MYSTIC FINANCIAL, INC.
1,742,500 TO 2,711,125 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
$10.00 PER SHARE
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Mystic Financial, Inc., a corporation organized under the laws of the State
of Delaware (the "Company"), and Medford Co-operative Bank, a Massachusetts
chartered mutual co-operative bank (the "Bank") hereby confirm, as of [date],
their agreement with Trident Securities, Inc. ("Trident"), a broker-dealer
registered with the Securities and Exchange Commission ("Commission") and a
member of the National Association of Securities Dealers, Inc. ("NASD"), as
follows:
Introductory. The Company has been formed for the purpose of becoming the
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holding company for the Bank, which intends to convert from mutual to stock form
(together with the Offerings, as defined below, and the issuance of shares of
stock of the Bank to the Company, the "Conversion") pursuant to a plan of
conversion, as amended, adopted by the Board of Directors of the Bank on June
11, 1997 and August 13, 1997 (the "Plan"). In accordance with the Plan, the
Company is offering shares of its common stock, par value $0.01 per share (the
"Shares" or the "Common Stock"), pursuant to nontransferable subscription rights
in a subscription offering (the "Subscription Offering") to certain depositors
of the Bank and to the Bank's tax-qualified employee stock ownership plan (the
"ESOP"). Concurrently with the Subscription Offering, shares of the Common Stock
not sold in the Subscription Offering are being offered to natural persons
residing in Medford, Malden, Everett, Stoneham, Arlington, Winchester,
Somerville, Melrose, Lexington and Bedford (the "Direct Community Offering")
(the Subscription and Direct Community Offerings are sometimes referred to
collectively as the "Subscription and Direct Community Offering"), subject to
the right of the Bank in its absolute discretion, to reject orders in the Direct
Community Offering in whole or in part. It is anticipated that shares of Common
Stock not subscribed for in the Subscription and Direct Community Offering (if
any) will be offered to certain members of the general public on a best efforts
basis by a selling group of broker dealers managed by Trident in a syndicated
offering ("Syndicated Offering") (the Subscription and Direct Community Offering
and the Syndicated Offering are referred to collectively as the "Offerings"). In
the Subscription and Direct Community Offering (and the Syndicated Offering if
applicable), the Company is offering between 1,742,500 and 2,357,500
Trident Securities, Inc.
Sales Agency Agreement
Page 2
Shares (the "Current Valuation Range"), with the possibility of offering up to
2,711,125 Shares without a resolicitation of subscribers pursuant to
Massachusetts General Laws, Chapter 170, Section 26E and 209 C. M. R. 33.00 et
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seq. (together, the "Conversion Regulations"). With the exception of the ESOP,
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no individual person or other entity, together with associates of and persons
acting in concert with such person or other entity, may subscribe for more than
$600,000 of the Common Stock in the Conversion.
The Company has filed with the Commission a registration statement on Form
S-1 (No. 333-34447), including a prospectus for the registration of the Shares
under the Securities Act of 1933, as amended (the "Securities Act"), and such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective; and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein, if any, and the
information, if any, deemed to be part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")) are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus that shall be used by the Company in connection with the Subscription
and Direct Community Offering or the Syndicated Offering differs from the
Prospectus on file with the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations),
the term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to Trident for such use.
The Company has been advised by Trident that Trident will use its best
efforts in assisting the Company with the sale of the Shares in the Offerings.
Prior to the execution of this Agreement, the Company has delivered to Trident
the Prospectus dated [date] (as hereinafter defined) and all supplements thereto
to be used in the Offerings. Such Prospectus contains information with respect
to the Company, the Bank and the Shares.
2. Representations and Warranties.
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The Company and the Bank jointly and severally represent and warrant to
Trident as follows:
(a) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commis sion. At the time the
Registration Statement became effective and at all times subsequent thereto
through and including the Closing Date referred to in Section 4 below, the
Trident Securities, Inc.
Sales Agency Agreement
Page 3
Registration Statement (as amended or supplemented) complied and will
comply in all material respects with the requirements of the Securities Act
and the Securities Act Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date, the Prospectus (as amended
or supplemented) complied and will comply with the Conversion Regulations
and the Prospectus did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. Representations or warranties in this
subsection shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company
relating to Trident by or on behalf of Trident expressly for use in the
Prospectus or the Registration Statement.
(b) As of the Closing Date, the Bank will have completed all
conditions precedent to its conversion from the mutual to stock form in
accordance with the Plan, the Conversion Regulations and all other
applicable laws, regulations, decisions and orders. The Plan has been
approved by the Commissioner of Banks of The Commonwealth of Massachusetts
(the "Commissioner") and has been reviewed without objection by the Federal
Deposit Insurance Corporation ("FDIC") and no person has challenged or
sought to obtain judicial review of the action of the Commissioner in
approving the Plan and the Conversion.
(c) The Bank has filed an Application for Conversion including (i)
the Prospectus; (ii) a Notice and Information Statement relating to the
Special Meeting of the Bank's Shareholders (as amended or supplemented, the
"Notice"); and (iii) certain exhibits (together, such Application for
Conversion, Prospectus, Notice and exhibits, as amended or supplemented,
shall sometimes be referred to herein as the "Conversion Application"). By
letter dated ______, the Commissioner has approved the Conversion
Application, such approval remains in full force and effect and no order
has been issued by the Commissioner suspending or revoking such approval
and no proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the Commissioner.
(d) The Commissioner has not, by order or otherwise, prevented or
suspended the use of the Prospectus or any supplemental sales literature
authorized by the Company or the Bank for use in connection with the
Offerings.
(e) As of the Closing Date, the Company will have completed all
conditions precedent to its registration as a bank holding company. The
Company has filed an application (the "Holding Company Application") with
the Board of Governors of the Federal Reserve System (the "Board") for
approval to acquire the Bank and become a bank holding company and has
received written notice from the Board of its approval of the Company's
application.
Trident Securities, Inc.
Sales Agency Agreement
Page 4
(f) The Bank is now a Massachusetts chartered co-operative bank of
mutual form of organization and upon the Conversion will be a Massachusetts
chartered co-operative bank of capital stock form of organization, in both
instances duly licensed to conduct its business as described in the
Prospectus, and each of the Bank and the Bank Subsidiary (as defined below)
is in good standing under the laws of The Commonwealth of Massachusetts
and is not required to qualify as a foreign corporation in any
jurisdiction. The Bank is a member in good standing of the Federal Home
Loan Bank of Boston (the "FHLB of Boston") and The Co-operative Central
Bank (the "Central Bank"); the deposit accounts of the Bank are insured by
the Bank Insurance Fund of the FDIC up to the applicable limits; deposits
not insured by the FDIC are insured by the Share Insurance Fund of the
Central Bank; and upon the Conversion, the liquidation account for the
benefit of eligible account holders and supplemental eligible account
holders will be duly established in accordance with the requirements of the
Conversion Regulations. The Bank does not own equity securities of or an
equity interest in any business enterprise, except as described in the
Prospectus.
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in The Commonwealth of Massachusetts and in all other
jurisdictions in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business.
(h) The Company does not directly own any subsidiaries other than the
Bank. The Bank owns one subsidiary, Mystic Securities Corporation (the
"Bank Subsidiary").
(i) Each of the Company, the Bank and the Bank Subsidiary has
obtained all licenses, permits and other governmental authorizations
currently required for the conduct of its business or as required for the
conduct of its business as contemplated by the Conversion Application and
the Holding Company Application; all such licenses, permits and other
governmental authorizations are in full force and effect and each of the
Company, the Bank and the Bank Subsidiary is in all material respects
complying therewith.
(j) Each of the Company, the Bank and the Bank Subsidiary has good,
marketable and insurable title to all assets material to its business and
to those assets described in the Prospectus as owned by it, free and clear
of all material liens, charges, encumbrances or restrictions, except for
liens for taxes not yet due, except as described in the Prospectus and
except as could not in the aggregate have a material adverse effect upon
the operations or financial condition of the Company, the Bank and the
Bank Subsidiary, taken as a whole; all of the leases and subleases material
to the operations or financial condition of
Trident Securities, Inc.
Sales Agency Agreement
Page 5
the Company, the Bank and the Bank Subsidiary, taken as a whole, under
which the Company, the Bank or the Bank Subsidiary holds properties,
including those described in the Prospectus, are in full force and effect
as described therein.
