Exhibit 1.1
COMMUNITY NATIONAL CORPORATION
LEXINGTON FIRST FEDERAL SAVINGS BANK
LEXINGTON FIRST FEDERAL MUTUAL HOLDING COMPANY
Up to 299,370 Shares of Common Stock
($1.00 Par Value Per Share)
AGENCY AGREEMENT
----------------
____________, 1997
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Community National Corporation, a Tennessee corporation (the
"Company"), Lexington First Federal Savings Bank (the "Bank"), a federally
chartered stock savings bank, the deposit accounts of which are insured by the
Federal Deposit Insurance Corporation (the "FDIC") through the Savings
Association Insurance Fund ("SAIF"), and Lexington First Federal Mutual Holding
Company (the "MHC"), a federally chartered mutual holding company, hereby
confirm their agreement (the "Agreement") with Trident Securities, Inc.
("Trident"), as follows:
Introduction
------------
On December 14, 1992, the Bank reorganized into a mutual holding
company structure in a transaction in which the MHC was formed and acquired
62.8% of the issued and outstanding shares of common stock of the Bank. The
remaining 37.2% of the outstanding shares of common stock was sold to
individuals (the "Public Stockholders"). The foregoing transactions are
hereinafter referred to as the "1992 Conversion."
The Bank and the MHC now desire to eliminate the mutual holding company
structure. In furtherance of such elimination, the Boards of Directors of the
MHC and the Bank adopted on April 12, 1997, a Plan of Conversion and Agreement
and Plan of Reorganization (the "Plan"). Pursuant to the Plan, the MHC intends
to convert from mutual to stock form in a series of transactions involving the
following:
(i) the Company has been formed as a subsidiary of the Bank;
(ii) an interim savings bank (the "Interim") will be formed as a
subsidiary of the Company;
(iii) the MHC will convert from a federally chartered mutual
holding company
to an interim federal stock savings bank and simultaneously merge with and into
the Bank;
(iv) the shares of common stock of the Bank owned by the MHC
will be canceled and extinguished;
(v) the Interim will merge with and into the Bank;
(vi) based on an independent appraisal of the Bank, the
Company will conduct an offering in which it will offer between 221,255 and
299,370 (subject to increase to up to 344,275 shares) shares of common stock,
$1.00 par value per share, of the Company (the "Shares") to depositors of the
Bank with account balances of $50 or more as of the close of business on
December 31, 1995 ("Eligible Account Holders"); to depositors of the Bank with
account balances of $50 or more as of the close of business on ____________,
1997 ("Supplemental Eligible Account Holders"); to other members of the MHC, to
directors, officers and employees of the Bank; and to the Public Stockholders
(the "Subscription Offering");
(vii) any Shares not sold in the Subscription Offering may be
offered for sale to the public in a direct community offering to certain members
of the general public with preference given to residents of Xxxxxxxxx County in
the State of Tennessee (the "Community Offering") or a syndicated community
offering (the "Syndicated Community Offering") (the Subscription Offering, the
Community Offering and any Syndicated Community Offering are hereinafter
referred to collectively as the "Offerings"); and
(viii) each share of Bank common stock held by a Public
Stockholder will be converted into between 1.639 and 2.550 Shares based upon the
final number of Shares issued in the Offerings in order to maintain the Public
Stockholders' approximately 39.46% ownership interest in the Bank.
Upon consummation of the transactions set forth above and the receipt
of all necessary regulatory approvals, the Company will be a public company
required to file certain reports with, and otherwise comply with the rules and
regulations of, the Securities and Exchange Commission (the "Commission") and
the Bank will be a wholly-owned subsidiary of the Company.
The foregoing transactions are hereinafter referred to collectively as
the "Conversion."
The Company has filed with the Commission a Registration Statement on
Form SB-2 (File No. 333-31637) (the "Registration Statement") for the
registration of the Shares under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed such amendments thereto, if any, as may have been
required to the date hereof. The offering prospectus, which forms a part of the
Registration Statement, as amended, on file with the Commission at the time the
Registration Statement initially became effective, is hereinafter referred to as
the "Prospectus"; provided, however, that if any offering prospectus is filed by
the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and is different from
the offering prospectus on file at the time the Registration Statement initially
becomes effective, the term "Prospectus" shall refer to the offering prospectus
filed pursuant to Rule 424(b) or (c) from and after the time such offering
prospectus is filed with the Commission or mailed to the Commission for filing.
In accordance with Title 12, Part 563b of the Code of Federal
Regulations (the "Conversion Regulations"), the MHC has filed with the Office of
Thrift Supervision (the "OTS") an Application for Approval of Conversion on Form
AC (the "Conversion Application") and has filed such amendments
- 2 -
thereto, if any, as may have been required by the OTS. In addition, the Company
has filed with the OTS an Application on Form H-(e)1-S (the "Holding Company
Application") to acquire and hold the shares of the Bank.
Each term not defined in this Agreement shall have the meaning given to
it in the Prospectus.
