Exhibit 1.0
NEW ENGLAND BANCSHARES, INC.
(In Formation)
535,000 to 724,500 Shares
(as may be increased to 833,175 shares)
Common Stock
($.01 Par Value Per Share)
Purchase Price: $10.00 Per Share
SALES AGENCY AGREEMENT
-----------------------------
__________ __, 2002
Trident Securities, a Division of McDonald Investments Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Enfield Mutual Holding Company, a federal mutual holding company in
formation (the "MHC"), New England Bancshares, Inc., a federally-chartered
corporation in formation (the "Company"), and Enfield Federal Savings and Loan
Association, a federally-chartered savings bank (referred to herein as the
"Bank," in mutual or stock form and including its subsidiaries as the context
may require), hereby confirm, as of __________ __, 2002, their respective
agreements with Trident Securities, a Division of McDonald Investments Inc.
together with its successors and assigns as contemplated in Section 13 hereof
(collectively, "McDonald"), a broker-dealer registered with the Securities and
Exchange Commission (the "Commission") and a member of the National Association
of Securities Dealers, Inc. (the "NASD"), as follows:
1. Introduction. The Bank intends to reorganize from a federally
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chartered mutual savings bank to a federally chartered capital stock savings
bank as a wholly owned subsidiary of the Company (together with the Offerings,
as defined below, the issuance of shares of common stock of the Bank to the
Company, the formation of the Company and the MHC and the issuance of a majority
of the Company's capital stock to the MHC, the "Reorganization") pursuant to a
plan of reorganization adopted by the Bank's Board of Directors on November 13,
2001, as subsequently amended (the "Plan"). As of the date hereof, the Company
and the MHC are in formation. Accordingly, the Bank hereby agrees to cause the
MHC and the Company to ratify, execute and deliver this Agreement upon
completion of their formation. In accordance with the Plan, the Company is
offering shares of its common stock, $.01 par value per share ("Common
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Stock"), pursuant to nontransferable subscription rights in a subscription
offering ("Subscription Offering") to certain depositors and borrowers of the
Bank, to the Bank's tax-qualified employee benefit plans (including an employee
stock ownership plan) and to officers, employees and directors of the Bank. Any
shares of the Common Stock not sold in the Subscription Offering are being
offered to the general public in a Community Offering ("Community Offering"),
with preference given to natural persons who are residents of Hartford County,
Connecticut ("Local Community") (the Subscription and Community Offerings are
sometimes referred to collectively as the "Subscription and Community Offering"
or the "Offerings"), subject to the right of the Company and the Bank, in their
absolute discretion, to reject orders in the Community Offering in whole or in
part. In the Subscription Offering (and the Community Offering, if applicable),
the Company is offering between 535,000 and 724,500 shares of Common Stock
("Shares"), with the possibility of offering up to 833,175 shares without a
resolicitation of subscribers, as contemplated by Parts 563b and 575 of Title 12
of the Code of Federal Regulations. Except for the tax qualified employee
benefit plans, no person may purchase shares with an aggregate purchase price of
more than $50,000 and no person or entity, together with associates of and
persons acting in concert with such person or other entity, may purchase more
than $200,000 of Common Stock.
McDonald has advised the Company that it will utilize its best efforts
to assist the Company with the sale of the Shares in the Offerings. Prior to the
execution of this Agreement, the Company has delivered to McDonald the
prospectus dated __________ __, 2002 (as hereinafter defined) and all
supplements thereto, if any, to be used in the Offerings have also been
delivered to McDonald (or if after the date of this Agreement, will be promptly
delivered to McDonald). Such prospectus contains information with respect to the
Company, the Bank, the MHC and the Shares.
2. Representations and Warranties.
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(a) The Company, the Bank and the MHC jointly and severally
represent and warrant to McDonald that:
(i) The Company has filed with the Commission a
registration statement, including exhibits and an amendment or
amendments thereto, on Form SB-2 (No. 333-__________),
including a prospectus relating to the Offerings, for the
registration of the Shares under the Securities Act of 1933,
as amended ("Act"). Such registration statement has become
effective under the Act and no stop order has been issued with
respect thereto and no proceedings therefor have been
initiated or, to the Company's best knowledge, threatened by
the Commission. Except as the context may otherwise require,
such registration statement, as amended or supplemented, on
file with the Commission at the time the registration
statement became effective, including the prospectus,
financial statements, schedules, exhibits and all other
documents filed as part thereof, as amended and supplemented,
is herein called the "Registration Statement," and the
prospectus, as amended or supplemented, on file with the
Commission at the time the Registration Statement became
effective is herein called the "Prospectus,"
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except that if the prospectus filed by the Company with the
Commission pursuant to Rule 424(b) of the general rules and
regulations of the Commission under the Act ("SEC
Regulations") differs from the form of prospectus on file at
the time the Registration Statement became effective, the term
"Prospectus" shall refer to the Rule 424(b) prospectus from
and after the time it is filed with the Commission and shall
include any amendments or supplements thereto from and after
their dates of effectiveness or use, respectively. If any
Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offering, if any, the
Company (i) will, if required by SEC Regulations, promptly
file with the Commission a post-effective amendment to such
Registration Statement relating to the results of the
Subscription Offering and the Community Offering, if any, 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 the
Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and
the Community Offerings and pricing information pursuant to
Rule 424(c) of the SEC Regulations, in either case in a form
reasonably acceptable to the Company and McDonald.
(ii) The Bank has filed a Combined Form MHC-1/MHC-2,
Notice of Mutual Holding Company Reorganization and an
Application for Approval of Minority Stock Issuance by a
Savings Association Subsidiary of a Mutual Holding Company (as
amended or supplemented, the "Combined Form MHC-1/MHC-2" and
together with the Form H-(e)1-S referred to below, the
"Reorganization Application") with the Office of Thrift
Supervision ("Office") under the Home Owners' Loan Act, as
amended ("HOLA") and the enforceable rules and regulations,
including published policies and actions, of the Office
thereunder ("OTS Regulations"), which has been approved by the
Office; the Prospectus and the proxy statement for the
solicitation of proxies from members of the Bank for the
special meeting to approve the Plan ("Proxy Statement")
included as part of the Reorganization Application have been
approved for use by the Office. No order has been issued by
the Office preventing or suspending the use of the Prospectus
or the Proxy Statement; and no action by or before the Office
revoking such approvals is pending or, to the Bank's best
knowledge, threatened. The Company has filed with the Office
the Company's application on Form H-(e)1-S ("Holding Company
Application") under the savings and loan holding company
provisions of the HOLA and the OTS Regulations, which has been
conditionally approved.
(iii) At the date of the Prospectus and at all times
subsequent thereto through and including the Closing Date (as
hereinafter defined) (i) the Registration Statement and the
Prospectus (as amended or supplemented, if amended or
supplemented) complied and will comply as to form in all
material respects with the Act and the SEC Regulations, (ii)
the Registration Statement (as amended or supplemented, if
amended or supplemented) did not contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading and (iii) the Prospectus (as amended or
supplemented, if amended or supplemented) did not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or
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necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Representations or warranties in this subsection shall not
apply to statements or omissions made in reliance upon and in
conformity with written information about McDonald furnished
to the Company or the Bank by or on behalf of McDonald
expressly for use in the Registration Statement or Prospectus.