(k) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary actions on the part of each of the Company and
the Bank, and this Agreement is a valid and binding obligation of each of
the Company and the Bank with valid execution and delivery of Trident,
enforceable in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of financial
institutions, the accounts of which are insured by the FDIC or by general
equity principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law, and except to the extent that the
provisions of Section 7 hereof may be unenforceable as against public
policy).
(l) There is no litigation or governmental proceeding pending or, to
the best knowledge of any of the Company, the Bank or the Bank Subsidiary,
threatened against or involving the Company, the Bank or the Bank
Subsidiary or their assets which individually or in the aggregate would
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), results of operations and business, including the
assets and properties, of the Company, the Bank or the Bank Subsidiary.
(m) The Bank has received the opinion of Xxxxxxx Xxxxxxxx & Xxxx with
respect to federal tax consequences of the Conversion to the effect that
the Conversion will constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and will not be a taxable
transaction for the Bank under the laws of Massachusetts, and the facts
relied upon in such opinion are accurate and complete.
(n) Each of the Company and the Bank has all such corporate power,
authority, authorizations, approvals and orders as may be required to enter
into this Agreement and to carry out the provisions and conditions hereof,
subject to the limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the Commissioner in connection with his
approval of the Conversion Application, and except as may be required under
the securities, or "blue sky, " laws of various jurisdictions, and as of
the Closing Date, the Company will have such approvals and orders to issue
and sell the Shares to be sold by the Company as provided herein, and as
provided in the Plan, subject to the issuance of an amended charter of the
Bank in the form required for Massachusetts chartered capital stock co-
operative banks (the "Stock Charter"), the form of which Stock Charter has
been approved by the Commissioner.
(o) To the best of its knowledge, the Bank is not in violation of any
rule or regulation of Massachusetts or the FDIC that could reasonably be
expected to result in any
Trident Securities, Inc.
Sales Agency Agreement
Page 6
enforcement action against the Bank or its officers or directors that might
have a material adverse effect on the condition (financial or otherwise),
operations, businesses, assets or properties of the Bank.
(p) The financial statements and any related notes or schedules which
are included in the Prospectus and the Registration Statement fairly
present the financial condition, income, retained earnings and cash flows
of the Bank at the respective dates thereof and for the respective periods
covered thereby and comply as to form with the applicable accounting
requirements of the Conversion Regulations and the Securities Act Regula
tions. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, except as set forth therein, and such financial
statements are consistent with financial statements and other reports filed
by the Bank with supervisory and regulatory authorities except as such
generally accepted accounting principles may otherwise require. The tables
in the Prospectus and Registration Statement accurately present the
information purported to be shown thereby at the respective dates thereof
and for the respective periods therein.
(q) There has been no material change in the condition (financial or
otherwise), results of operations or business, including assets and
properties, of the Company, the Bank or the Bank Subsidiary, since the
latest date as of which such condition is set forth in the Prospectus and
the Registration Statement, except as set forth therein; and the
capitalization, assets, properties and business of the Company, the Bank
and the Bank Subsidiary conform to the descriptions thereof contained in
the Prospectus and the Registration Statement. The Company, the Bank and
the Bank Subsidiary have no material liabilities of any kind, contingent or
otherwise, except as set forth in the Prospectus and the Registration
Statement.
(r) There has been no breach or default (or the occurrence of any
event which, with notice or lapse of time or both, would constitute a
default) under, or creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the Company, the Bank
or the Bank Subsidiary, pursuant to any of the terms, provisions or
conditions of, any agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Company, the Bank or the Bank
Subsidiary is a party or by which it or any of its respective assets or
properties may be bound or is subject, or violation of any governmental
license or permit or any enforceable published law, administrative
regulation or order or court order, writ, injunction or decree, which
breach, default, encumbrance or violation would have a material adverse
effect on the condition (financial or otherwise), operations, business,
assets or properties of the Company, the Bank or the Bank Subsidiary; all
agreements which are material to the condition (financial or other wise),
results of operations or business of the Company, the Bank and the Bank
Subsidiary, are in full force and effect, and no party to any such
agreement has instituted or, to the best knowledge of the Company, the Bank
or the Bank Subsidiary, threatened any action or proceeding wherein the
Company, the Bank or the Bank Subsidiary would be
Trident Securities, Inc.
Sales Agency Agreement
Page 7
alleged to be in default thereunder.
(s) The Bank is not in violation of its mutual charter or bylaws. The
execution and delivery hereof and the consummation of the transactions
contemplated hereby by the Bank do not conflict with or result in a breach
of the charter or bylaws of the Bank (in either mutual or stock form) or
constitute a material breach of or default (or an event which, with notice
or lapse of time or both, would constitute a default) under, give rise to
any right of termination, cancellation or acceleration contained in, or
result in the creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the Bank, pursuant to
any of the terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or obligation to
which the Bank is a party or violate any governmental license or permit or
any enforceable published law, administrative regulation or order or court
order, writ, injunction or decree, which breach, default, encumbrance or
violation would have a material adverse effect on the condition (financial
or otherwise), operations or business of the Bank.
(t) The Company is not in violation of its charter or bylaws. The
execution and delivery hereof and the consummation of the transactions
contemplated hereby by the Company do not conflict with or result in a
breach of the charter or bylaws of the Company or constitute a material
breach of or default (or an event which, with notice or lapse of time or
both, would constitute a default) under, give rise to any right of
termination, cancellation or acceleration contained in, or result in the
creation or imposition of any lien, charge or other encumbrance upon any of
the properties or assets of the Com pany, pursuant to any of the terms,
provisions or conditions of, any material agreement, contract, indenture,
bond, debenture, note, instrument or obligation to which the Com pany is a
party or violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court order, writ,
injunction or decree, which breach, default, encumbrance or violation would
have a material adverse effect on the condition (financial or otherwise),
operations or business of the Company.
(u) Subsequent to the respective dates as of which information is
given in the Prospectus and the Registration Statement and prior to the
Closing Date, except as otherwise may be indicated or contemplated therein,
neither the Company none of the Company, the Bank or any Subsidiary will
have issued any securities which will remain issued at the Closing Date or
incurred any liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business, or entered
into any other transaction not in the ordinary course of business and
consistent with prior practices, which is material in light of the business
of the Company, the Bank and the Bank Subsidiary, taken as a whole.
(v) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be within the range as set
forth in the Prospectus under the caption "CAPITALIZATION," and no Common
Stock of the Company shall be
Trident Securities, Inc.
Sales Agency Agreement
Page 8
outstanding immediately prior to the Closing Date; the issuance and the
sale of the Shares of the Company have been duly authorized by all
necessary action of the Company, and when issued in accordance with the
terms of the Plan and paid for, shall be validly issued, fully paid and
nonassessable and shall conform to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to preemptive rights,
except as set forth in the Prospectus; and good title to the Shares will be
transferred by the Company upon issuance thereof against payment therefor,
free and clear of all claims, encumbrances, security interests and liens
against the Company whatsoever. The certificates representing the Shares
will conform in all material respects with the requirements of applicable
laws and regulations.
(w) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Bank shall be ________shares of common
stock, par value ____ per share (the "Bank Common Stock"); no shares of
Bank Common Stock or Bank preferred stock have been or will be issued prior
to the Closing Date; at the time of the Closing, the Bank Common Stock will
have been duly authorized for issuance by all necessary action of the Bank
and approved by the Commissioner, and when issued in accordance with the
terms of the Plan and paid for, shall be validly issued, fully paid and
nonassessable; the issuance of the Bank Common Stock is not subject to
preemptive rights; and good title to the Bank Common Stock will be
transferred by the Bank upon issuance thereof against payment therefor,
free and clear of all claims, encumbrances, security interests and liens
against the Bank whatsoever. The certificate(s) representing the Bank
Common Stock will conform in all material respects with the requirements of
applicable laws and regulations.
(x) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for compliance with certain
conditions imposed in the approval of the Conversion Application and the
Plan by the Commissioner, the declaration of effectiveness of any required
post-effective amendment by the Commission, the issuance of the Stock
Charter by the Commissioner, compliance with any conditions imposed by the
Board in its approval of the Company's Holding Company Application,
compliance with certain conditions imposed in the review of the Plan
without objection by the FDIC and as may be required under the securities
laws of various jurisdictions.
(y) All contracts and other documents required to be filed as
exhibits to the Conversion Application or as required by the Commissioner
or the FDIC have been filed with the Commissioner and/or the FDIC, as the
case may be.
(z) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission.
(aa) To the best knowledge of the Bank, Wolf & Company, P.C., who have
audited
Trident Securities, Inc.
