EXHIBIT 1
[Form of]
BUCS FINANCIAL CORP
348,500 to 471,500 Shares
(as may be increased to 542,225 shares)
Common Stock
($.10 Par Value Per Share)
Purchase Price: $10.00 Per Share
SALES AGENCY AGREEMENT
----------------------
___________________, 2001
Trident Securities, a Division of McDonald Investments, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Bucs Financial Corp, a Maryland corporation ("Company"), and BUCS
Federal (to be renamed as BUCS Federal Bank after the conversion from mutual to
stock form) (referred to herein as "Bank," in mutual or stock form as the
context may require), hereby confirm, as of ___________________, 2001, 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, "Trident"), a broker-dealer registered with the
Securities and Exchange Commission ("Commission") and a member of the National
Association of Securities Dealers, Inc. ("NASD"), as follows:
1. Introduction. The Bank intends to convert from a federally chartered
mutual savings association 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
and the incorporation of the Company, the "Conversion") pursuant to a plan of
conversion adopted by the Bank's Board of Directors on September 25, 2000 [and
amended on ______________] ("Plan"). In accordance with the Plan, the Company is
offering shares of its common stock, $.10 par value per share ("Common Stock"),
pursuant to nontransferable subscription rights in a subscription offering
("Subscription Offering") to certain depositors and borrowers of the Bank and to
the Bank's tax-qualified employee benefit plans (i.e., the Bank's Employee Stock
Ownership Plan ("ESOP")). And 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 Baltimore and Xxxxxx Counties, Maryland ("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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 2
Offering in whole or in part. In the Subscription Offering (and the Community
Offering, if applicable), the Company is offering between 348,500 and 471,500
shares of Common Stock ("Shares"), with the possibility of offering up to
542,225 shares without a resolicitation of subscribers, as contemplated by Part
563b of Title 12 of the Code of Federal Regulations. Except for the ESOP, no
person may purchase shares with an aggregate purchase price of more than
$125,000 and no person or entity, together with associates of and persons acting
in concert with such person or other entity, may purchase more than $150,000 of
Common Stock.
Trident has advised the Company and the Bank 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 Trident
the prospectus dated ___________________, 2001 (as hereinafter defined) and all
supplements thereto, if any, to be used in the Offerings have also been
delivered to Trident (or if after the date of this Agreement, will be promptly
delivered to Trident). Such prospectus contains information with respect to the
Company, the Bank and the Shares.
2. Representations and Warranties.
(a) The Company and the Bank jointly and severally represent
and warrant to Trident 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. 333-47524), 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," 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 3
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 Trident.
(ii) The Bank has filed an Application for Approval
of Conversion on Form AC, including exhibits (as amended or
supplemented, the "Form AC" and together with the Form
H-(e)1-S referred to below, the "Conversion 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 Form AC 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 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 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 Trident furnished to the Company or the
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 4
Bank by or on behalf of Trident expressly for use in the
Registration Statement or Prospectus.
(iv) The Company is duly incorporated as a Maryland
corporation and the Bank is duly organized as a mutual savings
bank under the laws of the United States, and each of them is
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 Atlanta; 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. Neither the Company nor
the Bank is 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 and the Bank, 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 Bank has good and marketable title to all
assets material to its business and to those assets described
in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except as described in
the Prospectus and except as would not in the aggregate have a
material adverse effect on the Bank; and all of the leases and
subleases material to the operations or financial condition of
the Bank, under which it holds properties, including those
described in the Prospectus, are in full force and effect as
described therein.
(vi) The Bank has 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 is 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 and the Bank, taken as
a whole.
(vii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 5
necessary corporate action on the part of each of the Company
and the Bank, and this Agreement has been validly executed and
delivered by, and is a valid and binding obligation of, each
of the Company and the Bank, 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")).
(viii) There is no litigation or governmental
proceeding pending or, to the best knowledge of the Company or
the Bank, threatened against or involving the Company, the
Bank, 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 and the Bank, taken as a whole.
