Exhibit 1.1
[UVEST LETTERHEAD]
SELLING AGENT PLACEMENT AGREEMENT
September , 2001
UVEST Investment Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: HCSB Financial Corporation
Public Offering Of Common Stock
Ladies and Gentlemen:
This letter agreement (this "Agreement") sets forth and confirms the
terms and conditions of the engagement of UVEST Financial Services Group, Inc.,
doing business as "UVEST Investment Services," a North Carolina corporation
("UVEST"), by HCSB Financial Corporation, a South Carolina corporation (the
"Company"), as selling agent for the Company with respect to the Company's
proposed public offering (the "Offering") of 500,000 shares of its common stock,
par value $.01 per share (the "Shares"). The Offering will be made by means of a
prospectus (the "Prospectus") incorporated in a registration statement on Form
S-2 (together with any amendments thereto, the "Registration Statement") filed
with the U.S. Securities and Exchange Commission ("SEC"), which will be provided
to UVEST. UVEST and the Company are hereinafter referred to collectively as the
"Parties."
The Company intends to offer and sell the Shares in North Carolina. The
Parties understand that unless an issuer of securities is excluded from the
definition of "dealer" as set forth in Section 2(2)d.3 or Section 2(2)d.4 of
Chapter 78A of the North Carolina General Statutes ("Chapter 78A"), no
securities will be considered for registration by the Securities Division of the
North Carolina Secretary of State (the "North Carolina Securities Division")
unless the application therefor is "sponsored" by a North Carolina-registered
dealer. In accordance with the provisions of Section 18 NCAC 6.1305 of the North
Carolina Administrative Code, the Company hereby appoints UVEST as its
sponsoring dealer and UVEST accepts such appointment. In such capacity, UVEST
will act as a sponsoring dealer for the account of the Company in connection
with effecting the public offer and sale of the Shares to residents of North
Carolina in North Carolina after the Registration Statement's effectiveness with
the SEC and the Company's filing of the appropriate notice, fee and consent to
service of process with the North Carolina Securities Division. UVEST will
effect the sale of the Shares in North Carolina on behalf of the Company at a
public offering price of twenty two dollars ($22) per share, unless and until
the Company establishes another price in accordance with SEC procedures and so
informs UVEST. The Company acknowledges that UVEST has not been, nor will UVEST
be involved, in the determination of the public offering price of the Shares.
1. Representations and Warranties of the Company.
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The Company represents and warrants to, and agrees with UVEST as follows:
(a) The Registration Statement, including the Prospectus,has been
prepared and will be filed with the SEC by the Company with respect to
the Shares in conformity with the requirements for registration under
the Securities Act of 1933, as amended (the "1933 Act") and the SEC's
rules and regulations (the "Rules and Regulations") under the 1933 Act
of the offering and sale of the Shares. The Company proposes to file or
has filed prior to the effective date of the Registration Statement an
amendment or amendments thereto, which amendment or amendments have
been or will be similarly prepared.
(b) The SEC has not issued any order preventing or suspending the use of
the Prospectus and the Prospectus conforms in all material respects to
the requirements of the 1933 Act and the Rules and Regulations. As of
its date, the Prospectus does not include any untrue statement of a
material fact nor does it omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. At the time the Registration Statement
becomes effective, and at all times subsequent thereto up to and
including the closing of the Offering, the Registration Statement and
the Prospectus, and any amendments or supplements thereto, will contain
all material statements and information required to be included therein
by the 1933 Act and the Rules and Regulations and will in all material
respects conform to the requirements of the 1933 Act and the Rules and
Regulations, and neither the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, will include any 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; provided, however, no representation or warranty contained
in this paragraph (b) of Section 1 shall be applicable to information
contained in or omitted from the Registration Statement, the Prospectus
or any amendment or supplement thereof in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of UVEST, specifically for use in the preparation thereof.
(c) The Company is current in all filings of reports, financial
statements and schedule requirements to be made with the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(d) The Company and [each of] its subsidiary[ies] is, and at all times
during the Offering will be, a corporation duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of organization, with all power and authority to own,
lease or operate its properties and conduct its business as described
in the Prospectus; and is duly qualified to do business as a foreign
corporation in each jurisdiction in which it owns or leases properties
or conducts its business so as to require qualification and is in good
standing in each such jurisdiction, except where failure to be so
qualified would not have a material adverse effect on the condition,
financial or otherwise, results of operations, affairs or business
prospects of the Company or [each of] its subsidiary[ies]; except as
disclosed in the Prospectus and the financial statements of the
Company, the Company,
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directly or indirectly, owns all of the outstanding capital stock of
its subsidiary[ies] free and clear of all claims, liens, charges and
encumbrances; the Company and [each of] its subsidiary[ies] are in
possession of and operating in compliance with all banking, securities,
insurance and other applicable approvals, authorizations, licenses,
permits, consents, certificates and orders material to the conduct of
their respective businesses, all of which are valid and in full force
and effect. The deposits in [each of] the Company's banking
subsidiary[ies] are insured by the Federal Deposit Insurance
Corporation.
