As filed with the Securities and Exchange Commission on December 23, 1999
Registration No. 333-90865
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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EXHIBITS
TO THE
PRE-EFFECTIVE AMENDMENT NO. 1
TO THE
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Connecticut Bancshares, Inc.
(Exact name of registrant as specified in its charter)
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TABLE OF CONTENTS
List of Exhibits (filed herewith unless otherwise noted)
The exhibits and financial statement schedules filed as a part of this
registration statement are as follows:
(a) List of Exhibits (filed herewith unless otherwise noted)
1.1 Engagement Letters between Connecticut Bankshares, M.H.C., The Savings
Bank of Manchester and Sandler O'Neill & Partners, L.P.*
1.2 Form of Agency Agreement between The Savings Bank of Manchester and
Sandler O'Neill & Partners, L.P.
2.1 Amended Provisional Plan of Conversion for Connecticut Bankshares, M.H.C.
and The Savings Bank of Manchester (including the Amended and Restated
Stock Articles of Incorporation and Bylaws of The Savings Bank of
Manchester)*
3.1 Certificate of Incorporation of Connecticut Bancshares, Inc.*
3.2 Bylaws of Connecticut Bancshares, Inc.*
3.3 Amended and Restated Stock Articles of Incorporation and Bylaws of The
Savings Bank of Manchester
(See Exhibit 2.1 hereto)*
4.0 Draft Stock Certificate of Connecticut Bancshares, Inc.*
5.0 Opinion of Muldoon, Murphy & Faucette LLP re: Legality *
8.1 Opinion of Muldoon, Murphy & Faucette LLP re: Federal Tax Matters
8.2 Opinion of Arthur Andersen LLP re: State Tax Matters
10.1 The Savings Bank of Manchester Savings Plan
10.2 The Savings Bank of Manchester Longevity Incentive Plan
10.3 Draft ESOP Loan Commitment Letter and ESOP Loan Documents *
10.4 Form of The Savings Bank of Manchester Employee Stock Ownership Plan Trust
Agreement *
10.5 Form of Employment Agreement between The Savings Bank of Manchester and
certain executive officers *
10.6 Form of Employment Agreement between Connecticut Bancshares, Inc. and
certain executive officers *
10.7 Form of Chairman's Employment Agreement *
10.8 Form of Change in Control Agreement between The Savings Bank of Manchester
and certain executive officers *
10.9 Form of The Savings Bank of Manchester Directors' Consultation Plan *
10.10 Form of The Savings Bank of Manchester Supplemental Executive Retirement
Plan *
10.11 Form of The Savings Bank of Manchester Employee Severance Compensation
Plan *
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Muldoon, Murphy & Faucette LLP *
23.3 Consent of RP Financial LC.*
23.4 Subscription Rights Opinion of RP Financial LC.*
24.1 Powers of Attorney
27.0 Financial Data Schedule *
99.1 Appraisal Report of RP Financial LC. (P) *
99.2 Draft of SBM Charitable Foundation, Inc. Gift Instrument *
99.3 Stock Certification and Order Form
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* Previously filed
(P) Filed pursuant to Rule 202 of Regulation S-T.
Exhibit 1.2
Form of Agency Agreement between
The Savings Bank of Manchester and Sandler O'Neill & Partners, L.P.
12/17/99
13,225,000 Shares
(subject to increase up to 15,208,750 shares
in the event of an oversubscription)
CONNECTICUT BANCSHARES, INC.
(a Delaware corporation)
Common Stock
(par value $0.01 per share)
AGENCY AGREEMENT
January __, 2000
SANDLER O'NEILL & PARTNERS, L.P.
Two World Trade Center, 104th Floor
New York, New York 10048
Ladies and Gentlemen:
Connecticut Bancshares, Inc., a Delaware corporation (the "Company"),
Connecticut Bankshares, M.H.C., a Connecticut-chartered mutual holding company
("M.H.C.") and The Savings Bank of Manchester, a Connecticut-chartered stock
savings bank (the "Bank"), hereby confirm their agreement with Sandler O'Neill &
Partners, L.P. ("Sandler O'Neill" or the "Agent") with respect to the offer and
sale by the Company of 13,225,000 shares (subject to increase up to 15,208,750
shares in the event of an oversubscription described in the Plan of Conversion)
of the Company's Common Stock, par value $0.01 per share (the "Common Stock").
The shares of Common Stock to be sold by the Company are hereinafter called the
"Securities." In addition, as described herein, the Company expects to
contribute shares of Common Stock in an amount equal to eight (8%) of the shares
of Common Stock sold in the Offerings (as hereinafter defined) to the SBM
Charitable Foundation, Inc. (the "Foundation"), such shares hereinafter being
referred to as the "Foundation Shares".
The Securities are being offered for sale and the Foundation Shares are
being contributed in accordance with the Amended Provisional Plan of Conversion
for M.H.C. and the Bank (the "Plan"), adopted by the respective Boards of
Directors of M.H.C. and the Bank and approved by the corporators of M.H.C. on
November 23, 1999, pursuant to which M.H.C. intends to merge with and into the
Bank, with the Bank being the surviving entity of the combination, and the Bank
intends to issue all of its stock to the Company, which intends to become a
savings and loan holding company. Pursuant to the Plan, the Company is offering
to the Bank's tax qualified employee benefit plans, including the Employee Stock
Ownership Plan (the "ESOP") (collectively, the "Employee Plans") and to certain
of the Bank's depositors rights to subscribe for the Securities in a
subscription offering (the "Subscription Offering"). Rights to subscribe
will also be offered to the Bank's officers, directors and employees who do not
have a higher priority right. To the extent Securities are not subscribed for in
the Subscription Offering, such Securities may be offered to certain members of
the general public, with preference given to certain natural persons residing in
the counties in which the Bank's offices are located, in a direct community
offering (the "Community Offering" and together with the Subscription Offering,
as each may be extended or reopened from time to time, the "Subscription and
Community Offering"), which may be commenced concurrently with the Subscription
Offering. It is currently anticipated by the Company, M.H.C. and the Bank that
any Securities not subscribed for in the Subscription and Community Offering
will be offered, subject to Section 2 hereof, in a syndicated community offering
(the "Syndicated Community Offering"). The Subscription and Community Offering
and the Syndicated Community Offering are hereinafter referred to collectively
as the "Offerings," and the merger of M.H.C. with and into the Bank, the
acquisition of the capital stock of the Bank by the Company and the Offerings
are hereinafter referred to collectively as the "Conversion." It is acknowledged
that the number of Securities to be sold in the Conversion may be increased or
decreased as described in the Prospectus (as hereinafter defined). If the number
of Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable. In the
event that a stock holding company form of organization is not utilized, all
pertinent terms of this Agreement will apply to the combination of M.H.C. by
merger, with and into the Bank and the sale of the Bank's common stock.
In connection with the Conversion and pursuant to the terms of the Plan as
described in the Prospectus, the Company has established the Foundation.
Immediately following the consummation of the Conversion, subject to compliance
with such conditions as may be imposed by regulatory authorities, the Company
will contribute newly issued shares of Common Stock in an amount equal to eight
percent (8%) of the Securities sold in the Offering, or between 782,000 and
1,058,000 shares of Common Stock (subject to increase in certain circumstances
to 1,216,700 shares).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-90865), including a
related prospectus, for the registration of the Securities and the Foundation
Shares under the Securities Act of 1933, as amended (the "Securities Act"), has
filed such amendments thereto, if any, and such amended prospectuses as may have
been required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectuses constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be a part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are
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hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be used by the Company
in connection with the Subscription and Community Offering or the Syndicated
Community Offering which differs from the Prospectus on file at the Commission
at the time the Registration Statement became effective (whether or not such
revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Securities Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, M.H.C., the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, M.H.C. and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued that suspends the
effectiveness of the Registration Statement or the use of the
Prospectus or any other offering materials, and no proceedings
therefor have been initiated or, to the knowledge of the
Company, M.H.C. and the Bank, threatened by the Commission. At
the time the Registration Statement became effective and at the
Closing Time referred to in Section 2 hereof, the Registration
Statement complied and will comply in all material respects with
the requirements of the Securities Act and the Securities Act
Regulations and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading. The Prospectus at the date hereof does not, and
at the Closing Time referred to in Section 2 hereof, will not,
include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the
representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity
with information with respect to the Agent furnished to the
Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information"),
which the Company, M.H.C. and the Bank acknowledge appears only
in the sections captioned "The
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Conversion - Syndicated Community Offering," "- Plan of
Distribution for the Subscription, Direct Community and
Syndicated Community Offering" and "- Description of Sales
Activities" of the Prospectus.
(ii) The Company has filed with the Department of the Treasury,
Office of Thrift Supervision (the "OTS") the Company's
application for approval of its acquisition of the Bank (the
"Holding Company Application") on Form H-(e)1-S promulgated
under the savings and loan holding company provisions of the
Home Owners' Loan Act, as amended ("HOLA"), and the regulations
promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank,
such approval remains in full force and effect and no order has
been issued by the OTS suspending or revoking such approval and
no proceedings therefor have been initiated or, to the knowledge
of the Company or the Bank, threatened by the OTS. At the date
of such approval and at the Closing Time referred to in Section
2 hereof, the Holding Company Application complied and will
comply in all material respects with the applicable provisions
of HOLA and the regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the Department of
Banking of the State of Connecticut (the "Department of
Banking"), the Federal Deposit Insurance Corporation ("FDIC"),
or any other governmental agency or regulatory authority having
jurisdiction over the conversion of a Connecticut-chartered
mutual holding company into an interim stock bank and the
combination, by merger or otherwise, of the converted holding
company with and into the Bank, including without limitation,
the terms and conditions described in the letter dated July 9,
1996, from John P. Bourke, Banking Commissioner of the State of
Connecticut, the letter dated May 21, 1996, from the Acting
Associate Director of the FDIC to the Bank's Board of Directors,
and the letter dated April 29, 1996, from Robert M. Brody, Vice
President of the Federal Reserve Bank of Boston to Richard P.
Meduski (collectively, the "Conversion Regulations"), the Bank
has filed an application for conversion with the Department of
Banking and the FDIC, and has furnished a copy of such
application to the Federal Reserve Bank of Boston ("FRB"), and
the Bank has filed such amendments thereto and supplementary
materials as may have been required to the date hereof (such
application, as amended to date, if applicable, and as from time
to time amended or supplemented hereafter, is hereinafter
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referred to as the "Conversion Application"), including copies
of the Bank's Proxy Statement, dated November 12, 1999, relating
to the Conversion (the "Proxy Statement"), and the Prospectus.
