EXHIBIT 1.1
SFB Bancorp, Inc.
493,000 to 767,050 Shares
Common Stock
(Par Value $.10 Per Share)
$10.00 Per Share
SALES AGENCY AGREEMENT
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
SFB Bancorp, Inc., a Tennessee-chartered corporation (the "Company"), and
Security Federal Savings Bank, a federally chartered and insured mutual savings
association (the "Bank"), hereby confirm, as of ________ ___, 1997, their
respective agreements with Trident Securities, Inc. ("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. Introductory. The Bank intends to convert from a federally chartered
mutual savings association to a federally chartered stock savings association
(to be known as Security Federal 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 on ________ ___, 1997
(as amended, if amended, the "Plan"). In accordance with the Plan, the Company
is offering shares of its common stock, par value $.10 per share (the "Shares"
and the "Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "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 (the "ESOP")). Shares of the
Common Stock not sold in the Subscription Offering may be offered to the general
public in a community offering, with preference given to natural persons
residing in Xxxxxx County, Tennessee (the "Community Offering"), 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. Shares not sold in the
Subscription Offering or otherwise in the Community Offering may be offered to
certain members of the general public as part of the Community Offering by a
group of broker-dealers (the "Syndicated Community Offering") (the Subscription
Offering and, if any, the Community and Syndicated Community Offerings are
sometimes referred to collectively as the "Offerings"). In the Offerings, the
Company is offering between 493,000 and 667,000 Shares, with the possibility of
offering up to 767,050 Shares without a resolicitation of subscribers, as
contemplated by Part 563b of Title 12 of the Code of Federal Regulations. With
the exception of the ESOP, no person (or persons through a single account) may
purchase in the
Trident Securities, Inc.
Sales Agency Agreement
Page 2
Offerings more than 15,000 Shares; no person, together with associates of and
persons acting in concert with such person, may purchase in the Offerings more
than 25,000 Shares.
The Company and the Bank have been advised by Trident that it will utilize
its best efforts in assisting the Company and the Bank with the sale of the
Shares in the Offerings, including any Syndicated Community Offering. Prior to
the execution of this Agreement, the Company has delivered to Trident a
prospectus dated as of the date hereof and all supplements thereto to be used in
the Offerings. 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 ____ (No. __________), including a prospectus
relating to the Offerings, for the registration of the Shares under
the Securities Act of 1933, as amended (the "Act"); and 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 (together with the enforceable published policies and
actions of the Commission thereunder, the "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 or
mailed for filing to 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, if any, the Community
Offering, the Company (i) will promptly file with the Commission a
post-effective amendment to such Registration Statement relating to
the results of the Subscription Offering and, if any, the Community
Offering, any additional information with respect to the
Trident Securities, Inc.
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Page 3
proposed plan of distribution and any revised pricing information or
(ii) if no such post-effective amendment is required, will file
with, or mail for filing to, the Commission a prospectus or
prospectus supplement containing information relating to the results
of the Subscription Offering and, if any, the Community Offering and
pricing information pursuant to Rule 424(c) of the 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 (the "Office") under the Home Owners' Loan Act,
as amended (the "HOLA") and the enforceable rules and regulations,
including published policies and actions, of the Office thereunder
(the "OTS Regulations"), which has been approved by the Office; and
the Prospectus and the proxy statement for the solicitation of
proxies from members for the special meeting to approve the Plan
(the "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 promulgated under the savings and loan holding company
provisions of the HOLA and the OTS Regulations and has received
approval of its acquisition of the Bank from the Office.
(iii) At the date of the Prospectus and at all times
subsequent thereto through and including the Closing Date (i) the
Registration Statement and the Prospectus (as amended or
supplemented, if amended or supplemented) complied with the Act and
the 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 furnished to the Company or
the Bank relating to Trident by or on behalf of Trident expressly
for use in the Registration Statement or Prospectus.
Trident Securities, Inc.