(ix) The Company and the Bank have received the
opinion of Xxxxxxx Xxxxx & Xxxxx, PC, counsel to the Company
and the Bank, with respect to federal income tax consequences
of the Conversion, to the effect that the Conversion will
constitute a tax-free reorganization under the Internal
Revenue Code of 1986, as amended; the Company and the Bank
have also received the opinion of Xxxxxxx Xxxxx & Xxxxx, PC
with respect to the Maryland tax consequences of the
Conversion, to the effect that the Conversion will not be a
taxable transaction for the Bank or the Company under the laws
of Maryland; and the facts and representations upon which such
entities relied upon in rendering their respective opinion are
accurate and complete.
(x) Each of the Company and the Bank has all such
corporate power, authority, authorizations, approvals and
orders as may be required to enter into this Agreement and to
carry out the provisions and conditions hereof, subject to the
limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the Office in connection with
its approvals of the Form AC and the Application H-(e)1-S, and
except as 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 6
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 banks ("Stock
Charter"), the form of which Stock Charter has been filed with
the Form AC and approved by the Office.
(xi) Neither the Company nor the Bank is in violation
of any rule or regulation of the Office or the FDIC that could
reasonably be expected to result in any enforcement action
against the Company, the Bank, 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 and the Bank, taken as a
whole.
(xii) The 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 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 and the Bank,
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 and the Bank conform in all
materials respects to the descriptions thereof contained in
the Prospectus. Neither the Company nor the Bank has any
material liabilities of any kind, contingent or otherwise,
except as set forth in the Prospectus.
(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 or the Bank
pursuant to any of the terms, provisions or conditions of, any
agreement, contract, indenture, bond, debenture,
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 7
note, instrument or obligation to which the Company or the
Bank 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 and the Bank, taken as a whole; all agreements which
are material to the financial condition, results of operations
or business, assets or properties of the Company or the Bank
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 or the Bank, threatened any action or proceeding
wherein the Company or the Bank is alleged to be in default
thereunder.
(xv) Neither the Company nor the Bank is in violation
of its respective articles of incorporation, charter or
bylaws. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by the
Company and the Bank do not conflict with or result in a
breach of the respective articles of incorporation, charter or
bylaws of the Company or the Bank (in either mutual or stock
form) or any legal requirements resulting from the Bank's
former conversion from a national credit union to a federal
savings bank 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 or the Bank pursuant to any of the terms, provisions
or conditions of, any material agreement, contract, indenture,
bond, debenture, note, instrument or obligation to which the
Company or the Bank is a party or violate any governmental
license or permit or any enforceable published law,
administrative regulation or order or court order, writ,
injunction or decree (subject to the satisfaction of certain
conditions imposed by the Office in connection with its
approval of the Conversion Application or the Application
H-(e)1-S), which breach, default, encumbrance or violation
would have a material adverse effect on the Company and the
Bank, taken as a whole.
(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, neither the Company
nor the Bank has issued any securities which will remain
issued and outstanding at the Closing Date or incurred any
liability or obligation, 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
Trident Securities, a Division of McDonald Investments, Inc.
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Page 8
and consistent with prior practices, which is material in
light of the business of the Company and the Bank, taken as a
whole.
(xvii) Upon consummation of the Conversion, 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 and the Bank 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 Conversion Application and the Application
H-(e)1-S), 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 or the
Bank 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 Company's Application H-(e)1-S, the
issuance of the Stock Charter by the Office and as may be
required under the "blue sky" laws of various jurisdictions.
(xix) All contracts and other documents required to
be filed as exhibits to the Registration Statement or the
Conversion Application have been filed with the Commission or
the Office, as the case may be.
Trident Securities, a Division of McDonald Investments, Inc.
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Page 9
(xx) Xxxxxxx & Associates, P.A., which has audited
the financial statements of the Bank at December 31, 1999 and
1998 and for the years ended December 31, 1999 and 1998
included in the Prospectus, is an independent public
accountant with respect to the Company and 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 Company and the Bank, independent
certified public accountants as required by the Act and the
SEC Regulations.