The Bank has received written notice from the Banking
Commissioner of its approval of the Plan of Conversion, and has
received a letter of non-objection from the FDIC, and no other
approval, authorization or consent of any governmental agency or
regulatory authority is required in connection with the
Conversion. Such approval and letter of non-objection remain in
full force and effect and no order has been issued by the
Department of Banking, the FDIC or any other governmental agency
or regulatory authority suspending or revoking such approval or
letter of non-objection, and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank,
threatened by the Department of Banking, the FDIC or any other
governmental agency or regulatory authority. At the dates of
such approval or letter of non-objection and at the Closing
Time, the Conversion Application complied and will comply in all
material respects with the applicable provisions of the
Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any other
proxy solicitation materials complied in all material respects
with the applicable provisions of the Conversion Regulations and
did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
The Company, M.H.C. and the Bank will promptly file the
Prospectus and any supplemental sales literature with the
Department of Banking, the FDIC or any other governmental agency
or regulatory authority. The Prospectus and all supplemental
sales literature, as of the date that the Registration Statement
became effective and at the Closing Time, complied and will
comply in all material respects with the applicable requirements
of the Conversion Regulations and, at or prior to the time of
their first use, will have received all required approvals and
authorizations for its use in final form from the Department of
Banking, the FDIC and any other governmental agencies and
regulatory authorities having jurisdiction over the Conversion
or the Offering.
(v) The Commission has not, by order or otherwise, prohibited or
suspended the use of the Prospectus or any supplemental sales
literature authorized by the Company for use in connection with
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the Offerings, and no proceedings for such purposes are pending
or threatened.
(vi) The Conversion, the Offering and the consummation of the
transactions contemplated by this Agreement will comply in all
material respects with the applicable Conversion Regulations and
all other applicable laws, regulations, decisions and orders,
including all material terms, conditions, requirements and
provisions applicable to the Conversion imposed upon the
Company, M.H.C. or the Bank by the Department of Banking, the
FDIC or any other governmental agency or regulatory authority
having jurisdiction over such matters. At the Closing Time, all
of the conditions precedent to the Conversion and the
establishment of the Foundation will have been satisfied as
provided in the Plan and under all other applicable laws,
regulations, decisions and orders, including all material terms,
conditions, requirements and provisions of the Conversion
Regulations, other than those which the regulatory authorities
permit to be completed after the Conversion. The Conversion,
the Offerings and the other transactions contemplated hereby do
not and will not require any material consent, approval,
authorization or permit or filing with or notice to any other
governmental agency or other regulatory authority, except as
disclosed in the Prospectus.
(vii) RP Financial, LC, which prepared the valuation of the Bank as
part of the Conversion, has advised the Company and the Bank in
writing that it satisfies all requirements for an appraiser set
forth in the Conversion Regulations and any interpretations or
guidelines issued by the Department of Banking and the FDIC with
respect thereto.
(viii) The accountants who certified the consolidated financial
statements and supporting schedules of M.H.C. included in the
Registration Statement have advised the Company, M.H.C. and the
Bank in writing that they are independent public accountants
within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants (the "AICPA"), and
such accountants are, with respect to the Company, M.H.C. and
its subsidiaries, independent certified public accountants as
required by the Securities Act and the Securities Act
Regulations.
(ix) The only subsidiary of M.H.C. is the Bank, and the only
subsidiaries of the Bank are SBM, Ltd., a Connecticut
corporation, 923 Main, Inc., a Connecticut corporation, and
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Savings Bank of Manchester Mortgage Company, Inc., a Connecticut
corporation. References herein to "M.H.C. and its consolidated
subsidiaries," to "M.H.C. and its subsidiaries" or to similar
terms shall include all four of the direct and indirect
subsidiaries of M.H.C.
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the
Prospectus present fairly the financial position of the Company
and M.H.C. and its consolidated subsidiaries at the dates
indicated and the results of operations, retained earnings and
cash flows for the periods specified, and comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act Regulations and the
Conversion Regulations; except as otherwise stated in the
Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting
schedules and tables included in the Registration Statement
present fairly the information required to be stated therein.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as
otherwise stated therein (A) there has been no material adverse
change in the financial condition, results of operations or
business affairs of the Company or M.H.C. and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business, and (B) except for transactions
specifically referred to or contemplated in the Prospectus,
there have been no transactions entered into by the Company,
M.H.C. or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to
the Company, M.H.C. and its subsidiaries, considered as one
enterprise.
(xii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement and the transactions
contemplated hereby; the Company has obtained all licenses,
permits and other governmental authorizations currently required
for the conduct of its businesses or required for the conduct of
its business as contemplated by the Holding Company Application
and the Conversion Application and as described in the
Prospectus,
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except where the failure to obtain such licenses, permits or
other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations
or business affairs of the Company and its subsidiaries
considered as one enterprise; all such licenses, permits and
other governmental authorizations are in full force and effect,
and the Company and each of its subsidiaries are in all material
respects in compliance therewith; the Company has not received
notice of any proceeding or action relating to the revocation or
modification of any such license, permit or other governmental
authorization which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, might have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company and its
subsidiaries, considered as one enterprise; and the Company is
duly qualified as a foreign corporation to transact business and
is in good standing in the State of Connecticut and in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a material adverse effect on the financial condition, results of
operations or business affairs of the Company and its
subsidiaries, considered as one enterprise.
(xiii) Upon consummation of the Conversion and the issuance of the
Foundation Shares to the Foundation immediately upon completion
thereof and in the amount described in Plan and the Prospectus,
the authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under
"Capitalization"; no shares of Common Stock have been or will be
issued and outstanding prior to the Closing Time referred to in
Section 2 hereof. Upon consummation of the Conversion, the
Securities will have been duly authorized for issuance and sale
and, when issued and delivered by the Company pursuant to the
Plan against payment of the consideration described in the Plan
and stated on the cover page of the Prospectus, will be duly and
validly issued and fully paid and non-assessable; the terms and
provisions of the Common Stock and the capital stock of the
Company conform to all statements relating thereto contained in
the Prospectus; the certificates representing the shares of
Common Stock conform to the requirements of applicable law and
regulations; and the issuance of the Securities is not subject
to preemptive or other similar rights.
(xiv) M.H.C. has been duly organized as a Connecticut-chartered
mutual holding company and the Bank has been duly organized
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as a Connecticut-chartered stock savings bank, and upon
consummation of the Conversion, M.H.C. will have converted into
an interim stock savings bank and merged with and into the Bank,
with the Bank being the surviving entity and being Connecticut-
chartered stock savings bank, in both instances with full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and to enter into and perform their respective
obligations under this Agreement and the transactions
contemplated hereby; M.H.C. and each of its subsidiaries have
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of their
respective businesses or required for the conduct of their
respective businesses as contemplated by the Holding Company
Application and the Conversion Application and as described in
the Prospectus, except where the failure to obtain such
licenses, permits or other governmental authorizations would not
have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, M.H.C.
and its subsidiaries considered as one enterprise; all such
licenses, permits and other governmental authorizations are in
full force and effect and the Company, M.H.C. and each of its
subsidiaries are in all material respects in compliance
therewith; neither the Company, M.H.C. or any of its
subsidiaries has received notice of any proceeding or action
relating to the revocation or modification of any such license,
permit or other governmental authorization which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling
or finding, might have a material adverse effect on the
financial condition, results of operations or business affairs
of the Company, M.H.C. and its subsidiaries, considered as one
enterprise; and each of M.H.C. and the Bank is in good standing
under the laws of the State of Connecticut and is duly qualified
to transact business as a foreign corporation in any
jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, M.H.C. and its
subsidiaries considered as one enterprise.
(xv) The Bank is a member in good standing of the Federal Home Loan
Bank of Boston; the deposit accounts of the Bank are insured by
the FDIC up to the applicable limits; and upon consummation of
the Conversion, the liquidation account for the benefit of
eligible account holders will be duly established in accordance
with the requirements of the Conversion Regulations.
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The Bank is a "qualified thrift lender" within the meaning of 12
U.S.C. Section 1467a(m).
(xvi) The authorized capital stock of the Bank on the date hereof is
____ shares of common stock, without par value, and ____ shares
of preferred stock without par value, and the issued and
outstanding capital stock of the Bank is _____ shares, all of
which are owned beneficially and of record by M.H.C., free and
clear of any security interest, mortgage, pledge, lien,
encumbrance or legal or equitable claim. Upon consummation of
the Conversion, M.H.C. will have been merged with and into the
Bank, with the Bank being the surviving entity and being a
Connecticut-chartered stock savings bank, and the authorized
capital stock of the Bank will be 10,000 shares of common stock,
without par value (the "Bank Common Stock"), and 1,000 shares of
preferred stock, without par value (the "Bank Preferred Stock"),
and the issued and outstanding capital stock of the Bank will be
1,000 shares of Bank Common Stock; and no additional shares of
Bank Common Stock or any shares of Bank Preferred Stock will be
issued on or after the date hereof and prior to the Closing Time
referred to in Section 2 hereof. As of Closing Time referred to
Section 2 hereof, all of the issued and outstanding capital
stock of the Bank will be duly authorized, validly issued and
fully paid and nonassessable and have been issued in compliance
with all federal and state securities laws. The shares of Bank
Common Stock to be issued to the Company will have been duly
authorized for issuance and, when issued and delivered by the
Bank pursuant to the Plan against payment of the consideration
described in the Plan and in the Prospectus, will be duly and
validly issued and fully paid and nonassessable, and all such
Bank Common Stock will be owned beneficially and of record by
the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or legal or equitable claim; the terms
and provisions of the Bank Common Stock and the Bank Preferred
Stock conform to all statements relating thereto contained in
the Prospectus, and the certificates representing the shares of
the Bank Common Stock will conform with the requirements of
applicable laws and regulations; and the issuance of the Bank
Common Stock is not subject to preemptive or similar rights.
(xvii) The establishment of the Foundation and the contribution of
the Company's shares of common stock as described in the
Prospectus have been duly authorized by all necessary corporate
action, and the Foundation has been duly incorporated and is
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validly existing as a nonstock corporation in good standing
under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; the
Foundation will not be a savings and loan holding company within
the meaning of 12 C.F.R. Section 574.2(q) as a result of the
issuance of shares of Common Stock to it in accordance with the
terms and conditions of the Plan and in the amounts as described
in the Prospectus; no approvals or authorizations are required
to establish the Foundation and contribute the shares of Common
Stock thereto as described in the Plan and the Prospectus, other
than those imposed by the Department of Banking and the FDIC;
except as specifically disclosed in the Prospectus; there are no
agreements and/or understandings, written or oral, between the
Company, M.H.C. or any of its subsidiaries, on the one hand, and
the Foundation, on the other hand, with respect to the control,
directly or indirectly, over the voting and the acquisition or
disposition of the Foundation Shares; at the time of the
Conversion, the Foundation Shares will have been duly authorized
for issuance and, when issued and contributed by the Company
pursuant to the Plan and as described in the Prospectus, will be
duly and validly issued and fully paid and non-assessable; and
the issuance of the Foundation Shares is not subject to
preemptive or similar rights.