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Page 4
(iv) The Company has been duly organized as a Tennessee
corporation, and the Bank has been duly organized as a mutual
savings association 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
Registration Statement and Prospectus; the Bank is a member in good
standing of the Federal Home Loan Bank of Cincinnati; 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 legal limits.
Each of the Company and the Bank is not 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 rules and regulations of the
Office and completion of the sale by the Company of the Shares as
contemplated by the Prospectus, (i) the Bank will be converted
pursuant to the Plan 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, marketable and insurable 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 material liens,
charges, encumbrances or restrictions, except for liens for taxes
not yet due, except as described in the Prospectus and except as
could not in the aggregate have a material adverse effect upon the
operations or financial condition of 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 execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary actions on the part of each
of the Company and the Bank, and this Agreement is a valid and
binding obligation with valid execution and delivery 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 savings and loan holding companies the
accounts of whose subsidiaries are insured by the FDIC or by general
equity principles, regardless of whether such enforceability
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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")).
(vii) 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 and
business, including the assets and properties, of the Company and
the Bank, taken as a whole.
(viii) The Company and the Bank have received the opinions of
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C. with respect to federal tax
consequences of the Conversion, and of Crisp Xxxxxx & Co., L.L.P.,
with respect to Tennessee 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, and will not be
a taxable transaction for the Bank or the Company under the laws of
Tennessee, and the facts relied upon in such opinions are accurate
and complete.
(ix) 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 securities 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 amended charter in the form required for
federally chartered stock savings associations (the "Stock
Charter"), the form of which Stock Charter has been approved by the
Office.
(x) 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 might have a material
adverse effect on the condition (financial or otherwise),
operations, businesses, assets or properties of the Company and the
Bank, taken as a whole.
Trident Securities, Inc.
Sales Agency Agreement
Page 6
(xi) The financial statements and any related notes or
schedules which are included in the Registration Statement and the
Prospectus fairly present the financial condition, income, retained
earnings and cash flows of the Bank at the respective dates thereof
and for the respective periods covered thereby and comply as to form
with the applicable accounting requirements of the SEC and OTS
Regulations. 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 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.
(xii) There has been no material change in the condition
(financial or otherwise), 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 to the descriptions thereof contained
in the Prospectus. None of the Company or the Bank has any material
liabilities of any kind, contingent or otherwise, except as set
forth in the Prospectus.
(xiii) 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,
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), operations, business, assets or properties of the
Company and the Bank, taken as a whole; all agreements which are
material to the condition (financial or otherwise), results of
operations or business of the Company and 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 and the Bank,
threatened any action or proceeding wherein the Company or the Bank
would be alleged to be in default thereunder.
(xiv) None of the Company or the Bank is in violation of its
respective
Trident Securities, Inc.
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charter or bylaws. The execution and delivery hereof 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
charter or bylaws of the Company or the Bank (in either mutual or
stock form) 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), which breach, default, encumbrance or violation would
have a material adverse effect on the condition (financial or
otherwise), operations or business of the Company and the Bank,
taken as a whole.
(xv) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus
and prior to the Closing Date (as hereinafter defined), except as
otherwise may be indicated or contemplated therein, none of the
Company or the Bank has issued any securities which will remain
issued at the Closing Date or incurred any liability or obligation,
direct or contingent, or borrowed money, except 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 is material in light of the business of the Company
and the Bank, taken as a whole.
(xvi) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range as set forth in the Prospectus under the caption
"Capitalization," and no Common Stock of the Company shall be
outstanding immediately prior to the Closing Date; the issuance and
the sale of the Shares of the Company have been duly authorized by
all necessary action of the Company and approved by the Office and,
when issued in accordance with the terms of the Plan and paid for,
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 upon issuance thereof against payment
therefor, free and clear of all claims, encumbrances, security
interests and liens against 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
Trident Securities, Inc.
