EXHIBIT 1.2
MONADNOCK COMMUNITY BANCORP, INC.
(a Federal Corporation - in Formation)
Up to 485,156 Shares
(Subject to Increase Up to 557,930 Shares)
COMMON STOCK ($0.01 Par Value)
Subscription Price $8.00 Per Share
AGENCY AGREEMENT
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___________, 2004
Ryan Beck & Co., Inc.
220 South Orange Avenue
Livingston, New Jersey 07039-5817
Ladies and Gentlemen:
Monadnock Community Bancorp, Inc., a federal corporation in formation
(the "Holding Company"), Monadnock Mutual Holding Company, a federal mutual
holding company in formation (the "MHC") and Monadnock Community Bank (the
"Bank") (collectively, the "Primary Parties") hereby confirm, jointly and
severally their agreement with Ryan Beck & Co., Inc. (the "Agent"), as follows:
1. THE OFFERING. On March 11, 2004, the Board of Directors of the
Bank adopted a Plan of Mutual Holding Company Reorganization and Stock Issuance
(the "Plan") which provides for the reorganization of the Bank into a two-tier
mutual holding company structure, the issuance of all of the Bank's outstanding
common stock to the Holding Company (the "Reorganization"), and the issuance of
a majority of the outstanding common stock to the MHC. Upon completion of the
Reorganization, the Bank will be a wholly owned subsidiary of the Holding
Company and the Holding Company will be a majority owned subsidiary of the MHC.
The Holding Company is offering up to 485,156 shares (the "Shares" or
"Conversion Shares") of common stock, par value $0.01 per share (the "Common
Stock") (subject to an increase up to 557,930 shares), in (i) a subscription
offering (the "Subscription Offering"), and, if necessary, (ii) a direct
community offering (the "Direct Community Offering") and (iii) a syndicated
community offering (the "Syndicated Community Offering"), in connection with the
Reorganization. References to the Bank herein shall include the Bank in its
current mutual form or post-Reorganization stock form as a wholly-owned
subsidiary of the Holding Company.
Upon the completion of the Subscription Offering, Community Offering, and
Syndicated Community Offering (collectively, the "Conversion Offerings" or
"Offering"), the purchasers of Shares in the Conversion Offerings will own 45%
of the outstanding Common Stock and the MHC will own 55% of the outstanding
Common Stock. The Holding Company will issue the Shares at a purchase price of
$8.00 per share (the "Purchase Price"). If the number of Conversion Shares is
increased or decreased in accordance with the Plan, the term "Shares" or
"Conversion Shares" shall mean such greater or lesser number, where applicable.
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In the Subscription Offering, non-transferable rights to subscribe for
between 358,594 and 485,156 shares (subject to an increase up to 557,930 shares)
of the Common Stock ("Subscription Rights") will be granted, in the following
order of priority: (1) the Bank's depositors with account balances of at least
$50.00 as of the close of business on December 31, 2002 ("Eligible Account
Holders"); (2) the Bank's tax-qualified employee plans; (3) the Bank's
depositors with account balances of at least $50.00 as of the close of business
on March 31, 2004 ("Supplemental Eligible Account Holders"); and (4) other
depositors of the Bank (other than Eligible Account Holders and Supplemental
Eligible Account Holders) (the "Other Members"), subject to the priorities and
purchase limitations set forth in the Plan. The Holding Company may offer shares
of Common Stock for which subscriptions have not been received in the
Subscription Offering in the Community Offering to members of the general
public, with preference given to natural persons residing in Hillsborough and
Cheshire Counties, New Hampshire. Shares may also be reserved in the Community
Offering for institutional investors. 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 selected members of the general public
through a syndicate of registered broker-dealers managed by the Agent
("Assisting Brokers") which are members of the National Association of
Securities Dealers, Inc. ("NASD").
It is acknowledged that the number of Shares to be sold in the Offering
may be increased or decreased as described in the Prospectus (as hereinafter
defined); that the purchase of Shares in the Offering is subject to maximum and
minimum purchase limitations as described in the Prospectus; and that the
Company and Holding Company may reject, in whole or in part, any subscription
received in the Community Offering and Syndicated Community Offering. 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.
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form SB-2 (File No.
333-113783) 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 Reorganization, the Bank filed with the Office of
Thrift Supervision (the "OTS"), pursuant to Title 12, Parts 575 and 563b of the
Code of Federal Regulations (the "Conversion Regulations"), a Notice of Mutual
Holding Company Reorganization and Application for Approval of a Minority Stock
Issuance by a Stock Holding Company Subsidiary of a Mutual Holding Company,
including exhibits and the Prospectus, and has filed amendments thereto as
required by the OTS (as so amended, the "MHC Notice and Application"). The
Holding Company filed with the OTS its application on Form H-(e)1 (the "Holding
Company Application") to acquire the Bank under the Home Owners Loan Act and the
regulations promulgated thereunder ("HOLA"). The Bank's application with the OTS
for approval of the formation of an interim stock savings bank
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and the merger of the interim stock savings bank with and into the Bank (the
"Merger Application") was filed as an exhibit to the MHC Notice and Application.
The MHC Notice and Application and the Holding Company Application (including
the Merger Application) shall collectively be hereinafter referred to as the
"OTS Applications."
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus dated _____________, 2004 of
the Holding Company to be used in the Subscription Offering and Community
Offering (if any), and, if necessary, will deliver copies of the Prospectus and
any prospectus supplement for use in a Syndicated Community Offering and/or
Public Offering, as defined in the Prospectus (as hereinafter defined).
2. APPOINTMENT OF AGENT. Subject to the terms and conditions of this
Agreement, the Primary Parties hereby appoint Agent as their financial advisor
and marketing agent to utilize its best efforts to solicit subscriptions for the
Conversion Shares and to advise and assist the Primary Parties with respect to
the sale of the Conversion Shares in the Conversion 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 consult with and advise the MHC,
the Holding Company and the Bank as to the matters set forth in the letter
agreement ("Letter Agreement"), dated February 17, 2004, between the Bank and
Agent (a copy of which is attached hereto as Exhibit A). It is acknowledged by
the Primary 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. Subscriptions for Conversion
Shares will be offered by means of order forms as described in the Prospectus.
Except as provided in the last paragraph of this Section 2, the appointment of
the Agent hereunder shall terminate upon consummation of the Offerings.
If selected broker-dealers are used to assist in the sale of Conversion
Shares in the Syndicated Community Offering, the Primary Parties hereby, subject
to the terms and conditions of this Agreement, appoint the Agent to manage such
broker-dealers in this Syndicated Community Offering. 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 manage the selling group of broker-dealers in the
Syndicated Community Offering.
