EXHIBIT 1.2
PORT FINANCIAL CORP.
(a Massachusetts-chartered Stock Corporation)
Up to 10,350,000 Shares
(Subject to Increase Up to 11,902,500 Shares)
COMMON STOCK ($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
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November 17, 1999
Ryan, Beck & Co., Inc.
220 South Orange Avenue
Livingston, NJ 07039-5817
Ladies and Gentlemen:
Port Financial Corp., a Massachusetts-chartered stock corporation (the
"Holding Company"), Cambridgeport Mutual Holding Company, a Massachusetts-
chartered mutual savings bank holding company (the "MHC"), in formation, and
Cambridgeport Bank, a Massachusetts-chartered stock savings bank (the "Bank")
(collectively, the "Primary Parties") hereby confirm, jointly and severally,
their agreement with Ryan, Beck & Co., Inc. (the "Agent"), as follows:
Section 1. The Offering. The Bank, in accordance with the Plan of
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Conversion of Cambridgeport Mutual Holding Company to Stock Holding Company and
Stock Issuance adopted October 19, 1999(the "Plan"), intends to convert from a
Massachusetts-chartered holding company to a Massachusetts-chartered stock form
corporation which will offer stock on a priority basis to (i) qualifying
depositors; (ii) Tax-Qualified Employee Plans of the Bank; and (iii) management.
Pursuant to the Plan, the Holding Company is offering up to 10,350,000 shares of
common stock, par value $.01 per share (the "Common Stock") (subject to an
increase up to 11,902,500 shares), in a subscription offering (the "Subscription
Offering"), and, if necessary, (i) a direct community offering (the "Community
Offering") and/or (ii) syndicated community offering ("Syndicated Community
Offering").
Pursuant to the Plan, the Holding Company will offer and sell shares
of its Common Stock (the "Shares") in the Subscription Offering, Community
Offering, and Syndicated Community Offering (the "Offerings") so that, upon
completion of the Offerings, the purchasers of Shares in the Offerings will own
100% of the outstanding Common Stock of Holding Company. The Holding Company
will issue the Shares at a purchase price of $10.00 per share (the "Purchase
Price"). If the number of Shares is increased or decreased in accordance with
the Plan, the term "Shares" shall mean such greater or lesser number, where
applicable.
Pursuant to the Plan, in the Subscription Offering, the Company will
offer the Shares in descending order of priority to: (1) the Bank's depositors
with aggregate account balances of $50 or more on July 31, 1998 (the "Eligible
Account Holders"), subject to the allocation procedures and purchase limitations
set forth in the Plan; (2) the Bank's depositors with aggregate account balances
of $50 or more on September 30, 1999 (the "Supplemental Eligible Account
Holders"); (3) the Tax-Qualified Employee Stock Benefit Plans (as such term is
defined in the Plan); and (4) management. The Holding Company may offer Shares
offered but not subscribed for in the Subscription Offering, in the Community
Offering on a priority basis to the natural persons residing within the Bank's
Community Reinvestment Act assessment area which consist of cities and towns of
Cambridge, Arlington, Bedford, Belmont, Boston, Braintree, Brookline,
Burlington, Canton, Dedham, Dover, Framingham, Lexington, Lincoln, Medford,
Milton, Natick, Needham, Newton, Norwood, Quincy, Randolph, Sherbourne,
Somerville, Stoneham, Walpole, Waltham, Watertown, Wayland, Wellesley, Weston,
Westwood, Weymouth, Winchester and Woburn, and then to the general public. In
the event a Community Offering is held, it may be held at any time during or
immediately after the Subscription Offering. Depending on market conditions,
Shares not subscribed for in the Subscription Offering or purchased in the
Community Offering may be offered in the Syndicated Community Offering to
eligible members of the general public on a best efforts basis, as described in
subsection 4(c) below.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1 (File No.
_____________) in order to register the Shares under the Securities Act of 1933,
as amended (the "1933 Act"), and has filed such amendments thereto as have been
required to the date hereof (the "Registration Statement"). The prospectus, as
amended, included in the Registration Statement at the time it initially became
effective is hereinafter called the "Prospectus," except that if any prospectus
is filed by the Holding Company pursuant to Rule 424(b) or (c) of the
regulations of the Commission under the 1933 Act differing from the prospectus
included in the Registration Statement at the time it initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission and shall include any supplements and amendments thereto from and
after their dates of effectiveness or use, respectively.
In connection with the Conversion, the Bank filed with the Federal
Deposit Insurance Corporation (the "FDIC"), pursuant to Part 303 of Title 12, of
the Code of Federal Regulations (the "Federal Regulations"), a Notice of
Conversion and an Interagency Merger Application for approval of the merger of
an interim savings bank with and into the Bank, and has filed amendments thereto
as required by the FDIC (as so amended, the "Conversion Notice and
Application"). The Holding Company has filed with the Board of Governors of the
Federal Reserve System (the "FRB") its application on Form FRY-3 (the "Holding
Company Application") to become a bank holding company under the Bank Holding
Company Act of 1956, as amended, and the regulations promulgated thereunder
("BHCA").
Section 2. Appointment of Agent. Subject to the terms and
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conditions of this Agreement, the Primary Parties hereby appoint the Agent to
consult with, advise and assist the
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Primary Parties with the solicitation of subscriptions and purchase orders for
the Shares in connection with the sale of the Shares in the Offerings.
On the basis of the representations and warranties of the Primary
Parties contained in, and subject to the terms and conditions of, this
Agreement, the Agent accepts such appointment and agrees to use its best efforts
to assist the Primary Parties with the solicitation of subscriptions and
purchase orders for the shares and agrees to consult with and advise the Primary
Parties as to the matters set forth in Section 3 of the letter agreement (the
"Letter Agreement"), dated May 19, 1999, between the Bank and Agent (a copy of
which is attached hereto as Exhibit A). It is acknowledged by the Primary
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Parties that the Agent shall not be obligated to purchase any Shares and shall
not be obligated to take any action which is inconsistent with any applicable
law, regulation, decision or order. The appointment of the Agent to provide
services hereunder shall terminate upon consummation of the Offerings.
If requested by the Bank or the Holding Company, Agent may also
assemble and manage a selling group of broker-dealers that are members of the
National Association of Securities Dealers, Inc. ("NASD") to participate in the
solicitation on a "best efforts" basis of purchase orders for the Shares (the
"Assisting Brokers") under a selected dealers' agreement ("Selected Dealers'
Agreement"), the form of which is set forth as Exhibit B to this Agreement. The
Agent will distribute the Shares among dealers in the Syndicated Community
Offering in a fashion which best meets the distribution objectives of the Bank
and the Plan. The Agent will not commence the Syndicated Community Offering
without the prior approval of the Primary Parties.
Section 3. Refund of Purchase Price. In the event that the
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Conversion is not consummated for any reason, including but not limited to the
inability to sell 7,650,000 Shares during the Offerings (including any permitted
extension thereof) or such other minimum number of Shares as shall be
established consistent with the Plan and the Conversion Regulations, this
Agreement shall terminate and any persons who have subscribed for any of the
Shares shall have refunded to them the full amount which has been received from
such person, together with interest as provided in the Prospectus.
Section 4. Fees. In addition to the expenses specified in Section 9
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hereof, as compensation for the Agent's services under this Agreement, the Agent
has received or will receive the following fees from the Primary Parties:
(a) Fees for services of $1,000,000 due at Closing. The first $50,000
of such fee was paid upon execution of the Letter Agreement, and the remaining
$50,000 will be due upon the commencement of the Offering. Each of these
payments will be offset against the fee for services of $1,000,000 or, if this
Agreement is terminated pursuant to Section 14 hereof prior to the commencement
of the Offering, such fees of $100,000 are due immediately upon such
termination.
(b) If any of the Shares remain available after the Subscription
Offering and Community Offering, at the request of the Bank, the Agent will seek
to form a group of
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approved broker-dealer firms in accordance with Section 2 for purposes of the
Syndicated Community Offering. Pursuant to this subsection 4(c), the Agent will
be paid a fee of 1%. The Holding Company fees to the Agent will not exceed 6% of
the aggregate dollar amount of the Shares sold pursuant to this subsection 4(c)
in the Syndicated Community Offering. Of such fee, the Agent will retain at
least 1% of the aggregate dollar amount of the shares sold pursuant to this
subsection 4(c) as a management fee, and will pass on to the Assisting Brokers,
which may include the Agent, the remainder of such fee relating to the Shares
sold by such Assisting Brokers pursuant to this subsection 4(c).