(xviii) Each direct and indirect subsidiary of the Bank has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus; each
such subsidiary has obtained all licenses, permits and other
governmental authorizations currently required for the conduct
of its businesses or required for the conduct of its business as
described in the Prospectus, except where the failure to obtain
such licenses, permits or other governmental authorizations
would not have a material adverse effect on the financial
condition, results of operations or business affairs of the Bank
and its subsidiaries considered as one enterprise; all such
licenses, permits and other governmental authorizations are in
full force and effect and each of such subsidiaries are in all
material respects in compliance therewith; neither the Bank nor
any of such subsidiaries has received notice of any proceeding
or action relating to the revocation or modification of any such
license, permit or other governmental authorization which,
singly or in the aggregate, if
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the subject of an unfavorable decision, ruling or and is duly
qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a material adverse effect on the financial condition, results of
operations or business affairs of the Bank and its subsidiaries
considered as one enterprise; the activities of each such
subsidiary are permitted to subsidiaries of a state chartered
savings bank by the rules, regulations, resolutions and
practices of the Department of Banking, the FDIC and all other
governmental agencies and regulatory authorities having
jurisdiction over the Conversion; all of the issued and
outstanding capital stock of each such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable
and is owned by the Bank, directly, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal
or equitable claim; and each such subsidiary is in good standing
under the laws of the jurisdiction of its organization and is
duly qualified to transact business as a foreign corporation in
any jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, results of
operations or business affairs of the Bank and its subsidiaries
considered as one enterprise.
(xix) Savings Bank of Manchester Foundation, Inc. has been duly
incorporated and is validly existing as a nonstock corporation
in good standing under the laws of the State of Connecticut with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as it is currently being
conducted.
(xx) The Company, M.H.C. and the Bank have taken all corporate action
necessary for them to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated
hereby, and no other corporate proceedings by any of them are
necessary to authorize any of such actions; and this Agreement
has been duly executed and delivered by, and is the valid and
binding agreement of, the Company, M.H.C. and the Bank,
enforceable against each of them in accordance with its terms,
except as may be limited by bankruptcy, insolvency or other laws
affecting the enforceability of the rights of creditors
generally and judicial limitations on the right of specific
performance and except to the extent that the enforceability of
-12-
indemnification and contribution provisions may be limited by
applicable securities laws.
(xxi) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior
to the Closing Time, except as otherwise may be indicated or
contemplated therein, none of the Company, M.H.C. or any of its
subsidiaries will have (A) issued any securities or incurred any
liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business from
the same or similar sources and in similar amounts as indicated
in the Prospectus, or (B) entered into any transaction or series
of transactions which is material in light of the business of
the Company, M.H.C. and its subsidiaries, taken as a whole,
excluding the origination, purchase and sale of loans or the
purchase or sale of investment securities or mortgaged-backed
securities by the Bank in the ordinary course of its business.
(xxii) No approval of any governmental agency or other regulatory
authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Securities and
the Foundation Shares that has not been obtained and a copy of
which has been delivered to the Agent, except as may be required
under the securities laws of various jurisdictions.
(xxiii) Neither the Company, nor M.H.C. or any of its subsidiaries is
in violation of its charter or bylaws (and upon conversion, the
Bank will not be in violation of the amended and restated
articles of incorporation or bylaws set forth in the Plan; and
neither the Company nor M.H.C. or any of its subsidiaries is in
default (nor has any event occurred which, with notice or lapse
of time or both would constitute a default) in the performance
or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company,
M.H.C. or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or
assets of the Company, M.H.C. or any of its subsidiaries is
subject, except for such defaults that would not, individually
or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business of the
Company, M.H.C. and its subsidiaries considered as one
enterprise; and there are no contracts or documents of the
Company, M.H.C. or any of their subsidiaries which are required
to be filed as exhibits to the
-13-
Registration Statement or the Conversion Application which have
not been so filed.
(xxiv) The execution, delivery and performance of this Agreement, the
making of the Offerings, and the consummation of the Conversion
and the other transactions contemplated hereby have been duly
authorized by all necessary corporate action and do not and will
not (i) conflict with or violate the charter or bylaws of the
Company, M.H.C. or the Bank; (ii) conflict with or violate any
federal, state or local law or regulation or any order, decree,
judgment or decree applicable to the Company, M.H.C. or the Bank
or by which any of their property or assets are bound or
affected; or (iii) constitute a breach of, or default (or an
event which, with notice or lapse of time or both would
constitute a default) under, or give any other person any right
of termination, amendment, acceleration or cancellation of, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, M.H.C.
or the Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company,
M.H.C. or the Bank is a party or by which it or any of them may
be bound, or to which any of the property or assets of the
Company, M.H.C. or the Bank is subject, except for such defaults
that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of
operations or business affairs of the Company, M.H.C. and its
subsidiaries considered as one enterprise.
(xxv) No labor dispute with the employees of the Company, M.H.C. or
any of its subsidiaries exists or, to the knowledge of the
Company, M.H.C. or the Bank, is imminent or threatened; and the
Company, M.H.C. and the Bank are not aware of any existing or
threatened labor disturbance by the employees of any of their
principal suppliers or contractors which might be expected to
result in any material adverse change in the financial
condition, results of operations or business affairs of the
Company, M.H.C. and its subsidiaries considered as one
enterprise.
(xxvi) Each of the Company, M.H.C. and its subsidiaries have good and
marketable title to all properties and assets for which
ownership is material to the business of the Company, M.H.C. or
its subsidiaries and to those properties and assets described in
the Prospectus as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are
-14-
described in the Prospectus or are not material in relation to
the business of the Company, M.H.C. or its subsidiaries
considered as one enterprise; and all of the leases and
subleases material to the business of the Company, M.H.C. or its
subsidiaries under which the Company, M.H.C. or its subsidiaries
hold properties, including those described in the Prospectus,
are valid and binding agreements of the Company, M.H.C. and its
subsidiaries, enforceable in accordance with their terms (except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights or
general principles of equity).
(xxvii) None of the Company, M.H.C. nor its subsidiaries is in
violation of any order or direction from the Department of
Banking, the FDIC or any other governmental agency or regulatory
authority to make any material change in the method of
conducting their respective businesses; M.H.C. and its
subsidiaries have conducted and are conducting their business so
as to comply in all material respects with all applicable
statutes, regulations, administrative orders and court decrees
(including, without limitation, all regulations, decisions,
directives and orders of the Department of Banking, the FDIC and
other governmental agencies and regulatory authorities).
(xxviii) There is no action, suit or proceeding before or by any
court or governmental agency or regulatory authority, domestic
or foreign, now pending, or, to the knowledge of the Company,
M.H.C. or the Bank, threatened, against or affecting the
Company, M.H.C. or any of its subsidiaries which is required to
be disclosed in the Registration Statement (other than as
disclosed therein), or which might result in any material
adverse change in the financial condition, results of operations
or business affairs of the Company, M.H.C. and its subsidiaries
considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of the
Conversion or the Offerings; all pending legal or governmental
proceedings to which the Company, M.H.C. or any subsidiary is a
party or of which any of their respective property or assets is
the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to
the business, are considered in the aggregate not material; and
there are no contracts or documents of the Company, M.H.C. or
any of its subsidiaries which are required to be filed as
exhibits to the
-15-
Registration Statement or the Conversion Application which have
not been so filed.
(xxix) The Company, M.H.C. and the Bank will obtain at the Closing
Time an opinion of their counsel, Muldoon, Murphy & Faucette,
LLP, with respect to the legality of the Securities to be issued
and the Foundation Shares and the federal income tax
consequences of the Conversion, and an opinion from Arthur
Andersen LLP regarding state and local income tax (including
franchise tax, sales or use tax, license fee on foreign
corporations, stock transfer tax, real property transfer gain
tax and real estate transfer tax), drafts of which have been
filed as exhibits to the Registration Statement; all material
aspects of the aforesaid opinions are accurately summarized in
the Prospectus; the facts and representations upon which such
opinions are based are truthful, accurate and complete in all
material respects; and none of the Company, M.H.C. or the Bank
has taken or will take any action inconsistent therewith.
(xxx) The Company will not be required as a result of the Conversion
to be registered under the Investment Company Act of 1940, as
amended.
(xxxi) All of the loans represented as assets on the most recent
consolidated financial statements or consolidated selected
financial information of the Bank included in the Prospectus
meet all requirements of federal, state and local laws, unless
exempt, pertaining to lending, including without limitation
truth in lending (including the requirements of Regulations Z
and 12 C.F.R. Part 226 and Section 563.99), real estate
settlement procedures, consumer credit protection, equal credit
opportunity and all disclosure laws applicable to such loans,
except for violations which, if asserted, would not result in a
material adverse effect on the financial condition, results of
operations or business of the Company, M.H.C. and its
subsidiaries considered as one enterprise.
(xxxii) To the knowledge of the Company, M.H.C. and the Bank, with
the exception of the intended loan to the Bank's ESOP by the
Company to enable the ESOP to purchase shares of Common Stock in
an amount of up to eight percent (8%) of the Common Stock issued
in the Conversion, none of the Company, M.H.C., the Bank or
employees of any of them has made any payment of funds of the
Company or the Bank as a loan for the purchase of the Common
Stock or made any other payment of funds
-16-
prohibited by law, and no funds have been set aside to be used
for any payment prohibited by law.
(xxxiii) The Company, M.H.C. and its subsidiaries are in compliance
in all material respects with the applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transaction Reporting Act of 1970, as amended, and the
rules and regulations thereunder.
(xxxiv) None of the Company, M.H.C. nor its subsidiaries nor any
properties owned or operated by the Company, M.H.C. or its
subsidiaries is in violation of or liable under any
Environmental Law (as defined below), except for such violations
or liabilities that, individually or in the aggregate, would not
have a material adverse effect on the financial condition,
results of operations or business affairs of the Company, M.H.C.
and its subsidiaries considered as one enterprise. There are no
actions, suits or proceedings, or demands, claims, notices or
investigations (including, without limitation, notices, demand
letters or requests for information from any environmental
agency) instituted or pending, or to the knowledge of the
Company, M.H.C. or the Bank threatened, relating to the
liability of any property owned or operated by the Company,
M.H.C. or any of its subsidiaries under any Environmental Law.