(xxi) For the past five years, or in the case of the
Company, such lesser period corresponding to the Company's
existence, the Company and the Bank have timely 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 Company and the Bank 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 and
the Bank, 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 and the Bank, taken as a whole.
(xxiii) To the best knowledge of the Company and the
Bank, the records of account holders, depositors and other
members of the Bank delivered to Trident by the Bank or its
agent for use during the Conversion are reliable and accurate.
(xxiv) To the best knowledge of the Company and the
Bank, neither the Company nor the Bank nor the employees of
the Company or the Bank, has made any payment of funds of the
Company or the Bank prohibited by law, and no funds of the
Company or the Bank have been set aside to be used for any
payment prohibited by law.
(xxv) To the best knowledge of the Company and the
Bank, the Company and the Bank are in compliance with all
laws, rules and regulations relating to the discharge,
storage, handling and disposal of hazardous or toxic
substances, pollutants
Trident Securities, a Division of McDonald Investments, Inc.
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Page 10
or contaminants and neither the Company nor the Bank believes
that the Company and Bank is subject to liability under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar law, except
for violations which, if asserted, would not have a material
adverse effect on the Company and the Bank, taken as a whole.
There are no actions, suits, regulatory investigations or
other proceedings pending or, to the best knowledge of the
Company or the Bank, threatened against the Company or the
Bank relating to the discharge, storage, handling and disposal
of hazardous or toxic substances, pollutants or contaminants.
To the best knowledge of the Company and the Bank, 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 or
the Bank or, to the best knowledge of the Company or the Bank,
has occurred on, in or at any of the facilities or properties
of the Company or the Bank, except such disposal, release or
discharge which would not have a material adverse effect on
the Company and the Bank, taken as a whole.
(xxvi) For purposes of Trident's obligation to file
certain documents and to make certain representations to the
National Association of Securities Dealers ("NASD") in
connection with the conversion, the Bank warrants that: (a)
the Bank has not privately placed any securities within the
last 18 months; (b) there have been no materials dealings
within the last 12 months between the Bank 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 has any
affiliation with the NASD, (d) except as contemplated by the
engagement letter with Trident, the Bank has no financial or
management consulting contracts outstanding with any other
person; and (e) there has been no intermediary between Trident
and the Association in connection with the public offering of
the Association's shares, and no person is being compensated
in any manner for providing such service.
(b) Trident represents and warrants to the Company and
the Bank that:
(i) Trident 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) Trident 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 and the
Bank hereunder.
Trident Securities, a Division of McDonald Investments, Inc.
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Page 11
(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 Trident, and this Agreement is a legal, valid
and binding obligation of Trident, enforceable in accordance
with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of
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) Each of Trident, and to Trident's best
knowledge, its employees, agents and representatives who shall
perform any of the services required hereunder to be performed
by Trident shall be duly authorized and shall have all
licenses, approvals and permits necessary to perform such
services, and Trident 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 Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by
Trident, 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
Trident 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 Trident 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 a material
adverse effect on Trident.
(vi) All funds received by Trident 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 Xxxxxxx's best
knowledge, threatened against Trident any action or proceeding
before the Commission, the NASD, any state securities
commission or any state or federal court concerning Trident's
activities as a broker-dealer.
Trident Securities, a Division of McDonald Investments, Inc.
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Page 12
3. Employment of Trident; Sale and Delivery of the Shares. On the basis
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank hereby employ Trident
as their agent to utilize its best efforts in assisting the Company with the
sale of the Shares by the Company in the Offerings. Trident will assist the Bank
in the Conversion 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 conversion 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 Trident 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 Conversion, whichever date shall first occur.
If the Company is unable to sell a minimum of 348,500 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 Conversion 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 Xxxxxxx is paid the
compensation due hereunder is herein called the "Closing Date."