In the event that the Holding Company and/or the Bank are required to
resolicit subscribers for Shares in the Subscription Offering and Community
Offering and the Agent is required to provide significant additional services in
connection with such a resolicitation, the Primary Parties and the Agent shall
mutually agree to the dollar amount of additional compensation due to the Agent
and the Primary Parties shall pay such amount, if any. Until any agreement
called for by this paragraph is reached, the Agent shall not incur expenses
relating to any resolicitation in an amount that would cause the total expenses
incurred by the Agent, that are reimbursable by the Bank pursuant to Section 9
hereof, to be greater than those permitted without the prior written consent of
the Holding Company or the Bank, which consent shall not be unreasonably
withheld.
Section 5. Closing. If the minimum number of Shares permitted to be
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sold in the Conversion on the basis of the most recently updated Appraisal (as
defined in Section 6(h)) are subscribed for at or before the termination of the
Offerings, and the other conditions to the completion of the Conversion are
satisfied, the Holding Company agrees to issue the Shares on the Closing Date
(as hereinafter defined) against payment therefor by the means authorized by the
Plan and to deliver certificates evidencing ownership of the Shares in such
authorized denominations and registered in such names as may be indicated on the
subscription order forms directly to the purchasers thereof as promptly as
practicable after the Closing Date. The closing (the "Closing") shall be held at
the offices of Thacher Proffitt & Wood ("Thacher Proffitt"), New York, NY, or at
such other place as shall be agreed upon among the Primary Parties and the
Agent, at 10:00 a.m., Eastern Standard Time, on the business day selected by the
Holding Company, which business day shall be no less than two business days
following the giving of prior notice by the Holding Company to the Agent or at
such other time as shall be agreed upon by the Primary Parties and the Agent. At
the Closing, the Primary Parties shall deliver to the Agent by wire transfer in
same-day funds the commissions, fees and expenses owing to the Agent as set
forth in Sections 4 and 9 hereof and the opinions required hereby and other
documents deemed reasonably necessary for the Agent shall be executed and
delivered to effect the sale of the Shares as contemplated hereby and pursuant
to the terms of the Prospectus; provided, however, that all fees and expenses to
which the Agent is entitled under this Section 4 and 9 hereof shall be due and
payable upon receipt by the Company or the Bank of a written accounting therefor
setting forth in reasonable detail the expenses incurred by the Agent. The hour
and date upon which the Holding Company shall release the Shares for delivery in
accordance with the terms hereof is referred to herein as the "Closing Date."
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Section 6. Representations and Warranties of the Primary Parties.
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The Primary Parties jointly and severally represent and warrant to the Agent
that:
(a) The Bank and the Holding Company have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, and, as of the Closing Date, the Bank, the MHC and Holding Company
will have all such power, authority, authorizations, approvals and orders as may
be required to carry out the provisions and conditions hereof and to issue and
sell the Shares as provided herein and as described in the Prospectus. The
consummation of the Conversion, the execution, delivery and performance of this
Agreement and the Letter Agreement and the consummation of the transactions
contemplated herein have been duly and validly authorized by all necessary
corporate action on the part of the Bank (except for the approval of the Bank's
depositors necessary for the consummation of the Conversion) and, as of the
Closing Date, will have been duly and validly authorized by all necessary
corporate action on the part of the MHC and the Holding Company. This Agreement
has been validly executed and delivered by the Primary Parties, and is a valid,
legal and binding obligation of the Primary Parties, in each case enforceable in
accordance with its terms, except as the legality, validity, binding nature and
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, and (iii) the extent, if any, that the
provisions of Sections 11 or 12 hereof may be unenforceable as against public
policy.
(b) The Registration Statement was declared effective by the
Commission on _____________, 2000. No stop order has been issued with respect
to the Prospectus. to the best knowledge of the Primary Parties no proceedings
related to the Prospectus have been initiated or threatened by the Commission.
At the time the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), became effective, the
Registration Statement complied as to form in all material respects with the
1933 Act and the regulations promulgated thereunder. The Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto) at the time such Registration Statement became effective,
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with the
Commission and at the Closing Date referred to in Section 5, the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto) and, when taken together with the Prospectus, any Blue
Sky Application or Sales Information authorized for use by any of the Primary
Parties in connection with the Offerings, 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, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 6(c) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Primary Parties by the Agent expressly regarding
the Agent for use under the captions "Market for the Common Stock", "The
Conversion and the Offering - Marketing Arrangements" and "The
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Conversion and the Offering - Direct Community Offering and Syndicated Community
Offering" or with written statements or omissions from any Sales Information or
information filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(c) The Application for Conversion was filed with the FDIC and the
FDIC has issued to the Bank a notice of its intent not to object to the
Conversion; the Massachusetts Application has been approved by the Commissioner.
The Application for Conversion, the Massachusetts Application, did and will as
of the Closing Date comply as to form in all material respects with the
Conversion Regulations and any other applicable rules and regulations of the
FDIC and the Massachusetts Division of Banks, respectively (except as modified
or waived in writing by the FDIC and the Massachusetts Division of Banks.
(d) No order has been issued by the FDIC, the Commissioner of Banks
of the Commonwealth of Massachusetts (the "Commissioner"), or any state
regulatory authority, preventing or suspending the use of the Prospectus and no
action by or before any such government entity to revoke any approval,
authorization or order of effectiveness related to the Conversion is, to the
best knowledge of the Primary Parties, pending or threatened.
(e) The Plan has been duly adopted by the Board of the Bank. To the
best knowledge of the Primary Parties, no person has, or at the Closing Date
will have, sought to obtain review of the final action of the FDIC or the
Commissioner in approving the Plan, the Conversion, or the Applications,
pursuant to the BHCA or any other statute or regulation.
(f) The Holding Company has filed the Holding Company Application
with the FRB. As of the Closing Date the FRB will have approved of the Holding
Company's becoming a bank holding company with respect to the Bank.
(g) RP Financial, LC, which prepared the appraisal of the aggregate
pro forma market value of the Common Stock on which the Offerings were based
(the "Appraisal"), has advised the Primary Parties in writing that it is
independent with respect to each of the Primary Parties.
(h) Arthur Andersen LLP, which certified the financial statements
filed as part of the Registration Statement and the Application, has advised the
Primary Parties that it is an independent certified public accountant within the
meaning of the Code of Ethics of the AICPA, and Arthur Andersen LLP is, with
respect to the Company, the Bank and each subsidiary of the Bank, independent
certified public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(i) The financial statements and the notes thereto which are included
in the Registration Statement and which are a part of the Prospectus present
fairly in all material respects the financial condition and retained earnings of
the Bank as of the dates indicated and the results of operations and cash flows
for the periods specified. The financial statements comply in all material
respects with the applicable accounting requirements of Title 12 of the Code of
Federal Regulations, Regulation S-X of the Commission and generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
presented,
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except as otherwise noted therein, and present fairly in all material respects
the information required to be stated therein. The other financial, statistical
and pro forma information and related notes included in the Prospectus present
fairly the information shown therein on a basis consistent with the audited and
unaudited financial statements included in the Prospectus, and as to the pro
forma adjustments, the adjustments made therein have been consistently applied
on the basis described therein.
(j) Since the respective dates as of which information is given in
the Registration Statement, including the Prospectus; (i) there has not been any
material adverse change in the financial condition or in the earnings, capital,
properties or business affairs of the Primary Parties considered as one
enterprise, whether or not arising in the ordinary course of business; (ii)
there have not been any material transactions entered into by any of the Primary
Parties, other than those in the ordinary course of business; and (iii) the
capitalization, liabilities, assets, properties and business of the Primary
Parties conform in all material respects to the descriptions thereof contained
in the Prospectus and, none of the Primary Parties has any material liabilities
of any kind, contingent or otherwise, except as disclosed in the Registration
Statement or the Prospectus.
(k) As of the Closing Date, the Holding Company will be a stock
corporation duly organized and in good standing under the laws of the
Commonwealth of Massachusetts, with corporate power and authority to own its
properties and to conduct its business as described in the Prospectus, and will
be qualified to transact business and in good standing in Massachusetts and in
each jurisdiction in which the conduct of business requires such qualification,
unless the failure to qualify in one or more of such jurisdictions would not
have a material adverse effect on the financial condition, earnings, capital,
properties or business affairs of the Primary Parties taken as a whole. As of
the Closing Date, the Holding Company will have obtained all licenses, permits
and other governmental authorizations required for the conduct of its business,
except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, or business of the Primary
Parties taken as a whole (a "Material Adverse Effect"); and as of the Closing
Date, all such licenses, permits and governmental authorizations will be in full
force and effect, and the Holding Company will be in compliance therewith in all
material respects.
(l) The Holding Company does not, and as of the Closing Date, will
not own any equity securities or any equity interest in any business enterprise
except as described in the Prospectus.