The Agent agrees to make available to the Bank, the MHC and the Holding
Company for a period of 12 months following the consummation of the
Reorganization its Strategic Advisory Services ("STARS") program. If the Bank
elects to participate in the STARS program, the Agent will meet with the Bank at
its request and will render general advice on the financial matters listed in
Section 9 of the Letter Agreement (but not including (i) any in-depth merger and
acquisition analyses or studies which are available under the Agent's normal fee
schedule, or (ii) advice with respect to a specific acquisition transaction by,
or sale of, the Bank or the Holding Company). If the Bank elects to participate
in the STARS program, the Agent will waive the regular retainer fee and hourly
charges for the first 12 months of such participation. The Bank would be
required, however, to reimburse the Agent for its reasonable out-of-pocket
expenses incurred in conjunction with the performance of these services. Such
out-of-pocket expenses include travel, legal and other miscellaneous expenses.
The Agent would not be permitted to incur any single expense in excess of $1,000
pursuant to this paragraph without the prior approval of the Bank. If
negotiations for a transaction conducted during the 12-month participation
period result in the execution of a definitive
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agreement and/or consummation of a transaction for which the Agent customarily
would be entitled to a fee for its advisory or other investment banking
services, the Agent shall receive a contingent advisory fee in accordance with
the terms of a separate engagement letter to be entered into with respect to
such transaction. Nothing in this Agreement shall require the Holding Company or
the Bank to obtain such financial advisory services from the Agent. After the
completion of such 12-month participation period, if the parties wish to
continue the relationship, a fee will be negotiated and an agreement with
respect to specific advisory services will be entered into at this time.
3. REFUND OF PURCHASE PRICE. In the event that the Reorganization is
not consummated for any reason, including but not limited to the inability to
sell the Conversion Shares during the Offerings (including any permitted
extension thereof), this Agreement shall terminate and any persons who have
subscribed for any of the Conversion Shares shall have refunded to them the full
amount which has been received from such person, together with interest at the
Bank's current passbook rate, from the date payment is received to the date said
refund is made as provided in the Prospectus. Upon termination of this
Agreement, neither the Agent nor the Primary Parties shall have any obligation
to the other except that (i) the Primary Parties shall remain liable for any
amounts due pursuant to Sections 4, 8, 10 and 11 hereof, unless the transaction
is not consummated due to the breach by the Agent of a warranty, representation
or covenant; and (ii) the Agent shall remain liable for any amount due pursuant
to Sections 10 and 11 hereof, unless the transaction is not consummated due to
the breach by the Primary Parties of a warranty, representation or covenant.
4. FEES. In addition to the expenses specified in Section 8 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. A management and marketing fee in the amount of $25,000 and
$100,000, respectively, of which $25,000 has been paid
prior to the date hereof, and $100,000 of which will be
paid at closing.
b. A fee equal to 1.00% of the aggregate Purchase Price of the
Conversion Shares sold by the Agent in any Syndicated
Community Offering which fee along with the fee payable
directly by the Bank to assisting brokers other than the
Agent will not exceed 6.00% in the aggregate. Assisting
Brokers will not be utilized without the prior approval of
the Primary Parties, and it is agreed that Agent will
manage the Assisting Brokers in the Syndicated Offering.
In the event that the Company and/or the Bank are required to resolicit
subscribers for Shares in the Subscription 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 fees due to the Agent, if any. Until any agreement
called for by this paragraph is reached, the Agent shall not accrue expenses
relating to any resolicitation in an amount that would cause the total expenses
incurred by the Agent to be greater than as set forth in Section 8 hereof
without the prior written consent of the Company or the Bank, which consent
shall not be unreasonably withheld.
If this Agreement is terminated in accordance with the provisions of
Sections 3, 9, or 13, the Agent shall not be entitled to receive the fee set
forth in Sections 4(a) and 4(b), but the Primary Parties shall pay the Agent an
advisory and administrative services fee of $25,000 and will reimburse
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the Agent for its reasonable expenses pursuant to Section 8, including without
limitation accounting, communication, legal and travel expenses.
5. CLOSING. If the minimum number of Conversion Shares required to be
sold in the Offering 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 Reorganization are
satisfied, the Holding Company agrees to issue the Shares on the Closing Date
(as hereinafter defined) against payment therefore by the means authorized by
the Plan and to deliver certificates evidencing ownership of the Conversion
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 shall be held at the
offices of special counsel to the Primary Parties, 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 as set forth in Sections 4 and 8 hereof and
the opinions required hereby and other documents deemed reasonably necessary by
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. The Holding
Company shall notify the Agent when funds shall have been received for the
minimum number of shares of the Common Stock. The hour and date upon which the
Holding Company shall release the Conversion Shares for delivery in accordance
with the terms hereof is referred to herein as the "Closing Date."
The Holding Company and the Bank (or their respective agents) shall
advise the Agent as to the allocation of shares should the final allocation not
strictly correspond to the subscriptions received. The Agent shall have no
liability to any party for the records or other information provided by the
Holding Company and the Bank (or their respective agents) to the Agent for use
in allocating the Shares. The Holding Company and the Bank shall indemnify and
hold harmless the Agent for any liability arising out of the allocation of the
Shares in accordance with (i) the Plan generally, and (ii) the records or other
information provided to the Agent by the Holding Company and the Bank (or their
respective agents).
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6. REPRESENTATIONS AND WARRANTIES OF THE PRIMARY PARTIES. The Primary
Parties jointly and severally represent and warrant to the Agent that:
(a) The Bank has, and as of the Closing Date, the MHC and the
Holding Company will have, all such power, authority, authorizations, approvals
and orders as may be required to enter into this Agreement, 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
Reorganization, the execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the Bank
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 Holding Company, the
MHC and the Bank, and is a valid, legal and binding obligation of the Bank, the
Holding Company and the MHC, in each case enforceable in accordance with its
terms, except to the extent, if any, that the provisions of Sections 10 and 11
hereof may be unenforceable as against public policy, and except to the extent
that such enforceability may be limited by bankruptcy laws, insolvency laws, or
other laws affecting the enforcement of creditors' rights generally, or the
rights of creditors of savings institutions insured by the FDIC (including the
laws relating to the rights of the contracting parties to equitable remedies).
(b) The Plan has been approved by the OTS.