Trident 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 Trident to the Bank for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) Trident 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) Trident
will mail acknowledgments of receipt of orders to each
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 13
subscriber confirming interest on the business day following such confirmation,
(iii) Trident will debit accounts of such subscribers on the third business day
("debit date") following receipt of the confirmation referred to in (i), and
(iv) Trident 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. Trident 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, Trident
shall receive the following compensation for its services hereunder and
reimbursement of expenses:
(a) (i) a non-refundable management fee of twenty thousand
dollars ($20,000) payable on September 28, 2000; and
(ii) a consulting fee of one hundred thousand dollars
($100,000) for any stock sold in the Subscription and
Community Offerings. The consulting fee is to be
payable in same-day funds to Trident on the Closing
Date. Trident acknowledges the receipt of the $20,000
management fee.
(b) Trident shall be reimbursed for reasonable allocable
expenses, including but not limited to travel,
communications, postage, and the fees and expenses of
its legal counsel incurred by it whether or not the
Offerings are successfully completed. Trident shall be
reimbursed for such fees in an amount not to exceed
$35,000. Neither the Company nor the Bank shall pay or
reimburse Trident for any of the foregoing expenses,
however, if accrued after Trident 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
Trident is in breach of this Agreement. Full payment to
defray Trident's reimbursable expenses shall be made in
next-day funds on the Closing Date or, if the
Conversion is not completed and is terminated for any
reason, within ten (10) business days of receipt by the
Company of a written request from Trident for
reimbursement of its expenses. Trident acknowledges
receipt of $10,000 advance payment from the Bank which
shall be credited against the total reimbursement due
Trident hereunder.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Conversion 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
Conversion.
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 14
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
assisting the Company on a best efforts basis in offering a minimum of 348,500
and a maximum of 471,500 Shares, with the possibility of offering up to 542,225
Shares (except as the Office may permit to be decreased or increased) in the
Subscription and Community Offerings. The Shares are to be offered to the public
at the price set forth on the cover page of the Prospectus and the first page of
this Agreement.
5. Further Agreements. The Company and the Bank jointly and severally
covenant and agree that:
(a) The Company shall deliver to Trident, from time to time,
such number of copies of the Prospectus as Trident reasonably may
request. The Company authorizes Trident to use the Prospectus in any
lawful manner in connection with the offer and sale of the Shares.
(b) The Company will notify Trident 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 or the Bank
shall occur as a result of which it is necessary, in the opinion of
counsel for Trident, 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 Trident 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 Trident) 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 15
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 Trident has not first
been furnished a copy or to which Trident 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 Trident 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 Trident 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 Trident 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) Appropriate entries will be made in the financial records
of the Bank sufficient to establish a liquidation account for the
benefit of Eligible Account Holders and Supplemental Eligible Account
Holders in accordance with the requirements of the Office.
(f) The Company will file a registration statement for the
Common Stock under Section 12(g) of the Exchange Act prior to
completion of the Conversion pursuant to the Plan and shall request
that such registration statement be effective upon completion of the
Conversion. 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.
(g) 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.
(h) 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 Trident, 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 Trident (i) as soon as publicly available, a copy of each
report or definitive proxy statement of the
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 16
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 Trident may reasonably request.
(i) The Company shall use the net proceeds from the sale of
the Shares consistently with the manner set forth in the Prospectus.
(j) 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 Trident.
(k) The Company shall advise Trident, 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 Trident final instructions as to the
allocation of the Shares ("Allocation Instructions") and such
information shall be accurate and reliable. Trident 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.
(l) The Company and the Bank will take such actions and
furnish such information as are reasonably requested by Trident in
order for Trident to ensure compliance with the NASD's "Interpretation
Relating to Free-Riding and Withholding."
(m) At the Closing Date, the Company and the Bank will have
completed the conditions precedent to, and shall have conducted the
Conversion in all material respects in accordance with, the Plan, the
OTS Regulations and all other applicable laws, regulations, published
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion imposed by the Office, or
appropriate waivers shall have been obtained.