(m) The Bank is a duly organized and validly existing Massachusetts-
chartered savings bank in stock form, duly authorized to conduct its business as
described in the Prospectus; the activities of the Bank are permitted by the
rules, regulations and practices of the FDIC, and the Commissioner and under
Massachusetts law; the Bank has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its business,
except those that individually or in the aggregate would not have a Material
Adverse Effect; all such licenses, permits and other governmental authorizations
are in full force and effect and the Bank is in good standing under the laws of
the Commonwealth of Massachusetts and is duly
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qualified as a foreign corporation to transact business in each jurisdiction in
which failure to so qualify would have a Material Adverse Effect; all of the
issued and outstanding capital stock of the Bank after the Conversion will be
duly and validly issued and fully paid and nonassessable; and the Holding
Company will directly own all of such capital stock free and clear of any
mortgage, pledge, lien, encumbrance, claim or restriction. The Bank does not own
equity securities or any equity interest in any other business enterprise except
as otherwise described in the Prospectus or as are immaterial in amount and are
not required to be described in the Prospectus.
(n) The deposit accounts of the Bank are insured by the FDIC up to
applicable limits. Upon consummation of the Conversion, the Bank will establish
a liquidation account for the benefit of the Bank's depositors, in accordance
with the Plan and the requirements of applicable Conversion Regulations.
(o) As of the Closing Date, the Bank will not be authorized to issue
any shares of capital stock except to the Holding Company.
(p) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Holding Company will be within the range set
forth in the Prospectus under the caption "Capitalization" and no shares of
Common Stock have been or will be issued and outstanding prior to the Closing
Date; and the shares of Common Stock to be subscribed for in the Offering have
been duly and validly authorized for issuance and, when issued and delivered by
the Holding Company pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will be duly and validly
issued and fully paid and nonassessable; the issuance of the Shares is not
subject to preemptive rights, except for the Subscription Rights granted
pursuant to the Plan; and the terms and provisions of the shares of Common Stock
will conform in all material respects to the description thereof contained in
the Prospectus. Upon issuance of the Shares, good title to the Shares will be
transferred from the Holding Company to the purchasers of Shares against payment
therefor in the Offering as set forth in the Plan and the Prospectus.
(q) The Primary Parties are not in violation of their respective
articles of incorporation or charter or their respective bylaws, or in material
default in the performance or observance of any obligation, agreement, covenant,
or condition contained in any contract, lease, loan agreement, indenture or
other instrument to which they are a party or by which they, or any of their
respective property, may be bound which would result in a Material Adverse
Effect. The consummation of the transactions herein contemplated will not (i)
conflict with or constitute a breach of, or default under, the Certificate of
Incorporation, charter or bylaws of any of the Primary Parties, or materially
conflict with or constitute a material breach of, or default under, any material
contract, lease or other instrument to which any of the Primary Parties has a
beneficial interest, or any applicable law, rule, regulation or order that is
material to the financial condition of the Bank; (ii) violate any authorization,
approval, judgment, decree, order, statute, rule or regulation applicable to the
Primary Parties except for such violations which would not have a material
adverse effect on the financial condition and results of operations of the Bank;
or (iii) result in the creation of any lien, charge or encumbrance upon any
property of the Primary
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Parties, except for such liens, changes or encumbrances that would not
individually or in the aggregate have a Material Adverse Effect.
(r) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on the
part of any of the Primary Parties, in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, note,
bank loan or credit agreement or any other material instrument or agreement to
which any of the Primary Parties is a party or by which any of their property is
bound or affected in any respect which, in any such case, is material to the
Primary Parties taken as a whole, and such agreements are in full force and
effect; and no other party to any such agreements has instituted or, to the best
knowledge of any of the Primary Parties, threatened any action or proceeding
wherein any of the Primary Parties is alleged to be in default thereunder under
circumstances where such action or proceeding, if determined adversely to any of
the Primary Parties, would have a Material Adverse Effect.
(s) The Primary Parties have good and marketable title to all assets
which are material to the businesses of the Primary Parties, free and clear of
all liens, charges, encumbrances, restrictions or other claims, except such as
are described in the Prospectus or which do not have a Material Adverse Effect;
and all of the leases and subleases which are material to the businesses of the
Primary Parties, as described in the Registration Statement or Prospectus, are
in full force and effect.
(t) The Primary Parties are not in material violation of any
directive from the FDIC, the Commissioner the FRB, the Commission or any other
agency to make any material change in the method of conducting their respective
businesses; the Primary Parties have conducted and are conducting their
respective businesses so as to comply in all respects with all applicable
statutes and regulations (including, without limitation, regulations, decisions,
directives and orders of the Commissioner, the FRB, the Commission and the
FDIC), except where the failure to so comply would not reasonably be expected to
result in a Material Adverse Effect, and there is no charge, investigation,
action, suit or proceeding before or by any court, regulatory authority or
governmental agency or body pending or, to the best knowledge of any of the
Primary Parties, threatened, which would reasonably be expected to materially
and adversely affect the Conversion, the performance of this Agreement, or the
consummation of the transactions contemplated in the Plan as described in the
Registration Statement, or which would reasonably be expected to result in a
Material Adverse Effect.
(u) Prior to the Closing Date, the Primary Parties will have received
an opinion of their special counsel, Thacher Proffitt, with respect to the
federal income tax consequences of the Conversion, as described in the
Registration Statement and the Prospectus, and an opinion from Arthur Andersen
LLP with respect to the tax consequences of the Conversion under the laws of the
Commonwealth of Massachusetts; and the facts and representations upon which such
opinions will be based, will be truthful, accurate and complete, and none of the
Primary Parties will take any action inconsistent therewith.
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(v) The Bank has filed all required federal and state tax returns,
has paid all taxes that have become due and payable in respect of such returns,
except where permitted to be extended, and no deficiency has been asserted with
respect thereto by any taxing authority.
(w) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Primary Parties of this Agreement, or the issuance
of the Shares, except for the non-objection of the FDIC, and the approval of the
Commissioner, the FRB and the Commission and any necessary qualification,
notification, or registration or exemption under the securities or blue sky laws
of the various states in which the Shares are to be offered.
(x) None of the Primary Parties has: (i) issued any securities within
the last 18 months (except for (a) notes to evidence bank loans or other
liabilities in the ordinary course of business or as described in the
Prospectus, and (b) shares of Common Stock issued with respect to the initial
capitalization of the Holding Company); (ii) had any dealings with respect to
sales of securities within the 12 months prior to the date hereof with any
member of the NASD, or any person related to or associated with such member,
other than discussions and meetings relating to the Offering and purchases and
sales of U.S. government and agency and other securities in the ordinary course
of business; or (iii) engaged any intermediary between the Agent and the Primary
Parties in connection with the Offering or the offering of shares of the common
stock of the Bank, and no person is being compensated in any manner for such
services.
(y) The Primary Parties have not made any payment of funds of the
Primary Parties as a loan to any person for the purchase of Shares, except for
the Holding Company's loan to the employee stock ownership plan the proceeds of
which will be used to purchase Shares, or has made any other payment of funds
prohibited by law, and no funds have been set aside to be used for any payment
prohibited by law.
(z) The Bank complies in all material respects with the applicable
financial record keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the regulations and rules
thereunder.
(aa) The Primary Parties have not relied upon Agent or its counsel for
any legal, tax or accounting advice in connection with the Conversion.
(ab) The records of Eligible Account Holders and Supplemental Eligible
Account Holders are accurate and complete in all material respects.
(ac) The Primary Parties comply with all laws, rules and regulations
relating to environmental protection, and none of them has been notified or is
otherwise aware that any of them is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any other Federal, state or local
environmental laws and regulations except to the extent that any non-compliance
would not have a Material Adverse Effect; no action, suit, regulatory
investigation or other proceeding is pending, or to the knowledge of the Primary
Parties, threatened against the
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Primary Parties relating to environmental protection, nor do the Primary Parties
have any reason to believe any such proceedings may be brought against any of
them; and, to the knowledge of the Primary Parties, no disposal, release or
discharge of hazardous or toxic substances, pollutants or contaminants,
including petroleum and gas products, as any of such terms may be defined under
federal, state or local law, has occurred on, in, at or about any facilities or
properties owned or leased by any of the Primary Parties or in which the Bank
has a security interest, except to the extent such disposal, release or
discharge would not have a Material Adverse Effect.
(ad) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank included in
the Prospectus meet or are exempt from all requirements of federal, state and
local law pertaining to lending, including, without limitation, truth in lending
(including the requirements of Regulations Z and 12 C.F.R. Part 226), real
estate settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not result in a Material Adverse Effect.