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Company has been duly authorized by all necessary action of the Bank
and the Company and appropriate regulatory authorities (subject to the
satisfaction of various conditions imposed by the Office in connection
with its approval of the Conversion Application), and such capital
stock, when issued in accordance with the terms of the Plan, will be
fully paid and nonassessable and will conform in all material respects
to the description thereof contained in the Prospectus.
(xvii) No approval of any regulatory or supervisory or other
public authority is required 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 on Form H-(e)1-S by the
Office, the issuance of the Stock Charter by the Office and as may
be required under the securities laws of various jurisdictions.
(xviii) 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 and/or the Office,
as the case may be.
(xix) Crisp Xxxxxx & Co., L.L.P., which has audited the
financial statements of the Bank at December 31, 1996 and 1995 and
for the years ended December 31, 1996, 1995 and 1994 included in the
Prospectus, is an independent public accountant within the meaning
of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and Title 12 of the Code of Federal
Regulations, Section 571.2(c)(3).
(xx) For the past five years, the Company and the Bank have
timely filed all required federal, state and local franchise 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 similar 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 condition of the Company and the
Bank, taken as a whole.
(xxi) All of the loans represented as assets of the Bank on
the most recent financial statements of the Bank included in the
Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending and interest, 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,
Trident Securities, Inc.
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taken as a whole.
(xxii) The records of account holders, depositors, borrowers
and other members of the Bank delivered to Trident by the Bank or
its agent for use during the Conversion have been prepared or
reviewed by the Bank and, to the best knowledge of the Company and
the Bank, are reliable and accurate.
(xxiii) None of the Company, the Bank or 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.
(xxiv) 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 or
contaminants and neither the Company nor the Bank believes that the
Company or the 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.
(xxv) 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 HOLA, 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.
(b) Trident represents and warrants to the Company and the Bank
that:
(i) Trident is registered as a broker-dealer with the
Commission, and
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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.
(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 whose 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 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.
(vi) Any funds received by Trident to purchase Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's knowledge,
threatened
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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.
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
Company's sale of the Shares in the Subscription Offering and, if any, the
Community Offering. 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.
In the event the Company is unable to sell a minimum of 493,000 Shares (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 persons who have 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) and 9 hereof.
Appropriate arrangements for placing the funds received from subscriptions for
Shares in special interest-bearing accounts with the Bank until all Shares are
sold and paid for were made prior to the commencement of the Offerings, 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 at 000 Xxxx Xxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxx ______, or at such other place as shall be agreed upon between the
parties hereto. The date upon which Trident 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 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 acknowledgements of receipt of orders to each 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
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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:
(a)(i) a commission equal to 1.85% of the aggregate dollar amount of
Common Stock sold to investors who reside in Xxxxxx County, Tennessee, a
commission equal to 1.50% on sales to investors residing in the contiguous
Tennessee counties, a commission equal to 1.15% on sales to investors
residing in other Tennessee counties and a commission equal to 0.95% on
sales to investors residing outside the state of Tennessee, except no
commissions shall be payable on shares purchased by officers, directors,
employees or their associates or employee benefit plans and (ii) a
commission to be agreed upon by Trident and the Company for Shares sold by
other member firms of the NASD through a selected dealers arrangement in
any Syndicated Community Offering. All commissions shall be based on the
amount of Common Stock sold; however, fees shall be capped based on the
sale of shares of Common Stock at the midpoint of the final appraised
value as stated on the final Prospectus cover. In the event that the
Offerings are closed above the midpoint of such final appraised value, the
above described fee schedule will be applied on a pro rata basis as if the
Offerings had closed at such midpoint. All such commissions are to be
payable in same-day funds to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses, including
but not limited to travel, communications and postage and legal fees and
expenses, whether or not the Offerings are successfully completed;
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 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. Trident's
out-of-pocket expenses will not exceed $7,500, and its legal fees will not
exceed $23,500, without the consent of the Company and the Bank. Full
payment to defray Trident's reimbursable expenses shall be made in
same-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 $7,500 advance payment from the
Bank which shall be credited against the total reimbursement due Trident
hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in the immediately preceding paragraph (b), in
the event that a
Trident Securities, Inc.