(c) The Registration Statement was declared effective by the
Commission on _________________, 2004; and no stop order has been issued with
respect thereto and no proceedings therefore have been initiated or to the best
knowledge of the Primary Parties 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 and the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 10 hereof) authorized by the Primary Parties for use in connection with
the Offerings 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 any Blue Sky Application or any Sales
Information authorized by the Primary Parties for use in connection with the
Offerings will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section 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" and
"The Reorganization and Stock Offering --Marketing Arrangements" or written
statements or omissions from any sales information or information filed pursuant
to state securities or blue sky laws or regulations regarding the Agent.
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(d) The MHC Notice and Application, including the Prospectus,
was approved by the OTS on __________________, 2004; the Proxy Statement of the
Bank relating to the special meeting of the members of the Bank at which the
Plan shall be considered for approval by the Bank's eligible voting members (the
"Proxy Statement") and the Prospectus (including any amendment or supplement
thereto) was authorized for use by the OTS, and at all times subsequent thereto
until the Closing Date, the MHC Notice and Application, including the
Prospectus, did and will comply as to form in all material respects with the
Conversion Regulations and any other applicable rules and regulations of the OTS
(except as modified or waived in writing by the OTS). At the time of the
approval and at all times subsequent thereto until the Closing Date, the MHC
Notice and Application, including the Prospectus (including any amendment or
supplement thereto), did not and does not include any untrue statement of a
material fact or omit 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; provided, however, that representations or
warranties in this subsection (d) 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 in
Prospectus contained in the MHC Notice and Application under the captions
"Market for the Common Stock" and "The Reorganization and Stock Offering
- --Marketing Arrangements" or written statements or omissions from any sales
information or information filed pursuant to state securities or blue sky laws
or regulations regarding the Agent.
(e) No order has been issued by the OTS, the Commission, 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 Reorganization is pending
or, to the best knowledge of the Primary Parties, threatened.
(f) The Plan has been duly adopted by the Board of Directors 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 OTS
in approving the Plan, the Reorganization, or the OTS Applications, pursuant to
the HOLA or any other statute or regulation.
(g) The Holding Company has filed with the OTS the Holding
Company Application (including the Merger Application) and as of the Closing
Date the OTS will have approved of the Holding Company's acquisition of the
Bank.
(h) RP Financial, LC, which prepared the appraisal of the
aggregate pro forma market value of the Holding Company and the Bank 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
within the meaning of the Conversion Regulations. (a)
(i) Shatswell, MacLeod & Company, PC, which certified the
financial statements filed as part of the Registration Statement and the MHC
Notice and Application, have each advised the Primary Parties that each is, with
respect to each of the Primary Parties, an independent certified public
accountant within the meaning of 12 C.F.R. Sections 563c.3 and 571.2(c)(3) and
under the 1933 Act and the Regulations promulgated thereunder.
(j) The financial statements and the notes thereto which are
included in the Registration Statement and which are a part of the Prospectus
present fairly the financial condition and retained earnings of the Bank as of
the dates indicated and the results of operations and cash
7
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 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
properly applied on the basis described therein.
(k) 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 any of the Primary Parties or of the
Primary Parties considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has not been any change in total assets
of the Bank in an amount greater than $600,000, any material increase in the
aggregate amount of loans past due ninety (90) days or more, or any real estate
acquired by foreclosure or loans characterized as "in substance foreclosure";
nor has the Bank issued any securities or incurred any liability or obligation
for borrowings other than in the ordinary course of business; (iii) 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 (iv) 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 Registration
Statement or the Prospectus.
(l) As of the Closing Date, the Holding Company will be a
corporation duly organized and in good standing under the federal laws of the
United States, with corporate power 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 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. 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,
capital, assets, properties or business of the Primary Parties taken as a whole;
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.
(m) As of the Closing Date, the MHC will be duly organized and
will be validly existing as a federally chartered mutual holding company under
the laws of the United States, duly authorized to conduct its business and own
its property as described in the Registration Statement and the Prospectus; as
of the Closing Date, the MHC 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, capital, assets or properties of the
Primary Parties taken as a whole; as of the Closing Date, all such licenses,
permits and governmental authorizations will be in full force and effect and the
MHC will be in compliance therewith in all material respects; as of the Closing
Date, the MHC will
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be duly qualified as a foreign corporation to transact business in each
jurisdiction in which the failure to be so qualified in one or more of such
jurisdictions would have a material adverse effect on the financial condition,
earnings, capital, assets, properties or business of the Primary Parties.
(n) The MHC 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.
(o) The MHC is not authorized to issue any shares of capital
stock.
(p) The Bank is duly organized and validly existing federally
chartered savings association in mutual 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 OTS; 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 materially adversely affect the financial condition of
the Primary Parties taken as a whole; 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 United States and is duly qualified as a foreign
corporation to transact business in each jurisdiction in which failure to so
qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank after the Reorganization 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.
(q) The Bank is a member of the Federal Home Loan Bank of
Boston ("FHLB of Boston"); the deposit accounts of the Bank are insured by the
FDIC up to applicable limits. Upon consummation of the Reorganization, the
rights of the members of the Bank in its mutual form shall be transferred to MHC
in accordance with the Plan and the requirements of the Conversion Regulations.
(r) The Bank is not authorized to issue any shares of capital
stock.
(s) Upon consummation of the Reorganization, 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, except
for the shares of Common Stock held by MHC, 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.
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(t) The Bank is not, and as of the Closing Date neither the
Holding Company nor the MHC will be, 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
change in the condition (financial or otherwise), earnings, capital, properties
or assets. The consummation of the transactions herein contemplated will not (i)
conflict with or constitute a breach of, or default under, the articles of
incorporation, charter or bylaws of the Bank or, as of the Closing Date, the
Holding Company or the MHC, 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 material lien, charge or encumbrance upon any property of the Primary
Parties.
(u) 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 them or any of
their property is bound or affected in any respect which, in any such case, is
material to the Primary Parties individually or considered as one enterprise,
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 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 upon the Primary Parties individually or considered as
one enterprise.
(v) The Primary Parties have good and marketable title to all
assets which are material to the businesses of the Primary Parties and to those
assets described in the Prospectus as owned by them, free and clear of all
material liens, charges, encumbrances, restrictions or other claims, except such
as are described in the Prospectus or which do not have a material adverse
effect on the businesses of the Primary Parties taken as a whole; 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.
(w) The Primary Parties are not in material violation of any
directive from the OTS, the FDIC, 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 OTS, the Commission and the FDIC), except where the failure to so comply
would not reasonably be expected to result in any material adverse change in the
financial condition, results of operations, capital, properties or business
affairs of the Primary Parties considered as one enterprise 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,
10
threatened, which would reasonably be expected to materially and adversely
affect the Reorganization, 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 any
material adverse change in the financial condition results of operations,
capital, properties or business affairs of the Primary Parties considered as one
enterprise.