(ae) None of the Primary Parties are required to be registered as an
investment company under the Investment Company Act of 1940.
Any certificates signed by an officer of any of the Primary Parties
and delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Primary Parties to the Agent
as to the matters covered thereby with the same effect as if such representation
and warranty were set forth herein.
Section 7. Representations and Warranties of the Agent. Agent
-------------------------------------------
represents and warrants to the Primary Parties that:
(a) Agent is a corporation and is validly existing and in good
standing under the laws [of the State of New Jersey] with full power and
authority to provide the services to be furnished to the Primary Parties
hereunder.
(b) The execution, delivery and performance of this Agreement and the
Letter Agreement and the consummation of the transactions contemplated herein
have been duly and validly authorized by all necessary corporate action on the
part of Agent, and this Agreement is the legal, valid and binding agreement of
Agent. This Agreement has been validly executed and delivered by Agent and is a
valid, legal and binding obligation of Agent, enforceable in accordance with its
terms, except as the legality, validity, binding nature and enforceability
thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, and (iii) the extent, if any, that the
provisions of Sections 11 or 12 hereof may be unenforceable as against public
policy.
11
(c) Each of Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall have, and until the Conversion
is completed or terminated shall maintain, all licenses, approvals and permits
necessary to perform such services and shall comply in all material respects
with all applicable laws and regulations in connection with the performance of
such services.
(d) No action, suit, charge or proceeding before the Commission, the
NASD, any state securities commission or any court is pending, or to the
knowledge of Agent threatened, against Agent which, if determined adversely to
Agent, would have a material adverse effect upon the ability of Agent to perform
its obligations under this Agreement.
(e) Agent is registered as a broker/dealer pursuant to Section 15(b)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a
member of the National Association of Securities Dealers, Inc.
(f) Any funds received in the Offering by the Agent will be handled
by the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
Section 8. Covenants of the Primary Parties. The Primary Parties
--------------------------------
hereby jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or supplement
to the Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or file any amendment or supplement to
which amendment the Agent or its counsel shall reasonably object. The Holding
Company will furnish promptly to the Agent and its counsel copies of all
correspondence from the Commission with respect to the Registration Statement
and the Holding Company's responses thereto.
(b) The Primary Parties will not, at any time after the date any
Application is approved, file any amendment or supplement to such Application
without providing the Agent and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which amendment
or supplement the Agent or its counsel shall reasonably object. The Primary
Parties will furnish promptly to the Agent and its counsel copies of all
correspondence from the FRB, the FDIC and the Commissioner with respect to the
Applications and the Primary Parties' responses thereto.
(c) The Primary Parties will use their best efforts to cause the FRB
to approve the Holding Company's acquisition of the Bank, and will use their
best efforts to cause any post-effective amendment to the Registration Statement
to be declared effective by the Commission and any post-effective amendment to
the Applications to be approved by the FDIC and the Commissioner, as applicable,
and will promptly upon receipt of any information concerning the events listed
below notify the Agent (i) when the Registration Statement, each as amended, has
become effective; (ii) when the Conversion Applications, as amended, have
received the non-objection of the FDIC and the approval of the Commissioner;
(iii) when the Holding Company
12
Application, as amended, has been approved by the FRB; (iv) of the receipt of
any comments from the Commission, the FDIC and the Commissioner, or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (v) of any request by the Commission, the FRB,
the FDIC, the Commissioner, or any other governmental entity for any amendment
or supplement to the Registration Statement or the Applications or for
additional information; (vi) of the issuance by the Commission, the FDIC or the
Commissioner, or any other governmental agency of any order or other action
suspending the Offerings or the use of the Registration Statement or the
Prospectus or any other filing of the Primary Parties under the Conversion
Regulations or other applicable law, or the threat of any such action; (vii) of
the issuance by the Commission, the FDIC or the Commissioner, or any other state
authority of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of any
proceedings for that purpose; or (viii) of the occurrence of any event mentioned
in subsection (f) below. The Primary Parties will make every reasonable effort
to prevent the issuance by the Commission, the FDIC, the Commissioner, or any
other state authority of any order referred to in (vi) and (vii) above and, if
any such order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(d) The Primary Parties will deliver to the Agent and to its counsel
conformed copies of each of the following documents, with all exhibits: each of
the Applications as originally filed and of each amendment or supplement
thereto, and the Registration Statement, as originally filed and each amendment
thereto. Further, the Primary Parties will deliver such additional copies of the
foregoing documents to counsel to the Agent as may be required for any NASD
filings. In addition, the Primary Parties will also deliver to the Agent such
number of copies of the Prospectus, as amended or supplemented, as the Agent may
reasonably request.
(e) The Primary Parties will comply in all material respects with any
and all terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the Commission,
by applicable state law and regulations, and by the 1933 Act, the 1934 Act, and
the rules and regulations of the Commission promulgated under such Acts, to be
complied with prior to the Closing Date; and when the Prospectus is required to
be delivered, the Primary Parties will comply in all material respects, at their
own expense, with all material requirements imposed upon them by the FDIC, the
Commissioner, the Conversion Regulations (except as modified or waived in
writing by the FDIC or the Commissioner), the Commission, by applicable state
law and regulations and by the 1933 Act, the 1934 Act and the rules and
regulations of the Commission promulgated under such statutes, in each case as
from time to time in force, 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.
(f) During any period when the Prospectus is required to be delivered,
each of the Primary Parties will inform the Agent of any event or circumstance
of which it is or becomes aware as a result of which the Registration Statement
and/or Prospectus, as then supplemented or amended, would include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading. If it is necessary, in the
reasonable opinion of counsel for the Primary Parties, to amend or supplement
the Registration
13
Statement or the Prospectus in order to correct such untrue statement of a
material fact or to make the statements therein not misleading in light of the
circumstances existing at the time of their use, the Primary Parties will, at
their expense, prepare, file with the Commission, the FDIC, and the
Commissioner, and furnish to the Agent, a reasonable number of copies of an
amendment or amendments of, or a supplement or supplements to, the Registration
Statement and the Prospectus (in form and substance reasonably satisfactory to
counsel for the Agent after a reasonable time for review) which will amend or
supplement the Registration Statement and/or the Prospectus so that as amended
or supplemented it will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing at the time, not misleading. For the
purpose of this subsection, each of the Primary Parties will furnish such
information with respect to itself as the Agent may from time to time reasonably
request.
(g) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to register or to qualify
the Shares for offering and sale or to exempt such Shares from registration and
to exempt the Holding Company and its officers, directors and employees from
registration as broker-dealers, under the applicable securities laws of the
jurisdictions in which the Offering will be conducted; provided, however, that
the Holding Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation to do business in any
jurisdiction in which it is not so qualified. In each jurisdiction where any of
the Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports for a period of
not less than one year from the effective date of the Registration Statement.
(h) The Holding Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof, any shares
of Common Stock, without the Agent's prior written consent, which consent shall
not be unreasonably withheld, other than in connection with any plan or
arrangement described in the Prospectus.
(i) For a period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent, as soon as practical after such
information is available (i) a copy of each report of the Holding Company
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 Holding
Company is listed or quoted, (ii) a copy of each report of the Holding Company
mailed to holders of Common Stock, (iii) each press release and material news
item and article released by the Holding Company and/or Bank, and (iv) from
time-to-time, such other publicly available information concerning the Primary
Parties as the Agent may reasonably request.
(j) The Primary Parties will use the net proceeds from the sale of
the Common Stock in the manner set forth in the Prospectus under the caption
"How We Intend to Use the Proceeds from the Offering."
(k) The Holding Company and the Bank will distribute the Prospectus
or other offering materials in connection with the offering and sale of the
Common Stock only in accordance with the Conversion Regulations, the 1933 Act
and the 1934 Act and the rules and
14
regulations promulgated under such statutes, and the laws of any state in which
the shares are qualified for sale.
(l) Prior to the Closing Date, the Holding Company shall register its
Common Stock under Section 12(b) or 12(g) of the 1934 Act, and will request that
such registration statement be effective no later than the completion of the
Conversion. The Holding Company shall maintain the effectiveness of such
registration for not less than three years.
(m) For so long as the Shares are registered under the 1934 Act, the
Holding Company will furnish to its stockholders as soon as practicable after
the end of each fiscal year such reports and other information as are required
to be furnished to its stockholders under the 1934 Act.
(n) The Holding Company will report the use of proceeds of the
Offering in accordance with Rule 463 under the 1933 Act.