(iv) The Company will at the Closing Date be duly
incorporated and validly existing as a corporation under the
laws of the United States, the Bank is currently duly
organized as a mutual savings bank under the laws of the
United States, and the MHC will at the Closing Date be duly
organized as a federal mutual holding company under the laws
of the United States, and each of them at the Closing Date
will be validly existing and in good standing under the laws
of the jurisdiction of its organization with full power and
authority to own its property and conduct its business as
described in the Prospectus; the Bank is a member of the
Federal Home Loan Bank of Chicago; and the deposit accounts
of the Bank are insured by the Savings Association Insurance
Fund ("SAIF") administered by the Federal Deposit Insurance
Corporation ("FDIC") up to the applicable limits. None of
the Company, the MHC, the Bank or the Bank's subsidiaries
(referred to herein as "Subsidiaries") is or will be
required to be qualified to do business as a foreign
corporation in any jurisdiction where non-qualification
would have a material adverse effect on the Company, the
Bank, the MHC and the Subsidiaries, taken as a whole. The
Bank does not own equity securities of or an equity interest
in any business enterprise, except as described in the
Prospectus. Upon amendment of the Bank's charter and bylaws
as provided in the OTS Regulations and completion of the
sale by the Company of the Shares as contemplated by the
Prospectus and the Plan, (i) the Bank will convert to a
federally chartered capital stock savings bank with full
power and authority to own its property and conduct its
business as described in the Prospectus, (ii) all of the
authorized and outstanding capital stock of the Bank will be
owned of record and beneficially by the Company, and (iii)
the Company will have no direct subsidiaries other than the
Bank.
(v) The Subsidiaries are duly organized, under the
laws of their jurisdictions of organization, and each of them
is validly existing and in good standing under the laws of
their jurisdiction of organization with full power and
authority to own their property and conduct their businesses
as described in the Prospectus.
(vi) The Bank and the Subsidiaries have good and
marketable title to all assets material to their businesses
and to those assets described in the Prospectus as owned by
them, free and clear of all liens, charges, encumbrances or
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restrictions, except as described in the Prospectus and except
as would not in the aggregate have a material adverse effect
on the Bank and the Subsidiaries; and all of the leases and
subleases material to the operations or financial condition of
the Bank and the Subsidiaries, under which they hold
properties, including those described in the Prospectus, are
in full force and effect as described therein.
(vii) The Bank and the Subsidiaries have each
obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its
business, all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank and
the Subsidiaries are in all material respects complying
therewith, except where the failure to hold or comply with
such licenses, permits or governmental authorizations would
not have a material adverse effect on the Company, the Bank,
the MHC and the Subsidiaries, taken as a whole.
(viii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary
corporate action on the part of each of the Company, the Bank
and the MHC, and this Agreement has been validly executed and
delivered by, and is a valid and binding obligation of, each
of the Company, the Bank and the MHC, enforceable in
accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally or the rights of
creditors of depository institutions whose accounts are
insured by the FDIC and of savings and loan holding companies
the accounts of whose subsidiary are insured by the FDIC or by
general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at
law, and except to the extent that the provisions of Sections
8 and 9 hereof may be unenforceable as against public policy
or pursuant to Section 23A of the Federal Reserve Act,
12 U.S.C. Section 371c ("Section 23A")).
(ix) There is no litigation or governmental
proceeding pending or, to the best knowledge of the Company,
the Bank or the MHC, threatened against or involving the
Company, the Bank, the MHC, the Subsidiaries or any of their
respective assets which individually or in the aggregate would
reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), results of operations,
assets or properties of the Company, the Bank, the MHC and the
Subsidiaries, taken as a whole.
(x) Each of the Company, the Bank and the MHC has all
such corporate power, authority, authorizations, approvals and
orders as may be required to enter into this Agreement and to
carry out the provisions and conditions hereof, subject to the
limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the Office in connection with
its approvals of the Reorganization Application and the
Holding Company Application, and except as
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may be required under the "blue sky" laws of various
jurisdictions, and in the case of the Company, as of the
Closing Date, will have such approvals and orders to issue and
sell the Shares to be sold by the Company as provided herein,
and in the case of the Bank, as of the Closing Date, will have
such approvals and orders to issue and sell the shares of its
common stock to be sold to the Company as provided in the
Plan, subject to the issuance of an amended charter in the
form required for federally chartered capital stock savings
bank ("Stock Charter"), the form of which Stock Charter has
been filed with the Reorganization Application and approved by
the Office.
(xi) None of the Company, the Bank, the MHC or the
Subsidiaries are in violation of any rule or regulation of the
Office, or the FDIC, or any insurance regulator that could
reasonably be expected to result in any enforcement action
against the Company, the Bank, the MHC or their officers or
directors that would have a material adverse effect on the
condition (financial or otherwise), results of operations,
businesses, assets or properties of the Company, the Bank, the
MHC and the Subsidiaries, taken as a whole.
(xii) The consolidated financial statements and the
related notes or schedules which are included in the
Registration Statement and are part of the Prospectus fairly
present the financial condition, income and comprehensive
income, equity and cash flows of the Bank and its consolidated
Subsidiaries at the respective dates thereof and for the
respective periods covered thereby and comply as to form in
all material respects with the applicable accounting
requirements of the SEC Regulations and the applicable
accounting regulations of the Office. Such financial
statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods involved, except as set forth therein, and such
financial statements are in all material respects consistent
with financial statements and other reports filed by the Bank
with supervisory and regulatory authorities except as such
generally accepted accounting principles may otherwise
require. The tables in the Prospectus accurately present the
information purported to be shown thereby at the respective
dates thereof and for the respective periods therein.
(xiii) There has been no material change in the
financial condition, results of operations or business,
including assets and properties, of the Company, the Bank, the
MHC and the Subsidiaries, taken as a whole, since the latest
date as of which such condition is set forth in the
Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the
Company, the Bank, the MHC and the Subsidiaries conform in all
materials respects to the descriptions thereof contained in
the Prospectus. None of the Company, the Bank, the MHC or the
Subsidiaries has any material liabilities of any kind,
contingent or otherwise, except as set forth in the
Prospectus.
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(xiv) There has been no breach or default (or the
occurrence of any event which, with notice or lapse of time or
both, would constitute a default) under, or creation or
imposition of any lien, charge or other encumbrance upon any
of the properties or assets of the Company, the Bank, the MHC
or the Subsidiaries pursuant to any of the terms, provisions
or conditions of, any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the
Company, the Bank, the MHC or the Subsidiaries is a party or
by which any of them or any of their respective assets or
properties may be bound or is subject, or violation of any
governmental license or permit or any enforceable published
law, administrative regulation or order or court order, writ,
injunction or decree, which breach, default, encumbrance or
violation would have a material adverse effect on the
condition (financial or otherwise), results of operations,
businesses, assets or properties of the Company, the Bank, the
MHC and the Subsidiaries, taken as a whole; all agreements
which are material to the financial condition, results of
operations or business, assets or properties of the Company,
the Bank, the MHC and the Subsidiaries, taken as a whole, are
in full force and effect, and no party to any such agreement
has instituted or, to the best knowledge of the Company, the
Bank, the MHC or the Subsidiaries, threatened any action or
proceeding wherein the Company, the Bank, the MHC or the
Subsidiaries is alleged to be in default thereunder.
(xv) Neither the Bank nor the Subsidiaries are in
violation of their respective certificates of incorporation,
charters or bylaws. Upon completion of their formation,
neither the Company nor the MHC will be in violation of their
respective charters or bylaws. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby by the Company, the Bank, the MHC and the
Subsidiaries do not and in the case of the Company and the MHC
upon receipt of their charters will not, conflict with or
result in a breach of the respective certificates of
incorporation, charters or bylaws of the Company, the Bank (in
either mutual or stock form), the MHC or the Subsidiaries, or
constitute a material breach of or default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, give rise to any right of termination,
cancellation or acceleration contained in, or result in the
creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the
Company, the Bank, the MHC or the Subsidiaries pursuant to any
of the terms, provisions or conditions of, any material
agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Company, the Bank, the
MHC or the Subsidiaries is a party or violate any governmental
license or permit or any enforceable published law,
administrative regulation or order or court order, writ,
injunction or decree (subject to the satisfaction of certain
conditions imposed by the Office in connection with its
approval of the Reorganization Application or the Holding
Company Application), which breach, default, encumbrance or
violation would have a material adverse effect on the Company,
the Bank, the MHC and the Subsidiaries, taken as a whole.