Sales Agency Agreement
Page 9
the financial statements of the Bank as of June 30, 1997 and 1996 and for
each of the years in the three-year period ended June 30, 1997 included in
the Prospectus and the Registration Statement, are independent public
accountants within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants and Title 12 of the Code
of Federal Regulations, Section 335.604(a) of the FDIC's securities
disclosure regulations.
(bb) R.P. Financial (the "Appraiser") which prepared the appraisal, is
independent with respect to the Bank within the meaning of the Conversion
Regulations, and has so advised the Bank.
(cc) For the past five years, the Bank has timely filed all required
federal, state and local franchise tax returns, and the Bank has no
knowledge of any tax deficiency which has been asserted with respect to
such returns by any taxing authorities, and the Bank has paid all taxes
that have become due and, to the best of its knowledge, have made adequate
reserves for similar future tax liabilities, except where any failure to
make such filings, payments and reserves, or the assertion of such a
deficiency, would not have a material adverse effect on the condition of
the Bank.
(dd) To the best knowledge of the Bank, all of the loans represented
as assets of the Bank on the most recent financial statements of the Bank
included in the Prospectus and the Registration Statement meet or are
exempt from all requirements of federal, state or local law pertaining to
lending, including without limitation truth in lending (including the
requirements of Regulation Z and 12 C.F.R. Part 226 and Section 563.99),
real estate settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a material adverse effect on
the Bank.
(ee) The records of account holders, depositors and other Shareholders
of the Bank delivered to Trident by the Bank or its agent for use during
the Conversion have been prepared or reviewed by the Bank and, to the best
knowledge of the Bank, are reliable and accurate.
(ff) None of the Company, the Bank or the Bank Subsidiary, or the
employees of the Company, the Bank or the Bank Subsidiary have made any
payment of funds of the Company, the Bank or the Bank Subsidiary prohibited
by law, and no funds of the Company, the Bank or the Bank Subsidiary have
been set aside to be used for any payment prohibited by law.
(gg) To the best knowledge of the Company, the Bank and the Bank
Subsidiary, the Company, the Bank and the Bank Subsidiary are in compliance
with all laws, rules and regulations relating to the discharge, storage,
handling and disposal of hazardous or toxic substances, pollutants or
contaminants and none of the Company, the Bank or the Bank
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Sales Agency Agreement
Page 10
Subsidiary believes that the Company, the Bank or the Bank Subsidiary is
subject to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar law,
except for violations which, if asserted, would not have a material adverse
effect on the Company, the Bank and the Bank Subsidiary, taken as a whole.
There are no actions, suits, regulatory investigations or other proceedings
pending or, to the best knowledge of the Company, the Bank and the Bank
Subsidiary, threatened against the Company, the Bank or the Bank
Subsidiary, relating to the discharge, storage, handling and disposal of
hazardous or toxic substances, pollutants or contaminants. To the best
knowledge of the Company, the Bank and the Bank Subsidiary, 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 been caused by the
Company, the Bank or the Bank Subsidiary or, to the best knowledge of the
Company, the Bank or the Bank Subsidiary, has occurred on, in or at any of
the facilities or properties of the Company, the Bank or the Bank
Subsidiary, except such disposal, release or discharge which would not have
a material adverse effect on the Company, the Bank or the Bank Subsidiary,
taken as a whole.
(hh) At the Closing Date, the Company and the Bank will have completed
the conditions precedent to, and shall have conducted the Conversion in all
material respects in accordance with, the Plan, the Conversion Regulations,
the Securities Act, the Securities Act Regulations and all other
applicable laws, regulations, published decisions and orders, including all
terms, conditions, requirements and provisions precedent to the Conversion
imposed by the Commissioner, the FDIC and the Board in their approval and
review without objection of the Plan, the Conversion Application and the
Holding Company Application, as applicable.
(ii) The Company has received approval, subject to official notice of
issuance, to have the Common Stock quoted on the National Market of the
Nasdaq Stock Market, Inc. effective at the Closing Date.
Any closing certificate signed by any officer of the Company or the Bank
and delivered to Trident or Trident's counsel that contains a representation or
warranty shall be deemed a representation and warranty of the Company or the
Bank, as applicable, to Trident as to the matters covered thereby.
3. Agency. On the basis of the representations and warranties herein
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contained, but subject to the terms and conditions herein set forth, the Company
and the Bank hereby agree with Trident as follows:
(a) Assistance with Conversion. The Company and the Bank hereby
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employ Trident to assist the Company and the Bank on a best efforts basis
in the offer and sale of the Shares in the Conversion by assisting in:
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Sales Agency Agreement
Page 11
(i) training and educating the employees of the Bank regarding
the mechanics and regulatory requirements of the conversion process;
(ii) conducting information meetings for the employees of the
Bank, Shareholders of the Bank and the general public, if desired by
the Bank;
(iii) coordinating the selling efforts in the local communities
of the Bank, if desired by the Bank; and
(iv) keeping records of all subscriptions for the Shares.
(b) Assistance with the Direct Community Offering and the Syndicated
----------------------------------------------------------------
Offering. The Company and the Bank hereby employ Trident to act as their
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exclusive agent to utilize its best efforts in managing the sale of the
Shares in the Direct Community Offering and the Syndicated Offering;
provided, however, that the Company and the Bank acknowledge and agree
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that Trident may offer to other NASD-registered broker dealers ("Selected
Dealers") the opportunity to solicit subscriptions for the Shares to be
sold in the Syndicated Offering on a best efforts basis pursuant to the
terms and conditions of the Selected Dealers' Agreements between Trident
and each of the Selected Dealers.
(c) Other Matters. Subscriptions shall be submitted in the
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Subscription Offering only during the subscription period by means of Order
Forms as described in the Prospectus, and may be submitted in the Direct
Community Offering and the Syndicated Community Offering by means of Order
Forms or by solicitation of indications of interest from customers of
Selected Dealers residing in those states where the Common Stock is
registered or is exempt from registration. The Company shall notify Trident
promptly after the expiration of the Subscription Offering of the number of
Shares sold in the Subscription Offering and pursuant to Order Forms in the
Direct Community Offering and the Syndicated Offering, and the aggregate
number of Shares remaining that are available to be sold in the Direct
Community Offering or Syndicated Offering, if any. The Company shall advise
Trident as to the allocation of the Shares in the event of an
oversubscription. The Company shall indemnify and hold harmless Trident
against any losses, claims, damages or liabilities resulting from the
failure of the Company (or its agents) to properly record stock orders, to
properly credit subscription rights of Eligible Account Holders or
Supplemental Eligible Account Holders, to properly allocate Shares in the
event of an oversubscription or to otherwise properly deal with or account
for any records of qualifying deposit account holders of the Bank during
the Conversion and Trident shall similarly indemnify and hold harmless the
Company for a similar failure by Trident (or its agents).
(d) Fees and Expenses.
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Sales Agency Agreement
Page 12
(i) As compensation for Trident's services hereunder, the
Company agrees to pay to Trident a management fee of .40% and a
commission equal to 2.0% of the aggregate dollar amount of the Shares
sold in the Offerings excluding any Shares sold to the ESOP, directors
and executive officers and "associates" of the Bank's directors and
executive officers. All fees and commissions shall be payable to
Trident on the Closing Date, in next day funds.
(ii) In addition to the fees described in (i) above, each of
the Company and the Bank agrees to reimburse Trident for all allocable
out-of-pocket expenses, including travel, communication, legal fees
and postage (up to an aggregate of $44,000) incurred by Trident in
connection with the Conversion. The expenses to be reimbursed
hereunder shall be payable by the Company or the Bank as they are
incurred by Trident and billed on a periodic basis to the Company or
the Bank, and shall be payable regardless of whether the Closing
occurs or this Agreement is terminated in accordance with paragraph
(e) of this Section 3. To the extent not previously paid, full payment
of Trident's expenses shall be made in same day funds at the Closing
and any expenses and fees incurred by Trident or its counsel but not
billed as of the Closing shall subsequently be payable in full upon
receipt of such xxxxxxxx.