(e) The Shares to be issued and sold by the Company hereunder, when issued
and delivered against payment therefor as provided herein, will be duly
and validly authorized and issued, fully paid and nonassessable and
will conform to the description thereof contained in the Prospectus;
have been issued in compliance with all federal and state securities
laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and
conform to the description thereof contained in the Prospectus. All
issued and outstanding shares of capital stock of [each/the]
subsidiary[ies] have been duly authorized and validly issued, are fully
paid and nonassessable and are owned directly or indirectly by the
Company. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Shares by
the Company pursuant to this Agreement. No shareholder of the Company
has any right that has not been waived to require the Company to
register the sale of any share owned by such shareholder under the 1933
Act in the Offering contemplated by this Agreement. No further approval
or authority of the shareholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be
sold by the Company as contemplated herein.
(f) Except as disclosed in the Prospectus or information incorporated
therein by reference, there are no (i) outstanding securities or
obligations of the Company convertible into or exchangeable for any
capital stock of the Company, (ii) warrants, rights or options to
subscribe for or purchase from the Company any such capital stock or
any such convertible or exchangeable securities or obligations or (iii)
obligations of the Company to issue any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
options; the description of the Company's stock option, stock bonus and
other stock plans or arrangements, if any, and the options or other
rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(g) The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
in accordance with its terms, except to the extent enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or
other laws affecting the rights of creditors generally and by
principles of equity, whether considered at law or equity. Neither the
making of or the execution and delivery of this Agreement by the
Company, nor the consummation of the transactions herein contemplated,
nor compliance with the terms and provisions hereof, will violate any
provisions of the articles of
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incorporation or bylaws, or other organizational documents, of the
Company and will not conflict with, result in the breach or violation
of, or constitute, either by itself or upon notice or the passage of
time or both, a default under any agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to
which the Company is a party or by which the Company or any of its
properties may be bound or affected, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body
applicable to the Company or any of its properties.
(h) There are no contracts, agreements or understandings between the
Company and any person which would give rise to a valid claim against
the Company for a brokerage commission, finder's fee or other like
payment in connection with the Offering, other than compensation due
and payable to UVEST pursuant to this Agreement.
(i) No action, suit or proceeding at law or in equity is pending or,
to the Company's knowledge, threatened to which the Company is a party,
and no proceedings are pending or, to the Company's knowledge,
threatened against or affecting the Company before or by any
governmental official, commission, board or other administrative
agency, (other than in connection with required regulatory approvals)
wherein an unfavorable decision, ruling or finding could have a
material adverse effect on the consummation of this Agreement or the
condition, financial or otherwise, results of operations, affairs or
business prospects of the Company.
(j) The Company has such permits, licenses, franchises and
governmental and regulatory authorizations ("permits") as are necessary
to own its properties and conduct its business in the manner described
in the Prospectus, subject to such qualifications as may be set forth
in the Prospectus, and except where the failure to have such permits
would not have a material adverse effect on the consummation of this
Agreement or the condition, financial or otherwise, results of
operations, affairs or business prospects of the Company.
(k) Any historical financial statements (other than any pro forma
financial statements) included in the Prospectus present fairly the
financial position of the Company as of the date indicated and the
results of operations, equity and cash flows for the periods specified,
and such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a basis that is
consistent in all material respects during the periods involved.
(l) To the best knowledge of the Company after due inquiry, no
officer, director or 5% shareholder of the Company is an associated
person of or otherwise affiliated with a member of the National
Association of Securities Dealers, Inc. (the "NASD"), with the
exception of Xxxx X. Xxxxxxx, who is a registered representative of
UVEST.
(m) The Company is not in default in the performance of any obligation,
agreement or condition contained in any agreement by which the Company
is bound.