(x) Prior to the Closing Date, the Primary Parties will have
received an opinion of their special counsel, Luse Gorman Pomerenk & Schick,
P.C., with respect to the federal income tax consequences of the Reorganization,
as described in the Registration Statement and the Prospectus, and an opinion
from Shatswell, McLeod & Co., P.C. with respect to the tax consequences of the
proposed transaction under the laws of the State of New Hampshire; and the facts
and representations upon which such opinions are based are truthful, accurate
and complete, and none of the Primary Parties will take any action inconsistent
therewith.
(y) The Bank has timely 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, has made adequate reserves
for similar future tax liabilities, and no deficiency has been asserted with
respect thereto by any taxing authority.
(z) 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 approval of the OTS and the Commission (which have
been received) 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.
(aa) 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; (iii) entered into a financial or management consulting agreement
except for the Letter Agreement and as contemplated hereunder; or (iv) 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.
(ab) Neither the Primary Parties nor, to the best knowledge of
the Primary Parties, any employee of the Primary Parties has made any payment of
funds of the Primary Parties as a loan to any person for the purchase of
Conversion Shares, except for the Holding Company's loan to the ESOP the
proceeds of which will be used to purchase Conversion 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.
(ac) 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.
11
(ad) The Primary Parties have not relied upon Agent or its
counsel for any legal, tax or accounting advice in connection with the
Reorganization.
(ae) The records of Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members are accurate and complete in all
material respects.
(af) 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; no action, suit, regulatory
investigation or other proceeding is pending, threatened against the 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 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, to the best knowledge of the Bank, in which the Bank has a security
interest.
(ag) 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 on
the financial condition, results of operations or business of the Primary
Parties taken as a whole.
(ah) None of the Primary Parties are required to be registered
as an investment company under the Investment Company Act of 1940.
(ai) As of the date hereof, the charters of the Holding Company
and the MHC have been filed with the OTS, but neither charter is effective or
otherwise in force.
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 6.B. REPRESENTATIONS AND WARRANTIES OF THE AGENT. Agent
represents and warrants to the Primary Parties that:
(a) Agent is a corporation and is validly existing 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.
12
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Agent, and this Agreement and
is the legal, valid and binding agreement 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 10 or 11 hereof may be unenforceable as against public
policy.
(c) Except for licenses, approvals and permits required by the
State of New Hampshire or required by another jurisdiction solely because the
Offering is being made in such jurisdiction, each of Agent and its employees,
agents and representatives who shall perform any of the services hereunder shall
have, and until the Reorganization is completed or terminated shall maintain all
licenses, approvals and permits necessary to perform 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 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 Securities
Exchange Act of 1934, as amended (the "1934 Act") to the extent applicable.
7. 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.
(b) The Primary Parties will not, at any time after the date
any OTS Application is approved, file any amendment or supplement to such OTS
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.
(c) The Primary Parties will use their best efforts to cause
the OTS 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 OTS Applications to be approved by the OTS, and will
immediately upon receipt of any information concerning the events listed below
notify the Agent (i) when the Registration Statement, as amended, has become
effective; (ii) when the MHC Notice and
13
Application, as amended, has been approved by the OTS; (iii) when the Holding
Company Application, as amended, has been approved by the OTS; (iv) when the
Merger Application has been approved by the OTS; (v) of the receipt of any
comments from the Commission, the OTS, or any other governmental entity with
respect to the Reorganization or the transactions contemplated by this
Agreement; (vi) of any request by the Commission, the OTS, any other
governmental entity for any amendment or supplement to the Registration
Statement or the OTS Applications or for additional information; (vii) of the
issuance by the Commission, the OTS, 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; (viii) of the issuance by the Commission, the OTS, the FDIC or any 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 (ix) of the occurrence of any event mentioned
in paragraph (f) below. The Primary Parties will make every reasonable effort to
prevent the issuance by the Commission, the OTS, the FDIC or any state authority
of any order referred to in (vii) and (viii) 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 OTS 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 Reorganization 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
statutes, to be complied with prior to or subsequent 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 OTS, the Conversion Regulations (except as modified or
waived in writing by the OTS), 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) Each of the Primary Parties will inform the Agent of any
event or circumstances 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 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 and the OTS, 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
14
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 offer 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 in each year as
are or may be required by the laws of such jurisdictions.
(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,
without the Agent's prior written consent, which consent shall not be
unreasonably withheld, any shares of Common Stock other than in connection with
any plan or arrangement described in the Prospectus.
(i) For the period of three years from the date of this
Agreement, the Holding Company will furnish to the Agent upon request (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 or
non-confidential report filed with the Commission or the OTS or any other
supervisory or regulatory authority or any national securities exchange or
system on which any class of the securities of the Holding Company is listed or
quoted, (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."
(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 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(g) of the 1934 Act, as amended, and
will request that such registration statement be effective upon completion of
the Reorganization. The Holding Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as permitted
by the OTS.
15
(m) For so long as the Common Stock is 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
(including consolidated financial statements of the Holding Company and its
subsidiaries, certified by independent public accountants).
(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 Conversion 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 Conversion
Shares in the Conversion 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) Within 90 days following the Closing Date, the MHC and the
Holding Company will each register as a savings and loan holding company under
the HOLA.
(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 OTS and the FDIC.
(s) The Holding Company and the Bank shall comply with any and
all terms, conditions, requirements and provisions with respect to the
Reorganization and the transactions contemplated thereby imposed by the OTS, the
HOLA, the Commission, the 1933 Act, the Regulations, the Exchange Act and the
regulations promulgated by the Commission pursuant to the Exchange Act to be
complied with subsequent to the Closing Date. The 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 Conversion Shares in
the event of an oversubscription, and such information shall be accurate and
reliable in all material respects.
16
(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 9 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) the MHC
shall have been formed pursuant to the Plan and shall own at all times more than
50% of the issued and outstanding shares of Common Stock, (ii) all of the issued
and outstanding shares of capital stock of the Bank shall be owned by the
Holding Company, (iii) the Holding Company shall have no direct subsidiaries
other than the Bank, and (iv) the Reorganization 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
Reorganization (except those that are conditions subsequent) imposed by the
Commission, the OTS 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 eligible voting members of the Bank in accordance with the
Conversion Regulations and the provisions of the Bank's charter and bylaws.
(y) As of the Closing Date, the Primary Parties shall have
completed all conditions precedent to the Reorganization in accordance with the
Plan and shall have complied in all material respects with applicable laws,
regulations (except as modified or waived in writing by the OTS), decisions and
orders, including all terms, conditions, requirements and provisions precedent
to the Reorganization imposed upon it by the OTS as set forth in correspondence
received from the OTS.