(o) The Primary Parties will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Holding Company's obligation to refund payments received
from persons subscribing for or ordering Shares in the Offerings, in accordance
with the Plan as described in the Prospectus, or until refunds of such funds
have been made to the persons entitled thereto or withdrawal authorizations
canceled in accordance with the Plan and as described in the Prospectus. The
Primary Parties will maintain such records of all funds received to permit the
funds of each subscriber to be separately insured by the FDIC (to the maximum
extent allowable) and to enable the Primary Parties to make the appropriate
refunds of such funds in the event that such refunds are required to be made in
accordance with the Plan and as described in the Prospectus.
(p) The Holding Company will register as a bank holding company under
the Bank Holding Company Act ("BHCA").
(q) The Primary Parties will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the "Interpretation of the Board of Governors of the NASD
on Free Riding and Withholding."
(r) The Primary Parties will conduct their businesses in compliance
in all material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders, including all decisions,
directives and orders of the Commission, the FDIC, the Commissioner,
and the FRB.
(s) The Primary Parties shall comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the FDIC, the Commissioner, the
BHCA, the Commission, the 1933 Act, the Regulations, the 1934 Act and the
regulations promulgated by the Commission pursuant to the
15
1934 Act to be complied with subsequent to the Closing Date. The Holding Company
will comply with all provisions of all undertakings contained in the
Registration Statement.
(t) The Primary Parties will not amend the Plan without notifying the
Agent prior thereto.
(u) The Holding Company shall provide the Agent with any information
necessary to carry out the allocation of the Shares in the event of an
oversubscription, and such information shall be accurate and reliable in all
material respects.
(v) The Holding Company will not deliver the Shares until the Primary
Parties have satisfied or caused to be satisfied each condition set forth in
Section 10 hereof, unless such condition is waived in writing by the Agent.
(w) Immediately upon completion of the sale by the Holding Company of
the Shares contemplated by the Plan and the Prospectus, (i) all of the issued
and outstanding shares of capital stock of the Bank shall be owned by the
Holding Company, (ii) the Holding Company shall have no direct subsidiaries
other than the Bank, and (iii) the Conversion shall have been effected in
accordance with all applicable statutes, regulations, decisions and orders; and
all terms, conditions, requirements and provisions with respect to the
Conversion (except those that are conditions subsequent) imposed by the
Commission, the FDIC, the Commissioner, the FRB, or any other governmental
agency, if any, shall have been complied with by the Primary Parties in all
material respects or appropriate waivers shall have been obtained and all notice
and waiting periods shall have been satisfied, waived or elapsed.
(x) Prior to the Closing Date, the Plan shall have been approved by
the corporators of the Bank in accordance with the Plan and the Conversion
Regulations and the applicable provisions, if any, of the Bank's charter and
bylaws.
(y) On or before the Closing Date, the Primary Parties will have
completed all conditions precedent to the Conversion specified in the Plan and
the offer and sale of the Shares will have been conducted in all material
respects in accordance with the Plan, the Conversion Regulations (except as
modified or waived in writing by the FDIC and/or the Commissioner) and with all
other applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion imposed upon
any of the Primary Parties by the FDIC and/or the Commissioner, the Commission,
the FRB, or any other regulatory authority and in the manner described in the
Prospectus.
(z) The Holding Company shall notify the Agent when funds shall have
been received for the minimum number of Shares set forth in the Prospectus.
Section 9. Payment of Expenses. Whether or not the Conversion is
-------------------
completed or the sale and exchange of the Shares by the Holding Company is
consummated, the Primary Parties will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Applications; (b) the preparation,
16
printing, filing, delivery and shipment of the Registration Statement, including
the Prospectus, and all amendments and supplements thereto; (c) all filing fees
and expenses in connection with the qualification or registration of the Shares
for offer and sale by the Holding Company or the Bank under the securities or
"blue sky" laws, including without limitation filing fees, reasonable legal fees
and disbursements of counsel in connection therewith, and in connection with the
preparation of a blue sky law survey; (d) the filing fees of the NASD related to
the Agent's fairness filing under NASD Rule 2710 and the application of the
Holding Company to list its shares; (e) fees and expenses related to the
preparation of the independent appraisal; (f) the reasonable expenses of the
Agent, including but not limited to the reasonable fees and expenses of its
counsel; (g) fees and expenses related to auditing and accounting services; and
(h) expenses relating to advertising, temporary personnel, and the preparation
of stock certificates. The Primary Parties also agree to reimburse Agent for
reasonable out-of-pocket expenses, including legal fees and expenses, incurred
by Agent in connection with the services hereunder. Agent will not incur legal
fees (excluding the out-of-pocket expenses of counsel) in excess of $55,000
without the approval of the Bank. Other out-of-pocket expenses will not exceed
$1,000 without the approval of the Bank. The Primary Parties acknowledge,
however, that such caps may be increased by the mutual consent of the Bank and
Agent in the event of any material delay in the Offering which would require an
update of the financial information in tabular form contained in the Prospectus
for a period later than that set forth in the original Prospectus filing. Not
later than three days prior to the Closing Date, the Agent will provide the Bank
with a detailed accounting of all reimbursable expenses to be paid at the
Closing.
Section 10. Conditions to the Agent's Obligations. The obligations
-------------------------------------
of the Agent hereunder and the occurrence of the Closing and the Conversion are
subject to the condition that all representations and warranties of the Primary
Parties herein contained are, at and as of the commencement of the Offering and
at and as of the Closing Date, true and correct, the condition that the Primary
Parties shall have performed, in all material respects, all of their obligations
hereunder to be performed on or before such dates and to the following further
conditions:
(a) The Registration Statement shall have been declared effective by
the Commission, the Application and the Conversion and Massachusetts Application
shall have been approved by the FDIC and the Commissioner, as applicable, the
Holding Company Application shall have been approved by the FRB, and no stop
order or other action suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act to any of the Primary Parties' best
knowledge or proceedings therefor initiated or threatened by the Commission or
any state authority and no order or other action suspending the authorization
for use of the Prospectus or the consummation of the Conversion shall have been
issued to any of the Primary Parties' best knowledge, or proceedings therefor
initiated or threatened by the FDIC, the Commissioner, the FRB, the Commission,
or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The opinion, dated as of the Closing Date, of Thacher
Proffitt, and/or local counsel acceptable to the Agent, in form and
substance satisfactory to the Agent and counsel for the Agent to the
effect that:
17
(i) The Holding Company is a corporation duly organized and
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with corporate power and authority to
own its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is in good
standing in Massachusetts and in each other jurisdiction in which the
conduct of its business requires such qualification and except where
the failure to qualify would have a Material Adverse Effect.
(ii) On the date hereof, the Bank is a validly existing
Massachusetts-chartered stock savings bank, and upon consummation of
the Conversion, the Bank will continue to be a validly existing
Massachusetts-chartered stock savings bank, with full power and
authority to own its properties and to conduct its business as
described in the Prospectus and to enter into this Agreement and
perform its obligations hereunder; the activities of the Bank as
described in the Prospectus are permitted by federal and Massachusetts
law and the rules, regulations and practices of the FDIC and the
Commissioner; the issuance and sale of the capital stock of the Bank
to the Holding Company in the Conversion has been duly and validly
authorized by all necessary corporate action on the part of the
Holding Company and the Bank and, upon payment therefor in accordance
with the terms of the Plan, will be validly issued, fully paid and
nonassessable and will be owned of record and beneficially by the
Holding Company, free and clear of any mortgage, pledge, lien,
encumbrance, claim or restriction.
(iii) The activities of the Holding Company and the Bank, as
described in the Prospectus, are permitted for bank holding companies
and for subsidiaries of a bank holding company and a Massachusetts-
chartered stock holding company under applicable federal and state
law. To the best of such counsel's knowledge, each of the Holding
Company and the Bank has obtained all licenses, permits, and other
governmental authorizations that are material for the conduct of its
business, and all such licenses, permits and other governmental
authorization are in full force and effect, and to the best of such
counsel's knowledge the Holding Company and the Bank are complying
therewith in all material respects.
(iv) The Bank is an insured depository institution under the
provisions of the Federal Deposit Insurance Act, as amended, and to
such counsel's knowledge, no proceedings for the termination or
revocation of the federal deposit insurance of the Bank are pending or
threatened.
(v) Upon consummation of the Conversion, (a) the authorized,
issued and outstanding capital stock of the Holding Company will be
within the range set forth in the Prospectus under the caption
"Capitalization", and no shares of Common Stock have been or will be
issued and outstanding prior to the Closing Date (except for the
shares issued upon incorporation of the Holding Company to facilitate
the Conversion); (b) the shares of Common Stock of the Holding
18
Company to be subscribed for in the Offering will have been duly and
validly authorized for issuance, and when issued and delivered by the
Holding Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan, will be fully paid
and nonassessable; and (c) the issuance of the Shares is not subject
to preemptive rights under the charter, articles of incorporation or
bylaws of the Holding Company, or arising or outstanding by operation
of law or, to the best knowledge of such counsel, under any contract,
indenture, agreement, instrument or other document, except for the
subscription rights under the Plan.