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(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus and prior to the Closing Date, except as otherwise
may be indicated or contemplated therein, none of the Company,
the Bank, the MHC or the Subsidiaries have issued any
securities which will remain issued and outstanding at the
Closing Date or incurred any liabilities or obligations,
direct or contingent, or borrowed money, except liabilities,
obligations or borrowings in the ordinary course of business,
or entered into any other transaction not in the ordinary
course of business and consistent with prior practices, which
are material in light of the business of the Company, the
Bank, the MHC and the Subsidiaries, taken as a whole.
(xvii) Upon consummation of the Reorganization, the
authorized, issued and outstanding equity capital of the
Company shall be within the range set forth in the Prospectus
under the caption "Capitalization," and no capital stock of
the Company shall be outstanding immediately prior to the
Closing Date; the issuance and the sale of the Shares have
been duly authorized by all necessary corporate action of the
Company, the Bank and the MHC and approved by the Office and,
when issued and paid for in accordance with the terms of the
Plan, shall be validly issued, fully paid and nonassessable
and shall conform to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to
preemptive rights, except as set forth in the Prospectus; and
good title to the Shares will be transferred by the Company to
the purchasers thereof upon issuance thereof against payment
therefor, free and clear of all claims, encumbrances, security
interests and liens of the Company whatsoever. The
certificates representing the Shares will conform in all
material respects with the requirements of applicable laws and
regulations. The issuance and sale of the capital stock of the
Bank to the Company has been duly authorized by all necessary
corporate action of the Bank and the Company and has been
approved by the Office (subject to the satisfaction of various
conditions imposed by the Office in connection with its
approval of the Reorganization Application and the Holding
Company Application), and such capital stock, when issued in
accordance with the terms of the Plan, will be fully paid and
nonassessable and will conform to the description thereof
contained in the Prospectus.
(xviii) No approval of any regulatory or supervisory
or other public authority is required of the Company, the
Bank, the MHC or the Subsidiaries in connection with the
execution and delivery of this Agreement or the issuance of
the Shares, except for the declaration of effectiveness of any
required post-effective amendment by the Commission and
approval thereof by the Office and approval of the Holding
Company Application, the issuance of the MHC, Mid-Tier Holding
Company and Stock Charters by the Office and as may be
required under the "blue sky" laws of various jurisdictions.
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(xix) All contracts and other documents required to
be filed as exhibits to the Registration Statement or the
Reorganization Application have been filed with the Commission
or the Office, as the case may be.
(xx) The Bank's financial statements as of March 31,
2001 and for the two year ended March 31, 2002 included in
this Prospectus, have been audited by Xxxxxxxxx, XxxXxxx &
Company, P.C Xxxxxxxxx, XxxXxxx & Company, P.C. are
independent public accountants with respect to the Bank within
the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants and such accountants
are, with respect to the Bank, independent certified public
accountants as required by the Act and the SEC Regulations.
(xxi) For the past five years, the Bank and the
Subsidiaries have timely (including any permissible
extensions) filed all required federal, state and local tax
returns, and no deficiency has been asserted with respect to
such returns by any taxing authorities, and the Bank and the
Subsidiaries have paid all taxes that have become due and, to
the best of their knowledge, have made adequate reserves for
known future tax liabilities, except where any failure to make
such filings, payments and reserves, or the assertion of such
a deficiency, would not have a material adverse effect on the
Company, the Bank, the MHC and the Subsidiaries, taken as a
whole.
(xxii) All of the loans represented as assets of the
Bank on the most recent statement of financial condition of
the Bank included in the Prospectus meet or are exempt from
all requirements of federal, state or local law pertaining to
lending, including without limitation truth in lending
(including the requirements of Regulation Z and 12 C.F.R. Part
226 and Section 563.99), real estate settlement procedures,
consumer credit protection, equal credit opportunity and all
disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a material
adverse effect on the Company, the Bank and the MHC, taken as
a whole.
(xxiii) To the best knowledge of the Company, the
Bank and the MHC, the records of account holders, depositors
and other members of the Bank delivered to McDonald by the
Bank or its agent for use during the Reorganization are
reliable and accurate.
(xxiv) To the best knowledge of the Company, the
Bank, the MHC and the Subsidiaries, none of the Company, the
Bank, the MHC or the Subsidiaries nor the employees of the
Company, the Bank, the MHC or the Subsidiaries, have made any
payment of funds of the Company, the Bank, the MHC or the
Subsidiaries prohibited by law, and no funds of the Company,
the Bank or the MHC have been set aside to be used for any
payment prohibited by law.
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(xxv) To the best knowledge of the Company, the Bank,
the MHC and the Subsidiaries, the Company, the Bank, the MHC
and the Subsidiaries are in compliance with all laws, rules
and regulations relating to the discharge, storage, handling
and disposal of hazardous or toxic substances, pollutants or
contaminants and none of the Company, the Bank, the MHC or the
Subsidiaries believes that the Company, the Bank, the MHC or
the Subsidiaries are subject to liability under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar law, except
for violations which, if asserted, would not have a material
adverse effect on the Company, the Bank, the MHC and the
Subsidiaries, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending or, to
the best knowledge of the Company, the Bank, the MHC and the
Subsidiaries, threatened against the Company, the Bank, the
MHC or the Subsidiaries relating to the discharge, storage,
handling and disposal of hazardous or toxic substances,
pollutants or contaminants. To the best knowledge of the
Company, the Bank, the MHC and the Subsidiaries, no disposal,
release or discharge of hazardous or toxic substances,
pollutants or contaminants, including petroleum and gas
products, as any of such terms may be defined under federal,
state or local law, has been caused by the Company, the Bank,
the MHC or the Subsidiaries or, to the best knowledge of the
Company, the Bank, the MHC and the Subsidiaries, has occurred
on, in or at any of the facilities or properties of the
Company, the Bank, the MHC or the Subsidiaries, except such
disposal, release or discharge which would not have a material
adverse effect on the Company, the Bank, the MHC and the
Subsidiaries, taken as a whole.
(xxvi) For purposes of McDonald's obligation to file
certain documents and to make certain representations to the
National Association of Securities Dealers ("NASD") in
connection with the reorganization, the Bank and the
Subsidiaries warrants that: (a) the Bank and the Subsidiaries
have not privately placed any securities within the last
18 months; (b) there have been no material dealings within the
last 12 months between the Bank, its Subsidiaries and any NASD
member or any person related to or associated with any such
member; (c) none of the officers or directors of the Bank or
the Subsidiaries have any affiliation with the NASD, (d)
except as contemplated by the engagement letter with McDonald,
the Bank and the Subsidiaries have no financial or management
consulting contracts outstanding with any other person; and
(e) there has been no intermediary between McDonald and the
Bank in connection with the public offering of the Bank's
shares, and no person is being compensated in any manner for
providing such service.
(b) McDonald represents and warrants to the Company, the Bank
and the MHC that:
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(i) McDonald is registered as a broker-dealer with
the Commission and a member of the NASD, and is in good
standing with the Commission and the NASD.
(ii) McDonald is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to
provide the services to be furnished to the Company, the Bank
and the MHC hereunder.
(iii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action
on the part of McDonald, and this Agreement is a legal, valid
and binding obligation of McDonald, enforceable in accordance
with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of
registered broker-dealers accounts of whom may be protected by
the Securities Investor Protection Corporation or by general
equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except
to the extent that the provisions of Sections 8 and 9 hereof
may be unenforceable as against public policy or pursuant to
Section 23A).