Sales Agency Agreement
Page 13
resolicitation or other event causes the Offerings to be extended beyond
their original expiration date, Trident shall be reimbursed for its
reasonable expenses incurred during such extended period, provided that
the allowances for reimbursable expenses provided for in the immediately
preceding paragraph (b) above have been exhausted and subject to the
following. Such reimbursements shall not exceed an amount equal to the
product obtained by dividing $31,000 (the original aggregate reimbursable
expense limit), respectively, by the total number of days of the
unextended Subscription Offering (calculated from the date of the
Prospectus to the intended close of the Subscription Offering as stated in
the Prospectus) and multiplying such product by the number of days of the
extension (that number of days from the date of the supplemental
prospectus used in the extended offering to the closing of the extension
of the offering(s) described in such supplemental prospectus), without the
consent of the Company and the Bank.
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,
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.
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 493,000
and a maximum of 667,000 Shares, with the possibility of offering up to 767,050
Shares (except as the Office may permit to be decreased or increased) in the
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 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
Trident Securities, Inc.
Sales Agency Agreement
Page 14
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 moment.
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter
amended, and by the 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 and the Bank, taken as a whole, shall occur as a
result of which it is necessary, in the opinion of counsel for Trident,
with the concurrence of counsel to the Company, to amend or supplement the
Prospectus in order to make the Prospectus not false or misleading in
light of the circumstances existing at the time it is delivered to a
purchaser of the Shares, the Company forthwith shall prepare and furnish
to Trident 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 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 and the Bank have taken or will take all reasonably
necessary action as may be required to qualify or register the Shares for
offer and sale by the Company under the securities 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
Trident Securities, Inc.
Sales Agency Agreement
Page 15
under Section 12(g) of the Exchange Act, prior to completion of the stock
offering 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 regulations promulgated under the
Act) 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 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
votes, in the case of other members, and of the Shares in the event of an
oversubscription and shall, after consultation with Trident, provide
Trident final instructions as to the allocation of the Shares ("Allocation
Instructions") in such event 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.
(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."
6. Payment of Expenses. Whether or not the Conversion is consummated, the
Trident Securities, Inc.
Sales Agency Agreement
Page 16
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 Offerings and, (b) in addition, if the Company is unable to sell a
minimum of 493,000 Shares 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 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 in writing
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
opinions of Xxxxxxx, Spidi, Sloane & Xxxxx, P.C., special counsel for the
Company and the Bank, and Xxxxx X. Xxxxxxx, Xx., Esquire, counsel for the
Company and the Bank, dated the Closing Date, addressed to Trident, in
form and substance reasonably satisfactory to counsel for Trident,
substantially as set forth in Exhibits B and C, respectively, hereto.
(b) At the Closing Date, Trident shall receive the letter of
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C., special counsel for the Company and
the Bank, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident, substantially as
set forth in Exhibit D hereto.
(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 herein contained, including but
not limited to, resolutions of the Board of Directors of the Company and
the Bank regarding the authorization of this Agreement and the
transactions contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material 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 such
condition 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,
Trident Securities, Inc.
Sales Agency Agreement
Page 17
transactions in the ordinary course of business, and transactions which
are not material to the Company and the Bank, taken as a whole; (iii) none
of the Company or the Bank shall have received from the Office or
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 business, operations, financial condition or income of 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
securities 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, financial and accounting officer(s) of each of the
Company and the Bank, dated the Closing Date, to the effect that: (i) they
have examined the Prospectus and, at the time the Prospectus became
authorized by the Company 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 Prospectus became
authorized by the Company 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 (iv) inclusive of subsection (d) of this
Section 7 have been satisfied; (iii) to the best knowledge of such
officers, no order has been issued by the Commission or the Office to
suspend the Offerings or the effectiveness of the Prospectus, and no
action for such purposes has been instituted or threatened by the
Commission or the Office; (iv) to the best 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, (ii) a copy of the order of the
Commission declaring the Registration Statement effective; (iii) copies of
the letters from the Office evidencing the corporate existence of the
Bank; (iv) a copy of the letter from the appropriate Tennessee authority
evidencing the incorporation (and, if generally available from such
authority, good standing) of the Company; (v) a copy of the Company's
charter certified by the appropriate Tennessee governmental authority;
and, (vi) if available, a copy of the letter
Trident Securities, Inc.