(vi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Primary Parties; and this Agreement constitutes a valid, legal and
binding obligation of each of the Primary Parties, enforceable in
accordance with its terms, except as rights to indemnity and
contribution thereunder may be limited under applicable law, subject
to the qualification that (i) enforcement thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws
(including the laws of fraudulent conveyance) or judicial decisions
affecting the enforceability of creditors' rights generally, the
rights of creditors of savings bank or other financial institutions,
the accounts of which are insured by the FDIC, or the reorganization
of financial institutions and (ii) enforcement thereof is subject to
general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and to the effect
of certain laws and judicial decisions upon the availability of
injunctive relief and enforceability of equitable remedies, including
the remedies of specific performance and self-help.
(vii) The Plan has been duly adopted by the Board of Trustees of
the Bank and by the corporators of the Bank, in the manner required by
the Conversion Regulations and the Bank's amended and restated charter
and bylaws.
(viii) The Massachusetts Application has been approved by the
Commissioner, the FRB has approved the Holding Company Application,
and the Bank has received the non-objection of the FDIC to the
Conversion, and subject to the satisfaction of any conditions set
forth in such approvals, no further approval, registration,
authorization, consent or other order of any federal or state
regulatory agency, public board or body is required in connection with
the execution and delivery of this Agreement, the offer, sale and
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.
(ix) The Registration Statement has become effective under the
1933 Act and to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, or
proceedings for that purpose have been instituted or threatened by the
Commission.
19
(x) The terms and provisions of the shares of Common Stock
conform to the description thereof contained in the Registration
Statement and the Prospectus, and the forms of certificates proposed
to be used to evidence the shares of Common Stock are in due and
proper form.
(xi) At the time the Conversion Application and the
Massachusetts Application was approved, the Conversion Application (as
amended or supplemented), complied as to form in all material respects
with the requirements of the Conversion Regulations and all applicable
laws, rules and regulations and decisions and orders of the FDIC and
the Commissioner, except as modified or waived in writing by the FDIC
and/or the Commissioner (other than the financial statements, notes to
financial statements, financial tables and other financial and
statistical data included therein and the appraisal valuation and the
business plan as to which counsel need express no opinion). To such
counsel's knowledge, no person has sought to obtain regulatory or
judicial review of the final action of the FDIC, the Commissioner, or
the FRB approving the Applications.
(xii) At the time that the Registration Statement became
effective the Registration Statement, including the Prospectus
contained therein (as amended or supplemented) (other than the
financial statements, notes to financial statements, financial tables
or other financial and statistical data included therein and the
appraisal valuation and the business plan as to which counsel need
express no opinion), complied as to form in all material respects with
the requirements of the 1933 Act and the rules and regulations
promulgated thereunder.
(xiii) To such counsel's knowledge, there are no legal or
governmental proceedings pending, or threatened (i) asserting the
invalidity of this Agreement or (ii) seeking to prevent the Conversion
or the offer, sale or issuance of the Shares.
(xiv) The information in the Prospectus under the captions
"Regulation," "Taxation," "Restrictions on the Acquisition of Port
Financial Corp. and Cambridgeport Bank," "Description of Capital Stock
of Port Financial Corp.," and "The Conversion and the Offering," to
the extent that such information constitutes matters of law, summaries
of legal matters, documents or proceedings, or legal conclusions, has
been reviewed by such counsel and is accurate in all material respects
(other than the financial statements, notes to financial statements,
financial tables and other financial and statistical data included
therein and the appraisal valuation and the business plan as to which
counsel need express no opinion).
(xvi) None of the Primary Parties are required to be registered
as an investment company under the Investment Company Act of 1940.
20
(xvii) None of the Primary Parties is in violation of its
articles of incorporation or its charter, as the case may be, or its
bylaws or, to the best of such counsel's knowledge, any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument filed as an exhibit to, or incorporated by reference in,
the Registration Statement, which violation would have a Material
Adverse Effect. In addition, the execution and delivery of and
performance under this Agreement by the Primary Parties, the
incurrence of the obligations set forth herein and the consummation of
the transactions contemplated herein will not result in any violation
of the provisions of the articles of incorporation or charter, as the
case may be, or the bylaws of any of the Primary Parties or any
violation of any applicable law, act, regulation, or to such counsel's
knowledge, order or court order, writ, injunction or decree.
The Agent's counsel may rely on the opinion for purposes of its own opinion
(Thacher Proffitt and/or local counsel shall expressly authorize such reliance).
The opinion may be limited to matters governed by the laws of the United States,
the laws of the Commonwealth of Massachusetts and the corporate laws of the
Commonwealth of Massachusetts and, in the case of local counsel, the
Commonwealth of Massachusetts or Massachusetts corporate law. In rendering such
opinion, such counsel may rely (A) as to matters involving the application of
laws of any jurisdiction other than the United States, to the extent such
counsel deems proper and specified in such opinion, upon the opinion of counsel
reasonably acceptable to the Agent, as long as such other opinion indicates that
the Agent may rely on the opinion, and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Primary Parties and public officials; provided copies of any such opinion(s) or
certificates of public officials are delivered to Agent together with the
opinion to be rendered hereunder by special counsel to the Primary Parties. In
rendering such opinion, all statements contained therein "to our knowledge" or
"to our attention" means the actual knowledge of the attorneys who have worked
on the transactions contemplated herein. The opinion of such counsel for the
Primary Parties shall state that it has no reason to believe that the Agent is
not reasonably justified in relying thereon.
(2) The letter of Thacher Proffitt to the effect that during the
preparation of the Registration Statement and the Prospectus, Thacher
Proffitt participated in conferences with certain officers of and other
representatives of the Primary Parties, counsel to the Agent,
representatives of the independent public accountants for the Primary
Parties and representatives of the Agent at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and has considered the matters required to be stated therein and
the statements contained therein and, although (without limiting the
opinions provided pursuant to Section 10(b)(1)), Thacher Proffitt has not
independently verified the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus, on the
basis of the foregoing, nothing has come to the attention of Thacher
Proffitt that caused Thacher Proffitt to believe that the Registration
Statement at the time it was declared effective by the SEC and as of the
date of such letter, contained or contains any untrue statement of a
material
21
fact or omitted to state any 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 (it being understood that
counsel need express no comment or opinion with respect to statements,
notes to financial statements, schedules and other financial and
statistical data included, or statistical or appraisal methodology
employed, in the Registration Statement or Prospectus, the appraisal
valuation or the business plan).
(3) The favorable opinion, dated as of the Closing Date, of Nixon
Peabody LLP, counsel for the Agent, with respect to such matters as the
Agent may reasonably require; such opinion may rely, as to matters of fact,
upon certificates of officers and directors of the Primary Parties
delivered pursuant hereto or as such counsel may reasonably request.
(4) A Blue Sky Memorandum from Thacher Proffitt and/or local counsel
relating to the offering, including Agent's participation therein, and
shall furnish Agent with a copy thereof addressed to Agent or upon which
Thacher Proffitt and/or local counsel shall state Agent may rely. The Blue
Sky Memorandum will relate to the necessity of obtaining or confirming
exemptions, qualifications or the registration of the common stock under
applicable state securities law.
(c) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Arthur Andersen LLP, dated the date hereof and addressed
to the Agent, such letter (i) confirming that Arthur Andersen LLP is a firm of
independent public accountants within the meaning of the 1933 Act and the
regulations promulgated thereunder, and stating in effect that in Arthur
Anderson's opinion the financial statements of the Bank included in the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act and the related rules
and regulations of the Commission thereunder; (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 Executive Committee of the Bank, a review of interim financial
information in accordance with Statement on Auditing Standards No. 71, 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, if any, 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 consolidated financial statements included in the Prospectus to a
specified date not more than three business days prior to the date of the
Prospectus, there was any increase in borrowings (defined as securities sold
under agreements to repurchase and any other form of debt other than deposits)
of the Bank or in nonperforming loans of the Bank; or (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 or 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 audited income statement
22
included in the Prospectus and ended on the latest month end prior to the date
of the Prospectus or in 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 (c), they have compared
with the general accounting records of the Bank, which are subject to the
internal controls of the accounting system of the Bank and other data prepared
by the Primary Parties directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in the
Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding).