(iii) Regardless of whether the Closing occurs or this Agreement
is terminated in accordance with paragraph (e) of this Section 3 and
in addition to the obligations under clauses (i) and (ii) hereof, each
of the Company and the Bank shall pay all expenses incident to the
performance of its obligations in connection with the Conversion
including, but not limited to, all fees and disbursements of its
counsel, the Appraiser and the conversion agent, all expenses incurred
in the preparation, printing, filing and distribution of all documents
relating to the Conversion (including all NASD filing fees), telephone
charges, air freight, rental equipment, supplies, marketing
materials, all fees and expenses of the transfer agent of the Company
and all transfer taxes that may be payable with respect to the sale of
the Common Stock, all fees of the accountants of the Bank, and all
legal and filing fees incurred in connection with the matters referred
to in Section 5(d) hereof. Any expenses to be reimbursed to Trident,
pursuant to this clause (iii) shall be in addition to, and not subject
to the limitations on, the expenses to be reimbursed to Trident
pursuant to clause (ii) above.
(e) Termination. The employment of Trident hereunder shall terminate
-----------
upon the first to occur of the following: (i) the forty-fifth day after the
expiration of the Subscription Offering, as extended, unless the Bank with
the approval of the Commissioner, is permitted to extend such date; (ii)
the Closing; or (iii) the termination of this Agreement pursuant to Section
9 hereof.
4. Closing.
-------
(a) Subject to the terms and conditions set forth herein, the closing
of the purchase
Trident Securities, Inc.
Sales Agency Agreement
Page 13
and sale of the Common Stock (the "Closing") shall take place at the
offices of Xxxxxxx Xxxxxxxx & Wood, Washington, D.C., at 10:00 a.m.,
Washington, D.C. time, on a business day that shall be agreed upon by the
parties hereto (the "Closing Date"). At the Closing, the Common Stock will
be issued by the Company against payment of the purchase price therefor.
Certificates representing the Common Stock shall be prepared in definitive
form and in such denominations and registered in such names as set forth on
the Order Forms or (in the case of Shares not subscribed for pursuant to
Order Forms) in such names as Trident may request, upon at least two
business days' prior notice to the Company, and will be (i) in the case of
Shares subscribed for pursuant to Order Forms, delivered by the Company or
its agent directly to the purchasers thereof as promptly as practicable
following the Closing, and (ii) in the case of Shares not subscribed for
pursuant to Order Forms, made available for checking and packaging at least
one business day prior to the Closing at a location to be designated by
Trident.
(b) Pursuant to the Conversion Regulations, prior to the commencement
of the Offerings, appropriate arrangements will be made for placing the
funds received in payment for the shares of Common Stock in special
interest-bearing segregated accounts (the "Segregated Accounts") with the
Bank until such shares are sold and paid for at the Closing. If the Closing
does not occur within the time specified in Section 3(e)(i) of this
Agreement, the Bank will promptly refund all funds, including interest, in
the Segregated Accounts to the persons who have the beneficial interests
therein, unless alternative arrangements are agreed to by the parties and
approved by the Commissioner and the FDIC.
5. Covenants of the Company and the Bank. Each of the Company and the
-------------------------------------
Bank covenants and agrees with Trident as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Notice as may hereafter be required by the Securities
Act Regulations or the Conversion Regulations or as may hereafter be
reasonably requested by Trident. Following completion of the Subscription
and Direct Community Offerings, in the event of a Syndicated Offering, the
Company and the Bank will (i) promptly prepare and file with the Commis
sion a post-effective amendment to the Registration Statement relating to
the results of the Subscription and Direct Community Offering, any
additional information with respect to the proposed plan of distribution
and any revised pricing information or (ii) if no such post-effective
amendment is required, file with, or mail for filing to, the Commission a
prospectus or prospectus supplement containing information relating to the
results of the Subscription and Direct Community Offering and pricing
information pursuant to Rule 424(c) of the Securities Act Regulations, in
either case in a form acceptable to Trident.
(b) The Company and the Bank will notify Trident immediately, and
confirm the notice in writing, (i) of the effectiveness of any post-
effective amendment to the Registra-
Trident Securities, Inc.
Sales Agency Agreement
Page 14
tion Statement, the filing of any supplement to the Prospectus and the
filing of any amendment to, and the receipt of any approval relating to,
the Conversion Application, (ii) of the receipt of any comments from the
Commissioner, the FDIC or the Commission with respect to the Prospectus,
the Conversion Application or the transactions contemplated by this
Agreement or the Plan, (iii) of any request by the Commission, the
Commissioner or the FDIC for any amendment to the Registration Statement or
the Conversion Application or any amendment or supplement to the Prospectus
or for additional information, (iv) of the issuance by the Commissioner of
any order suspending the Offerings or the use of the Prospectus or the
initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose, and (vi) of the receipt of any notice with respect to the
suspension of any qualification of the Common Stock for offering or sale in
any jurisdiction. The Company and the Bank will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(c) The Company and the Bank will give Trident prompt notice of its
intention to file any amendment to the Conversion Application or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
that the Company proposes for use in connection with the Syndicated
Offering that differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the
Securities Act Regulations), will furnish Trident with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which Trident or counsel for
Trident may reasonably object.
(d) The Company or the Bank has furnished or will furnish to Trident
copies of the Conversion Application, and each amendment thereto (one of
each of which will include all exhibits), the Prospectus and all amendments
and supplements thereto, and the Registration Statement and all amendments
and supplements thereto, in each case as soon as available and in such
quantities as Trident may from time to time reasonably request.
(e) During the period when the Prospectus is required to be
delivered, the Company and the Bank will comply, at their own expense, with
all requirements imposed upon them by the Commissioner, by the FDIC, by the
Conversion Regulations, and by the Securities Act, the Securities Act
Regulations, the Securities Exchange Act of 1934 (the "Exchange Act") and
the rules and regulations of the Commission promulgated thereunder,
including, without limitation, Rule 10b-6 under the Exchange Act, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
Trident Securities, Inc.
Sales Agency Agreement
Page 15
(f) If during the offering period any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statement therein,
in light of the circumstances then existing, not misleading, or if during
such period it is necessary to amend or supplement the Conversion
Application or the Prospectus to comply with the Conversion Regulations or
the Securities Act Regulations, the Company promptly will notify Trident
and will prepare and file with the Commissioner, the FDIC and the
Commission and any other authority with jurisdiction, an amendment or
supplement that will correct such statement or omission or effect such
compliance.
(g) The Company and the Bank have taken or will take all necessary
action to qualify or obtain an exemption for the Common Stock for offer and
sale under the securities laws of such jurisdictions as Trident and the
Company may agree upon and to continue such qualifications or exemptions in
effect so long as required for the distribution of the Common Stock
pursuant to the Conversion; provided, however, that the Company shall not
be obligated in connection therewith to execute any general consent to
service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction. The Company shall notify Trident
immediately of the suspension of qualification of the Common Stock or the
threat of such action, in any jurisdiction, of which the Company becomes
aware. The Company shall comply in all material respects with the
undertakings, if any, given by it in connection with the qualification of
the Common Stock for offer and sale under laws of such jurisdictions.
(h) The Company authorizes Trident and any Selected Dealers to act as
agent of the Company in distributing the Prospectus to persons entitled to
subscription rights and other persons having record addresses in the states
or jurisdictions set forth in a survey of the securities or "blue sky" laws
of the various jurisdictions in which the Offerings will be made (the "Blue
Sky Survey").
(i) The Company will make generally available to its security holders
as soon as practicable but no later than sixty (60) days from the close of
the period covered thereby an earnings statement (in compliance with the
provisions of Rule 158 of the Securities Act Regulations) covering a twelve
month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as
soon as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows of the Company,
the Bank and the Subsidiaries, certified by independent public accountants)
and, as soon as
Trident Securities, Inc.
Sales Agency Agreement
Page 16
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective
date of the Registration Statement), consolidated summary financial
information of the Company, the Bank and the Subsidiaries for such quarter
in reasonable detail. In addition, such annual report and quarterly
consolidated summary financial information shall be made public through the
issuance of appropriate press releases at the same time or prior to the
time of the furnishing thereof to stockholders of the Company.
(k) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to Trident (i) as soon
as available, a copy of each report or other document of the Company
furnished generally to stockholders of the Company or furnished to or filed
with the Commission under the 1934 Act or any national securities exchange
or system on which any class of securities of the Company is listed, and
(ii) from time to time, such other public information concerning the
Company as Trident may reasonably request.
(l) The Company and the Bank will conduct the Conversion in all
material respects in accordance with the Plan, the Conversion Regulations
and all other applicable regulations, decisions and orders thereunder,
including all applicable terms, requirements and conditions precedent to
the Conversion imposed upon the Company or the Bank by the Commissioner or
the FDIC.
(m) Each of the Company and the Bank will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectus under "Use of Proceeds."