None of the properties owned or operated by the Company, M.H.C.
or its subsidiaries has been included in the description of
contiguous real estate within the past three years on which
"Hazardous Substances" have been "Released" (as such terms are
defined in the Environmental Laws), or are otherwise subject to
the provisions of the Connecticut "Superlien" statute, Section
22a-452a of the Connecticut General Statutes, and none of the
foregoing properties are an "Establishment" under the
Connecticut Transfer Act (S) 22a-134 et seq. of the Connecticut
-- ---
General statutes. For purposes of this Subsection, the term
"Environmental Law" means any federal, state, local or foreign
law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, order, judgment,
decree, injunction or agreement with any regulatory authority
relating to (i) the protection, preservation or restoration of
the environment (including, without limitation, air, water,
vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of any
substance presently listed, defined,
-17-
designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance
as a component. Such laws include, without limitation, the
Resource Conservation and Recovery Act, 42 U.S.C. (S)(S) 6901,
et seq.; the Emergency Planning and Community Right to Know Act,
-- ---
42 U.S.C. (S)(S) 11001, et seq.; the Occupational Safety and
-- ---
Health Act, 29 U.S.C. (S)(S) 651, et seq., the Comprehensive
-- ---
Environmental Responsibility, Compensation and Liability Act, 42
U.S.C. (S) 9601 et seq. including the Asset Conservation Lender
-- ---
Liability, and Deposit Insurance Protection Act of 1996, (S)42
U.S.C. (S) 9607(n); the Clean Air Act, 42 U.S.C. (S)(S) 7401,
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
-- ---
(S)(S) 1801, et seq.; the Toxic Substance Control Act, 15
-- ---
U.S.C. (S)(S) 2601, et seq.; the Federal Insecticide Fungicide
-- ---
and Rodenticide Act, 7 U.S.C. (S)(S) 136, et seq.; the Clean
-- ---
Water Act, 33 U.S.C. (S)(S) 1251 et seq.; the Safe Drinking
-- ---
Water Act, 42 U.S.C. (S)(S) 300f, et seq.; and Title 22a of the
-- ---
Connecticut General Statutes, all as amended and effective on
the date hereof or the Closing Time, as the case may be.
(xxxv) The Company, M.H.C. and its subsidiaries have filed all
federal income and state and local franchise tax returns
required to be filed and have made timely payments of all taxes
shown as due and payable in respect of such returns, and no
deficiency has been asserted with respect thereto by any taxing
authority.
(xxxvi) The Company has received all approvals required to consummate
the Conversion and the Offerings, and to have the Securities
listed on the Nasdaq National Market, effective as of the
Closing Time.
(xxxvi) The Company has filed a registration statement for the
Securities under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and such registration
statement was declared effective concurrent with the
effectiveness of the Registration Statement.
(b) Any certificate signed by any officer of the Company, M.H.C. or the
Bank and delivered to either of the Agent or to counsel for the Agent
shall be deemed a representation and warranty by the Company, M.H.C.
or the Bank to the Agent as to the matters covered thereby.
-18-
SECTION 2. APPOINTMENT OF SANDLER O'NEILL; SALE AND DELIVERY OF THE SECURITIES;
CLOSING.
On the basis of the representations, warranties and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
hereby appoints Sandler O'Neill as its Agent to consult with and advise the
Company, and to assist the Company with the solicitation of subscriptions and
purchase orders for the Securities, in connection with the Company's sale of
Common Stock in the Subscription and Community Offering and the Syndicated
Community Offering. On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, Sandler
O'Neill accepts such appointment and agrees to use its best efforts to assist
the Company with the solicitation of subscriptions and purchase orders for the
Securities in accordance with this Agreement; provided, however, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler O'Neill pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
of Conversion or related corporate documents; (ii) reviewing with the Board of
Directors the independent appraiser's appraisal of the common stock; (iii)
reviewing all offering documents, including the Prospectus, stock order form and
related offering materials (it being understood that preparation and filing of
such documents is the sole responsibility of the Company, M.H.C., the Bank and
their counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting the Company, M.H.C. and the Bank in
their obtaining all requisite regulatory approvals; (vi) assisting management in
preparing for meetings with potential investors and broker-dealers; and (vii)
providing such other general advice and assistance as may be requested to
promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) forty-five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the FDIC and the Department of Banking agree to extend the
period of time in which the Shares may be sold, or (b) the receipt and
acceptance of subscriptions and purchase orders for all of the Securities, or
(c) the completion of the Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler O'Neill will seek to form a syndicate of registered brokers or dealers
("Selected Dealers") to assist in the solicitation of purchase orders for such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
O'Neill will endeavor to limit the aggregate fees to be paid by the Company and
the Bank, under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market
-19-
environment; provided, however, that the aggregate fees payable to Sandler
O'Neill and Selected Dealers shall not exceed six percent (6%) of the aggregate
dollar amount actually paid for all of the Securities sold by such Selected
Dealers (the "Purchase Price"). Sandler O'Neill will endeavor to distribute the
Securities among the Selected Dealers in a fashion which best meets the
distribution objectives of the Company and the requirements of the Plan, which
may result in limiting the allocation of stock to certain Selected Dealers. It
is understood that in no event shall Sandler O'Neill be obligated to act as a
Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the minimum number of
Securities set forth on the cover page of the Prospectus within the period
herein provided, this Agreement shall terminate and the Company shall refund to
any persons who have subscribed for any of the Securities the full amount which
it may have received from them, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation to the
others hereunder, except for the obligations of the Company, M.H.C. and the Bank
as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent
as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing
the funds received from subscriptions for the Securities or other offers to
purchase the Securities in special interest-bearing accounts with the Bank until
the Securities are sold and paid for were made by the Company prior to the
commencement of the Subscription Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all Securities
are sold.
If at least the minimum number of Securities set forth on the cover page of
the Prospectus are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing account referred to above. The closing shall be held at the
Washington, D.C. offices of Muldoon, Murphy & Faucette LLP, at 10:00 a.m., local
time, or at such other place and time as shall be agreed upon by the parties
hereto, on a business day to be agreed upon by the parties hereto. The Company
shall notify the Agent by telephone, confirmed in writing, when funds shall have
been received for all the Securities. Certificates for Securities shall be
delivered directly to the purchasers thereof in accordance with their
directions. Notwithstanding the foregoing, certificates for Securities
purchased through Selected Dealers shall be made available to the Agent for
inspection at least 48 hours prior to the Closing Time at such office as the
Agent shall designate. The hour and date upon which the Company shall release
for delivery all of the Securities, in accordance with the terms hereof, is
herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to the reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
-20-
(a) One and one-half percent (1.5%) of the Purchase Price for the
Securities sold in the Subscription and Community Offering, excluding
in each case shares purchased by (i) any employee benefit plan of the
Company or the Bank established for the benefit of their respective
directors, officers and employees, (ii) by any foundation or
charitable organization established by the Company or the Bank in
connection with the Conversion, and (iii) any director, officer or
employee of the Company or the Bank or members of their immediate
families (which term shall mean parents, grandparents, spouse,
siblings, children and grandchildren); and
(b) With respect to any Securities sold by an NASD member firm (other than
Sandler O'Neill) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the compensation payable to
Selected Dealers under any Selected Dealers' Agreement, (ii) any
sponsoring dealer's fees; and (iii) a management fee to Sandler
O'Neill of one and one-half percent (1.5%) of the Purchase Price of
Securities sold in the Syndicated Community Offering. Any fees
payable to Sandler O'Neill for Securities sold by Sandler O'Neill
under any such agreement shall be limited to an aggregate of six
percent (6%) of the Purchase Price for such Securities.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Plan is terminated by the Boards of
Directors of M.H.C. and the Bank, no fee shall be payable by the Company to
Sandler O'Neill; however, the Company shall reimburse the Agent for all of its
reasonable out-of-pocket expenses incurred prior to termination, including the
reasonable fees and disbursements of counsel for the Agent in accordance with
the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of fifty thousand dollars ($50,000), twenty-five thousand
dollars ($25,000) of which has been previously paid and the remaining twenty-
five thousand ($25,000) of which shall be payable upon commencement of the
Subscription Offering, which shall be credited against any fees or reimbursement
of expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY.
The Company, M.H.C. and the Bank covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement and the Prospectus as may
hereafter be required by the Securities Act Regulations or the
Conversion Regulations or as may hereafter be requested by the Agent.
-21-
Following completion of the Subscription and Community Offering, in
the event of a Syndicated Community Offering, the Company and the Bank
will (i) promptly prepare and file with the Commission a post-
effective amendment to the Registration Statement relating to the
results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if no such post-effective
amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and Community
Offering and pricing information pursuant to Rule 424 of the
Securities Act Regulations, in either case in a form acceptable to the
Agent. The Company and the Bank will notify the Agent immediately,
and confirm the notice in writing, (i) of the effectiveness of any
post-effective amendment of the Registration Statement, the filing of
any supplement to the Prospectus, (ii) of the receipt of any comments
from the Commission with respect to the transactions contemplated by
this Agreement or the Plan, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, and (v) of the receipt of any notice
with respect to the suspension of any qualification of the Securities
for offering or sale in any jurisdiction. The Company and the Bank
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of their intention
to file or prepare any amendment to the Conversion Application or the
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use in connection with the
Syndicated Community Offering which differs from the prospectus on
file at the Commission at the time the Registration Statement became
effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the Securities Act Regulations), will
furnish the Agent with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment or supplement or use
any such prospectus to which the Agent or counsel for the Agent may
object.
(c) The Company, M.H.C. and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Conversion
Application and the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
-22-
incorporated by reference therein) as the Agent may reasonably
request, and from time to time such number of copies of the Prospectus
as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered, the
Company and the Bank will comply, at their own expense, with all
requirements imposed by the applicable Conversion Regulation's and the
Securities Act, the Securities Act Regulations, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission promulgated thereunder, including,
without limitation, Regulation M under the Exchange Act, insofar as
compliance with such Regulation M is necessary to permit the
continuance of sales or dealing in shares of Common Stock during such
period.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or
supplement the Registration Statement or Prospectus in order to make
the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company and
the Bank will forthwith amend or supplement the Registration Statement
or Prospectus (in form and substance satisfactory to counsel for the
Agent) so that, as so amended or supplemented, the Registration
Statement or Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading,
and the Company and the Bank will furnish to the Agent a reasonable
number of copies of such amendment or supplement. For the purpose of
this subsection, the Company, M.H.C. and the Bank will each furnish
such information with respect to itself as the Agent may from time to
time reasonably request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and
sale under the applicable securities laws of such states of the United
States and other jurisdictions as the Conversion Regulations may
require and as the Agent and the Company have agreed; provided,
however, that the Company and the Bank shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In
each jurisdiction in which the Securities have been so qualified, the
Company and the Bank will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
-23-
(g) The Company authorizes Sandler O'Neill and any Selected Dealers to act
as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be
offered Securities having record addresses in the states or
jurisdictions set forth in a survey of the securities or "blue sky"
laws of the various jurisdictions in which the Offerings will be made
(the "Blue Sky Survey").