(d) At the Closing Date, the Agent shall receive a letter from Arthur
Andersen LLP dated the Closing Date, addressed to the Agent, confirming the
statements made by its letter delivered by it pursuant to subsection (c) of this
Section 10, 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.
(e) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may require
for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Common Stock as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
and warranties, or the fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and Chief Financial Officer of each of the Primary
Parties, dated the Closing Date, to the effect that: (i) they have examined the
Prospectus and at the time the Prospectus became authorized for final use, the
Prospectus did not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; (ii)
there has not been, since the respective dates as of which information is given
in the Prospectus, any Material Adverse Effect otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus; (iii) the
representations and warranties contained in Sections 6 and 7 of this Agreement
are true and correct with the same force and effect as though made at and as of
the Closing Date; (iv) the Primary Parties have complied in all material
respects with all material agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date including the
conditions contained in this Section 10; (v) no stop order has been issued or,
to the best of their knowledge, is threatened, by the Commission or any other
governmental body; (vi) no order suspending the Offering, the Conversion, the
acquisition of all of the shares of the Bank by the Holding Company, the
acquisition by the MHC of shares of the Common Stock or the effectiveness of the
Prospectus has been issued and to the best of their knowledge, no proceedings
for any such purpose have been initiated or threatened by the FDIC, the
Commissioner, the FRB, the Commission, or any other federal or state authority;
(vii) to the best of their knowledge, no person has sought to obtain regulatory
or judicial review of the action of the FRB, the FDIC or the Commissioner in
approving the Plan or to enjoin the Conversion.
23
(g) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC., dated as of the Closing Date, (i) confirming that said firm is
independent of the Primary Parties and is experienced and expert in the area of
corporate appraisals, (ii) stating in effect that the Appraisal complies in all
material respects with the applicable requirements of the Conversion
Regulations, and (iii) further stating that its opinion of the aggregate pro
forma market value of the Primary Parties, as converted, expressed in the
appraisal as most recently updated, remains in effect.
(h) None of the Primary Parties shall have sustained, since the date
of the latest financial statements included in the Registration Statement and
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth in the Registration Statement and the Prospectus, and since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any Material Adverse
Effect, otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus, the effect of which, in any such case described
above, is in the Agent's reasonable judgment sufficiently material and adverse
as to make it impracticable or inadvisable to proceed with the Offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
(i) Prior to and at the Closing Date, in the reasonable opinion of
the Agent (i) there shall have been no material adverse change in the financial
condition or in the earnings or business affairs of any of the Primary Parties
independently, or the Primary Parties taken as a whole, from and as of the
latest dates as of which such condition is set forth in the Prospectus, except
as referred to therein; or (ii) there shall have been no material transaction
entered into by the Primary Parties, independently or considered as one
enterprise, from the latest date as of which the financial condition of the
Primary Parties is set forth in the Prospectus, other than transactions referred
to or contemplated therein which is reasonably likely to result in a Material
Adverse Effect.
(j) At or prior to the Closing Date, the Agent shall receive (i) a
copy of the letters from the FDIC of non-objection to the Conversion, the
Conversion Application and the Massachusetts Application, (ii) a copy of the
order from the Commission declaring the Registration Statement effective, (iii)
a certified copy of the certificate of incorporation of the Holding Company,
(iv) a copy of the letter from the FRB approving the Holding Company
Application, (v) a certificate from the FDIC evidencing the Bank's insurance of
accounts, (vi) a copy of the letter from the Commissioner approving the
Massachusetts Application and (viii) any other documents that Agent shall
reasonably request.
(k) Subsequent to the date hereof, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the NASDAQ Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority
other than temporary trading halts (A) imposed as a result of intraday changes
in the Dow Jones Industrial Average,
24
(B) lasting no longer than until the regularly scheduled commencement of trading
on the next succeeding business-day, and (C) which, when combined with all other
such halts occurring during the previous five business days, total less than
three; (ii) a general moratorium on the operations of federally-insured
financial institutions or a general moratorium on the withdrawal of deposits
from commercial banks or other federally-insured financial institutions declared
by either federal or state authorities; or (iii) there shall not have occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, is so material and
adverse as to make it impracticable to market the Shares or to enforce
contracts, including subscriptions or orders, for the sale of the Shares.
(l) All such options, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Agent and to counsel for the Agent. Any
certificate signed by an officer of the Holding Company or the Bank and
delivered to the Agent or to counsel for the Agent shall be deemed a
representation and warranty by the Holding Company or the Bank, as the case may
be, to the Agent as to the statements made therein.
Section 11. Indemnification.
---------------
(a) The Primary Parties jointly and severally agree to indemnify and
hold harmless the Agent, its officers, directors, agents, attorneys, servants
and employees and each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever (including but not
limited to settlement expenses, subject to the limitation set forth in the last
sentence of subsection (c) below), joint or several, that the Agent or any of
such officers, directors, agents, attorneys, servants, employees and controlling
Persons (collectively, the "Related Persons") may suffer or to which the Agent
or the Related Persons may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Agent and any Related Persons
upon written demand for any reasonable expenses (including reasonable fees and
disbursements of counsel) incurred by the Agent or any Related Persons in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Prospectus
(or any amendment or supplement thereto), the Applications, or any blue sky
application or other instrument or document of the Primary Parties or based upon
written information supplied by any of the Primary Parties filed in any state or
jurisdiction to register or qualify any or all of the Shares under the
securities laws thereof (collectively, the "Blue Sky Applications"), or any
application or other document, advertisement, or communication ("Sales
Information") prepared, made or executed by or on behalf of any of the Primary
Parties with its consent or based upon written information furnished by or on
behalf of any of the Primary Parties, in order to qualify or register the Shares
under the securities laws thereof, (ii) arise out of or are based upon the
omission or alleged omission to state in any of the foregoing documents or
information, a material fact required to be stated therein or necessary to make
the statements
25
therein, in light of the circumstances under which they were made, not
misleading; (iii) arise from any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement (or any amendment or
supplement thereto), the Prospectus (or any amendment or supplement thereto),
the Applications, any Blue Sky Applications or Sales Information or other
documentation delete distributed in connection with the Conversion; or (iv)
result from any claims made with respect to the accuracy, reliability and
completeness of the records of Eligible Account Holders and Supplemental
Eligible Account Holders or for any denial or reduction of a subscription or
order to purchase Common Stock, whether as a result of a properly calculated
allocation pursuant to the Plan or otherwise, based upon such records; provided,
however, that no indemnification is required under this subsection (a) to the
extent such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue material statements or alleged untrue material statements
in, or material omission or alleged material omission from, the Registration
Statement (or any amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto), the Applications, the Blue Sky Applications or
Sales Information or other documentation distributed in connection with the
Conversion made in reliance upon and in conformity with written information
furnished to the Primary Parties by the Agent or its representatives (including
counsel) with respect to the Agent expressly for use in the Registration
Statement (or any amendment or supplement thereto) or Prospectus (or any
amendment or supplement thereto) under the captions "Market for the Common
Stock", "The Conversion and the Offering - Marketing and Arrangements" and "The
Conversion and the Offering - Direct Community Offering and Syndicated Community
Offering" or statistical information regarding the Holding Company prepared by
the Agent for use in the Sales Information, except for information derived from
the Prospectus. Provided further, that the Primary Parties will not be
responsible for any loss, liability, claim, damage or expense to the extent a
court of competent jurisdiction finds they result primarily from material oral
misstatements by the Agent to a purchaser of Shares which are not based upon
information in the Registration Statement or Prospectus, or from actions taken
or omitted to be taken by the Agent in bad faith or from the Agent's gross
negligence or willful misconduct, and the Agent agrees to repay to the Primary
Parties any amounts advanced to it by the Primary Parties in connection with
matters as to which it is found by a court of competent jurisdiction not to be
entitled to indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the Primary
Parties, their directors and officers, agents, servants and employees and each
person, if any, who controls any of the Primary Parties within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all
loss, liability, claim, damage or expense whatsoever (including but not limited
to settlement expenses, subject to the limitation set forth in the last sentence
of subsection (c) below), joint or several which they, or any of them, may
suffer or to which they, or any of them, may become subject under all applicable
federal and state laws or otherwise, and to promptly reimburse the Primary
Parties and any such persons upon written demand for any reasonable expenses
(including fees and disbursements of counsel) incurred by them in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto),
26
the Applications or any Blue Sky Applications or Sales Information or are based
upon the omission or alleged omission to state in any of the foregoing documents
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Agent's obligations under this
Section 11(b) shall exist only if and only to the extent that such untrue
statement or alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Applications, Registration Statement
(or any amendment or supplement thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Primary Parties by the Agent or its representatives (including
counsel) expressly for use under the captions "Market for the Common Stock",
"The Conversion and the Offering - Marketing Arrangements" and "The Conversion
and the Offering - Direct Community Offering and Syndicated Community Offering"
or statistical information regarding the Holding Company prepared by the Agent
for use in the Sales information (except for statistical information derived
from the Prospectus).