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(n) The Company is not an "investment company" or a company "controlled" by
an investment company within the meaning of the Investment Company Act
of 1940;
(o) The Company agrees as follows:
(i) The Company will notify UVEST immediately, and confirm such notice
in writing, of the receipt of any comments from the SEC or any state
securities commission or regulatory authority that relate to the
Registration Statement or any amendment thereto or requests by the SEC
or any state securities commission or regulatory authority for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information;
(ii) The Company will use the net proceeds from the sale of the Shares
received by it in the manner specified in the Prospectus under the
caption "Use of Proceeds;" and
(iii) For three (3) years from the date of this Agreement, the Company
will furnish to UVEST copies of all reports and communications
(financial or otherwise) furnished by the Company to its shareholders,
copies of all reports or financial statements filed with the regulatory
agencies as soon as such are available (except for quarterly Call
Reports), and such other publicly available documents, reports and
information concerning the business and financial condition of the
Company as UVEST may reasonably request; and
(p) The Company acknowledges and agrees that UVEST and its affiliates may,
from time to time, have relationships and engagements with the Company
or other parties including, but not limited to, its customers,
suppliers, creditors, potential investors and investors. Such
engagements and relationships may include, but are not limited to, the
following: (i) loans, other extensions of credit or financial
accommodations; (ii) treasury and cash management services; (iii)
acting in various capacities in connection with private or public
placement of debt and/or equity; (iv) acting as trustee or otherwise
performing fiduciary services for the Company or such other parties or
in connection with transactions in which the Company is involved or may
have an interest, including without limitation any employee benefit
plan or trust; (v) any and all forms of depository services; (vi) any
and all other services or products which may be offered or provided by
UVEST or any of its affiliated companies; and (vii) other services or
products customarily provided from time to time by financial
institutions. The Company waives any and all conflicts of interest,
which may result from UVEST dealing in any of the aforesaid capacities.
Specifically, the Company waives any conflict that may arise on account
of, or in connection with UVEST's engagement pursuant to this
Agreement. The Company acknowledges that UVEST and its affiliates may,
in the course of such other relationships, acquire information about
the Company or such other parties but UVEST shall have no obligation to
disclose such information, or the fact that it has such information in
its possession, to the Company or to use such information on the
Company's behalf.
(q) Xxxxxxxxx, Xxxxxxx & Xxxxxx, L.L.P., who have expressed their
opinion with respect to the financial statements and schedules filed
with the Commission as a part of
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the Registration Statement and included in the Prospectus and in the
Registration Statement, or incorporated by reference therein, are
independent accountants as required by the Act and the Rules and
Regulations.
(r) The combined financial statements and schedules of the Company and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of
the respective dates of such financial statements and schedules, and
the results of operations and changes in financial position of the
Company for the respective periods covered thereby. Such statements,
schedules and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
as certified by Xxxxxxxxx, Xxxxxxx & Xxxxxx, L.L.P.. No other financial
statements or schedules are required to be included in the Registration
Statement. The selected financial data set forth in the Prospectus
under the captions "Capitalization" and "Pro Forma Confidential
Financial Statements" fairly present the information set forth therein
on the basis stated in the Registration Statement. The pro forma
financial information (including the related notes) included in the
Prospectus complies as to form in all material respects to the
applicable accounting requirements of the Act and the Rules and
Regulations, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable. Such
pro forma adjustments have been properly applied to the historical
amounts in the compilation of the information and such information
fairly represents with respect to the Company the financial position,
results of operations and other information purported to be shown
therein at the respective dates and for the respective periods
specified.
(s) The Company has disclosed in the Registration Statement and Prospectus
all information it is required to disclose therein, and such
Registration Statement and Prospectus are true and correct in every
material respect and do not fail to disclose any information which if
not disclosed would cause the Registration Statement and/or Prospectus
to be materially misleading in any respect.
(t) The Company and [each of] its subsidiary[ies] maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
2. Representations and Warranties of UVEST. UVEST hereby represents and
warrants to the Company that:
(a) The information set forth in the Prospectus that was furnished to
the Company by and on behalf of UVEST for use in connection with the
preparation of the Registration
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Statement and the Prospectus is correct in all material respects;
(b) UVEST is registered as a dealer under the requirements of Chapter
78A; and
(c) UVEST shall make all necessary filings, if any, with the NASD
and/or the North Carolina Securities Division in connection with its
services provided hereunder.
3. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and
date that this Agreement is executed and delivered by the parties
hereto, to become effective. UVEST will have the opportunity to review
and approve the Registration Statement and any amendment thereto. The
Company will promptly advise UVEST in writing (i) of the receipt of any
comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before
or after it becomes effective) or the Prospectus or for additional
information, (iii) when the Registration Statement shall have become
effective, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose. If the Commission
shall enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order at the earliest
possible moment. The Company will not file any amendment or supplement
to the Registration Statement (either before or after it becomes
effective) or the Prospectus of which UVEST has not been furnished with
a copy a reasonable time prior to such filing or to which UVEST
reasonably objects or which is not in compliance with the Act and the
Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon UVEST's request, any amendment or supplement to the Registration
Statement or the Prospectus which in UVEST's reasonable judgment may be
necessary to enable UVEST to continue the distribution of the Shares in
compliance with Chapter 78A, the 1933 Act, and the Rules and
Regulations, and will use its best efforts to cause the same to become
effective as promptly as possible. Additionally, in the event that
UVEST is required to make any filings with the NASD or the North
Carolina Securities Division in connection with this Offering, the
Company will apply its best efforts to cooperate with UVEST. The
Company covenants that it will not commence the Offering in North
Carolina until such time as UVEST has received any required approvals
from the North Carolina Securities Division.
(c) If at any time within the nine-month period referred to in Section
10(a)(3) of the 1933 Act during which a prospectus relating to the
Common Shares is required to be delivered under the 1933 Act any event
occurs, as a result of which the Prospectus, including any amendments
or supplements, would include an 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 not misleading, or if it is
necessary at any
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time to amend the Prospectus, including any amendments or supplements,
to comply with the 1933 Act or the Rules and Regulations, the Company
will promptly advise UVEST thereof and will promptly prepare and file
with the Commission, at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best
efforts to cause the same to become effective as soon as possible; and,
in case UVEST is required to deliver a prospectus after such nine-month
period, the Company upon request, but at the expense of UVEST, will
promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the 1933
Act.
(d) The Company will timely file such reports as are necessary pursuant
to the Exchange Act in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by UVEST, the Company, at its
expense, but only for the nine-month period referred to in Section
10(a)(3) of the 1933 Act, will furnish to UVEST or mail to the order of
UVEST copies of the Registration Statement and the Prospectus and all
amendments and supplements to any such documents, in each case as soon
as available and in such quantities as UVEST may request, for the
purposes contemplated by the Act.
(f) The Company shall qualify or register the Shares for sale under (or
obtain exemptions from the application of) Chapter 78A, will comply
with such law and will continue such qualification, registration and
exemption in effect so long as reasonably required for the distribution
of the Shares. The Company will advise UVEST promptly of the suspension
of the qualification or registration of (or any such exemption relating
to) the Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, the Company, with UVEST's cooperation, will
use its best efforts to obtain the withdrawal thereof.
(g) In the event that the Company intends to publish or distribute any
sales literature, advertisements or other communications ("Marketing
Material") to existing shareholders or prospective purchasers of the
Shares in connection with the Offering, the Company will afford UVEST
with a reasonable opportunity to review and approve the Marketing
Material prior to such publication or distribution.
(h) The Company will apply the net proceeds of the sale of the Shares
sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus. UVEST may, in its sole
discretion, waive in writing the
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performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
4. Services to be Provided by UVEST. In connection with this Agreement,
the scope of UVEST's services shall include the following:
(a) As soon as practicable following the date on which the SEC declares
the Registration Statement to be effective and continuing until such
time as the Offering is terminated by the Company, UVEST shall serve as
the selling agent and North Carolina-sponsoring dealer for the Company
and will act on a best efforts basis. UVEST will not have any
commitment to acquire any Shares for its own account or with a view to
their distribution. UVEST is acting as an agent, not as an underwriter,
and UVEST is not bound hereunder to purchase any Shares. Further, the
Company acknowledges that UVEST may enter into selected dealer
agreements with other registered broker-dealers (the "Selected
Dealers") for the sale of the Shares and that no such contractual
arrangements shall violate or conflict with the terms of this
Agreement.
(a) The Parties acknowledge that the Shares shall be offered and sold
exclusively through certain employees, officers and directors of the
Company and, with respect to offers and sales to North Carolina
residents, exclusively through officers or other employees of the
Company who are registered representatives of UVEST. The Parties also
acknowledge that the Shares shall be sold by means of the subscription
offer that is attached to and made part of the Prospectus; and
(b) UVEST shall perform its duties pursuant to this Agreement in
compliance with all applicable federal and state securities laws, and
shall solicit subscriptions for the Shares only by means of the
Prospectus and only in such jurisdictions specified by the Company and
in which the Company may make such offers and sales.
