company nor the Bank shall have been in default (nor shall
an event have occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any agreement or instrument
relating to any outstanding indebtedness; (v) no action, suit or
proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or, 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 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 Xxxx
Xxxxxx.
(e) Concurrently with the execution of this Agreement, Xxxx, Back, the
Company and the Bank shall receive a letter from Xxxxx Xxxxxxxx LLP dated
the date hereof and addressed to Xxxx, Xxxx: (i) confirming that Xxxxx
Xxxxxxxx LLP is a firm of independent 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
-31-
Company is required to be disclosed in the Prospectus, and stating in
effect that in its opinion the financial statements of the Bank 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 and the 1934 Act
Regulations, the relevant Reorganization 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 financial statements of the Bank prepared by
the Bank, a reading of the minutes of the meetings of the Board of
Directors and corporators of the Bank and consultations with officers of
the Bank responsible for financial and accounting matters, nothing has come
to its attention which causes it to believe that: (A) the unaudited
financial statements included in the Prospectus do not comply as to form in
all material respects with applicable accounting requirements; (B) such
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the Prospectus;
(C) during the period from the date of the latest audited 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 surplus and reserves of the Bank at the date of such
letter as compared with amounts shown in the latest audited statement of
condition included in the Prospectus or any material decrease in net income
or net interest income of the Bank for the number of full months commencing
immediately after the period covered by the latest audited income statement
included in the Prospectus and ended on the latest month end prior to the
date of the Prospectus as compared to the corresponding period in the
preceding year; and (iii) stating that, in addition to the 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 Xxxx, Xxxx may reasonably
request; and they have found such amounts and percentages to be in
agreement therewith (subject to rounding).
(f) At the Closing Date, Xxxx, Xxxx shall receive a letter from Xxxxx
Xxxxxxxx LLP, dated the Closing Date, addressed to Ryan, Beck, confirming
the statements made by it 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.
-32-
(g) At the Closing Date, Xxxx, Xxxx shall have received a letter from
Xxxxxxx Financial, dated as of the Closing Date, confirming the Independent
Valuation.
(h) At the Closing Date, counsel to Xxxx, Xxxx 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
Reorganization and the sale of the Shares as herein contemplated shall be
satisfactory in form and substance to Xxxx, Xxxx and counsel to Xxxx, Xxxx.
(i) The Company and the Bank shall not have sustained since the date of
the latest audited 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 Xxxx, Xxxx 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 Ryan, Beck,
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 June 30, 1998, this
Agreement and all of Xxxx, Xxxx'x obligations hereunder may be canceled by Xxxx,
Xxxx by notifying the Bank of such cancellation in writing or by telegram at any
time at or prior to the Closing Date, and any
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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. Notwithstanding
the above, if this Agreement is canceled pursuant to this paragraph, the Bank
and the Company jointly and severally agree to reimburse Xxxx, Xxxx for all of
Xxxx, Xxxx'x out-of-pocket expenses reasonably incurred by Ryan, Beck, including
any legal fees to be paid to Xxxx, Xxxx'x counsel, subject to the limits
expressed in Section 6 hereof, and an advisory and administrative services fee
of $25,000 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 Reorganization
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 Ryan, Beck, with
respect to Xxxx, Xxxx'x 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 Reorganization has
not been completed by June 30, 1998.
SECTION 11. Survival. The respective indemnities, agreements,
--------
representations, warranties and other statements of the Bank, the Company and
Ryan, Beck, 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 Xxxx, Xxxx or any of Xxxx, Xxxx'x officers or
directors or any person controlling Ryan, Beck, 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), with a copy to Peabody & Xxxxx, 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (Attention: Xxxxx X. Xxxxxx,
Esq.) and (b) to the Bank and the Company at the Bank's principal office
(Attention: Xxxxxxx X. Xxxxxxx, Xx., President and Chief Executive Officer),
with a copy to Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000 (Attention: Xxxx Xxxx, Esq.).
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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.
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 Ryan, Beck, please indicate acceptance thereof in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement.
BROOKLINE BANCORP, INC. BROOKLINE SAVINGS BANK
BY: BY:
----------------------------------- ------------------------------------
Xxxxxxx X. Xxxxxxx, Xx., President Xxxxxxx X. Xxxxxxx, Xx., President
and Chief Executive Officer and Chief Executive Officer
Accepted as of the date first above written.
XXXX, XXXX & CO., INC.
By:
-----------------------------------
Xxx X. Xxxxxxx, President
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EXHIBIT B
BROOKLINE BANCORP, INC.
Shares of Common Stock
(par value $.01 per share)
Selected Dealers' Agreement
---------------------------
_________________, 1997
We have agreed to assist Brookline Bancorp, Inc. (the "Company"), and
Brookline Savings Bank (the "Bank") in connection with the offer and sale of up
to 11,891,000 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 Bank, which includes the formation
of a Massachusetts-chartered stock savings bank as the successor to the Bank in
its mutual form and the concurrent formation of the Company as a majority-owned
subsidiary of Brookline Bancorp, MHC. 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 13,674,650 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 _____________, 1997 (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 Employee Stock Ownership Plan, the Bank's Supplemental Eligible
Account Holders 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
Bank's Plan of Reorganization From a Mutual Savings Bank to a Mutual Holding
Company and Stock Issuance Plan (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 5.5% percent 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 "Brookline
Bancorp, Inc."
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 (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 "Brookline Bancorp, Inc."
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
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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 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.
B-3
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:
_______________________________, 1997
----------------------------------------
(Name of Dealer)
By:
------------------------------------
Its:
------------------------------------
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