6. Payment of Expenses. Whether or not the Conversion is consummated,
the Company and the Bank shall pay or reimburse Trident for (a) all filing fees
paid or incurred by Trident in connection with all filings with the NASD with
respect to the Subscription and Community Offerings and, (b) in addition, if the
Company is unable to sell a minimum of 348,500 Shares of Common Stock or such
lesser amount as the Office may permit or the Conversion is otherwise
terminated, the Company and the Bank shall reimburse Trident for allocable
expenses incurred by Trident 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 Trident for any of the foregoing expenses accrued after
Trident shall have notified the Company or the Bank of its election to terminate
this
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 17
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 Trident
is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
Trident, the obligations of Trident 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, Trident shall receive the favorable
opinion of Xxxxxxx Xxxxx & Xxxxx, PC, counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and
substance satisfactory to Trident to the effect that:
(i) The Company is a corporation in existence under
the laws of the State of Maryland, and the Bank is a mutual
savings bank in existence 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 Atlanta, and the deposit accounts of the Bank are
insured by the SAIF up to the applicable legal limits;
(iii) The activities of the Bank and the Company as
described in the Prospectus comply, in all material respects,
with federal and Maryland law.
(iv) The Plan complies with, and, to the knowledge of
such counsel, the Conversion has been effected in all material
respects in accordance with, the HOLA and the OTS Regulations;
to the knowledge of such counsel, all of the terms,
conditions, requirements and provisions with respect to the
Plan and the Conversion imposed by the Office, except with
respect to the filing or submission of certain required
post-Conversion reports by the Company or the Bank, have been
complied with by the Company and the Bank in all material
respects; and, to the best knowledge of such counsel, 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 18
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 Maryland 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 Conversion Application and
Application H-(e)1-S and 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 or the Bank for the execution and delivery of this
Agreement, the issuance of the Shares and the consummation of
the Conversion except as may be required under the "blue sky"
laws of various jurisdictions;
(x) The Company and the Bank 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 Board of Directors of the Bank and by the
requisite vote of the Board of Directors of the Company; 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," and "Restrictions on
Acquisitions of Bucs Financial Corp" 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;
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 19
(xiii) The Conversion 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 Trident 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 Conversion Application and the
Registration Statement have been so filed and the descriptions
in the Conversion Application and the Registration Statement
of such documents and exhibits are accurate in all material
respects;
(xiv) The Form AC 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 Conversion Application or, to such
counsel's knowledge, are contemplated or threatened (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 or the Bank, 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 Conversion by the Company and the
Bank, do not violate any provision of the Articles of
Incorporation, Charter or Bylaws of the Company or the Bank,
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 or the Bank (including any requirements imposed on the
Bank as a result of its conversion from a federal credit union
to a federal savings bank) or any of its assets, properties or
operations;
(xvi) To the knowledge of such counsel, the Company
and the Bank have obtained all licenses, permits and other
governmental authorizations currently required for the conduct
of its respective business as such business is described in
the Prospectus, all such licenses, permits and other
governmental authorizations are in full force and effect and
the Company and the Bank are in all material respects
complying therewith, except where the failure to hold such
licenses, permits or
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 20
governmental authorizations or the failure to so comply would
not have a material adverse effect on the Company and the
Bank, taken as a whole;
(xvii) To such counsel's knowledge, there is no
action, suit, proceedings, inquiry or investigation before or
by any court or governmental agency or body, now pending or
threatened, against either the Company or the Bank which
individually, or in the aggregate, would have a material
adverse effect on the Company and the Bank, taken as a whole;
(xviii) This agreement has been duly executed and
delivered by the Company and the Bank and is enforceable
against the Bank and the Company (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);
(xix) To such counsel's knowledge, the execution and
delivery of this Agreement and the consummation of the
Conversion by the Company and the Bank 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 or the Bank pursuant to any of the
terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or
obligation to which the Company or the Bank is a party or
violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court
order, writ, injunction or decree (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 and the
Bank, taken as a whole; and
(xx) To such counsel's knowledge, there has been no
material breach of any provision of the Company's or the
Bank's respective articles of incorporation, charter or bylaws
or 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 or
the Bank 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 21
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 and the Bank,
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 and the Bank 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 and the Bank. 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
legislative or regulatory action, judicial decision or otherwise; and such
counsels 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 Xxxxx & Xxxxx, PC, may rely on the
opinion of _______________________, with respect to any matter of Maryland law.