(c) In exchange for the services of UVEST pursuant to this Agreement,
the Company agrees to pay UVEST a fee of $125,000. ___ This fee shall
be paid as soon as the Company has received funds from the sale of at
least 100,000 Shares in the Offering, but in no event later than ten
(10) days after the completion of the Offering. If the offering is
terminated for any reason prior to the consummation of the Offering the
Company will pay to UVEST a fee of $40,000, as well as reimbursement
for all accountable out-of-pocket expenses, including fees and
disbursements billed by UVEST's counsel up to a maximum of $10,000.
5. Payment of Offering Expenses. In addition to the amounts set forth in
paragraph (d) of Section 4, above, the Company shall be responsible for the
following expenses of the Offering:
(a) the fees and disbursements of the independent accountants and
counsel retained by the Company and other related expenses in
connection with the Offering;
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(b) the cost of printing, filing and distributing the Prospectus and
state securities law memoranda and all other documents relating to the
Offering;
(c) the fees and disbursements of the Company's counsel in connection
with state securities law filings;
(d) the filing fees of the SEC, the NASD, and state securities law
administrators, as applicable;
(e) any costs associated with preparing any stock certificates, as well
as any transfer agent's or registrar's fees;
(f) the fees and other costs relating the services of an escrow agent
and any expenses associated with the preparation of an escrow
agreement;
(g) any miscellaneous travel and informational meeting expenses for the
Company associated with the Offering; and
(h) other usual and customary expenses.
6. Indemnification and Contribution
(a) The Company agrees to indemnify and hold harmless UVEST, and its
officers, directors, agents, representatives and affiliates and any
other person, if any, who controls UVEST within the meaning of Section
15 of the 1933 Act (said parties together with UVEST are hereinafter
referred to as the "UVEST Indemnitees"), against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs
of investigation and counsel's fees) arising out of or based upon the
engagement of UVEST as selling agent hereunder, and will reimburse the
UVEST Indemnitees for any legal or other expenses reasonably incurred
(individually or collectively) by the UVEST Indemnitees in connection
with investigating or defending any such loss, claim, damage, liability
or action, provided that the Company will not be responsible for any
losses, claims, damages, liabilities or expenses that result from bad
faith or gross negligence on the part of a UVEST Indemnitee or that are
finally judicially determined to have resulted primarily from UVEST's
bad faith or gross negligence.
(b) If any action or claim shall be brought or asserted against a UVEST
Indemnitee in respect of which indemnity may be sought from the
Company, said UVEST Indemnitee shall promptly notify the Company in
writing, enclosing copies of all papers served on or delivered to such
party. The failure to notify the Company shall not relieve the UVEST
Indemnitee from any liability hereunder to the extent it is not
materially prejudiced as a result of such failure. A UVEST Indemnitee
shall have the right to employ separate counsel in any such action and
to participate in the defense thereof, and the fees and expenses of
such counsel shall be at the expense of the Company and shall be
promptly reimbursed by the Company. No UVEST Indemnitee shall settle,
compromise or consent to the entry of any judgment with respect to any
litigation, any investigation or
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proceeding by any governmental agency or body, commenced or threatened,
or claim whatsoever in respect of which indemnification or contribution
can be sought under this Section 4 (whether or not the UVEST
Indemnitees are actual or potential parties thereto), unless the UVEST
Indemnitee gives prior written notification to the indemnifying party
and such settlement, compromise or consent does not include any
statement or admission of fault, culpability or failure to act on
behalf of, or with respect to, any indemnified party.
(c) UVEST agrees individually, and not jointly with any other selling
agent or Selected Dealer for the Shares, to indemnify and hold harmless
the Company and its respective directors and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the Exchange Act against, any and all losses,
liabilities, claims, damages and expenses to which the Company or such
persons may become subject if such losses, liabilities, claims, damages
or expenses arise solely out of, or are based solely on, any untrue or
alleged untrue statement of material fact contained in the Prospectus,
or any amendment or supplement thereto, or arise out of, or are based
upon, the omission of a material fact required to be stated therein, or
necessary to make the statements therein not misleading, but only if
such untrue statement or omission or alleged omission was made in the
Prospectus (as amended or supplemented) based upon and in conformity
with written information concerning UVEST furnished to the Company by
UVEST, specifically for use in the Prospectus.