(iv) McDonald, and to McDonald's best knowledge, its
employees, agents and representatives who shall perform any of
the services required hereunder to be performed by McDonald,
shall be duly authorized and shall have all licenses,
approvals and permits necessary to perform such services, and
McDonald is a registered selling agent in the jurisdictions
listed in Exhibit A hereto and will remain registered in such
jurisdictions in which the Company is relying on such
registration for the sale of the Shares, until the
Reorganization is consummated or terminated.
(v) The execution and delivery of this Agreement by
McDonald, the fulfillment of the terms set forth herein and
the consummation of the transactions contemplated hereby shall
not violate or conflict with the corporate charter or bylaws
of McDonald or violate, conflict with or constitute a breach
of, or default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, any material
agreement, indenture or other instrument by which McDonald is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or
court decree, injunction or order, except for such violations,
conflicts, breaches or defaults that would not have an effect
on McDonald's ability to perform its obligations under this
Agreement.
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(vi) All funds received by McDonald to purchase the Common
Stock will be handled in accordance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended ("Exchange Act").
(vii) There is not now pending or, to McDonald's best
knowledge, threatened against McDonald any action or proceeding
before the Commission, the NASD, any state securities commission or
any state or federal court concerning McDonald's activities as a
broker-dealer.
3. Employment of McDonald; Sale and Delivery of the Shares. On the
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basis of the representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company, the Bank and the MHC hereby
employ McDonald as their agent to utilize its best efforts in assisting the
Company with the sale of the Shares by the Company in the Offerings. McDonald
will assist the Bank in the Reorganization by acting as marketing advisor with
respect to the Subscription Offering and will represent the Bank as placement
agent on a best efforts basis in the sale of the Common Stock in the Community
Offering if one is held; conduct training sessions with directors, officers and
employees of the Bank regarding the reorganization process; and assist in the
establishment and supervision of the Bank's stock information center and, with
management's input, will train the Bank's staff to record properly and tabulate
orders for the purchase of Common Stock and to respond appropriately to customer
inquiries. The employment of McDonald hereunder shall terminate (a) forty-five
(45) days after the Offerings close, unless the Company and the Bank, with the
approval of the Office, are permitted to extend such period of time, or (b) upon
consummation of the Reorganization, whichever date shall first occur.
If the Company is unable to sell a minimum of 535,000 Shares of Common
Stock (or such lesser amount as the Office may permit) within the period herein
provided, this Agreement shall terminate, and the Company and the Bank shall
refund promptly to any person who has subscribed for any of the Shares, 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 other party hereunder, except as set forth in Sections 6, 8(a), 8(d) and
9 hereof. Appropriate arrangements for placing the funds received from
subscriptions for Shares in a special interest-bearing account with the Bank
until all Shares are sold and paid for were made prior to the commencement of
the Subscription and Community Offering, with provision for prompt refund to the
purchasers as set forth above, or for delivery to the Company if all Shares are
sold.
If all conditions precedent to the consummation of the Reorganization
are satisfied, including the sale of all Shares required by the Plan to be sold,
the Company agrees to issue or have issued such Shares and to release for
delivery certificates to subscribers thereof for such Shares on the Closing Date
against payment to the Company by any means authorized pursuant to the
Prospectus, at the principal office of the Company or at such other place as
shall be agreed upon between the parties hereto. The date upon which McDonald is
paid the compensation due hereunder is herein called the "Closing Date."
12
McDonald agrees either (a) upon receipt of an executed order form of a
subscriber to forward the aggregate offering price of the Common Stock ordered
on or before twelve noon on the next business day following receipt or execution
of an order form by McDonald to the Bank for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) McDonald will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii)
McDonald will mail acknowledgments of receipt of orders to each subscriber
confirming interest on the business day following such confirmation, (iii)
McDonald will debit accounts of such subscribers on the third business day
("debit date") following receipt of the confirmation referred to in (i), and
(iv) McDonald will forward completed order forms together with such funds to the
Bank on or before twelve noon on the next business day following the debit date
for deposit in a segregated account. McDonald acknowledges that if the procedure
in (b) is adopted, subscribers' funds are not required to be in their accounts
until the debit date.
In addition to the expenses specified in Section 6 hereof, McDonald
shall receive the following compensation for its services hereunder and
reimbursement of expenses:
(1) a non-refundable management fee of ten thousand dollars
($10,000) that was paid on November 12, 2001; and (ii) a
consulting fee equal to $85,000 for stock sold in the
Subscription and Community Offerings. The consulting fee is to
be payable in same-day funds to McDonald on the Closing Date.
McDonald acknowledges receipt of the $10,000 management fee.
(2) McDonald shall be reimbursed for out-of-pocket expenses
(including the legal fees and expenses of McDonald's counsel)
incurred, not to exceed $35,000, whether or not the
Reorganization is successfully completed, unless the Bank
agrees to a greater amount. McDonald will submit invoices for
expense reimbursement periodically throughout the
Reorganization, and full payment of any reimbursable expenses
shall be made in same-day funds to McDonald on the Closing
Date, or if the Reorganization is not completed and is
terminated for any reason, with ten business days of receipt
by the Bank of a written request from McDonald for
reimbursement of expenses.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company, the Bank and the
MHC shall also pay all expenses of the Reorganization incurred by them or on
their prior approval including but not limited to their attorneys' fees, NASD
filing fees, filing and registration fees, and attorneys' fees relating to any
required state securities laws research and filings, telephone charges, air
freight, rental equipment, supplies, transfer agent charges, fees relating to
auditing and accounting and costs of printing all documents necessary in
connection with the Reorganization.
4. Offering. Subject to the provisions of Section 7 hereof, McDonald is
--------
assisting the Company on a best efforts basis in offering a minimum of 535,000
and a maximum of 724,500
13
Shares, with the possibility of offering up to 833,175 Shares (except as the
Office may permit such amount to be decreased or increased) in the Subscription
and Community Offerings. The Shares are to be offered to the public at the price
per share set forth on the cover page of the Prospectus.
5. Further Agreements. The Company and the Bank jointly and severally
------------------
covenant and agree that:
(a) The Company shall deliver to McDonald, from time to time,
such number of copies of the Prospectus as McDonald reasonably may
request. The Company authorizes McDonald to use the Prospectus in any
lawful manner in connection with the offer and sale of the Shares.
(b) The Company will notify McDonald or its counsel
immediately upon discovery, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement becomes
effective or any supplement to the Prospectus has been filed, (ii) of
the issuance by the Commission of any stop order relating to the
Registration Statement or of the initiation or the threat of any
proceedings for that purpose, (iii) of the receipt of any notice with
respect to the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, and (iv) of the receipt of any
comments from the staff of the Commission relating to the Registration
Statement. If the Commission enters a stop order relating to the
Registration Statement at any time, the Company will make every
reasonable effort to obtain the lifting of such order at the earliest
possible time.
(c) During the time when the Prospectus is required to be
delivered under the Act, the Company will comply with all requirements
imposed upon it by the Act, as now in effect and hereafter amended, and
by the SEC Regulations and the OTS Regulations, as from time to time in
force, so far as necessary to permit the continuance of offers and
sales of or dealings in the Shares in accordance with the provisions
hereof and the Prospectus. If, during the period when the Prospectus is
required to be delivered in connection with the offer and sale of the
Shares, any event relating to or affecting the Company, the Bank or the
MHC shall occur as a result of which it is necessary, in the opinion of
counsel for McDonald, with concurrence of counsel of the Company, to
amend or supplement the Prospectus in order to make the Prospectus not
false or misleading as to a material fact in light of the circumstances
existing at the time it is delivered to a purchaser of the Shares, the
Company shall prepare and furnish to McDonald promptly a reasonable
number of copies of an amendment or amendments or of a supplement or
supplements to the Prospectus (in form and substance satisfactory to
counsel for McDonald) which shall amend or supplement the Prospectus so
that, as amended or supplemented, the Prospectus shall not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser of the Shares, not misleading. The Company will not file or
use any amendment or supplement to the Registration Statement or the
Prospectus of which McDonald has not first been
14
furnished a copy or to which McDonald shall reasonably object after
having been furnished such copy. For the purposes of this subsection
the Company and the Bank shall furnish such information with respect to
themselves as McDonald from time to time may reasonably request.