(z) On or before the Closing Date, the Primary Parties will
have completed all conditions precedent to the Reorganization 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 OTS) and with all other
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Reorganization imposed
upon any of the Primary Parties by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus.
8. PAYMENT OF EXPENSES. Whether or not the Reorganization 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 OTS Applications; (b) the preparation, 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; (e) fees
and expenses related to the preparation of the independent appraisal; and (f)
the reasonable expenses of the Agent. Notwithstanding the foregoing, the Primary
Parties shall not be required to reimburse Agent for more than $40,000 in legal
fees (other than such
17
fees as shall be related to "blue sky" matters) and out-of-pocket expenses,
except in the event of any material delay in the Offering that would require an
update of the financial information contained in the Registration Statement, as
amended or supplemented, to reflect a period later than that set forth in the
financial statements included in the original Registration Statement. Not later
than two 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.
9. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of the
Agent hereunder and the occurrence of the Closing and the Reorganization are
subject to the condition that all representations and warranties and other
statements 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 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 and the prospectus and proxy statement contained in
the MHC Notice and Application shall have been approved by the OTS for mailing
prior to the commencement of the Offering, the Holding Company Application shall
have been approved, and no stop order or other action suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefore initiated or, to any of the Primary Parties'
best knowledge, 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 Reorganization shall have been issued or proceedings
therefore initiated or, to any of the Primary Parties' best knowledge,
threatened by the OTS, the Commission, or any other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date,
of Luse Gorman Pomerenk & Schick, P.C., and/or local counsel acceptable to the
Agent in form and substance satisfactory to counsel for the Agent to the effect
that:
(i) The Holding Company is a corporation duly
organized and validly existing and in good standing under the federal laws of
the United States of America, 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 each jurisdiction
in which the conduct of its business requires such qualification and in which
the failure to qualify would have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of the Primary
Parties.
(ii) The Bank is a duly organized and validly
existing federally chartered mutual savings association 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 the rules, regulations and practices of the OTS; the issuance and
sale of the capital stock of the Bank to the Holding Company in the
Reorganization 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
18
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 Bank described in the
Prospectus are permitted under federal law to subsidiaries of a savings bank
holding company that is a federal corporation. 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 a member of the FHLB of Boston
and 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 such insurance are pending or
threatened.
(v) Upon consummation of the Reorganization, the
MHC will have been duly organized and will be validly existing as a federally
chartered mutual holding company, duly authorized to conduct its business and
own its properties as described in the Registration Statement and Prospectus.
(vi) Upon consummation of the Reorganization, (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); (b) the shares of Common Stock of the
Holding Company issued to the MHC will have been duly and validly authorized for
issuance and will be fully paid and nonassessable; (c) the shares of Common
Stock of the Holding 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
(d) the issuance of the shares of Common Stock is not subject to preemptive
rights under the charter, articles of incorporation or bylaws of any of the
Primary Parties, 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.
(vii) 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 to the
extent that the provisions of Sections 10 and 11 hereof may be unenforceable as
against public policy, and except to the extent that such enforceability may be
limited by bankruptcy laws, insolvency laws, or other laws affecting the
enforcement of creditors' rights generally, or the rights of creditors of
savings institutions insured by the FDIC (including the laws relating to the
rights of the contracting parties to equitable remedies).
19
(viii) The Plan has been duly adopted by the board
of directors of the Bank and by the members of the Bank, in the manner required
by the Conversion Regulations and the Bank's charter and bylaws.
(ix) The Reorganization was effected in accordance
with the Plan and all applicable laws, including statutes, regulations,
decisions and orders; and all terms conditions, requirements and provisions with
respect to the Reorganization imposed by the Commission, the OTS or any other
governmental agency, if any, were complied with by the Bank in all material
respects or appropriate waivers were obtained and all notice and waiting periods
were satisfied, waived or elapsed.
(x) The OTS Applications have been approved by
the OTS and the Prospectus and the Proxy Statement have been authorized for use
by the OTS, and subject to the satisfaction of any conditions set forth in such
OTS 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
Reorganization.
(xi) The purchase by the Holding Company of all of
the issued and outstanding capital stock of the Bank has been authorized by the
OTS and no action has been taken, or, to such counsel's knowledge, is pending or
threatened, to revoke any such authorization or approval.
(xii) The Registration Statement has become
effective under the 1933 Act, no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of such counsel's
knowledge, no proceedings for that purpose have been instituted or threatened.
(xiii) The material tax consequences of the
Reorganization are set forth in the Prospectus under the caption "The
Reorganization and Stock Offering - Effects of the Reorganization and Stock
Offering - Tax Effects of the Reorganization." The information in the Prospectus
under the caption "The Reorganization and Stock Offering - Effects of the
Reorganization and Stock Offering - Tax Effects of the Reorganization" has been
reviewed by such counsel and fairly describes such opinions rendered by such
counsel and Shatswell, Macleod & Company, PC to the Primary Parties with respect
to such matters.
(xiv) 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.
(xv) At the time the MHC Notice and Application
was approved, the MHC Notice and Application (as amended or supplemented)
including the Prospectus contained therein, 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 OTS, except as
modified or waived in writing by the OTS (other than the financial statements,
notes to financial statements, financial tables and other financial and
statistical data included therein and the appraisal valuation as to which
counsel need express no opinion). To such counsel's knowledge, no
20
person has sought to obtain regulatory or judicial review of the final action of
the OTS approving the OTS Applications.
(xvi) 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 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.
(xvii) To the best of 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
Reorganization or the offer, sale or issuance of the Shares.
(xviii) The information in the Prospectus under the
captions "How We Are Regulated," "Taxation," "Restrictions on Acquisition of
Monadnock Community Bancorp, Inc. and Monadnock Community Bank", "Description of
Capital Stock of Monadnock Community Bancorp, Inc.," "The Reorganization and
Stock Offering" to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has been reviewed
by such counsel and is accurate in all material respects (except as to the
financial statements and other financial data included therein as to which such
counsel need express no opinion).
(xix) None of the Primary Parties are required to
be registered as an investment company under the Investment Company Act of 1940.
(xx) The Bank has duly adopted a federal stock
charter and bylaws effective upon consummation of the Reorganization, and 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 on
the financial condition of the Primary Parties considered as one enterprise, or
on the earnings, capital, properties or business affairs of the Primary Parties
considered as one enterprise. 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 material 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 material violation of any applicable law,
act, regulation, or to such counsel's knowledge, order or court order, writ,
injunction or decree.