If the indemnification provided for in this Section 6 is unavailable to
an indemnified party under paragraphs (a), (b) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and UVEST on the other from the Offering 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 on the one
hand and of UVEST on the other in connection with the statements or omissions
that resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and UVEST on the other shall be deemed to be in
the same proportion as the total net proceeds received by the Company from the
Shares sold in the Offering (before deducting expenses), and the total
commissions received by UVEST. The relative fault of the Company on the one hand
and of UVEST 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 to state a material fact relates to information supplied by the
Company, or by UVEST, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company on the one hand and UVEST on the other agree that it would
not be just and equitable if contribution to be made pursuant to this Section 6
were determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable
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by an indemnified party as a result of the losses, claims, damages, liabilities
and expenses 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 such indemnified party in connection with
defending any such action or claim.
Notwithstanding the provisions of this Section 6, UVEST shall not be
required to contribute any amount in excess of the fees described herein. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
7. Termination. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by either party by notice to the
other party at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be
without liability on the part of the Company to UVEST (except for the
fees and expenses to be paid or reimbursed by the Company, pursuant to
Sections 4 and 6 hereof and except to the extent provided in Section 8
hereof) or of UVEST to the Company (except for the expenses to be paid
or reimbursed by UVEST, pursuant to Section 6 hereof and except to the
extent provided in Section 8 hereof).
(b) This Agreement may also be terminated by UVEST by notice to the
Company (i) if any adverse event shall have occurred or shall exist
which makes untrue or incorrect in any material respect any statement
or information contained in the Registration Statement or Prospectus or
which is not reflected in the Registration Statement or Prospectus but
should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect,
or (ii) if there shall be any action, suit or proceeding pending or
threatened; or there shall have been any development or prospective
development involving particularly the business or properties or
securities of the Company or [any of] its subsidiary[ies] or the
transactions contemplated by this Agreement which, in the reasonable
judgment of UVEST, may materially and adversely affect the Company's
business or earnings and makes it impracticable or inadvisable to offer
or sell the Shares. Any termination pursuant to this subsection (b)
shall be without liability on the part of UVEST to the Company or on
the part of the Company to UVEST (except for the fees and expenses to
be paid or reimbursed by the Company pursuant to Sections 4 and 6
hereof and except to the extent provided in Section 8 hereof).
8. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other statements of
the Company set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of UVEST or the Company or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
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9. Notices. All communications hereunder shall be in writing and, if sent
to UVEST shall be mailed, delivered or telegraphed and confirmed to:
UVEST Investment Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxx
with a copy to
Xxxxx & Xxxxx, XX
X.X. 0000
Xxxxxxxxx, XX 00000-0000;
Attention: Xxxxxxxx Xxxxx, Esq.
and if sent to the Company shall be mailed, delivered or telegraphed and
confirmed to:
HCSB Financial Corporation
0000 Xxxxx Xxxxxx
XX Xxx 000
Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, CEO
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
Xxxxxxxx Xxxxx, Xxxxx 000
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
The Company or UVEST may change the address for receipt of communications
hereunder by giving notice to the others.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the Parties and to the benefit of the officers and directors and
controlling persons of each, and in each case their respective successors,
personal representatives and assigns, and no other person will have any right or
obligation hereunder. No such assignment shall relieve any party of its
obligations hereunder. The term "successors" shall not include any purchaser of
the Shares as such from UVEST merely by reason of such purchase.
11. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for
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any reason determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
12. Governing Law; Assignments. This Agreement shall be governed by the
laws of the State of North Carolina. The Company and UVEST each hereby waives
any right to a trial by jury with respect to any claim or action arising out of
the engagement of UVEST under this Agreement. The Company hereby consents to the
jurisdiction of any state or federal court of competent jurisdiction sitting
within the area comprising the Western District of North Carolina as well as to
the jurisdiction of all courts from which an appeal may be taken from such
courts, for the purpose of any litigation, proceeding or other action arising
out of the Company's obligations under or with respect to this Agreement, and
expressly waives any and all objections the Company may have as to venue in any
of such courts. Neither party may assign this Agreement without the prior
written consent of the other party.
13. Miscellaneous. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company.
This Agreement may be executed in one of more counterparts, and when a
counterpart has been executed by each party hereto all such counterparts taken
together shall constitute one and the same Agreement. Signatures sent by
facsimile shall have the same effect as if manually signed copies had been
delivered, and shall be binding upon the parties.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
shall become a binding agreement between the Company and UVEST.
Very truly yours,
UVEST FINANCIAL SERVICES GROUP, INC.
By:
-------------------------------------
Name:
--------------------------
Title:
------------------------
Confirmed and Accepted,
HCSB FINANCIAL CORPORATION
By:
-------------------------------------
Name:
--------------------------
Title:
------------------------
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