(b) At the Closing Date, Trident shall receive the letter of
Xxxxxxx Xxxxx & Xxxxx, PC, special counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and
substance satisfactory to Trident 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, Trident 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 Trident 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 22
supplemented (except as to information in respect of Trident 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 Trident 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 Trident, 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 Board of
Directors of the Company and the Bank regarding the authorization,
execution and delivery of this Agreement and the transactions
contemplated by the Plan and this Agreement.
(d) Prior to and at the Closing Date, in the reasonable
opinion of Trident, (i) there shall have been no material adverse
change in the condition (financial or otherwise), business or results
of operations of the Company and the Bank, 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 or the Bank after the latest
date as of which the financial condition of the Company or the Bank is
set forth in the Prospectus other than transactions referred to or
contemplated therein, transactions in the ordinary course of business,
and transactions which are not material to the Company and the Bank,
taken as a whole; (iii) neither the Company nor the Bank shall have
received from the Office or the Commission 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
and the Bank, 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 or the Bank or
affecting any of their respective assets, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on the
Company and the Bank, 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 Trident and the Company
shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate
of the principal executive officer and the principal financial officer
of each of the Company and the Bank,
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 23
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 or the Bank; (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 or the Bank, 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 and division approving the
Plan; and (v) all of the representations and warranties contained in
Section 2 of this Agreement are true and correct, with the same force
and effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident 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
Conversion 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) a copy of the letter from the appropriate Maryland authority
evidencing the incorporation (and, if generally available from such
authority, good standing) of the Company; (v) a copy of the Company's
articles of incorporation certified by the appropriate Maryland
governmental authority; (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 Atlanta evidencing the Bank's membership
therein.
(g) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Bank's Stock Charter as executed by the
Office.
(h) Concurrently with the execution of this Agreement, Trident
shall receive a letter from Xxxxxxx & Associates, P.A., independent
certified public accountants, addressed to Trident, the Company and the
Bank, in substance and form satisfactory to Trident, with respect to
the financial statements of the Bank and other financial information
contained in the Prospectus. In addition, at the same time, Trident
shall receive a letter from Xxxxxxxxxx and Babbits, independent
certified public accountants and consultants to the Company and
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 24
the Bank, to the effect that they have reviewed the letter from
Xxxxxxx & Associates, P.A. and to their knowledge the letter is true,
accurate and complete in all material respects.
(i) At the Closing Date, Trident shall receive a letter in
form and substance satisfactory to Trident from Xxxxxxx & Associates,
P.A. and Xxxxxxxxxx and Babbits, independent certified public
accountants, dated the Closing Date and addressed to Trident, the
Company and the Bank, 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.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident. Any certificates
signed by an officer or director of the Company or the Bank prepared for
Trident's reliance and delivered to Trident or to counsel for Trident shall be
deemed a representation and warranty by the Company and the Bank to Trident as
to the statements made therein. If any condition to Trident's obligations
hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled,
Trident may terminate this Agreement or, if Trident so elects, may waive any
such conditions which have not been fulfilled, or may extend the time of their
fulfillment. If Trident terminates this Agreement as aforesaid, the Company and
the Bank shall reimburse Trident for its expenses as provided in Section 3(b)
hereof.
8. Indemnification.
(a) The Company and the Bank jointly and severally agree to
indemnify and hold harmless Trident, its officers, directors, employees
and agents and each person, if any, who controls Trident 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 or the
Bank in this Agreement or any breach of warranty by the Company or the
Bank 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 Form AC and the Form H-(e)1-S) or other document or
communication (in this Section 8 collectively called "Application")
prepared or executed by or on behalf of the Company or the Bank or
based upon information furnished by or on behalf of the Company or the
Bank, whether or not filed in any jurisdiction, to effect the
Conversion 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 25
conformity with information furnished to the Company or the Bank with
respect to Trident by or on behalf of Trident 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 Trident
in the Conversion; 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 Trident 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 and the
Bank may otherwise have to Trident.