The opinion may be limited to matters governed by the laws of the United
States, and in the case of local counsel, the State of New Hampshire. 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 other counsel of good standing, 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
21
rendered hereunder by special counsel to the Primary Parties. The opinion of
such counsel for the Primary Parties shall state that it has no reason to
believe that the Agent is not justified in relying thereon.
(2) The letter of Luse Gorman Pomerenk & Schick, P.C. in
form and substance to the effect that during the preparation of the Registration
Statement and the Prospectus, Luse Gorman Pomerenk & Schick, P.C. participated
in conferences with certain officers of and other representatives of the Primary
Parties, counsel to the Agent, representatives of the independent public
accounting firm 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 9(b)(1)) Luse Gorman Pomerenk & Schick,
P.C. 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 Luse Gorman
Pomerenk & Schick, P.C. that caused Luse Gorman Pomerenk & Schick, P.C. 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 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 the financial
statements, schedules and other financial and statistical data included, or
statistical or appraisal methodology employed, in the Registration Statement or
Prospectus).
(3) The favorable opinion, dated as of the Closing Date,
of Muldoon Murphy Faucette & Aguggia 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 and
upon the opinion of Luse Gorman Pomerenk & Schick, P.C.
(c) Concurrently with the execution of this Agreement, the
Agent shall receive a letter from Shatswell MacLeod & Company, P.C., dated the
date hereof and addressed to the Agent, such letter confirming that Shatswell
MacLeod & Company, P.C. is a firm of independent public accountants within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants, the 1933 Act and the regulations promulgated
thereunder and 12 C.F.R. Section 571.2(c)(3), and no information concerning its
relationship with or interests in the Primary Parties is required by the OTS
Applications or Item 13 of the Registration Statement, and stating in effect
that in Shatswell'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, the 1934 Act and the related published
rules and regulations of the Commission thereunder and the Conversion
Regulations and generally accepted accounting principles consistently applied;
(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 minutes of the meetings of the Board
of Directors of the Bank, the Executive Committee of the Bank and the Audit
Committee of the Bank, a review of the unaudited interim financial information
as of and for the interim period ending March 31, 2004 and May __, 2004 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 and financial information included in
22
the section titled "Recent Developments" are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Prospectus; or (B)
during the period from the date of the Recent Developments information included
in the Prospectus to a date not more than three business days prior to the date
of the Prospectus there was any increase in non-performing loans, special
mention loans, borrowings (defined as advances from the FHLB of Boston,
securities sold under agreements to repurchase and any other form of debt other
than deposits) of the Bank or decrease in assets, deposits, loan losses
allowances or retained earnings of the Bank or there was any decrease in net
income, noninterest income, tax expense or net interest income of the Bank or
any increase in noninterest expense for the number of full months commencing
immediately after the Recent Developments period and ended on the last month-end
prior to the date of the Prospectus as compared to the corresponding period in
the preceding year; and (iii) stating that, in addition to the 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
Shatswell MacLeod & Company, P.C. 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 9, 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 change in the
financial condition or in the earnings, capital, properties, business prospects
or business affairs of the Primary Parties, considered as one enterprise,
whether or not arising in the ordinary course of business; (iii) the
representations and warranties contained in Section 6 of this Agreement are true
and correct with the same force and effect as though made at and as of the
Closing Date; (iv) each of the Primary Parties has 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 9; (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 Reorganization,
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
23
of the Registration Statement has been issued and to the best of their
knowledge, no proceedings for any such purpose have been initiated or threatened
by the OTS, 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 OTS in approving the Plan or to enjoin the
Reorganization.
(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 within the meaning of the Conversion Regulations, (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 audited 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 change, or any development involving a prospective material change in,
or affecting the general affairs of, management, financial position, retained
earnings, long-term debt, stockholders' equity or results of operations of any
of the Primary Parties, 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: (i) in the reasonable
opinion of the Agent there shall have been no material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of any of the Primary Parties independently, or the Primary Parties considered
as one enterprise, from and as of the latest dates as of which such condition is
set forth in the Prospectus, except as referred to therein; (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; (iii) none of the
Primary Parties shall have received from the OTS or the FDIC any direction (oral
or written) to make any material change in the method of conducting their
business with which it has not complied in all material respects (which
direction, if any, shall have been disclosed to the Agent) and which would
reasonably be expected to have a material and adverse effect on the condition
(financial or otherwise) or on the earnings, capital, properties or business
affairs of the Primary Parties considered as one enterprise; (iv) none of the
Primary Parties shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any material
outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity
or before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the knowledge of the Primary Parties, threatened
against any of the Primary Parties or affecting any of their properties wherein
an unfavorable decision, ruling or finding would reasonably be expected to have
a material and adverse effect on the financial condition or on the earnings,
capital, properties or business affairs of the Primary Parties, considered as
one enterprise; and (vi)
24
the Shares shall have been qualified or registered for offering and sale under
the securities or "blue sky" laws of the jurisdictions requested by the Agent.
(j) At or prior to the Closing Date, the Agent shall receive
(i) a copy of the letter from the OTS authorizing the use of the Prospectus and
approving the MHC Notice and Application, (ii) a copy of the order from the
Commission declaring the Registration Statement effective, (iii) a copy of a
certificate of existence for the Bank, (iv) a certificate or other writing from
the appropriate federal authority in form and substance reasonably satisfactory
to Agent evidencing the valid existence of the Holding Company as of the Closing
Date, (v) a copy of the letter from the OTS approving the Holding Company
Application, (vi) a certificate from the FDIC evidencing the Bank's insurance of
accounts, (vii) a certificate of the FHLB of Boston evidencing the Bank's
membership therein, (viii) a certificate or other writing from the OTS in form
and substance reasonably satisfactory to Agent evidencing the valid existence of
the MHC as of the Closing Date, (ix) a copy of the letters from the OTS
approving the Merger Application and (x) 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, (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 commercial banks or other federally-insured
financial institutions or general moratorium on the withdrawal of deposits from
commercial banks or other federally-insured financial institutions declared by
either federal or state authorities; (iii) the engagement by the United States
in hostilities which have resulted in the declaration, on or after the date
hereof, of a national emergency or war; or (iv) a material decline in the price
of equity or debt securities in the United States financial markets or elsewhere
if the effect of any of (i) through (iv) herein, in the Agent's reasonable
judgment, makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(l) All such opinions, 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 of 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. If any condition to the
Agent's obligations hereunder to be fulfilled prior to or at the Closing Date is
not fulfilled, the Agent may terminate this Agreement (provided that if this
Agreement is so terminated but the sale of Shares is nevertheless consummated,
the Agent shall be entitled to the compensation provided for in Section 4
hereof) or, if the Agent so elects, may waive any such conditions which have not
been fulfilled or may extend the time of their fulfillment.