(d) The Company has taken or will take all necessary action as
may be required to qualify or register the Shares for offer and sale by
the Company under the securities or blue sky laws of such jurisdictions
as McDonald and either the Company or its counsel may agree upon;
provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction. In each jurisdiction where such qualification or
registration shall be effected, the Company, unless McDonald agrees
that such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or
reports as are, or reasonably may be, required by the laws of such
jurisdiction.
(e) The Company will file a registration statement for the
Common Stock under Section 12(g) of the Exchange Act prior to
completion of the Reorganization pursuant to the Plan and shall request
that such registration statement be effective upon completion of the
Reorganization. The Company shall maintain the effectiveness of such
registration for a minimum period of three years or for such shorter
period as may be required by applicable law.
(f) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the SEC 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.
(g) For a period of three (3) years from the date of this
Agreement (unless the Common Stock shall have been deregistered under
the Exchange Act), the Company will furnish to McDonald, as soon as
publicly available after the end of each fiscal year, a copy of its
annual report to shareholders for such year; and the Company will
furnish to McDonald (i) as soon as publicly available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, and (ii)
from time to time, such other public information concerning the Company
as McDonald may reasonably request.
(h) The Company and the Bank shall use the net proceeds from
the sale of the Shares consistently with the manner set forth in the
Prospectus.
(i) The Company shall not deliver the Shares until each and
every condition set forth in Section 7 hereof has been satisfied,
unless such condition is waived in writing by McDonald.
15
(j) The Company shall advise McDonald, if necessary, as to the
allocation of deposits, in the case of Eligible Account Holders and
Supplemental Eligible Account Holders, and votes, in the case of Other
Members (as defined in the Plan), and of the Shares in the event of an
oversubscription and shall provide McDonald final instructions as to
the allocation of the Shares ("Allocation Instructions") and such
information shall be accurate and reliable. McDonald shall be entitled
to rely on such instructions and shall have no liability in respect of
its reliance thereon, including without limitation, no liability for or
related to any denial or grant of a subscription in whole or in part,
except for such liability contemplated under Section 8(b) of this
Agreement.
(k) The Company and the Bank will take such actions and
furnish such information as are reasonably requested by McDonald in
order for McDonald to ensure compliance with the NASD's "Interpretation
Relating to Free-Riding and Withholding."
(l) At the Closing Date, the Company, the Bank and the MHC
will have completed the conditions precedent to, and shall have
conducted the Reorganization in all material respects in accordance
with the Plan, the OTS Regulations and all other applicable laws,
regulations, published decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Reorganization
imposed by the Office, or appropriate waivers shall have been obtained.
6. Payment of Expenses. Whether or not the Reorganization is
-------------------
consummated, the Company and the Bank shall pay or reimburse McDonald for
allocable expenses incurred by McDonald relating to the offering of the Shares
as provided in Section 3 hereof; provided, however, that neither the Company nor
the Bank shall pay or reimburse McDonald for any of the foregoing expenses
accrued after McDonald shall have notified the Company or the Bank of its
election to terminate this Agreement pursuant to Section 11 hereof or after such
time as the Company or the Bank shall have given notice in accordance with
Section 12 hereof that McDonald is in breach of this Agreement.
7. Conditions of McDonald's Obligations. Except as may be waived by
------------------------------------
McDonald, the obligations of McDonald as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, McDonald shall receive the favorable
opinion of Xxxxxxx Xxxxxx & Xxxxxxxx, LLP, counsel for the Company and
the Bank, dated the Closing Date, addressed to McDonald, in form and
substance satisfactory to McDonald to the effect that:
(i) The Company is a corporation in existence under
the laws of the United States, the Bank is a stock savings
bank in existence under the laws of the United States and the
MHC is a federal mutual holding company in existence
16
under the laws of the United States, each having the
corporate power to execute, deliver and perform its respective
obligations under this Agreement and to carry on its business
as now conducted and as described in the Prospectus;
(ii) The Bank is a member of the Federal Home Loan
Bank of Chicago, and the deposit accounts of the Bank are
insured by the SAIF up to the applicable legal limits;
(iii) The activities of the Bank, the Subsidiaries,
the MHC and the Company as described in the Prospectus comply,
in all material respects, with applicable federal and state
law.
(iv) The Plan complies with, and the Reorganization
has been effected in all material respects in accordance with,
the HOLA and the OTS Regulations; all of the terms,
conditions, requirements and provisions with respect to the
Plan and the Reorganization imposed by the Office, except with
respect to the filing or submission of certain required
post-Reorganization reports by the Company, the Bank or the
MHC, have been complied with by the Company, the Bank and the
MHC in all material respects; and no person has sought to
obtain regulatory or judicial review of the final action of
the Office in approving the Plan;
(v) The Company has authorized capital stock as set
forth in the Registration Statement and the Prospectus;
(vi) The Company has authorized the issuance and sale
of the Shares by all necessary corporate action; the Shares,
upon receipt of payment and issuance in accordance with the
terms of the Plan, will be validly issued, fully paid,
nonassessable and, except as disclosed in the Prospectus, free
of preemptive rights; and purchasers of the Shares from the
Company, upon issuance thereof against payment therefor, will
acquire such Shares free and clear of all claims,
encumbrances, security interests and liens created by the
Company;
(vii) The form of certificate used to evidence the
Shares is in proper form and complies in all material respects
with the applicable requirements of United States law and the
regulations of the Office;
(viii) The Bank has authorized the sale of its
capital stock to the Company by all necessary corporate
action, which sale has been approved by the Office, and such
capital stock, upon receipt of payment and issuance in
accordance with the terms of the Plan and the Prospectus, will
be validly issued, fully paid and nonassessable and owned of
record and beneficially by the Company;
(ix) Subject to the satisfaction of the conditions to
the Office's approval of the Reorganization Application and
Holding Company Application and
17
the issuance by the Office of the Bank's Stock Charter, no
consent, approval, authorization or other action by, or filing
or registration with, any governmental agency is required to
be obtained or made by the Company, the Bank or the MHC for
the execution and delivery of this Agreement, the issuance of
the Shares and the consummation of the Reorganization except
as may be required under the "blue sky" laws of various
jurisdictions;
(x) The Company, the Bank and the MHC have authorized
the execution, delivery and performance of this Agreement by
all necessary corporate action;
(xi) The Plan has been duly adopted by the requisite
vote of the Boards of Directors of the Bank, the Company and
the MHC; and, based upon the report of the Inspector of
Election, the Plan has been approved by the requisite vote of
the eligible voting members of the Bank at a duly called
meeting;
(xii) The statements in the Prospectus under the
captions "Dividend Policy," "Regulation," "Taxation,"
"Description of Capital Stock of New England Bancshares,
Inc.," and "Restrictions on Acquisitions of New England
Bancshares, Inc. and Enfield Federal" insofar as they are, or
refer to, statements of law or legal conclusions (excluding
financial data included therein or omitted therefrom, as to
which an opinion need not be expressed), have been prepared or
reviewed by such counsel and are accurate in all material
respects;
(xiii) The Reorganization Application, the
Registration Statement, the Prospectus and the Proxy
Statement, in each case as amended or supplemented, comply as
to form in all material respects with the requirements of the
Act, the SEC Regulations, the HOLA and the OTS Regulations, as
the case may be (except as to information with respect to
McDonald included therein and financial statements, notes to
financial statements, financial tables and other financial and
statistical data, including the appraisal, included therein or
omitted therefrom, as to which no opinion need be expressed);