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than sixty (60) days after the
close of the period covered thereby, an earnings statement (complying
with the provisions of Rule 158 of the Securities Act Regulations)
covering a twelve month period beginning not later than the first day
of the Company's fiscal quarter next following the effective date (as
defined in said Rule 158) of the Registration Statement.
(i) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its
stockholders as soon as practicable after the end of each such fiscal
year an annual report (including consolidated statements of condition
and consolidated statements of operations, changes in capital and cash
flows, certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company, the Bank and its subsidiaries
for such quarter in reasonable detail. In addition, such annual
report and quarterly consolidated summary financial information shall
be made public through the issuance of appropriate press releases at
the same time or prior to the time of the furnishing thereof to
stockholders of the Company.
(j) During the period ending on the third anniversary of the expiration of
the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i)
as soon as publicly available, a copy of each report or other document
of the Company furnished generally to stockholders of the Company or
furnished to or filed with the Commission under the Exchange Act or
any national securities exchange or system on which any class of
securities of the Company is listed, and (ii) from time to time, such
other information concerning the Company as the Agent may reasonably
request.
(k) The Bank will notify the Agent immediately, and confirm the notice in
writing, of (i) the occurrence of any event which would cause the
Company, M.H.C. or the Bank to withdraw, rescind, amend or terminate
the Plan or the Offerings, (ii) any proposal or requirement to
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prepare, amend or supplement the Registration Statement or Prospectus,
the Conversion Application or the Holding Company Application; (iii)
the issuance of any order or direction (oral or written), or the
taking of any other action by the Commission or any other government
agency or regulatory authority concerning the Plan, the Conversion or
the Offerings or any of the transactions contemplated hereby; (iv) all
material developments regarding any other approvals or consents
described in the Prospectus or herein; (v) the time when any amendment
to the Registration Statement, Conversion Application or Holding
Company Application has been filed or becomes effective, or that any
amendment or supplement to the Prospectus has been used or been filed;
(v) the receipt of any comments from the Commission or any other
government agency or regulatory authority relating to the Registration
Statement or the Offerings or the other transactions contemplated
hereby; (vi) the issuance by the Commission of any stop order or any
other order prohibiting or suspending the use of the Prospectus or any
other offering materials; (vii) the suspension of the qualification of
the Securities in any jurisdiction, and (viii) any other information
relating to the Conversion or the Offerings that the Agent may from
time to time reasonably request.
(l) The Bank will give the Agent notice of its intention to file or
prepare any amendment or supplement to the Conversion Application and
will furnish the Agent with copies of any such amendment or supplement
a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement or
use any such prospectus to which the Agent or counsel for the Agent
may object. The Company, M.H.C. and the Bank will comply, at their
own expense, with all requirements imposed by the Department of
Banking, the FDIC and all other governmental agencies and regulatory
authorities, or pursuant to the applicable Conversion Regulations, as
from time to time in force.
(m) The Company, M.H.C. and the Bank will conduct the Conversion including
the formation and operation of the Foundation in all material respects
in accordance with the Plan, the Conversion Regulations and all other
applicable regulations, decisions and orders, including all applicable
terms, requirements and conditions precedent to the Conversion imposed
upon the Company, M.H.C. or the Bank by the Department of Banking, the
FDIC and all other governmental agencies and regulatory authorities.
(n) The Company will promptly inform the Agent of any material litigation
or administrative action with respect to the Conversion or the
Offering.
(o) The Company and the Bank will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
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(p) The Company will report the use of proceeds from the Offerings as
required by Rule 463 of the Securities Act Regulations.
(q) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company
will file with the Nasdaq National Market all documents and notices
required for the listing of the Securities on the NASDAQ National
Market.
(r) The Company and the Bank 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 National Association of Securities
Dealers, Inc.'s "Interpretation Relating to Free-Riding and
Withholding."
(s) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior
written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock other than the
Securities for a period of 180 days following the Closing Time.
(t) During the period beginning on the date hereof and ending on the later
of the third anniversary of the Closing Time or the date on which the
Agent receives full payment in satisfaction of any claim for
indemnification or contribution to which it may be entitled pursuant
to Section 6 or 7, respectively, neither the Company nor the Bank
shall, without the prior written consent of the Agent, take or permit
to be taken any action that could result in the Bank's capital stock
becoming subject to any security interest, mortgage, pledge, lien or
encumbrance; provided, however, that this covenant shall be null and
void if the OTS, by regulation, policy statement or interpretive
release, or by written order or written advice addressed to the
Company, M.H.C., the Bank or the Agent specifically addressing the
provisions of Section 6(a) hereof, permits indemnification of the
Agent by the Company, M.H.C. and the Bank as contemplated by such
provisions.
(u) The Company, M.H.C. and the Bank will comply with the conditions
imposed by or agreed to with the OTS in connection with its approval
of the Holding Company Application and with the Department of Banking,
the FDIC or any other governmental agency or regulatory authority in
connection with their approval, or non-objection to, the Conversion
Application, including those conditions relating to the establishment,
funding and operation of the Foundation.
(v) The Company, M.H.C. and the Bank shall use their best efforts to
ensure that the Foundation submits within the time frames required by
-26-
applicable law a request to the Internal Revenue Service to be
recognized as a tax-exempt organization under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"); the Company,
M.H.C. and the Bank will take no action which will result in the
possible loss of the Foundation's tax exempt status; and none of the
Company, M.H.C. or the Bank will contribute any additional assets to
the Foundation until such time that such additional contributions will
be deductible for federal and state income tax purposes.
(w) During the period ending on the first anniversary of the Closing Time
referred to in Section 2 hereof, the Bank will comply with all
applicable law and regulations necessary for the Bank to continue to
be a "qualified thrift lender" within the meaning of 12 U.S.C. Section
1467a(m).
(x) The Company shall not deliver the Securities until the Company, M.H.C.
and the Bank have satisfied each condition set forth in Section 5
hereof, unless such condition is waived in writing by the Agent.
(y) The Company or the Bank will furnish to Sandler O'Neill as early as
practicable prior to the Closing Date, but no later than two (2) full
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of M.H.C. and its
subsidiaries which have been read by Arthur Andersen, LLP, as stated
in their letters to be furnished pursuant to subsections (e) and (f)
of Section 5 hereof.
SECTION 4. PAYMENT OF EXPENSES.
The Company, M.H.C. and the Bank jointly and severally agree to pay all
expenses incident to the performance of their obligations under this Agreement,
including but not limited to (i) the cost of obtaining all securities, bank
regulatory and other governmental approvals, (ii) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (iii)
the preparation, issuance and delivery of the certificates for the Securities to
the purchasers in the Offerings, (iv) the fees and disbursements of counsel to
the Company, M.H.C. and the Bank, and fees and disbursements of accountants,
appraisers and other advisors to the Company, M.H.C. and the Bank, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, and (viii) the fees and expenses incurred in connection with the listing
of the Securities on the Nasdaq National Market. In the event the Agent incurs
any such fees and expenses on behalf of the Bank, M.H.C. or the Company, M.H.C.
-27-
and the Bank will reimburse the Agent for such fees and expenses whether or not
the Conversion is consummated; provided, however, that the Agent shall not incur
any substantial expenses on behalf of M.H.C., the Bank or the Company pursuant
to this Section without the prior approval of the Bank.
The Company, M.H.C. and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph of
this Section 4 shall be due and payable upon receipt by the Company, M.H.C. or
the Bank of a written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
The Company, M.H.C., the Bank and the Agent agree that the issuance and
sale of the Securities and all obligations of the Agent hereunder are subject to
the accuracy of the representations and warranties of the Company, M.H.C. and
the Bank herein contained as of the date hereof and the Closing Time, to the
accuracy of the statements of officers and directors of the Company, M.H.C. and
the Bank made pursuant to the provisions hereof, to the performance by the
Company, M.H.C. and the Bank of their obligations hereunder, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or
proceedings therefor initiated or threatened by the Commission, no
order suspending the Offerings or authorization for final use of the
Prospectus shall have been issued or proceedings therefor initiated or
threatened by the Department of Banking, the FDIC or any other
government agency or regulatory authority and no order suspending the
sale of the Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Muldoon,
Murphy & Faucette, LLP, counsel for the Company, M.H.C. and the
Bank, in form and substance satisfactory to counsel for the
Agent, to the effect that:
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(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware.
(ii) The Company has full corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the
Prospectus and to enter into and perform its obligations
under this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of
Connecticut and in each other jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a
material adverse effect upon the financial condition,
results of operations or business affairs of the Company and
its subsidiaries, considered as one enterprise.
(iv) Upon consummation of the Conversion and the issuance of the
Foundation Shares to the Foundation immediately upon
completion thereof and in the amount described in the
Prospectus, and in compliance with all of the conditions
imposed upon the contribution thereof by the Department of
Banking, the FDIC and all other bank regulatory authorities,
the authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under
"Capitalization," and no shares of Common Stock have been
issued and were outstanding prior to the Closing Time.
(v) The Securities and the Foundation Shares have been duly and
validly authorized for issuance and sale and, when issued
and delivered by the Company pursuant to the Plan against
payment of the consideration as described in the Plan and on
the cover page of the Prospectus, or contributed by the
Company pursuant to the Plan in the case of the Foundation
Shares, will be duly and validly issued and fully paid and
non-assessable.
(vi) The issuance of the Securities and the Foundation Shares is
not subject to preemptive or other similar rights arising by
operation of law or, to the best of their knowledge
otherwise.
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(vii) Each of M.H.C. and the Bank has been duly organized and is
validly existing and in good standing under the laws of the
State of Connecticut as a Connecticut-chartered mutual
holding company and stock savings bank, respectively, with
full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in
the Registration Statement and the Prospectus; and each of
M.H.C. and the Bank is duly qualified as a foreign
corporation in each jurisdiction in which the failure to so
qualify would have a material adverse effect upon the
financial condition, results of operations or business
affairs of M.H.C. and its subsidiaries, considered as one
enterprise.