(n) The Company will report the use of proceeds of the Offerings
pursuant to the requirements of Rule 463 of the Securities Act Regulations.
(o) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act prior to completion of the
Offerings and will request that such registration statement be effective
upon completion of the Conversion. The Company will maintain the
effectiveness of such registration for not less than three years. The
Company will file with the Nasdaq all documents and notices required by
Nasdaq National Market of companies that have issued securities that are
traded in the over-the-counter market and quotations for which are reported
by the Nasdaq National Market.
(p) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Trident in order for Trident to
ensure compliance with the National Association of Securities Dealers,
Inc.'s ("NASD") "Interpretation Relating to Free-Riding and Withholding."
Trident Securities, Inc.
Sales Agency Agreement
Page 17
(q) The Company and the Bank will comply with the conditions imposed
by the Commissioner in connection with its approval of the Conversion
Application, by the FDIC in connection with its review of the Plan without
objection, and by the Board in connection with its approval of the Holding
Company Application.
(r) The Company and the Bank will comply with, or cause to be
complied with, the conditions to Trident's obligations set forth in Section
6 hereof unless such conditions are waived in writing by Trident and shall
not deliver the Shares until each and every condition set forth in Section
6 hereof has been satisfied, unless such condition is waived in writing by
Trident.
(s) The Company will promptly prepare and file with the Commissioner,
the Commission, the FDIC, the Board and any other appropriate regulatory
agency such reports or documents as may be required by the Conversion
Regulations, the Securities Act and rules and regulations promulgated
thereunder and other applicable laws and regulations to be filed with such
agencies, including, without limitation, reports with respect to the sale
of the Common Stock and the application of the proceeds thereof.
(t) The Company shall advise Trident, if necessary, as to the
allocation of the Shares ("Allocation Instructions") in the event of an
oversubscription and shall provide Trident final instructions as to the
allocation of the Shares in such event and such information shall be
accurate and reliable. Trident shall be entitled to rely on such Allocation
Instructions and shall have no liability in respect of its reliance
thereon, including without limitation, no liability for or related to any
denial or grant, full or partial, of a subscription unless liability
resulting from such denial or grant is due to Trident's willful disregard
of the Allocation Instructions.
(u) The Company will not sell or issue, contract to sell or otherwise
dispose of, for a period of 180 days after the Closing Time, without
Trident's prior written consent, any shares of Common Stock other than in
connection with the Offerings or in connection with any employee benefit
plan or arrangement described in the Prospectus.
6. Conditions to Trident's Obligations. Except as may be waived in
-----------------------------------
writing by Trident, the obligations of Trident as provided herein shall be
subject to the accuracy, as of the date hereof and at the Closing Date (as if
made at the Closing Date), of the representations and warranties of the Company
and the Bank herein, to the performance by the Company and the Bank of their
respective obligations hereunder and to the following additional conditions:
(a) The Prospectus and all supplemental sales literature shall have
received all required authorizations of the Commissioner for use in final
form. No order suspending the Offerings or authorization for final use of
the Prospectus shall have been issued or proceedings therefor initiated or
threatened by the Commissioner and no order suspending the sale of the
Securities in any jurisdiction shall have been issued.
Trident Securities, Inc.
Sales Agency Agreement
Page 18
(b) The Registration Statement shall have been declared effective by
the Commission. No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission.
(c) At the Closing Date, the Company and the Bank will have completed
in all material respects the conditions precedent to the Conversion in
accordance with the Plan, the applicable Conversion Regulations and all
other applicable laws, regulations, decisions and orders, including all
terms, conditions, requirements and provisions precedent to the Conversion
imposed upon the Company or the Bank by the Commissioner, the FDIC or any
other regulatory authority other than those that the Commissioner or the
FDIC permit to be completed after the Conversion.
(d) The Plan shall have been reviewed without objection by the FDIC.
The Board shall have approved the Company's Holding Company Application.
Any filings required by the Conversion Regulations or by the Bank Holding
Company Act (and the regulations promulgated thereunder) shall have been
timely made. Any request of the Commissioner, the FDIC, the Commission or
the Board for additional information (to be included in the Conversion
Application, the Prospectus, the Notice, the Registration Statement or the
Holding Company Application or otherwise) shall have been complied with.
The NASD, upon review of the terms of this Agreement, shall not have
objected to Trident's performance of its obligations hereunder or the
terms herein set forth.
(e) At the Closing Date, the Common Stock shall have been approved
for listing on the Nasdaq National Market upon notice of issuance.
(f) Nothing shall have come to the attention of Trident that would
cause Trident to reasonably believe that the Conversion Application, the
Holding Company Application, the Prospectus or the Registration Statement
or any amendment or supplement thereto, contains an untrue statement of
fact that in the opinion of Xxxxx, Xxxx & Xxxxx LLP, counsel for Trident,
is material, or omits to state a fact that in the opinion of such counsel
is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Prospectus, there
shall not have occurred any of the events specified in Section 9 hereof
which, in the reasonable judgment of Trident, makes it impractical or
inadvisable to proceed with the offering of the Shares.
(h) Trident shall have received a certificate, dated the Closing
Date, signed by the chief executive officer and the chief financial officer
of each of the Company and the Bank, in form and substance satisfactory to
counsel for Trident, to the effect that at the
Trident Securities, Inc.
Sales Agency Agreement
Page 19
effective date thereof and at all times subsequent thereto through and
including the Closing Date, the Registration Statement did not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statement
therein not misleading and that at the date thereof and at all times
subsequent thereto through and including the Closing Date, the Prospectus
did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statement therein, in light of the circumstances under which they
were made, not misleading; that since the effective date of the
Registration Statement, no event has occurred that should have been set
forth in an amendment or supplement to the Conversion Application, the
Prospectus, the Notice, the Registration Statement or the Holding Company
Application under applicable law that has not been so set forth, and to the
best of their knowledge, that no order has been issued by the Commissioner,
the FDIC, the Commission or the Board to suspend the offering of the Common
Stock or the approval of the Conversion Application or the Holding Company
Application and, to the best of their knowledge, no action for such
purposes has been instituted or threatened by the Commissioner, the FDIC,
the Commission or the Board; that, to the best of their knowledge, no
person has sought to obtain review of the final actions of the
Commissioner, the FDIC, the Commission or the Board in connection with the
Conversion; and that all of its representations and warranties contained
herein are true and correct as if made at and as of the Closing Date.
(i) Trident shall have received the opinion of Xxxxxxx Xxxxxxxx &
Wood, special counsel for the Company and the Bank, which opinion shall
address those matters set forth below in subsections (i) through (xvii),
inclusive. Such opinion shall be dated the Closing Date, in form and
substance satisfactory to counsel for Trident, to the following effect:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware. The Company has full corporate power and authority to own
its properties and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform
its obligations under this Agreement. The Company is duly qualified as
a foreign corporation to transact business and is in good standing in
the State of Massachusetts and in each other jurisdiction in which the
failure to so qualify would have a material adverse effect upon the
financial condition, results of operations or business of the Company,
the Bank and the Bank Subsidiary, taken as a whole.
(ii) The Bank has been at all times since the date hereof and
prior to the Closing Time duly organized, and is validly existing,
under the laws of the Common wealth of Massachusetts as a co-operative
bank of mutual form, and, at the Closing Time, has become duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts as a co-operative bank of stock form, in
both instances with full corporate power and authority to own, lease
and operate its
Trident Securities, Inc.
Sales Agency Agreement
Page 20
properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Bank is duly
qualified as a foreign corporation in each jurisdiction in which the
failure to so qualify would have a material adverse effect upon the
financial condition, results of operations or business of the Company,
the Bank and the Bank Subsidiaries, taken as a whole. The Bank is a
member in good standing of the FHLB of Boston and the Central Bank;
the deposit accounts of the Bank are insured by the FDIC up to the
applicable limits; deposits not insured by the FDIC are insured by the
Share Insurance Fund of the Central Bank; and the liquidation account
for the benefit of account holders as of [ ] has
been duly established in accordance with the requirements of the
Conversion Regulations and such account holders who continue to
maintain their deposit accounts in the Bank have a contingent
creditors' interest in their pro rata portion of the liquidation
account which will have a priority superior to that of the holders of
shares of Common Stock in the event of a complete liquidation of the
Bank.
(iii) The Company does not directly own any subsidiaries other
than the Bank, and the Bank's only subsidiary is the Bank Subsidiary.