to such counsel's knowledge, all documents and exhibits
required to be filed with the Reorganization Application and
the Registration Statement have been so filed and the
descriptions in the Reorganization Application and the
Registration Statement of such documents and exhibits are
accurate in all material respects;
(xiv) The Reorganization Application has been
approved by the Office, and the Prospectus and the Proxy
Statement have been authorized for use by the Office; the
Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission; no
proceedings are pending by or before the Commission or the
Office seeking to revoke or rescind the orders declaring the
Registration Statement effective or approving the
Reorganization Application or, to such counsel's knowledge,
are contemplated or threatened
18
(provided that for this purpose such counsel need not regard
any litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has
manifested to the management of the Company, the Bank or the
MHC, or to such counsel, a present intention to initiate such
litigation or proceeding);
(xv) The execution and delivery of this Agreement,
and the consummation of the Reorganization by the Company, the
Bank and the MHC, do not violate any provision of the
certificate of incorporation, charter or bylaws of the
Company, the Bank or the MHC, do not violate or constitute a
breach of or default under any contract, agreement or
instrument described in the Prospectus or filed as an exhibit
to the Registration Statement, and, to the knowledge of such
counsel, do not violate any applicable law, regulation or any
judgment or order of any government, governmental
instrumentality or court that is binding on the Company, the
Bank or the MHC or any of their assets, properties or
operations;
(xvi) To such counsel's knowledge, the Company, the
Bank, the MHC and the Subsidiaries have obtained all licenses,
permits and other governmental authorizations currently
required for the conduct of their respective businesses as
such businesses are described in the Prospectus; to such
counsel's knowledge, all such licenses, permits and other
governmental authorizations are in full force and effect and
the Company, the Bank, the MHC and the Subsidiaries are in all
material respects complying therewith, except where the
failure to hold such licenses, permits or governmental
authorizations or the failure to so comply would not have a
material adverse effect on the Company, the Bank, the MHC and
the Subsidiaries;
(xvii) There is no action, suit, proceedings, inquiry
or investigation before or by any court or governmental agency
or body, now pending or, to such counsel's knowledge,
threatened, against either the Company, the Bank the MHC or
the Subsidiaries which individually, or in the aggregate,
would have a material adverse effect on the Company, the Bank,
the MHC and the Subsidiaries, taken as a whole;
(xviii) This agreement has been duly executed and
delivered by the Company, the Bank and the MHC and is
enforceable against the Company, the Bank and the MHC (except
as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of insured depository
institutions or by general equity principles, regardless of
whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent that the provisions
of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A);
19
(xix) To such counsel's knowledge, the execution and
delivery of this Agreement and the consummation of the
Reorganization by the Company, the Bank and the MHC do not
constitute a breach of or default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or
imposition of any lien, charge or other encumbrance upon any
of the properties or assets of the Company, the Bank, the MHC
or the Subsidiaries pursuant to any of the terms, provisions
or conditions of, any material agreement, contract, indenture,
bond, debenture, note, instrument or obligation to which the
Company, the Bank, the MHC or the Subsidiaries are a party or
violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court
order, writ, injunction or decree (except as may be required
under the "blue sky" laws as to which no opinion need be
expressed), which breach, default, encumbrance or violation
would have a material adverse effect on the Company, the Bank,
the MHC and the Subsidiaries, taken as a whole; and
(xx) There has been no material breach of any
provision of the Company's, the Bank's or the MHC's respective
certificate of incorporation, charter or bylaws or, to such
counsel's knowledge, a breach or default (or the occurrence of
any event which, with notice or lapse of time or both, would
constitute a default) under any agreement, contract,
indenture, debenture, bond, note, instrument or obligation to
which the Company, the Bank, the MHC or the Subsidiaries is a
party or by which any of them or any of their respective
assets or properties may be bound, or any governmental license
or permit, or a violation of any enforceable published law,
administrative regulation or order, or court order, writ,
injunction or decree which breach, default, encumbrance or
violation would have a material adverse effect on the Company,
the Bank, the MHC and the Subsidiaries, taken as a whole.
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of officers and directors of the Company, the Bank and the MHC
and certificates of public officials delivered pursuant to this Agreement. Such
counsel may assume that any agreement is the valid and binding obligation of any
parties to such agreement other than the Company, the Bank, the MHC and the
Subsidiaries. Such opinion may be governed by, and interpreted in accordance
with, the Legal Opinion Accord ("Accord") of the ABA Section of Business Law
(1991), and, as a consequence, such opinion may be rendered subject to the
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord. Further,
references in such opinion to such counsel's "knowledge" may be limited to
"knowledge" as defined in the Accord (or knowledge based on certificates). In
addition, the "General Qualifications" set forth in the Accord and other
customary assumptions and limitations may apply to such opinion. Such opinion
may be limited to present statutes, regulations and judicial interpretations and
to facts as they presently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement them should the present laws be
changed by
20
legislative or regulatory action, judicial decision or otherwise; and such
counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company and the Bank of this Agreement or the issuance of the Shares.
Further, in rendering such opinions, Xxxxxxx Xxxxxx & Xxxxxxxx, LLP may rely on
the opinion of __________________________________ with respect to any matter of
Connecticut law.
(b) At the Closing Date, McDonald shall receive the letter of
Xxxxxxx Xxxxxx & Xxxxxxxx, LLP, special counsel for the Company and the
Bank, dated the Closing Date, addressed to McDonald, in form and
substance satisfactory to McDonald and to the effect that: based on
such counsel's participation in conferences with representatives of the
Company, the Bank, the independent appraiser, the independent certified
public accountants, McDonald and its counsel, review of documents and
understanding of applicable law (including the requirements of Form
SB-2 and the character of the Registration Statement contemplated
thereby) and the experience such counsel has gained in its practice
under the Act, nothing has come to such counsel's attention that would
lead it to believe that the Registration Statement, as amended (except
as to information in respect of McDonald contained therein and except
as to the appraisal, financial statements, notes to financial
statements, financial tables and other financial and statistical data
contained therein or omitted therefrom, as to which such counsel need
express no comment), at the time it became effective contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, not misleading, or that the Prospectus, as amended or
supplemented (except as to information in respect of McDonald contained
therein and except as to the appraisal, financial statements, notes to
financial statements, financial tables and other financial and
statistical data contained therein or omitted therefrom as to which
such counsel need express no comment), at the time the Prospectus was
filed with the Commission under Rule 424(b), and at the Closing Date,
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (in making
this statement such counsel may state that it has not undertaken to
verify independently the information in the Registration Statement or
Prospectus and, therefore, does not assume any responsibility for the
accuracy or completeness thereof).
(c) Counsel for McDonald shall have been furnished such
documents as they reasonably may require for the purpose of enabling
them to review or pass upon the matters required by McDonald, and for
the purpose of evidencing the accuracy, completeness or satisfaction of
any of the representations, warranties or conditions contained in this
Agreement, including but not limited to, resolutions of the Boards of
Directors of the Company, the Bank and the MHC regarding the
authorization, execution and delivery of this Agreement and the
transactions contemplated by the Plan and this Agreement.