25
10. 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 paragraph (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), preliminary or final Prospectus (or any
amendment or supplement thereto), the OTS 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, whether or not filed in any Jurisdiction
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 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), preliminary or
final Prospectus (or any amendment or supplement thereto), the OTS Applications,
any Blue Sky Applications or Sales Information or other documentation
distributed in connection with the Reorganization; or (iv) result from any
claims made with respect to the accuracy, reliability and completeness of the
records of Eligible Account Holders, Supplemental Eligible Account Holders and
Other Members 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 paragraph (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 preliminary or final Prospectus
(or any amendment or supplement thereto), the OTS Applications, the Blue Sky
Applications or Sales Information or other documentation distributed in
connection with the Reorganization 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" and "The Offering - Plan of Distribution and Marketing
Arrangements," 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 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
26
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 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 paragraph (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 of supplement thereto), the OTS 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 10(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 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" and "The Reorganization and Stock
Offering --Marketing Arrangements."
(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 10,
Section 11 or otherwise. 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 defense of
such action with counsel chosen by it and approved by 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
27
circumstances. The Holding Company shall be liable for any settlement of any
claim against the Agent (or its directors, officers, employees, affiliates or
controlling persons), made with the Holding Company's consent, which consent
shall not be unreasonably withheld. The Holding Company shall not, without the
written consent of the Agent, settle or compromise any claim against it based
upon circumstances giving rise to an indemnification claim against the Holding
Company hereunder unless such settlement or compromise provides that the Agent
and the other indemnified parties shall be unconditionally and irrevocably
released from all liability in respect of such claim.
(d) The agreements contained in this Section 10 and in Section
11 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 termination of this Agreement.
11. CONTRIBUTION.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 10 is due in
accordance with its terms but is found in a final judgment 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 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 Conversion Shares in the Conversion Offerings, net
of all expenses of the Offerings except Agent's Fees, 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 10 above, then each
indemnifying party shall contribute to such amount paid or payable by 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 Conversion Offerings, net of
all expenses of the Conversion Offerings except Agent's Fees, 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 11 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 11.
The amount paid or payable by
28
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 11 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 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
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 11 and under Section 10 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 11, each of the Agent's and the
Primary Parties' officers and directors 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 11, 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 11.
12. REPRESENTATIONS, WARRANTIES AND INDEMNITIES TO SURVIVE DELIVERY.
All representations, warranties and indemnities and other statements contained
in this 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.
13. 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 consummate the
sale of the minimum number of the Conversion Shares by __________________, 2006
in accordance with the provisions of the Plan or as required by the Conversion
Regulations and applicable law, this Agreement shall terminate upon refund by
the Primary Parties to each person who has subscribed for or ordered any of the
Conversion Shares the full amount which it may have received from such person,
together with interest in accordance with Section 3, and no party to this
Agreement shall have any obligation to the other hereunder, except as set forth
in Sections 3, 4, 8, 10 and 11 hereof.
(b) If any of the conditions specified in Section 9 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
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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, 8, 10
and 11 hereof.
(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 14
hereof.
(d) If this Agreement is terminated in accordance with the
provisions of Sections 3, 9, or 13, 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 8, including without limitation
accounting, communication, legal and travel expenses.
14. 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. Inc., 20 Ash Street, Conshocken, Pennsylvania 19004, Attention:
Michelle Darcey (with a copy to John R. Hall, Esq., Muldoon Murphy Faucette &
Aguggia LLP, 5101 Wisconsin Avenue, N.W., Washington, D.C. 20016); notices to
the Primary Parties shall be directed to Monadnock Community Bank, One Jaffrey
Road, Peterborough, New Hampshire 03458 Attention: William M. Pierce, Jr.,
President and Chief Executive Officer (with a copy to Richard Garabedian, Luse
Gorman Pomerenk & Schick, P.C. 5335 Wisconsin Avenue, N.W., Suite 400,
Washington, D.C. 20015).
15. 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 10 and 11 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.
16. 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.
17. CONSTRUCTION. This Agreement shall be construed in accordance with
the laws of the State of New Jersey.
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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,
MONADNOCK COMMUNITY BANCORP, INC.
(In Formation)
By:
-------------------------------------------
William M. Pierce, Jr.
President and Chief Executive Officer
MONADNOCK MUTUAL HOLDING COMPANY
(In Formation)
By:
-------------------------------------------
William M. Pierce, Jr.
President and Chief Executive Officer
MONADNOCK COMMUNITY BANK
By:
-------------------------------------------
William M. Pierce, Jr.
President and Chief Executive Officer
The foregoing Agency Agreement is
hereby confirmed and accepted as
of the date first set and above written.
RYAN BECK & CO., INC.
By:
-------------------------------------------
Michelle Darcey
First Vice President
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MASTER SELECTED DEALER AGREEMENT
_____________, 2004
Ryan Beck & Co., Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Gentlemen:
(1) GENERAL. We understand that Ryan Beck & Co., Inc. ("Ryan Beck") is
entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") pursuant to a registration
statement filed under the Securities Act of 1933 (the "Securities Act") wherein
Ryan Beck (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected dealers ("Selected Dealers")
and has informed us that such terms and conditions shall be applicable. Any such
offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities; the
term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, filed pursuant to
Rule 424(b) or Rule 424(c) under the Securities Act or any successor or similar
rules.
(2) CONDITIONS OF OFFERING, ACCEPTANCE AND PURCHASE. Any Offering will
be subject to delivery of the Securities and their acceptance by you and any
other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the basis
of reservation of Securities or an allotment against subscription. You will
advise us by telegram, telex, facsimile, e-mail, or other form of written
communication ("Written Communication") of the particular method and
supplementary terms and conditions (including, without limitation, the
information as to prices and offering date referred to in Section 3(b)) of any
Offering in which we are invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any provision herein,
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written Communication, acceptances, and other
communications by us with respect to any Offering should be sent to Ryan Beck.
You reserve the right to reject any acceptance in whole or in part. Payment for
Securities purchased by us is to be
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made at such office as you may designate, at the public offering price, or, if
you shall so advise us, at such price less the concession to dealers or at the
price set forth or indicated in a Written Communication, on such date as you
shall determine, on one day's prior notice to us, by wire transfer to a Ryan
Beck account, against delivery of certificates or other forms evidencing such
Securities. If payment is made for Securities purchased by us at the public
offering price, the concession to which we shall be entitled will be paid to us
upon termination of the provisions of Section 3(b) with respect to such
Securities.
Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, delivery of Securities purchased by us will be made
through such facilities if we are a member, or if we are not a member,
settlement may be made through our ordinary correspondent who is a member.
(3) REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) PROSPECTUSES. You shall provide us with such number of copies of
each preliminary prospectus, the Prospectus and any supplement thereto relating
to each Offering as we may reasonably request for the purposes contemplated by
the Securities Act and the Securities Exchange Act of 1934 (Exchange Act) and
the applicable Rules and regulations of the Securities and Exchange Commission
thereunder. We represent that we are familiar with Rule 15c2-8 under the
Exchange Act relating to the distribution of preliminary and final prospectuses
and agree that we will comply therewith. We agree to keep an accurate record of
our distribution (including dates, number of copies, and persons to whom sent)
of copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished. We agree to furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under
the Securities Act. We agree that in purchasing Securities in an Offering we
will rely upon no statements whatsoever, written or oral, other than the
statements in the Prospectus delivered to us by you. We will not be authorized
by the issuer or other seller of Securities offered pursuant to a Prospectus or
by any Underwriters to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Securities.
(b) OFFER AND SALE TO THE PUBLIC. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public offering
price, the selling concession, the reallowance (if any) to dealers, and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession, and the reallowance to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
public offering price not in excess of such reallowance may be allowed as
consideration for services rendered in distribution to dealers who are actually
engaged in the investment banking or securities business, who execute the
written agreement prescribed in the investment banking or securities business,
who execute the written agreement prescribed by Rule 2740 of the Rules of
Conduct of the National Association of Securities Dealers, inc. (the "NASD") and
who are either members in good standing of the NASD or foreign brokers or
dealers not eligible
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for membership in the NASD who represent to us that they will promptly reoffer
such Securities at the public offering price and will abide by the conditions
with respect to foreign brokers and dealers set forth in Section 3(e).
(c) STABILIZATION AND OVERALLOTMENT. You may, with respect to any
Offering, be authorized to over-allot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that may designate for long or short account, and to stabilize or maintain the
market price of the Securities. We agree to advise you from time to time upon
request, prior to the termination of the provisions of Section 3(b) with respect
to any Offering, of the amount of Securities purchased by us hereunder remaining
unsold and we will, upon your request, sell to you, for the accounts of the
Underwriters, such amount of Securities as you may designate, at the public
offering price thereof less an amount to be determined by you not in excess of
the concession to dealers. In the event that prior to the later of (i) the
termination of the provisions of Section 3(b) with respect to any Offering, or
(ii) the covering by you of any short position created by you in connection with
such Offering for your account or the account of one or more Underwriters, you
purchase or contract to purchase for the account of any of the Underwriters, in
the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest, and dividends paid in connection with such
purchase or contract to purchase.
(d) OPEN MARKET TRANSACTIONS. We agree to abide by Regulation M under
the Exchange Act and we agree not to bid for, purchase, attempt to purchase, or
sell, directly or indirectly, any Securities, any other Reference Securities (as
defined in Regulation M) of the issuer, or any other securities of such issuer
as you may designate, except as brokers pursuant to unsolicited orders and as
otherwise provided in this Agreement. If the Securities are common stock or
securities convertible into common stock, we agree not to effect, or attempt to
induce others to effect, directly or indirectly, any transactions in or relating
to any stock of such issuer, except to the extent permitted by Rule 101 of
Regulation M under the Exchange Act.
(e) NASD. We represent that we are actually engaged in the investment
banking or securities business and we are either a member in good standing of
the NASD, or, if not such a member, a foreign dealer not eligible for
membership. If we are such a member we agree that in making sales of the
Securities we will comply with all applicable Rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding and
Withholding and Rule 274 of the Conduct Rules. If we are such a foreign dealer,
we agree not to offer or sell any Securities in the United States of America we
agree to comply as though we were a member with such Interpretation and Rule
2730, 2740 and 2750 of the Conduct Rules of the NASD and to comply with Rule
2420 of the Conduct Rules of the NASD as it applies to a nonmember broker or
dealer in a foreign country.
(f) RELATIONSHIP AMONG UNDERWRITERS AND SELECTED DEALERS. You may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with your consent, the
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Underwriters (if any) and the Selected Dealers may purchase Securities from and
sell Securities to each other at the public offering price less all or any part
of the concession. We are not authorized to act as agent for you or any
Underwriter or the issuer or other seller of any Securities in offering
Securities to the public or otherwise. Nothing contained herein or in any
Written Communication from you shall constitute the Selected Dealers partners
with you or any Underwriter or with one another. Neither you nor any Underwriter
shall be under any obligation to us except for obligations assumed hereby or in
any Written Communication from you in connection with any Offering. In
connection with any Offering, we agree to pay our proportionate share of any
claim, demand, or liability asserted against us, and the other Selected Dealers
or any of them, or against you or the Underwriters, if any, based on any claim
that such separate entity, including in each case our proportionate share of any
expense incurred in defending against any such claim, demand, or liability.
(g) BLUE SKY LAWS. Upon application to you, you will inform us as to
the jurisdictions in which you believe the Securities have been qualified for
sale or are exempt under the respective securities or "blue sky" laws of such
jurisdictions. We understand and agree that compliance with the securities or
"blue sky" laws in each jurisdiction in which we shall offer or sell any of the
Securities shall be our sole responsibility and that you assume no
responsibility or obligations as to the eligibility of the Securities for sale
or our right to sell the Securities in any jurisdiction.
(h) COMPLIANCE WITH LAW. We agree that in selling Securities pursuant
to any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities), we will comply with the applicable provisions
of the Securities Act and the Exchange Act, the applicable Rules and regulations
of the Securities and Exchange Commission thereunder, the applicable Rules and
regulations of the NASD, and the applicable Rules and regulations of any
securities exchange having jurisdiction over the Offering. You shall have full
authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
(4) TERMINATION; SUPPLEMENTS AND AMENDMENTS. This Agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any Offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.
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(5) SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified or
indicated in Section 1, and the respective successors and assigns of each of
them.
(6) GOVERNING LAW. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such supplementary terms
and conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually, or as
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 are true and correct at
that time and (iii) confirmation that our agreements set forth in Sections 2 and
3 have been and will be fully performed by us to the extent and at the times
required thereby.
Very truly yours,
------------------------------------
(Name of Firm)
By:
---------------------------------
Confirmed, as of the date first above written.
RYAN BECK & CO., INC.
By:
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