(b) The Company shall indemnify and hold harmless Trident, its
officers, directors, employees and agents and each person, if any, who
controls Trident 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
Trident by the Bank or its agents for use during the Conversion;
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 Trident 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 and the
Bank may otherwise have to Trident.
(c) Trident agrees to indemnify and hold harmless the Company
and the Bank, their officers, directors and employees and each person,
if any, who controls the Company and the Bank 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 and the Bank to
Trident, 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 or the
Bank with respect to Trident by Trident expressly for use in the
Prospectus or in any Application; (ii) any misrepresentation by Trident
in Section 2(b) of this Agreement; or (iii) any liability of the
Company or the Bank 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 Trident.
(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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 26
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 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 Trident, the Company
and/or the Bank other than in accordance with its terms, the Company or the Bank
and Trident shall contribute to the aggregate losses, liabilities, claims,
damages, and expenses of the nature contemplated by said indemnity agreement
incurred by the Company or the Bank and Trident (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Bank, on the one hand, and Trident, 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 or the Bank, on the one hand, and Trident, 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 and the
Bank, on the one hand, and Trident, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the Conversion received by
the Company and the Bank bear to the total fees and expenses received by Trident
under this Agreement. The relative fault of the Company or the Bank, on the one
hand, and Trident, 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
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 27
to state a material fact relates to information supplied by the Company or the
Bank or by Trident and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Bank and Trident 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 connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident 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 and the Bank and Trident and the
representations and warranties of the Company and the Bank and of Trident 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 Trident or the Company or the Bank 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 Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. Trident 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 Trident's reasonable opinion,
impracticable to proceed with the offering of the Shares; or if trading
on the New York Stock Exchange shall have suspended; or if the United
States shall have become involved in a war or major hostilities; or if
a general banking moratorium has been declared by a state or federal
authority which has material effect on the Bank or the Conversion; 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, or if the Bank shall have sustained a material
or
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 28
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 or the Bank.
(b) If Trident elects to terminate this Agreement as provided
in this Section, the Company and the Bank shall be notified promptly by
Trident by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident 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 and the Bank shall pay Trident
the full amount so owing thereunder.
(d) The Bank may terminate the Conversion in accordance with
the terms of the Plan. Such termination shall be without liability to
any party, except that the Company and the Bank 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 Trident shall be
mailed, delivered or faxed and confirmed to Trident Securities, Inc., 0000 Xxx
Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxx Xxxxxx
Xxxx (with a copy to Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxxx, Esquire) and if sent
to the Company or the Bank, shall be mailed, delivered or telegraphed and
confirmed to BUCS Federal, 00000 Xxxx Xxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxx, President and Chief Executive Officer of the
Company and the Bank (with a copy to Xxxxxxx Spidi & Xxxxx, PC, 0000 Xxx Xxxx
Xxxxxx, Xxxxx 000 Xxxx, Xxxxxxxxxx, XX 00000 (Attention: Xxxxxx X. Xxxxxxx,
Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Trident, the Company, the Bank 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, Inc. 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.
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 29
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.
* * *
[Signature page follows]
Trident Securities, a Division of McDonald Investments, Inc.
___________________, 2001
Page 29
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.
BUCS FINANCIAL CORP BUCS FEDERAL
By: By:
----------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer President and Chief Executive Officer
Agreed to and accepted:
TRIDENT SECURITIES
A Division of McDonald Investments Inc.
By:
-----------------------------------
Xxxx Xxxxxx Xxxx
Senior Vice President
109974.1:11/9/00
Exhibit A
Trident Securities, 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 (Trident Securities, Inc. only, no agents)
Florida Ohio
Georgia Oklahoma
Idaho Oregon
Illinois Pennsylvania
Indiana Rhode Island
Iowa South Carolina
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
listed below: ---
Hawaii
South Dakota