21
(d) Prior to and at the Closing Date, in the reasonable
opinion of McDonald, (i) there shall have been no material adverse
change in the condition (financial or otherwise), business or results
of operations of the Company, the Bank, the MHC and the Subsidiaries,
taken as a whole, since the latest date as of which information is set
forth in the Prospectus, except as referred to therein; (ii) there
shall have been no transaction entered into by the Company, the Bank,
the MHC or the Subsidiaries after the latest date as of which the
financial condition of the Company, the Bank, the MHC or the
Subsidiaries is set forth in the Prospectus other than transactions
referred to or contemplated therein, transactions in the ordinary
course of business, and transactions which are not material to the
Company, the Bank, the MHC and the Subsidiaries, taken as a whole;
(iii) none of the Company, the Bank, the MHC or the Subsidiaries shall
have received from any governmental authority any direction (oral or
written) to make any change in the method of conducting their
respective businesses which is material to the business of the Company,
the Bank, the MHC and the Subsidiaries, taken as a whole, with which
they have not complied; (iv) no action, suit or proceeding, at law or
in equity or before or by any federal or state commission, board or
other administrative agency, shall be pending or threatened against the
Company, the Bank, the MHC or the Subsidiaries affecting any of their
respective assets, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the Company, the Bank, the MHC
and the Subsidiaries, taken as a whole; and (v) the Shares shall have
been qualified or registered for offering and sale by the Company under
the "blue sky" laws of such jurisdictions as McDonald and the Company
shall have agreed upon.
(e) At the Closing Date, McDonald shall receive a certificate
of the principal executive officer and the principal financial officer
or her designee, which designee shall be an executive officer, of each
of the Company, the Bank, and the MHC dated the Closing Date, to the
effect that: (i) they have examined the Prospectus and, at the time the
Registration Statement was declared effective by the Commission and at
the time the Prospectus was authorized by the Office for use, the
Prospectus did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading with respect to the Company, the Bank or the MHC; (ii) since
the date the Registration Statement was declared effective by the
Commission and since the date the Prospectus became authorized by the
Office for use, no event has occurred which should have been set forth
in an amendment or supplement to the Prospectus which has not been so
set forth, including specifically, but without limitation, any material
change in the business, condition (financial or otherwise) or results
of operations of the Company, the Bank, or the MHC and the conditions
set forth in clauses (ii) through (v) inclusive of subsection (d) of
this Section 7 have been satisfied; (iii) no order has been issued by
the Commission or the Office to suspend the Offering or the
effectiveness of the Prospectus, and no action for such purposes has
been instituted or, to the knowledge of such officers, threatened by
the Commission or the Office; (iv) to the knowledge of such officers,
no person has sought to obtain review of the final actions of the
Office approving the Plan; and (v) all of the representations and
warranties contained in Section 2 of this Agreement
22
are true and correct, with the same force and effect as though
expressly made on the Closing Date.
(f) At the Closing Date, McDonald shall receive, among other
documents, (i) copies of the letters from the Office authorizing the
use of the Prospectus and the Proxy Statement and the approval of the
Reorganization Application (ii) if available, a copy of the order of
the Commission declaring the Registration Statement effective; (iii) a
copy of the letter from the Office evidencing the corporate existence
of the Bank; (iv) if available, a copy of the letter from the Office
evidencing the corporate existence of the Company; (v) if available, a
copy of the letter from the Office evidencing the corporate existence
of the MHC; (vi) a copy of the letter from the Office approving the
Bank's Stock Charter; (vii) copy of the certificate from the FDIC
certifying to the insured status by the Bank; and (viii) copy of the
letter to FHLB of Chicago evidencing the Bank's membership therein.
(g) As soon as available after the Closing Date, McDonald
shall receive a certified copy of the Bank's Stock Charter, the
Company's Charter, and the MHC's Charter, each as executed by the
Office.
(h) Concurrently with the execution of this Agreement,
McDonald shall receive a letter from Xxxxxxxxx, XxxXxxx & Company,
P.C., independent certified public accountants, addressed to McDonald,
the Company, the Bank and the MHC, in substance and form satisfactory
to McDonald, with respect to the financial statements of the Bank and
other financial information contained in the Prospectus.
(i) At the Closing Date, McDonald shall receive a letter in
form and substance satisfactory to McDonald from Xxxxxxxxx, XxxXxxx &
Company, P.C., independent certified public accountants, dated the
Closing Date and addressed to McDonald, the Company, the Bank and the
MHC, confirming the statements made by them in the letters delivered by
them pursuant to the preceding subsection as of a specified date not
more than five (5) business days prior to the Closing Date.
(j) At the Closing Date, McDonald shall receive the opinion of
Xxxxxxx Xxxxxx & Xxxxxxxx, LLP, special counsel to the Company and the
Bank, dated the Closing Date, in form and substance satisfactory to
McDonald and to the Reorganization will constitute a tax- free
organization under the Internal Revenue Code of 1986, as amended;
McDonald shall have also received the letter of Xxxxxxxxx, XxxXxxx &
Company, P.C., dated the Closing Date, in form and substance
satisfactory to McDonald and to the effect that the Reorganization will
not be a taxable transaction for the Bank, the Company or the MHC under
the laws of Connecticut; and that the facts and representations upon
which such entities relied upon in rendering their respective opinions
to the Bank, the Company and the MHC are accurate and complete.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of McDonald and its counsel,
23
satisfactory to McDonald. Any certificates signed by an officer or director of
the Company, the Bank or the MHC prepared for McDonald's reliance and delivered
to McDonald or to counsel for McDonald shall be deemed a representation and
warranty by the Company, the Bank and the MHC to McDonald as to the statements
made therein. If any condition to McDonald's obligations hereunder to be
fulfilled prior to or at the Closing Date is not so fulfilled, McDonald may
terminate this Agreement or, if McDonald so elects, may waive any such
conditions which have not been fulfilled, or may extend the time of their
fulfillment. If McDonald terminates this Agreement as aforesaid, the Company,
the Bank, and the MHC shall reimburse McDonald for its expenses as provided in
Section 3(b) hereof.
8. Indemnification.
---------------
(a) The Company, the Bank and the MHC jointly and severally
agree to indemnify and hold harmless McDonald, its officers, directors,
employees and agents and each person, if any, who controls McDonald
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever and shall further promptly reimburse such persons
for any legal or other expenses reasonably incurred by each or any of
them in investigating, preparing to defend or defending against any
such action, proceeding or claim (whether commenced or threatened)
arising out of or based upon (i) any misrepresentation by the Company,
the Bank or the MHC in this Agreement or any breach of warranty by the
Company, the Bank or the MHC with respect to this Agreement or arising
out of or based upon any untrue or alleged untrue statement of a
material fact or the omission or alleged omission of a material fact
required to be stated or necessary to make not misleading any
statements contained in (A) the Registration Statement or the
Prospectus or (B) any application (including the Reorganization
Application and the Holding Company Application) or other document or
communication (in this Section 8 collectively called "Application")
prepared or executed by or on behalf of the Company, the Bank or the
MHC or based upon information furnished in writing by or on behalf of
the Company, the Bank or the MHC, whether or not filed in any
jurisdiction, to effect the Reorganization or qualify the Shares under
the securities laws thereof or filed with the Office or Commission,
unless such statement or omission was made in reliance upon and in
conformity with information furnished to the Company, the Bank or the
MHC with respect to McDonald by or on behalf of McDonald expressly for
use in the Prospectus or any amendment or supplement thereof or in any
Application, as the case may be, or (ii) the participation by McDonald
in the Reorganization; provided, however, that this indemnification
agreement will 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 McDonald or any other party who may otherwise be
entitled to indemnification pursuant to this Section 8(a). This
indemnity shall be in addition to any liability the Company, the Bank
and the MHC may otherwise have to McDonald.