Sales Agency Agreement
Page 18
from the Office approving the Bank's Stock Charter.
(g) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Bank's Stock Charter executed by
the appropriate federal governmental authority.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Crisp Xxxxxx & Co., L.L.P.,
independent certified public accountants, addressed to Trident and the
Company, in substance and form satisfactory to counsel for Trident, with
respect to the financial statements and certain financial information
contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Crisp Xxxxxx & Co.,
L.L.P., independent certified public accountants, dated the Closing Date
and addressed to Trident and the Company, confirming the statements made
by them in the letter delivered by them pursuant to the preceding
subsection as of a specified date not more than five (5) 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 and its counsel. 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 in writing 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 and employees
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 (A) 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
Trident Securities, Inc.
Sales Agency Agreement
Page 19
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 (i) the Registration Statement or the
Prospectus or (ii) 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 written 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 conformity
with written 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 (B) the participation by Trident in the Conversion. This
indemnity shall be in addition to any liability the Company and the Bank
may have to Trident otherwise.
(b) The Company shall indemnify and hold Trident harmless 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.
(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 or 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 (A) 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 or on behalf of Trident expressly for use in the Prospectus or
in any Application; (B) any misrepresentation by Trident in Section 2(b)
of this Agreement; or (C) 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 principally and directly resulted from
gross negligence 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 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
Trident Securities, Inc.
Sales Agency Agreement
Page 20
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 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 shall be deemed to be in the same
proportions as the total net proceeds from the Conversion received by the
Company and the Bank bear to the total commissions received by Trident under
this Agreement. The relative fault of the Company or the Bank on the one hand
and Trident on the other 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 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.
Trident Securities, Inc.
Sales Agency Agreement
Page 21
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 commissions 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 8 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
representation 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 change in the capitalization, condition or business
of the Company, or if the Bank 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 or prospects of the Company, the Bank or the
Subsidiary.
Trident Securities, Inc.
Sales Agency Agreement
Page 22
(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.
Trident Securities, Inc.
Sales Agency Agreement
Page 23
(c) If this Agreement is terminated by Trident for any of the
reasons set forth in subsection (a) above, and to fulfill its 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(b), 3(c), 6, 8(a) 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 telegraphed and confirmed to Trident Securities, Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Mr. R. Xxx
Xxxxxxx, Xx. (with a copy to Housley Kantarian & Xxxxxxxxx, P.C., 0000 00xx
Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxx, Esquire) and
if sent to the Company or the Bank, shall be mailed, delivered or telegraphed
and confirmed to SFB Bancorp, Inc., Security Federal Savings Bank (or Security
Federal Bank, as applicable), 000 Xxxx Xxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxx
______, Attention: Xx. Xxxxx X. Xxxxxxx, President (with a copy to Xxxxxxx,
Spidi, Sloane & Xxxxx, P.C., 0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx,
X.X. 00000, Attention: Xxxxxxx X. Xxxxxx, 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.
14. Construction. Unless governed by preemptive federal law, this
Agreement shall be governed by and construed in accordance with the substantive
laws of Tennessee.
15. Counterparts. 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.
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
SFB BANCORP, INC. SECURITY FEDERAL SAVINGS BANK
By: By:
---------------------------------- ----------------------------
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
President and Chief President and Chief
Executive Officer Executive Officer
Date: , 1997 Date: , 1997
---------- ----- ---------- -----
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
Date: , 1997
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