(viii) The Bank is a member in good standing of the Federal Home
Loan Bank of Boston, and the deposit accounts of the Bank
are insured by the FDIC up to the applicable limits.
(ix) Each direct and indirect subsidiary of the Bank has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
material adverse effect upon the financial condition,
results of operations or business of the Company, M.H.C. and
its subsidiaries, considered as one enterprise; the
activities of each such subsidiary are permitted to
subsidiaries of a bank holding company and of a Connecticut-
chartered savings bank by the rules, regulations,
resolutions and practices of the Department of Banking, the
FDIC and all other government agencies and regulatory
authorities; all of the issued and outstanding capital stock
of each such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the
Bank, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(x) The Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under
the laws of the State of Delaware with full corporate power
-30-
and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; the
Foundation is not a savings and loan holding company within
the meaning of 12 C.F.R. Section 574.2(q) as a result of the
issuance of shares of Common Stock to it in accordance with
the terms of the Plan and in the amounts as described in the
Prospectus; no approvals or authorizations are required to
establish the Foundation and to contribute the shares of
Common Stock thereto as described in the Prospectus, other
than those set forth in any written notice or order of
approval of, or letter of non-objection to, the Conversion,
the Conversion Application or the Holding Company
Application, all which have been duly given or obtained and
are in full force and effect on the date hereof and copies
of which have been provided to the Agent prior to the
Closing Time.
(xi) All of the issued and outstanding capital stock of the Bank,
when issued and delivered pursuant to the Plan against
payment of the consideration described in the Plan and in
the Prospectus, will be duly authorized and validly issued
and fully paid and non-assessable; and all such capital
stock will be owned beneficially and of record by the
Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(xii) The OTS has duly approved the Holding Company Application
and the Department of Banking, the FDIC and all other bank
regulatory authorities having jurisdiction thereof have duly
approved the Conversion Application, and no action is
pending, or to the best of such counsel's knowledge,
threatened respecting the Holding Company Application or the
Conversion Application or the acquisition by the Company of
all of the Bank's issued and outstanding capital stock; the
Holding Company Application and the Conversion Application
comply with the applicable requirements of the OTS, the
FDIC, the FRB and the Department of Banking, include all
documents required to be filed as exhibits thereto, and are,
to the best of such counsel's knowledge, truthful, accurate
and complete; and the Company is duly authorized to become a
savings and loan holding company and is duly authorized to
own all of the issued and outstanding capital stock of the
Bank to be issued pursuant to the Plan.
-31-
(xiii) At the time of their use, the Proxy Statement complied as
to form in all material respects with the requirements of
the Conversion Regulations, and to the best of such
counsel's knowledge did not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(xiv) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby,
including the establishment of the Foundation and the
contribution thereto of the Foundation Shares, (A) have been
duly and validly authorized by all necessary action on the
part of each of the Company, M.H.C. and the Bank, and this
Agreement constitutes the legal, valid and binding agreement
of each of the Company, M.H.C. and the Bank, enforceable in
accordance with its terms, except to the extent that the
rights to indemnity and contribution hereunder may be
limited under applicable law (it being understood that such
counsel may avail itself of customary exceptions concerning
the effect of bankruptcy, insolvency or similar laws and the
availability of equitable remedies); (B) will not result in
any violation of the provisions of the charter or by-laws of
the Company, M.H.C. or any of its subsidiaries; (C) will not
conflict with or violate any federal, state or local law or
regulation or, to the best of such counsel's knowledge, any
order, decree, judgment or decree applicable to the Company,
M.H.C. or any of its subsidiaries or by which any of their
property or assets are bound or affected; (D) constitute a
breach of, or default (or an event which, with notice or
lapse of time or both, would constitute a
-32-
default) under, or give any other person any right of
termination, amendment, acceleration or cancellation of, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company,
M.H.C. or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, M.H.C. or any of its
subsidiaries is a party or by which it or any of them may be
bound, or to which any of the properties or assets of the
Company, M.H.C. or any of its subsidiaries is subject; and
(E) will not conflict with or constitute a breach of, or a
default (or an event which with notice or lapse of time or
both, would constitute a default under) under, or give
another person a right of termination, amendment,
acceleration or cancellation of, or result in the creation
or imposition of any lien, charge or encumbrance, that,
individually or in the aggregate, would have a material
adverse effect on the financial condition, results of
operations or business affairs of the Company, M.H.C. and
its subsidiaries considered as one enterprise, upon any
property or assets of the Company, M.H.C. or its
subsidiaries pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Company, M.H.C. or its subsidiaries is a party or by which
any of them may be bound, or to which any of the property or
assets of the Company, M.H.C. or its subsidiaries is
subject.
(xv) The Registration Statement is effective under the Securities
Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities
Act or, to the best of such counsel's knowledge, proceedings
therefor initiated or threatened by the Commission.
(xvi) No further approval, authorization, consent or other order
of any governmental agency or regulatory authority is
required in connection with the execution and delivery of
this Agreement, the issuance and sale of the Securities and
the consummation of the Conversion in accordance with the
terms and conditions of the Plan, except as may be required
under the securities or Blue Sky laws of various
jurisdictions as to which no opinion need be rendered.
(xvii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial
statements and statistical data included therein, as to
which no opinion need be rendered) complied as to form in
all material respects with the requirements of the
Securities Act and the Securities Act Regulations and the
Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate
used to evidence the Common Stock is in due and proper form
and complies with all applicable statutory requirements.
(xix) There are no legal or governmental proceedings pending or
threatened against or affecting the Company, M.H.C. or any
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of its subsidiaries which are required, individually or in
the aggregate, to be disclosed in the Registration Statement
and Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company, M.H.C. or any of its subsidiaries is a party or to
which any of their property is subject which are not
described in the Registration Statement, including ordinary
routine litigation incidental to the business, are,
considered in the aggregate, not material.
(xx) The information in the Prospectus under "Risk Factors -
Contribution to the foundation may not be tax deductible
which could hurt Connecticut Bancshares' profits," "- Anti-
takeover provisions and statutory provisions could make
takeover attempts more difficult to achieve and may decrease
the market price of common stock," "-Banking reform
legislation may reduce Connecticut Bancshares' powers,"
"Dividend Policy," "Regulation and Supervision," "Federal
and State Taxation on Income," "The Conversion -
Establishment of the Charitable Foundation," "- Effects of
Conversion to Stock Form," "- Prospective investors are
urged to consult with their own tax advisors regarding the
tax consequences of the conversion particular to them," "-
Limitations of Purchaser of Shares," "- Restrictions on
Repurchase of Stock," "- Restrictions on Transferability by
Directors and Officers and NASD Members," "- Interpretation,
Amendment and Termination," "Restrictions on Acquisition of
Connecticut Bancshares and Savings Bank of Manchester",
"Description of Connecticut Bancshares Stock," "Description
of Savings Bank of Manchester Stock," "Registration
Requirements," "Legal and Tax Opinions" to the extent that
it constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been
reviewed by them and is complete and accurate in all
material respects.
(xxi) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement and the Prospectus
or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits
thereto, the descriptions thereof or references thereto are
correct, and no default exists, and no event has occurred
which, with notice or lapse of time or both, would
-34-
constitute a default, in the due performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described,
referred to or filed.
(xxii) The Plan has been duly authorized by the respective
Boards of Directors of the Company, M.H.C. and the Bank and
duly approved by M.H.C. and the corporators of M.H.C, and no
other corporate proceedings by any of them are necessary to
authorize any of the transactions contemplated thereby; the
Plan has been duly approved by the Department of Banking,
the FDIC has issued a letter of non-objection thereto, and
such approval and letter of non-objection remain in full
force and effect and no further governmental or regulatory
approvals, authorizations or consents are required in
connection therewith; the Certificate of Merger with respect
to the merger of M.H.C. with and into the Bank has been duly
filed with the Connecticut Secretary of State giving due
effect to the merger of M.H.C. with and into the Bank, with
the Bank being the surviving entity and being a Connecticut-
chartered stock savings bank; the articles of incorporation
of the Bank have been duly amended and restated by the
filing with the Connecticut Secretary of State of the Bank's
amended and restated articles of incorporation in the form
set forth in the Plan; to the best of such counsel's
knowledge, the Company, M.H.C. and the Bank have conducted
the Conversion and the establishment and funding of the
Foundation in all material respects in accordance with
applicable requirements of the Conversion Regulations, the
Plan and all other applicable regulations, decisions and
orders thereunder, including all material applicable terms,
conditions, requirements and conditions precedent to the
Conversion imposed upon the Company, M.H.C. and the Bank by
the Department of Banking, the FDIC and all other bank
regulatory authorities and, no order has been issued by the
Department of Banking, the FDIC or any other governmental
agency or regulatory authority to suspend the Conversion or
the Offerings and no action for such purpose has been
instituted or threatened by the Department of Banking, the
FDIC or any other governmental agency or regulatory
authority; and, to the best of such counsel's knowledge, no
person has sought to obtain regulatory or judicial review of
the action of the Department of Banking in approving the
-35-
Conversion Application (which includes the Plan and provides
for the establishment of the Foundation), the FDIC in
issuing the letter of non-objection, the final action of the
OTS in approving the Holding Company Application, or any
other action by any other governmental agency or regulatory
authority in connection the Conversion or the Offerings.
(xxiii) To the best of such counsel's knowledge, the Company,
M.H.C. and the Bank and its subsidiaries have obtained all
licenses, permits and other governmental authorizations
currently required for the conduct of their respective
businesses as described in the Registration Statement and
Prospectus, and all such licenses, permits and other
governmental authorizations are in full force and effect,
and the Company, M.H.C., the Bank and its subsidiaries are
in all material respects complying therewith.
(xxiv) Neither the Company, M.H.C. nor any of its subsidiaries
is in violation of its charter or bylaws or, to the best of
such counsel's knowledge, in default (nor has any event
occurred which, with notice or lapse of time or both, would
constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company, M.H.C. or
any of its subsidiaries is a party or by which the Company,
M.H.C. or any of its subsidiaries or any of their property
may be bound.
(xxiv) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Shipman &
Goodwin LLP, counsel for the Agent, with respect to the matters
set forth in Section 5(b)(1)(i), (iv), (v), (vi) (solely as to
preemptive rights arising by operation of law), (xii), (xiv),
(xvi) and (xviii) and such other matters as the Agent may
reasonably require.