(b) The Company, the Bank and the MHC shall indemnify and hold
harmless McDonald, its officers, directors, employees and agents and
each person, if any, who
24
controls McDonald within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act for any liability whatsoever arising
out of (i) the Allocation Instructions or (ii) any records of account
holders, depositors, borrowers and other members of the Bank delivered
to McDonald by the Bank or its agents for use during the
Reorganization; provided, however, that this indemnification agreement
will not apply to any loss, liability, claim, damage or expense found
in a final judgment by a court of competent jurisdiction to have
resulted principally and directly from the bad faith, willful
misconduct or gross negligence of McDonald or any other party who may
otherwise be entitled to indemnification pursuant to this Section 8(b).
This indemnity shall be in addition to any liability the Company, the
Bank and the MHC may otherwise have to McDonald.
(c) McDonald agrees to indemnify and hold harmless the
Company, the Bank, the MHC, their officers, directors and employees and
each person, if any, who controls the Company, the Bank or the MHC
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the
Company, the Bank and the MHC to McDonald, but only with respect to (i)
statements or omissions, if any, made in the Prospectus or any
amendment or supplement thereof, in any Application or to a purchaser
of the Shares in reliance upon, and in conformity with, written
information furnished to the Company, the Bank or the MHC with respect
to McDonald by McDonald expressly for use in the Prospectus or in any
Application, which the Company, the Bank and the MHC acknowledge
appears only in the section captioned "Market for Common Stock" and the
first two paragraphs of the section captioned "The Reorganization and
the Stock Offering - Marketing Arrangements"; (ii) any
misrepresentation by McDonald in Section 2(b) of this Agreement; or
(iii) any liability of the Company, the Bank or the MHC which is found
in a final judgment by a court of competent jurisdiction (not subject
to further appeal) to have resulted principally and directly from gross
negligence, bad faith or willful misconduct of McDonald.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with the other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable cost of
investigation except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the
25
indemnified party may retain additional counsel, but shall bear the
fees and expenses of such counsel unless (i) the indemnifying party
shall have specifically authorized the indemnified party to retain such
counsel or (ii) the parties to such suit include such indemnifying
party and the indemnified party, and such indemnified party shall have
been advised by counsel that one or more material legal defenses may be
available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought
shall not be liable to indemnify an indemnified party under this
Section 8 if any settlement of any such action is effected without such
indemnifying party's consent. To the extent required by law, this
Section 8 is subject to and limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to McDonald, the
Company, the Bank and/or the MHC other than in accordance with its terms, the
Company, the Bank or the MHC and McDonald shall contribute to the aggregate
losses, liabilities, claims, damages, and expenses of the nature contemplated by
said indemnity agreement incurred by the Company, the Bank or the MHC and
McDonald (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Bank or the MHC, on the one hand, and
McDonald, on the other hand, from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the Company, the
Bank or the MHC, on the one hand, and McDonald, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Bank or the
MHC, on the one hand, and McDonald, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the Reorganization received
by the Company, the Bank and the MHC bear to the total fees and expenses
received by McDonald under this Agreement. The relative fault of the Company,
the Bank or the MHC, on the one hand, and McDonald, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Bank or the
MHC or by McDonald and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the MHC and McDonald agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in
26
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, McDonald shall not be required
to contribute any amount in excess of the amount by which fees owed McDonald
pursuant to this Agreement exceeds the amount of any damages which McDonald has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. To the extent required by law, this Section 9 is subject to
and limited by the provisions of Section 23A.
10. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company, the Bank and the MHC and McDonald and the
representations and warranties of the Company, the Bank, the MHC and the
Subsidiaries and of McDonald set forth in or made pursuant to this Agreement
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of
McDonald or the Company, the Bank or the MHC or any controlling person or
indemnified party referred to in Section 8 hereof, and shall survive any
termination or consummation of this Agreement and/or the issuance of the Shares,
and any legal representative of McDonald, the Company, the Bank, the MHC and any
such controlling persons shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
11. Termination. McDonald may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or
occurrence has materially disrupted the United States securities
markets such as to make it, in McDonald's reasonable opinion,
impracticable to proceed with the offering of the Shares; or if trading
on the New York Stock Exchange or the Nasdaq Stock Market shall have
suspended; or if the United States shall have become involved in a war
or major hostilities other than as existing at the time this Agreement
becomes effective; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the Bank
or the Reorganization; or if a moratorium in foreign exchange trading
by major international banks or persons has been declared; or if there
shall have been a material adverse change in the capitalization,
financial condition or business of the Company, the Bank or the MHC, or
if the Company, the Bank or the MHC shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act, whether or not said
loss shall have been insured; or if there shall have been a material
adverse change in the condition, financial or otherwise, or prospects
of the Company, the Bank, the MHC and the Subsidiaries, taken as a
whole.
(b) If McDonald elects to terminate this Agreement as provided
in this Section, the Company, the Bank and the MHC shall be notified
promptly by McDonald by telephone or telegram, confirmed by letter.
27
(c) If this Agreement is terminated by McDonald for any of the
reasons set forth in subsection (a) above, and to fulfill their
obligations, if any, pursuant to Sections 3, 6, 8(a) and 9 of this
Agreement and upon demand, the Company, the Bank and the MHC shall pay
McDonald the full amount so owing thereunder.
(d) The Bank may terminate the Reorganization in accordance
with the terms of the Plan. Such termination shall be without liability
to any party, except that the Company, the Bank and the MHC shall be
required to fulfill their obligations pursuant to Sections 3, 6, 8(a),
8(d) and 9 of this Agreement.
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to McDonald shall be
mailed, delivered or faxed and confirmed to Trident Securities, A Division of
McDonald Investments Inc., 0000 Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxxxx, Senior Vice President (with a
copy to Xxxxxxx Spidi & Xxxxx, PC, 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000 Xxxx,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx X. Xxxxxxx, Esq.) and if sent to the
Company or the Bank, shall be mailed, delivered or faxed and confirmed to
Enfield Federal Savings and Loan Association, 000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000, Attention: Xxxxx X. X'Xxxxxx, President and Chief Executive
Officer of the Company and the Bank (with a copy to Xxxxxxx Xxxxxx & Xxxxxxxx,
LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx
Spaccasi, Esq. or Xxxx Xxxxxx, Esq.).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, McDonald, the Company, the Bank, the MHC and the
controlling and other persons referred to in Section 8 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained. The undersigned consent to the assignment of rights and obligations
of Trident Securities hereunder to McDonald Investments Inc.
14. Construction. This Agreement shall be governed by and construed in
------------
accordance with the substantive laws of North Carolina regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
15. Counterparts and Definitions. This Agreement may be executed in
----------------------------
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute but one and the same
instrument. Any initially capitalized terms not defined herein shall have the
meanings ascribed thereto in the Prospectus.
28
Please acknowledge your agreement to the foregoing as of the date above
written by signing below and returning to the Company one copy of this letter.
NEW ENGLAND BANCSHARES, INC. ENFIELD FEDERAL SAVINGS AND
(In Formation) LOAN ASSOCIATION
By: By:
------------------------------------- ---------------------------------
Xxxxx X. X'Xxxxxx Xxxxx X. X'Xxxxxx
President and Chief Executive Officer President and Chief Executive
Officer
ENFIELD MUTUAL HOLDING COMPANY
(In Formation)
By:
-------------------------------------
Xxxxx X. X'Xxxxxx
President and Chief Executive Officer
Agreed to and accepted:
MCDONALD INVESTMENTS INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxxx
Managing Director
29
Exhibit A
Trident Securities, a Division of McDonald Investments Inc. is a registered
selling agent in the jurisdictions listed below:
Alabama Montana
Xxxxxx Xxxxxxxx
Arizona Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of Columbia North Dakota
Florida Ohio
Georgia Oklahoma
Hawaii Oregon
Idaho Pennsylvania
Illinois Rhode Island
Indiana South Carolina
Iowa South Dakota
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
30