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 11,
Section 12 or otherwise, unless the failure to give such notice promptly results
in material prejudice to the indemnifying party. An indemnifying party may
participate at its own expense in the defense of such action. In addition, if it
so elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it reasonably
acceptable to the indemnified parties that are defendants in such action, unless
such indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding or claim, other than
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one separate firm of attorneys
(unless an indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or in
addition to those of other indemnified parties) for all indemnified parties in
connection with any one action, proceeding or claim or separate but similar or
related actions, proceedings or claims in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party, shall be
liable for any settlement of any action, proceeding or suit, which settlement is
effected without its prior written consent.
(d) The agreements contained in this Section 11 and in Section 12
hereof and the representations and warranties of the Primary Parties set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Agent or its officers,
directors, controlling persons, agents or employees or by or on behalf of any of
the Primary Parties or any officers, directors, controlling persons, agents or
employees of any of the Primary Parties; (ii) delivery of and payment hereunder
for the Shares; or (iii) any
27
termination of this Agreement. Notwithstanding the prior sentence, Sections 11
and 12 hereof are subject to and limited by Section 23A of the Federal Reserve
Act, as applicable.
28
Section 12. Contribution.
------------
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 11 is due in
accordance with its terms but is for any reason held by a court to be
unavailable from the Primary Parties or the Agent, the Primary Parties and the
Agent shall contribute to the aggregate losses, claims, damages and liabilities
of the nature contemplated by such indemnification (including any investigation,
legal and other expenses incurred in connection therewith and any amount paid in
settlement of any action, suit, or proceeding of any claims asserted, but after
deducting any contribution received by the Primary Parties or the Agent from
persons other than the other party thereto, who may also be liable for
contribution) in such proportion so that (i) the Agent is responsible for that
portion represented by the percentage that the fees paid to the Agent pursuant
to Section 4 of this Agreement (not including expenses) ("Agent's Fees"), less
any portion of Agent's Fees paid by Agent to Assisting Brokers, bear to the
total proceeds received by the Primary Parties from the sale of the Shares in
the Offering, net of all expenses of the Offering, and (ii) the Primary Parties
shall be responsible for the balance. If, however, the allocation provided above
is not permitted by applicable law or if the indemnified party failed to give
the notice required under Section 11 above, then each indemnifying party shall
contribute to such amount paid or payable to such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Primary Parties on the one hand and the Agent on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof), but also the
relative benefits received by the Primary Parties on the one hand and the Agent
on the other from the Offering, as well as any other relevant equitable
considerations. The relative benefits received by the Primary Parties on the one
hand and the Agent on the other hand shall be deemed to be in the same
proportion as the total proceeds from the Offering, net of all expenses of the
Offering, received by the Primary Parties bear, with respect to the Agent, to
the total fees (not including expenses) received by the Agent less the portion
of such fees paid by the Agent to Assisting Brokers. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Primary Parties on the
one hand or the Agent on the other and the parties relative intent, good faith,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Primary Parties and the Agent agree that it would not
be just and equitable if contribution pursuant to this Section 12 were
determined by pro-rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 12. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or action, proceedings or claims in
respect thereof) referred to above in this Section 12 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
It is expressly agreed that the Agent shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to the Agent under this Agreement less the portion of such fees paid by the
Agent to Assisting Brokers. It is understood and agreed that the above-stated
limitation on the Agent's liability is essential to the Agent and that the Agent
would not have entered into this Agreement
29
if such limitation had not been agreed to by the parties to this Agreement. No
person found guilty of any fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution with respect to
any loss or liability arising from such misrepresentation from any person who
was not found guilty of such fraudulent misrepresentation. The duties,
obligations and liabilities of the Primary Parties and the Agent under this
Section 12 and under Section 11 shall be in addition to any duties, obligations
and liabilities which the Primary Parties and the Agent may otherwise have. For
purposes of this Section 12, each of the Agent's and the Primary Parties'
officers, directors and, in the case of the Primary Parties, trustees and each
person, if any, who controls the Agent or any of the Primary Parties within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as the Primary Parties and the Agent. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 12, will
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 12.
Section 13. Survival.
--------
(a) All representations, warranties and indemnities and other
statements contained in this Agreement (and in Paragraph 11 of the Letter
Agreement), or contained in certificates of officers of the Primary Parties or
the Agent submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of the Agent or its controlling persons,
or by or on behalf of the Primary Parties and shall survive the issuance of the
Shares, and any legal representative, successor or assign of the Agent, any of
the Primary Parties, and any indemnified person shall be entitled to the benefit
of the respective agreements, indemnities, warranties and representations.
(b) The provisions of Paragraph 9 of the Letter Agreement shall
survive the issuance of the Shares (but not any termination or cancellation of
this Agreement) for a period of one (1) year, and any legal representative,
successor or assign of the Agent, and any of the Primary Parties shall be
entitled during such period to the benefit of the agreements contained therein.
Section 14. Termination. Agent may terminate this Agreement by
-----------
giving the notice indicated below in this Section at any time after this
Agreement becomes effective as follows:
(a) In the event the Holding Company fails to sell the minimum number
of the Shares prior to June 30, 2000, in accordance with the provisions of the
Plan or as required by the Conversion Regulations and applicable law, upon
notice by the Agent this Agreement shall terminate upon refund by the Primary
Parties to each person who has subscribed for or ordered any of the Shares the
full amount which it may have received from such person, together with interest
in accordance with Section 3 and any such termination shall be without liability
of any party to any other party except as otherwise provided in Sections 3, 4,
9, 11 and 12 hereof and Paragraph 11 of the Letter Agreement.
30
(b) If any of the conditions specified in Section 10 shall not have
been fulfilled when and as required by this Agreement, or by the Closing Date,
or waived in writing by the Agent, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying the Bank of such
cancellation in writing at any time at or prior to the Closing Date, and any
such cancellation shall be without liability of any party to any other party
except as otherwise provided in Sections 3, 4, 9, 11 and 12 hereof and
Paragraph 11 of the Letter Agreement.
(c) If Agent elects to terminate this Agreement as provided in this
Section, the Bank shall be notified by the Agent as provided in Section 15
hereof.
(d) If this Agreement is terminated in accordance with the provisions
of this Agreement, the Primary Parties shall pay the Agent the fees earned
pursuant to Section 4 and will reimburse the Agent for its reasonable expenses
pursuant to Section 9, including without limitation accounting, communication,
legal and travel expenses.
Section 15. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Agent shall be
directed to Ryan, Beck & Co., 220 South Orange Avenue, Livingston, New Jersey
07039, Attention: Mr. Ben Plotkin, President (with a copy to Nixon Peabody LLP,
1255 23/rd/ Street, N.W., Suite 800, Washington, D.C. 20037; Attention: Raymond
J. Gustini, Esq.); notices to the Primary Parties shall be directed to
Cambridgeport Bank, P.O. Box 9140, Cambridge, MA 02139-9140, Attention: James B.
Keegan, President and Chief Operating Officer (with a copy to Thacher Proffitt &
Wood, 1700 Pennsylvania Ave., N.W., Suite 800, Washington, D.C. 20006,
Attention: Richard A. Schaberg, Esq.)
Section 16. Parties. This Agreement shall inure to the benefit of and
-------
be binding upon the Agent and the Primary Parties, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 11 and 12 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties, except for Paragraphs 3, 9 and 11 of the Letter
Agreement, which are not hereby superseded.
Section 17. Partial Invalidity. In the event that any term,
------------------
provision or covenant herein or the application thereof to any circumstances or
situation shall be invalid or unenforceable, in whole or in part, the remainder
hereof and the application of said term, provision or covenant to any other
circumstance or situation shall not be affected thereby, and each term,
provision or covenant herein shall be valid and enforceable to the full extent
permitted by law.
31
Section 18. Construction. This Agreement shall be construed in
------------
accordance with the laws of the Commonwealth of Massachusetts.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and us in accordance with its terms.
Very truly yours,
PORT FINANCIAL CORP.
By: __________________________
James B. Keegan
President and Chief Executive Officer
CAMBRIDGEPORT BANK
By: __________________________
James B. Keegan
President and Chief Executive Officer
The foregoing Agency Agreement
is hereby confirmed and
accepted as of the date first
set forth above.
RYAN, BECK & CO., INC.
By: __________________________
Ben A. Plotkin
President and Chief Executive Officer
32