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively, of this Section, Murphy, Muldoon &
Faucette, LLP and Shipman & Goodwin LLP shall each additionally
state that nothing has come to their attention that would lead
them to believe that the Registration Statement (except for
-36-
financial statements and schedules and other financial or
statistical data included therein, as to which counsel need make
no statement), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus
(except for financial statements and schedules and other
financial or statistical data included therein, as to which
counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. In giving their opinions,
Murphy, Muldoon & Faucette, LLP and Shipman & Goodwin LLP may
rely as to matters of fact on certificates of officers and
directors of the Company and the Bank and certificates of public
officials, which opinions shall be in form and substance
satisfactory to counsel for the Agent, and Shipman & Goodwin LLP
may also rely on the opinion of Murphy, Muldoon & Faucette, LLP.
(c) At the Closing Time referred to in Section 2, the Company, M.H.C. and
the Bank shall have completed in all respects the conditions precedent
to the Conversion in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements
and provisions precedent to the Conversion imposed upon the Company,
M.H.C. or the Bank by the Department of Banking, the FDIC or any other
governmental agency or regulatory authority, other than those which
the Department of Banking, the FDIC or other governmental agency or
regulatory authority permits to be completed after the Conversion.
(d) At Closing Time referred to in Section 2 hereof, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change in the financial condition, results of
operations or business affairs of the Company, M.H.C. and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Agent shall have received a
certificate of the President and Chief Executive Officer of the
Company and M.H.C., the President of the Bank, and the chief financial
or chief accounting officer of the Company, M.H.C. and the Bank, dated
as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there shall have been no material
transaction entered into by the Company, M.H.C. or the Bank from the
latest date as of which the financial condition of the Company, M.H.C.
or the Bank is set forth in the Registration Statement and the
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Prospectus other than transactions referred to or contemplated therein
and transactions in the ordinary cause of business, (iii) neither the
Company, M.H.C. or any of its subsidiaries shall have received from
the Department of Banking, the FDIC or any other governmental agency
or regulatory authority any order or direction (oral or written) to
make any material change in the method of conducting its business with
which it has not complied (and which order or direction, if any, shall
have been disclosed in writing to the Agent) or which would materially
and adversely would affect the business, financial condition or
results of operations of the Company, M.H.C. or its subsidiaries, (iv)
the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and
as of the Closing Time, (v) each of the Company, M.H.C. and the Bank
have performed all of its obligations hereunder and under the
Engagement Letter referred to in Section 12 hereof, and complied with
all other agreements referred to herein and satisfied all conditions
on their part to be performed or satisfied at or prior to Closing
Time, (vi) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission and (vii)
no order suspending the Subscription and Community Offering or the
Syndicated Community Offering or the authorization for final use of
the Prospectus has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission or any state
securities agency or by the Department of Banking, the FDIC or any
other governmental agency or regulatory authority; and no person has
sought to obtain regulatory or judicial review of the action of the
Department of Banking in approving the Conversion Application (which
includes the Plan and provides for the establishment of the
Foundation), the FDIC in issuing the letter of non-objection, the
final action of the OTS in approving the Holding Company Application,
or any other action by another governmental agency or regulatory
authority in connection the Conversion or the Offerings.
(e) At the time of the execution of this Agreement, the Agent shall have
received from Arthur Andersen LLP a letter dated such date, in form
and substance satisfactory to the Agent, to the effect that (i) they
are independent public accountants with respect to the M.H.C. and its
subsidiary within the meaning of the Code of Ethics of the American
Institute of Certified Public Accountants, the Securities Act and the
Securities Act Regulations and the Conversion Regulations; (ii) it is
their opinion that the consolidated financial statements and
supporting schedules included in the Registration Statement and
covered by their opinions therein comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Securities Act Regulations; (iii) based upon limited
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procedures as agreed upon by the Agent and Arthur Andersen LLP set
forth in detail in such letter, nothing has come to their attention
which causes them to believe that (A) the unaudited financial
statements and supporting schedules of M.H.C. and its subsidiary
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act, the Securities Act Regulations and the Conversion
Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration
Statement and the Prospectus, (B) the unaudited amounts of net
interest income and net income set forth under "Selected Consolidated
Financial Information" in the Registration Statement and Prospectus do
not agree with the amounts set forth in unaudited consolidated
financial statements as of and for the dates and periods presented
under such captions or such amounts were not determined on a basis
substantially consistent with that used in determining the
corresponding amounts in the audited financial statements included in
the Registration Statement, (C) at a specified date not more than five
(5) days prior to the date of this Agreement, there has been any
increase in the consolidated long-term or short-term debt of M.H.C.
and its subsidiaries or any decrease in consolidated total assets, the
allowance for loan losses, total deposits or total capital of M.H.C.
and its subsidiaries, in each case as compared with the amounts shown
in the August 31, 1999 consolidated statement of condition included in
the Registration Statement, or (D) during the period from August 31,
1999 to a specified date not more than five (5) days prior to the date
of this Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in total interest income,
net interest income, net interest income after provision for loan
losses, income before income tax expense or net income of the Bank and
its subsidiaries, except in all instances for increases or decreases
which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (iv) in addition to the examination
referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in
the Registration Statement and Prospectus and which are specified by
the Agent, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of M.H.C. and its subsidiary identified in such
letter.
(f) At Closing Time, the Agent shall have received from Arthur Andersen
LLP a letter, dated as of Closing Time referred to in Section 2, to
the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the
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specified date referred to shall be a date not more than five (5) days
prior to Closing Time referred to in Section 2 hereof.
(g) At Closing Time, the Securities shall have been approved for listing
on the Nasdaq National Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from RP
Financial, LC, dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities and
the Foundation Shares as herein contemplated and related proceedings,
or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities and Foundation Shares as
herein contemplated shall be satisfactory in form and substance to the
Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have occurred
any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which, in the
judgment of the Agent, is so material and adverse as to make it
impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities;
(ii) trading generally on either the American Stock Exchange, the New
York Stock Exchange or the Nasdaq Stock Market shall not have been
suspended, and minimum or maximum prices for trading shall not have
been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or
any other governmental authority; and (iii) a banking moratorium shall
not have been declared by either Federal or Connecticut authorities.
SECTION 6. INDEMNIFICATION.
(a) The Company, M.H.C. and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who
controls the Agent, within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and its respective partners,
directors, officers, employees and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of
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the Conversion (including the establishment of the Foundation
and the contribution of the Foundation Shares thereto by the
Company) or any action taken by the Agent where acting as agent
of the Company, M.H.C. or the Bank or otherwise as described in
Section 2 hereof; provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage
or expense found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the bad faith,
willful misconduct or gross negligence of the Agent seeking
indemnification hereunder.
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Proxy Statement or Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or
regulatory authority, commenced or threatened, or of any claim
whatsoever described in clause (i) or (ii) above, if such
settlement is effected with the written consent of the Company,
M.H.C. or the Bank, which consent shall not be unreasonably
withheld; and
(iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Agent), reasonably
incurred in investigating, preparing for or defending against
any litigation, or any investigation, proceeding or inquiry by
any governmental agency or regulatory authority, commenced or
threatened, or any claim pending or threatened whatsoever
described in clause (i) or (ii) above, to the extent that any
such expense is not paid under clause (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this
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paragraph (a) shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading which was made in reliance upon and in conformity
with written information relating to the Agent furnished to the
Company or the Bank by the Agent expressly for use in the
Prospectus (or any amendments or supplements thereto), which
information the Company and the Bank acknowledge is included
only in the sections captioned "The Conversion - Syndicate
Community Offering," "-Plan of Distribution for the
Subscription, Direct Community Offering and Syndicated Community
Offering" and "-Description of Sales Activities" of the
Prospectus (the "Agent Information").
(b) The Agent agrees to indemnify and hold harmless the Company, M.H.C.,
the Bank, their directors and trustees, each of their officers who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, of a material fact made in the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with the Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against
it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying
party from any liability which it may have otherwise than on account
of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to no more than one local counsel in each
separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) The Company, M.H.C. and the Bank also agree that the Agent shall not
have any liability (whether direct or indirect, in contract or tort or
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otherwise) to M.H.C., the Bank or the Company or its security holders,
or the creditors of the Bank, M.H.C. or the Company relating to or
arising out of the engagement of the Agent pursuant to, or the
performance by the Agent of the services contemplated by, this
Agreement, except to the extent that any loss, claim, damage or
liability is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Agent's bad faith,
willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that the Agent, any person, if any,
who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act or any of its
partners, directors, officers, employees or agents is requested or
required to appear as a witness or otherwise gives testimony in any
action, proceeding, investigation or inquiry brought by or on behalf
of or against the Company, M.H.C., the Bank, the Agent or any of their
respective affiliates or any participant in the transactions
contemplated hereby in which the Agent or such person or agent is not
named as a defendant, the Company, M.H.C. and the Bank jointly and
severally agree to reimburse the Agent and its partners, directors,
officers, employees or agents for all reasonable and necessary out-of-
pocket expenses incurred by it in connection with preparing or
appearing as a witness or otherwise giving testimony and to compensate
the Agent in an amount to be mutually agreed upon.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, M.H.C.,
the Bank and the Agent shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, M.H.C. or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company, M.H.C. and the Bank are
jointly and severally responsible for the balance, or (ii) if, but only if, the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits to
the Company, M.H.C. and the Bank, on the one hand, and the Agent, on the other,
as reflected in clause (i), but also the relative fault of the Company, M.H.C.
and the Bank on the one hand and the Agent on the other, as well as any other
relevant equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Agent within the meaning of Section 15 of the
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Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, each trustee of the
Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company and the Bank. Notwithstanding
anything to the contrary set forth herein, to the extent permitted by applicable
law, in no event shall the Agent be required to contribute an aggregate amount
in excess of the aggregate marketing fees to which the Agent is entitled and
actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company, M.H.C. or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive the closing and the
delivery of the Securities.
SECTION 9. TERMINATION OF THIS AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time prior to Closing Time (i) if there has been, since the date
of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material
adverse change in the financial condition, results of operations or
business affairs of the Company, M.H.C. or the Bank, considered as one
enterprise, whether or not arising in the ordinary course of business;
(ii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, is so material and
adverse as to make it impracticable to market the Securities or to
enforce contracts, including subscriptions or orders, for the sale of
the Securities, (iii) if trading generally on the Nasdaq Stock Market,
the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by
either of said Exchanges or by order of the Commission or any other
governmental authority; (iv) if a banking moratorium has been declared
by either Federal or Connecticut authorities; (v) if any condition
specified in Section 5 shall not have been fulfilled when and as
required to be fulfilled; (vi) if there shall have been such material
adverse change in the condition or prospects of the Company, M.H.C. or
the Bank or the prospective market for the Company's securities as in
the Agent's good faith opinion would make it inadvisable to proceed
with the offering, sale or delivery of the Securities; (vii) if, in
the Agent's good faith opinion, the price for the Securities
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established by RP Financial, LC is not reasonable or equitable under
then prevailing market conditions; or (vii): if the Conversion is not
consummated on or prior to [DATE].