The Bank Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth
of Massachusetts, has full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect
upon the financial condition, results of operations or business of the
Company, the Bank and the Bank Subsidiary, taken as a whole; the
activities of the Bank Subsidiary as described in the Prospectus are
permitted to subsidiaries of a bank holding company and of a
Massachusetts-chartered co-operative bank by the rules, regulations,
resolutions and practices of the Board and the Commissioner; all of
the issued and outstanding capital stock of the Bank Subsidiary has
been duly authorized and validly issued, is fully paid and
nonassessable and is owned of record by the Bank free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim.
(iv) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, (A) have been
duly and validly authorized by all necessary action on the part of each
of the Company and the Bank, and this Agreement constitutes the legal,
valid and binding agreement of each of the Company and the Bank,
enforceable in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited under applicable law (it
being understood that such counsel may avail itself of customary
exceptions concerning the effect of bankruptcy, insolvency or similar
laws and the availability of equitable remedies), (B) to the best of
such counsel's knowledge, will not conflict with or constitute a breach
of, or default under, and no event has occurred which, with notice or
lapse of time or both, would constitute a default under, or result in
the creation or imposition of any
Trident Securities, Inc.
Sales Agency Agreement
Page 21
lien, charge or encumbrance, that, individually or in the aggregate,
would have a material adverse effect on the financial condition,
results of operations or business of the Company, the Bank and the
Bank Subsidiary, taken as a whole, upon any property or assets of the
Company, the Bank or the Bank Subsidiary pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company, the Bank or the Bank Subsidiary is a party or by
which any of them may be bound, or to which any of the property or
assets of the Company, the Bank or the Bank Subsidiary is subject, (C)
will not result in any violation of the provisions of the charter or
bylaws of the Company, the Bank or the Bank Subsidiary, and (D) will
not result in any violation of any law or administrative regulation or
any administrative or court decree.
(v) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be within the
range as set forth in the Prospectus under "Capitalization," and no
shares of Common Stock have been issued and outstanding prior to the
Closing Time. The Shares have been duly and validly authorized for
issuance and sale and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration therefor,
will be duly and validly issued and fully paid and non-assessable. The
issuance of the Shares is not subject to preemptive or other similar
rights arising by operation of law or, to the best of such counsel's
knowledge and information, otherwise. The terms and conditions of the
Common Stock conform to the description thereof contained in the
Prospectus under the caption "DESCRIPTION OF COMMON STOCK," and, to
the extent that it constitutes matters of law or legal conclusions,
that section of the Prospectus has been reviewed by such counsel and
is correct in all material respects; and the certificates
representing shares of Common Stock are in compliance in all material
respects with all applicable legal requirements.
(vi) Upon consummation of the Conversion, 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 by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or
equitable claim.
(vii) The Commissioner has duly approved the Conversion
Application and the Board has duly approved the Holding Company
Application and no action is pending or, to the best of such counsel's
knowledge, threatened respecting the Conversion Application or the
Holding Company Application or the acquisition by the Company of all
of the Bank's issued and outstanding capital stock; the Conversion
Application and the Holding Company Application comply as to form in
all material respects with the Conversion Regulations, the regulations
of the Board and all other applicable requirements of the Commissioner
and the Board, and, to the best of such counsel's knowledge, include
all documents required to be filed as exhibits thereto, and is
Trident Securities, Inc.
Sales Agency Agreement
Page 22
complete in all material respects; the Company is duly authorized to
become a bank holding company and is duly authorized to own all of the
issued and outstanding capital stock of the Bank to be issued pursuant
to the Plan.
(viii) The FDIC has duly reviewed the Plan without objection and
no action is pending or, to the best of such counsel's knowledge,
threatened respecting the FDIC's review thereof; the notice of the
Conversion filed with the FDIC complied as to form in all material
respects with the FDIC's regulations and all other applicable
requirements of the FDIC, and, to the best of such counsel's
knowledge, included all documents required to be filed as exhibits
thereto, and is complete in all material respects.
(ix) The Plan has been duly authorized by the Boards of
Directors of the Company and the Bank and by the mutual Shareholders
of the Bank. The Commissioner's approval of the Plan (and the FDIC's
non-objection thereto) remains in full force and effect; the Bank's
charter has been amended, effective upon consummation of the
Conversion and the filing of such amended charter with the Secretary
of State of the Commonwealth of Massachusetts, to authorize the
issuance of permanent capital stock; to the best of such counsel's
knowledge, the Company and the Bank have conducted the Conversion in
all material respects in accordance with applicable requirements of
the Plan, the Conversion Regulations and all other applicable
regulations, decisions and orders thereunder, including all material
applicable terms, conditions, requirements and conditions precedent to
the Conversion imposed upon the Company or the Bank by the
Commissioner or the FDIC, and no order, to the best of such counsel's
knowledge, has been issued by the Commissioner or the FDIC to suspend
the Offerings and, no action for such purpose has been instituted or,
to the best of such counsel's knowledge threatened by the Commissioner
or the FDIC and, to the best of such counsel's knowledge, no person
has sought to obtain review of the final action of the Commissioner in
approving, or of the FDIC in issuing a notice of non-objection to, the
Plan.
(x) The Prospectus and the Notice have been duly authorized by
the Commissioner for final use pursuant to the Conversion Regulations
and no action has been taken, or is pending or, to the best of such
counsel's knowledge, threatened, by the Commissioner to revoke such
authorization. The Prospectus and the Notice (other than the financial
statements, appraisal and statistical data included therein, as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the Conversion Regulations.
(xi) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act or
proceedings therefor initiated or, to the best of such counsel's
knowledge, threatened by the Commission. At the time the Registration
Trident Securities, Inc.
Sales Agency Agreement
Page 23
Statement became effective, the Registration Statement (other than the
financial statements, appraisal and statistical data included therein,
as to which no opinion need be rendered) and the Prospectus complied
as to form in all material respects with the requirements of the
Securities Act and the Securities Act Regulations.
(xii) No further approval, authorization, consent or other order
of any public board or body is required in connection with the
execution and delivery of this Agreement, the issuance of the Shares
and the consummation of the Conversion, except as may be required
under the securities or Blue Sky laws of various jurisdictions as to
which no opinion need be rendered.
(xiii) The information in the Prospectus under the caption "THE
CONVERSION," to the extent that it constitutes matters of law or
legal conclusions, has been reviewed by such counsel and is correct in
all material respects. The information in the Prospectus under the
caption "TAXATION," to the extent that it constitutes matters of law
or legal conclusions concerning federal tax matters, has been reviewed
by such counsel and is correct in all material respects; and the
information under the caption "The Conversion -- Effect of the
Conversion to Stock Form on Depositors and Borrowers of the Bank --
Tax Aspects" correctly summarizes the opinion of such counsel
regarding the federal tax effects of the Conversion to the Bank and
the Shareholders of the Bank
(xiv) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened against or
affecting the Company, the Bank, or the Bank Subsidiary that are
required, individually or in the aggregate, to be disclosed in the
Registration Statement and Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which
the Company, the Bank or the Bank Subsidiary is a party or to which
any of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material.
(xv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto.
(xvi) To the best of such counsel's knowledge and information,
the Company, the Bank and the Bank Subsidiary has obtained all
licenses, permits and other governmental approvals and authorizations
currently required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, except for
such licenses, permits, approvals or authorizations the failure of
which to have would not result in a material adverse change in the
financial condition, results of operations or the business of the
Company, the Bank and the Bank Subsidiary,
Trident Securities, Inc.
Sales Agency Agreement
Page 24
taken as a whole, and all such licenses, permits and other
governmental authorizations are in full force and effect, and each of
the Company, the Bank and the Bank Subsidiary is in all material
respects complying therewith.
(xvii) Neither the Company, the Bank nor the Bank Subsidiary is
in violation of its charter upon consummation of the Conversion nor,
to the best of such counsel's knowledge, in default (nor has any event
occurred which, with notice or lapse of time or both, would constitute
a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Company, the Bank or any Subsidiary is a party or by which the
Company, the Bank or any Subsidiary or any of their respective
property may be bound in any respect that would have a material
adverse effect upon the financial condition, results of operations or
business of the Company, the Bank and the Subsidiaries, taken as a
whole.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and the Bank and
certificates of public officials. Copies of any certificates of officers of the
Company or the Bank on which counsel relies shall be furnished to counsel for
Trident at the time the opinion is delivered. Such opinion may be governed by,
and interpreted in accordance with the Legal Opinion Accord (the "Accord") of
the American Bar Association Section of Business Law (1991) and, as a
consequence, references in such opinion to each such counsel's "knowledge" may
be limited to "actual knowledge" as defined in the Accord (or knowledge based on
certificates).