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party
except as provided in Section 4 hereof relating to the reimbursement
of expenses and except that the provisions of Sections 6 and 7 hereof
shall survive any termination of this Agreement.
SECTION 10. 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 the Agent shall be
directed to the Agent at Two World Trade Center, 104th Floor, New York, New York
10048, Attention of Catherine A. Lawton, Principal; notices to the Company,
M.H.C. and the Bank shall be directed to any of them at The Savings Bank of
Manchester, 923 Main Street, Manchester, Connecticut 06040, Attention of Richard
P. Meduski, President and Chief Executive Officer.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company, M.H.C. and the Bank 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
Agent, the Company, M.H.C. and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company, M.H.C. and the Bank and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made, except for the engagement letter dated August 31, 1999, by and
between the Agent and the Bank, relating to the Agent's providing conversion
agent services to the Bank in connection with the Conversion. No waiver,
amendment or other modification of this Agreement shall be effective unless in
writing and signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times
of day refer to Eastern time.
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SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
SECTION 15. HEADINGS. Sections headings are not to be considered part of this
Agreement, are for convenience and reference only, and are not to be deemed to
be full or accurate descriptions of the contents of any paragraph or
subparagraph.
[The next page is the signature page.]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company, M.H.C. and the Bank in accordance with its
terms.
Very truly yours,
CONNECTICUT BANCSHARES, INC.
By:__________________________________
Title:
CONNECTICUT BANKSHARES, M.H.C.
By:______________________________________
Title:
THE SAVINGS BANK OF MANCHESTER
By:_____________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: SANDLER O'NEILL & PARTNERS CORP.,
the sole general partner
By:____________________________________
[NAME]
Vice President
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CONNECTICUT BANCSHARES, INC.
13,225,000 Shares
(Maximum Offered in Conversion, subject
to increase up to 15,208,750 shares
in the event of an oversubscription)
Common Stock
(Par Value $0.01 Per Share)
SELECTED DEALER'S AGREEMENT
___________, 2000
Ladies and Gentlemen:
We have agreed to assist Connecticut Bancshares, Inc. (the "Company") in
connection with the offer and sale of shares (the "Shares") of Common Stock, par
value $0.01 per share, of the Company, to be issued in connection with the
conversion of The Savings Bank of Manchester, a Connecticut-chartered savings
bank (the "Bank"), from mutual to stock form of holding company. The Company,
in connection with its plan to effect such conversion, offered 13,225,000 Shares
for subscription by the Company's and the Bank's employee stock ownership plan
and certain of the Bank's depositors, in a subscription offering, and certain
members of the general public in a concurrent direct community offering. The
Shares which were not subscribed for pursuant to such subscription and direct
community offerings are being offered to the public in a syndicated community
offering (the "Syndicated Community Offering") in accordance with the rules of
the Federal Deposit Insurance Corporation ("FDIC") and the Banking Commissioner
of the State of Connecticut ("Banking Commissioner"). The Shares, the bases on
which the number of Shares to be issued may change, and certain of the terms on
which they are being offered are more fully described in the enclosed Prospectus
(the "Prospectus").
We are offering to Selected Dealers (of which you are one) the opportunity to
participate in the solicitation of offers to buy the Shares in the Syndicated
Community Offering, and we will pay you a fee in the amount of ___________
percent (______%) of the dollar amount of the Shares sold on behalf of the
Company by you. The number of Shares sold by you shall be determined based on
the authorized designation of your firm on the order form or forms for such
Shares accompanying the funds transmitted for payment therefor (whether in the
form of a check payable to the Bank or a withdrawal from an existing account at
the Bank) to the special account established by the Company for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Shares sold on behalf of
the Company by you, as evidenced in accordance with the preceding sentence. The
Bank has requested us to invite you to become a "Sponsoring Dealer," that is, a
Selected Dealer who solicits offers which result in the sale on behalf of the
Bank of at least ________ Shares. You may become a Sponsoring Dealer (subject
to your fulfillment of the requirement in the preceding sentence) by checking
the box on the confirmation at the end of this letter. If you become a
Sponsoring Dealer, you shall be entitled to an additional fee in the amount of
______ percent (_____%) of the dollar amount of the Shares sold on behalf of the
Company by you as evidenced in the manner set forth above.
Each order form for the purchase of Shares must set forth the identity, address
and tax identification number of each person ordering Shares regardless of
whether the Shares will be registered in street name or in the purchaser's name.
Such order form should clearly identify your firm.
As soon as practicable after all the Shares are sold, we will remit to you, out
of our compensation as provided above, the fees to which you are entitled
hereunder, including your Sponsoring Dealer fee.
This offer is made subject to the terms and conditions herein set forth and is
made only to Selected Dealers which are (i) members in good standing of the
National Association of Securities Dealers, Inc. ("NASD") which agree to comply
with all applicable rules of the NASD, including, without limitation, the NASD's
Interpretation With Respect to Free-Riding and Withholding and Section 24 of
Article III of the NASD's Rules of Fair Practice, or (ii) foreign dealers not
eligible for membership in the NASD which agree (A) not to sell any Shares
within the United States, its territories or possessions or to persons who are
citizens thereof or resident therein and (B) in making other sales to comply
with the above-mentioned NASD Interpretation, Sections 8, 24 and 36 of the
above-mentioned Article III as if they were NASD members and Section 25 of such
Article III as it applies to non-member brokers or dealers in a foreign country.
Orders for Shares will be strictly subject to confirmation and we, acting on
behalf of the Company, reserve the right in our absolute discretion to reject
any order in whole or in part, to accept or reject orders in the order of their
receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, the Bank or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the offering and sale of any of the Shares. No Selected Dealer is authorized to
act as agent for us when soliciting offers to buy the Shares from the public or
otherwise. No Selected Dealer shall engage in any stabilizing (as defined in
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Regulation M promulgated under the Securities Exchange Act of 1934, as amended)
with respect to the Company's Common Stock during the offering.
We and each Selected Dealer assisting in selling Shares pursuant hereto agree to
comply with the applicable requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and applicable rules and regulations issued by
the FDIC and Banking Commissioner. In addition, we and each Selected Dealer
confirm that the Securities and Exchange Commission interprets Rule 15c2-8
promulgated under the Exchange Act as requiring that a prospectus be supplied to
each person who is expected to receive a confirmation of sale at least 48 hours
prior to delivery of such person's order form.
We and each Selected Dealer further agree to the extent that our customers
desire to pay for Shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities and Exchange Commission of
Rule 15c2-4 promulgated under the Exchange Act either (a) upon receipt of an
executed order form or direction to execute an order form on behalf of a
customer to forward the Syndicated Community Offering price for the Shares
ordered on or before 12:00 p.m. on the business day following receipt or
execution of an order form by us to the Bank for deposit in a segregated account
as agent or trustee for the customer or (b) to solicit indications of interest
in which event (i) we will subsequently contact any customers indicating
interest to confirm the interest and give instructions to execute and return an
order form or to receive authorization to execute an order form on their behalf,
(ii) we will mail acknowledgements of receipt of orders to each customer
confirming interest on the business day following such confirmation, (iii) we
will debit accounts of such customers on the fifth business day (the "debit
date") following receipt of the confirmation referred to in (i) and (iv) we will
forward completed order forms together with such funds to the Bank on or before
12:00 p.m. on the next business day following the debit date for deposit in a
segregated account. We acknowledge that if the procedure in (b) is adopted, our
customer's funds are not required to be in their accounts until the debit date.
We and each Selected Dealer further acknowledge that, in order to use the
foregoing "sweep arrangements," we comply with the net capital requirements for
broker/dealers under Rule 15c3-1(a)(1) of the Securities Exchange Act of 1934.
Unless earlier terminated by us, this Agreement shall terminate 45 full business
days after the date hereof, but may be extended by us for an additional period
or periods not exceeding 30 full business days in the aggregate. We may
terminate this Agreement or any provisions hereof at any time by written or
telegraphic notice to you. Of course, our obligations hereunder are subject to
the successful completion of the offering, including the sale of all of the
Shares.
You agree that at any time or times prior to the termination of this Agreement
you will, upon our request, report to us the number of Shares sold on behalf of
the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem advisable in
respect to all matters pertaining to the offering. We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we believe
the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective blue sky laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.
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Additional copies of the Prospectus and any supplements thereto will be supplied
in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if mailed,
telephoned or telegraphed to you at the address to which this Agreement is
mailed.
This Agreement shall be construed in accordance with the laws of New York.
Please confirm your agreement hereto by signing and returning the confirmation
accompanying this letter at once to us at Sandler O'Neill & Partners, L.P., Two
World Trade Center, 104th Floor, New York, New York 10048. The enclosed
duplicate copy will evidence the agreement between us.
Very truly yours,
SANDLER O'NEILL & PARTNERS, L.P.
By:__________________________________
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Sandler O'Neill & Partners, L.P.
Two World Trade Center - 104th Floor
New York, New York 10048
Re: Connecticut Bancshares, Inc.
---------------------------------
Ladies and Gentlemen:
We hereby confirm our agreement to all the terms and conditions stated in the
foregoing letter. We acknowledge receipt of the Prospectus relating to the
Shares and we further state that in agreeing thereto we have relied upon the
Prospectus and no other statement whatsoever, written or oral. We confirm that
we are (i) a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"), and agree to comply with all applicable rules of the
NASD, including, without limitation, the NASD's "Interpretation With Respect to
Free-Riding and Withholding" and Section 24 of Article III of the NASD's Rules
of Fair Practice, or (ii) a foreign dealer not eligible for membership in the
NASD and agree (A) not to sell any Shares of Connecticut Bancshares, Inc. within
the United States, its territories or possessions or to persons who are citizens
thereof or resident therein and (B) in making other sales to comply with the
above-mentioned NASD Interpretation, Sections 8, 24 and 26 of the above-
mentioned Article III as if we were an NASD member and Section 25 of such
Article III as it applies to a non-member broker or dealer in a foreign country.
[_] We wish to become a "Sponsoring Dealer."
Dated:_________________
_____________________________
(Please print or type name of firm)
By:__________________________
(Authorized Representative)
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