Such counsel's opinion may be limited to present statutes, regulations and
judicial interpretations and to facts as they exist as of the date of the
opinions; in rendering such opinion, counsel need assume no obligation to
revise or supplement it should present laws be changed by legislative or
regulatory action, judicial decision or otherwise; and such counsel need express
no view, opinion or belief with respect to whether any proposed or pending
legislation, if enacted, or any regulations or any policy statements issued by
any regulatory agency, whether or not promulgated pursuant to any such
legislation, would affect the validity of the execution and delivery by the
Company or the Bank of this Agreement or the issuance of the Shares.
(j) At the Closing Date, Trident shall receive the letter of Xxxxxxx
Xxxxxxxx & Xxxx, special counsel for the Company and the Bank, dated the
Closing Date, addressed to Trident, in form and substance reasonably
satisfactory to counsel for Trident and to the effect that: in connection
with the preparation of the Conversion Application (including the
Prospectus and the Notice) and the Registration Statement, such counsel
participated in conferences with directors, officers, employees and other
representatives of the Bank and representatives of the independent public
accountants for the Bank as well as reviewed various documents and other
information deemed relevant and, based on such conferences and review,
nothing has come to such counsel's attention that would lead such counsel
to believe (i) that the Registration Statement, at the time it became
effective
Trident Securities, Inc.
Sales Agency Agreement
Page 25
(including any post-effective amendments), or that the Conversion
Application, at the time it was approved, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (except
as to information in respect to Trident, as to the appraisal and as to
financial statements, notes to financial statements, financial tables and
other financial and statistical data contained therein with respect to
which such counsel need express no comment), or (ii) that the Prospectus or
the Notice, at the date thereof or at Closing Time, included 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 (except as
to information in respect to Trident, as to the appraisal and as to
financial statements, notes to financial statements, financial tables and
other financial and statistical data contained therein with respect to
which such counsel need express no comment). In rendering this letter,
counsel may state that they have not undertaken to verify independently the
information in the Conversion Application, the Prospectus and the Notice or
the Registration Statement and therefore, do not assume any responsibility
for the accuracy or completeness thereof.
(k) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material adverse change in the
condition, financial or otherwise, of the Bank since the last date as of
which such condition is set forth in the Prospectus, except as referred to
therein; (ii) there shall have been no transaction entered into by the Bank
after the latest date as of which the financial condition of the Bank is
set forth in the Prospectus other than transactions referred to or
contemplated therein, transactions in the ordinary course of business, and
transactions which are not material to the Bank; (iii) the Bank shall not
have received from the Commissioner, the FDIC, or any other governmental
authority any direction (oral or written) to make any material change in
the method of conducting their respective businesses with which it has not
complied or which is material to the business of the Bank; (iv) no action,
suit or proceeding, at law or in equity or before or by any federal or
state commission, board or other administrative agency, shall be pending or
threatened against the Company, the Bank or the Bank Subsidiary or
affecting any of their respective assets, wherein an unfavorable decision,
ruling or finding materially and adversely would affect the business,
operations, financial condition or income of the Company, the Bank and the
Bank Subsidiary, taken as a whole; and (v) the Shares shall have been
qualified or registered for offering and sale by the Company or are exempt
from such qualification or registration under the securities or "blue sky"
laws of such jurisdictions as Trident and the Company shall have agreed
upon.
(l) At the Closing Date, Trident shall receive, among other
documents, (i) a copy of the letter of the Commissioner approving the
Conversion Application and authorizing the use of the Prospectus, (ii) a
copy of the letter from The Commonwealth of Massachusetts or the
Commissioner evidencing the good standing of the Bank, (iii) a copy of the
letter from the FDIC raising no objection to the Plan and the Conversion;
(iv) a copy of the letter from the Commonwealth of Massachusetts or the
Commissioner approving the
Trident Securities, Inc.
Sales Agency Agreement
Page 26
Bank's Stock Charter; (v) a copy of the letter from the Board approving the
Holding Company Application; and (vi) a copy of a statement from the
Commission declaring the Registration Statement effective.
(m) Trident shall have received such opinion of Xxxxx, Xxxx & Xxxxx
LLP, counsel for Trident, dated the Closing Date, with respect to certain
matters as Trident may reasonably request, and such counsel shall have
received such documents, papers and records as they request for the purpose
of enabling them to pass upon such matters.
(n) Concurrently with the execution of this Agreement, Trident shall
receive a letter from Wolf & Co., P.C., dated the date hereof and addressed
to Trident: (i) such letter confirming that Wolf & Co., P.C. is a firm of
independent public accountants within the meaning of the Securities Act and
the FDIC's securities disclosure regulations and 12 C.F.R. (S) 335.604(a)
and no information concerning its relationship with or interests in the
Bank is required by the Conversion Application, and stating in effect that
in Wolf & Co., P.C.'s opinion the financial statements of the Bank as are
included in the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Conversion Regulations, the
Securities Act, the Securities Act Regulations and generally accepted
accounting principles; (ii) stating in effect that, on the basis of certain
agreed upon procedures (but not an audit 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 Shareholders of the Bank and consultations with officers
of the Bank responsible for financial and accounting matters, nothing came
to their attention which caused them to believe that: (A) such unaudited
financial statements, including Recent Developments, 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; or (B) during the period from the date of the
latest unaudited financial statements included in the Prospectus to a
specified date not more than three business days prior to the date hereof,
there was any material increase in borrowings, and any other form of debt
other than deposits of the Bank (increases in borrowings will not be deemed
to be material if such increase in total borrowings outstanding does not
exceed $[1,000,000]); (C) there was any decrease in retained earnings of
the Bank at the date of such letter as compared with amounts shown in the
latest unaudited statement of condition included in the Prospectus,
including Recent Developments; or (D) there was any 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 unaudited income
statement included in the Prospectus, including Recent Developments, and
ended on the latest month end prior to the date of the Prospectus or such
letter as compared to the corresponding period in the preceding year; and
(iii) stating that, in addition to the audit examination referred to in its
opinion included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (j), they have compared with
the general accounting records of the Bank, which are subject to the
internal controls of the
Trident Securities, Inc.
Sales Agency Agreement
Page 27
Bank, accounting system and other data prepared by the Bank, directly from
such accounting records, to the extent specified in such letter, such
amounts and/or percentages set forth in the Prospectus as Trident may
reasonably request; and they have found such amounts and percentages to be
in agreement therewith (subject to rounding).
(o) At the Closing Date, Trident shall receive a letter from Wolf &
Co., P.C., dated the Closing Date, addressed to Trident, confirming the
statements made by its letter delivered by its pursuant to subsection (l)
of this Section 6, the "specified date" referred to in clause (ii)(B)
thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(p) Trident shall have received a confirming letter from the
Appraiser, dated the Closing Date, with respect to its estimated pro forma
fair market value appraisal. Such letter shall be of the type described in
the Prospectus to be submitted promptly after completion of the offering of
the Shares.
(q) All necessary approvals and consents to the consummation of the
Conversion shall have been obtained, and the Shares shall have been
qualified or be exempt from qualification under the state securities laws
of the states as shall have been agreed upon by Trident and the Company.
(r) The representations and warranties of each of the Company and the
Bank contained herein shall be true and correct on the date of this
Agreement and on and as of the Closing Date, and each of the Company and
the Bank shall have performed all covenants and agreements contained
herein, to be performed on their part at or prior to the Closing Date.
(s) At any time prior to the Closing Date, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effects of which, in the judgment of Trident,
are so material and adverse as to make it impracticable to market the
Common Stock or to enforce contracts, including subscriptions or orders,
for the sale of the Common Stock, and (ii) trading generally on either the
Nasdaq National Market or the New York Stock Exchange shall not have been
suspended, or minimum or maximum prices for trading shall not have been
fixed, or maximum ranges for prices for securities shall not have been
required, by either of such Exchange or Market or by order of the
Commission or any other governmental authority, and a banking moratorium
shall not have been declared by either or Massachusetts authorities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel.
Any certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident pursuant
Trident Securities, Inc.
Sales Agency Agreement
Page 28
to this Agreement shall be deemed a representation and warranty by the Company
or the Bank, as the case may be, to Trident as to the statements made therein.
If any condition to Trident's obligations hereunder to be fulfilled prior to or
at the Closing Date is not so fulfilled, Trident may terminate this Agreement
or, if Trident so elects, may waive in writing such conditions which have not
been fulfilled, or may extend the time of their fulfillment. If Trident
terminates this Agreement as aforesaid, the Company or the Bank shall reimburse
Trident for its accountable expenses as provided in Section 3 hereof.
7. Indemnification and Contribution.
--------------------------------
(a) Each of the Company and the Bank hereby agrees to indemnify and
hold harmless Trident and each person, if any, who controls Trident within
the meaning of Section 15 or Section 20(a) of the Exchange Act of, against
any losses, damages or liabilities, joint or several, to which Trident or
each such controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus or the Registration Statement or any amendment
or supplement thereto, or in any application filed under any state
securities law, or in any other document executed by the Company or the
Bank in connection with, or in contemplation of, the transactions
contemplated by this Agreement or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; each of the
Company and the Bank agrees to reimburse Trident and each such controlling
person in connection with investigating, preparing or defending against any
such loss, claim, damage, liability or action; provided, however, that
neither the Company nor the Bank will be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Prospectus or the Registration
Statement or any amendment or supplement thereto, in any state securities
law application or in any other document executed by the Company or the
Bank in connection with or in contemplation of the transactions
contemplated by this Agreement in reliance upon and in conformity with
written information furnished to the Company or the Bank by or on behalf of
Trident specifically for use therein. In the event the Company or the Bank
advances any amounts alleged to be due under this Section 7(a) to the
indemnified party, and it is determined by a court of competent
jurisdiction that the indemnified party is not entitled to indemnification
hereunder, then the indemnified party shall repay, without interest, any
amounts so advanced to the Company or the Bank. The indemnification
obligations of the Company and the Bank as provided above are in addition
to any liabilities the Company or the Bank may have under other agreements,
under common law or otherwise.
(b) Trident agrees to indemnify and hold harmless the Company and the
Bank, their
Trident Securities, Inc.
Sales Agency Agreement
Page 29
directors, officers and employees, and each person, if any, who controls
the Company or the Bank within the meaning of the Securities Act, against
any losses, claims, damages or liability to which the Company or the Bank,
or any such director, officer, or controlling person may be subject, under
the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue or alleged untrue statement of any material
fact contained in the Prospectus or the Registration Statement or any
amendment or supplement thereto, or in any other document executed by the
Company or the Bank in connection with or in contemplation of the
transactions contemplated by this Agreement in any state securities law
application, arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Prospectus
or the Registration Statement, or any amendment or supplement thereto, in
any state securities law application, or in any other document executed by
the Company or the Bank in connection with or in contemplation of the
transactions contemplated by this Agreement in reliance upon and in
conformity with any written information furnished to the Company or the
Bank by Trident specifically for use in the preparation thereof; Trident
will reimburse any legal or other expenses reasonably incurred by the
Company or the Bank or any such director, officer, or controlling person in
connection with investigating, preparing or defending against any such
loss, claim, damage, liability or action. In the event Trident advances any
amounts alleged to be due under this Section 7(b) to an indemnified party
and it is determined by a court of competent jurisdiction that the
indemnified party is not entitled to indemnification hereunder, then the
indemnified party shall repay, without interest, any amounts so advanced to
Trident. The indemnification obligations of Trident as provided above are
in addition to any liabilities Trident may have under other agreements,
under common law or otherwise.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party
will not relieve an indemnifying party from any liability which it or he
may have to any indemnified party otherwise than under this Section 7,
except to the extent, and only to the extent, that the indemnifying party
establishes that such failure to so notify prejudiced it or his rights in
the defense against such claim. In case any such action is brought against
any indemnified party, and such indemnified party notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it or he may wish, jointly with
all other indemnifying parties, similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have
Trident Securities, Inc.
Sales Agency Agreement
Page 30
reasonably concluded, based upon advice of its counsel, that there may be
legal defenses available to it or him and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 7 for
any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless:
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel);
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice or
commencement of the action; or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying party,
in lieu of indemnifying such indemnified party, shall, subject to the
limitations hereinafter set forth, contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Bank and Trident
from the offering of the Common Stock; or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Bank and Trident in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations.
The respective relative benefits received by the Company and the Bank and
Trident shall be deemed to be represented by the percentage that the fees to be
paid to Trident hereunder bears to the total gross proceeds of the Conversion.
The relative fault of the Company and the Bank
Trident Securities, Inc.
Sales Agency Agreement
Page 31
and Trident shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company and the Bank, or by
Trident, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in paragraph (d) of this Section 7, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
The Company and the Bank and Trident agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
or per capita allocation or by any other method or allocation which does not
take into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 7, no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
8. Survival of Certain Representations and Obligations. All
---------------------------------------------------
representations, warranties and agreements of the Company and the Bank herein
and of Trident, if any or certificates delivered pursuant hereto, and the
agreement of the parties contained in Section 7 hereof, will remain in full
force and effect and will survive the issuance of and payment for the Shares
and/or any termination or consummation of this Agreement, and any legal
representative of Trident, the Company and the Bank and any such controlling
persons shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
9. Termination. Trident shall have the right by giving notice as
-----------
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange or in the over-the-counter market, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks or savings
associations in the United States, (iii) a commencement of a war, armed
hostilities or other substantial international or national calamity
directly or indirectly involving the United States, (iv) any limitation
(whether or not mandatory) by any governmental authority on, or any other
event which might materially affect, the extension of credit by banks or
other lending institutions, or (v) a material change in United States or
any other currency exchange rates or a suspension of, or limitation on, the
markets therefor;
(b) there shall be threatened, instituted or pending any action,
suit, proceeding or other application before or by any court, regulatory
authority or governmental agency or body or by any other person that, in
the reasonable judgment of Trident might materially
Trident Securities, Inc.
Sales Agency Agreement
Page 32
and adversely affect the financial condition, business, or results of
operations of the Company or the Bank or the value of the Shares;
(c) the Company or the Bank shall have sustained a material loss by
fire, flood, accident or other calamity which is material to the property,
financial condition, business, or results of operations of the Company or
the Bank, whether or not such loss shall have been insured; or
(d) there otherwise shall have been, since the respective dates as of
which information is given in the Prospectus, any material adverse change
in the financial condition, business, or results of operations of the Bank,
whether or not arising in the ordinary course of business, that in the
reasonable judgment of Trident makes it impractical or inadvisable to
proceed with the offering of the Shares.
A termination pursuant to this Section 9 shall be without liability on the
part of Trident to the Company or the Bank or on the part of the Company or the
Bank to Trident (except that the Company and the Bank shall remain responsible
for the expenses to be paid or reimbursed by them pursuant to Sections 3(d) (ii)
and (iii) and the respective obligations of the parties pursuant to Section 7
hereof shall remain in full force and effect).
10. Notices. All notices or communications hereunder shall be in writing
-------
and if sent to Trident shall be mailed, delivered, telecopied or telegraphed and
confirmed to Trident at its address set forth on the first page hereof, to the
attention of Xxxxxxx X. Xxxxxxx (with a copy to Xxxxx, Xxxx & Xxxxx LLP, Xxx
Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxxxx
Xxxxx); or if sent to the Company or the Bank shall be mailed, delivered,
telecopied or telegraphed and confirmed to the Company or the Bank at 00 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, Attention: Xxxxxx X. Xxxxxxxx (with a copy to
Xxxxxxx Xxxxxxxx & Wood, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention:
Xxxxxxx X. Xxxxxxxx).
11. Parties. This Agreement shall inure to the benefit of, and shall be
-------
binding upon, Trident, the Company and the Bank, and the controlling persons,
officers and directors referred to in Section 7 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
any legal or equitable right, remedy or claim under or by virtue of this
Agreement.
12. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the laws of The Commonwealth of Massachusetts, except to the
extent that federal law applies.
13. Counterparts. This Agreement may be executed in separate counterparts,
------------
each of which when so executed and delivered shall be an original, but all of
which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 33
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement between the Company and the Bank and Trident in
accordance with its terms.
MYSTIC FINANCIAL, INC.
By:______________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
MEDFORD CO-OPERATIVE BANK
By:______________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
The foregoing Sales Agency
Agreement is hereby confirmed
and accepted as of the date
first above written.
TRIDENT SECURITIES, INC.
By:__________________________________
Xxxxxxx X. Xxxxxxx
President
Trident Securities, Inc.
Sales Agency Agreement
Page 34
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below:
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no
agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