1. Retention of Trident; Compensation; Sale and Delivery of the
------------------------------------------------------------
Shares.
------
(a) Subject to the terms and conditions herein set forth, the
Company, the Bank and the MHC hereby appoint Trident to serve as their financial
advisor to exercise its best efforts to sell the Shares in the Offerings.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, Trident
accepts such appointment. It is acknowledged by the Company, the Bank and the
MHC that Trident shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with applicable laws,
regulations, decisions or orders. Trident may assemble and manage a selling
group of broker-dealers, which are members of the National Association of
Securities Dealers, Inc. (the "NASD"), to participate in the solicitation of
purchase orders for Shares in the event of a Syndicated Community Offering.
Members of such selling group will enter into a selected dealers' agreement (the
"Dealers' Agreement"), the form of which is set forth as Exhibit A to this
Agreement.
The obligations of Trident pursuant to this Agreement shall terminate
in accordance with Section 8 hereof.
(b) Trident shall receive the following compensation for its
services hereunder:
(i) A management fee in the amount of $65,000;
(ii) For Shares sold by other NASD member firms in
the Syndicated Community Offering, if any, pursuant to the
Dealers' Agreement, a commission to be agreed upon jointly by
Trident and the Bank to reflect market requirements at the
time of the stock allocation in the Syndicated Community
Offering; and
(iii) Trident shall be reimbursed for all allocable
expenses incurred by it, including, but not limited to, legal
fees, whether or not the Conversion is successfully completed.
Reimbursement for such legal fees and other out-of-pocket
expenses shall not exceed $10,000, and $10,000, respectively,
excluding legal fees and out-of-pocket expenses relating to
compliance with state securities or "blue sky" laws and
regulations in conducting the Offerings. Trident acknowledges
receipt of $10,000 to be applied toward the payment of such
expenses. Neither the Company, the Bank nor the MHC shall pay
or reimburse Trident for any of the foregoing expenses which
are incurred or accrued after Trident shall have notified the
Company, the Bank or the MHC of its election to terminate this
Agreement pursuant to Section 8 hereof or after such time as
the Company, the Bank or the MHC shall have given notice in
accordance with Section 8 hereof that Trident is in breach of
this Agreement.
To the extent not previously paid, full payment of Trident's actual and
accountable expenses shall be made in next day funds on the Closing Date (as
hereinafter defined) or, if the Conversion is not completed and is abandoned or
terminated for any reason, within five (5) days of receipt by the Company
- 3 -
or the Bank of a reasonable accounting from Trident of its expenses provided
that the failure to renegotiate will not result in a termination of the
Agreement.
In the event of a resolicitation of subscribers, the parties agree to
renegotiate the expense cap on legal fees and out-of-pocket expenses applicable
to Trident.
(c) The release of Shares against payment therefor shall be
made on a date and at a place acceptable to Trident. The date upon which the
Company shall release or deliver the Shares sold in the Offerings in accordance
with the terms hereof is herein called the "Closing Date." If all conditions
precedent to the consummation of the Conversion are satisfied, including,
without limitation, the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued the Shares sold in the Offerings and to
release for delivery certificates for such Shares as soon as possible after the
Closing Date against payment to the Company by any means authorized by the Plan;
provided, however, that no funds shall be released to the Company until the
conditions specified in Section 4 hereof shall have been complied with to the
reasonable satisfaction of Trident.
In the event the Company is unable to sell a minimum of 221,255 Shares
(or such lesser number of Shares as the OTS may authorize) within the period
herein provided (including therein any extension of such period as may be
approved by the OTS), the Company shall refund to any persons who have
subscribed for any of the Shares the full amount which it may have received from
them, plus accrued interest as set forth in the Prospectus and none of the
parties to this Agreement shall thereafter have any obligation to the other
parties hereunder, except as set forth in this Section 1 and in Sections 5, 6, 7
and 8 hereof.
2. Representations and Warranties. The Company, the Bank and the MHC,
------------------------------
jointly and severally, represent and warrant to Trident that:
(a) The 1992 Conversion was conducted in accordance with all
applicable OTS and Commission rules and regulations and the MHC and the Bank
received all necessary approvals from the OTS and Commission required
thereunder.
(b) The Company has filed with the Commission the Registration
Statement, including exhibits, amendments or supplements thereto. The
Registration Statement, as amended, was declared effective by the Commission on
____________, 1997. No stop order or equivalent order has been issued with
respect to the Registration Statement and no proceedings therefor have been
initiated or, to the knowledge of the Company, the Bank or the MHC, threatened
by the Commission.
(c) As of the date of the Prospectus, and at all times
subsequent thereto through and including the Closing Date, the Registration
Statement and all exhibits, amendments or supplements thereto complied and will
comply in all material respects with the 1933 Act and the 1933 Act Regulations.
No order has been issued by the Commission preventing or suspending the use of
the Prospectus. No action by or for the Commission revoking such action is
pending, or to the knowledge of the Company, the Bank or the MHC, threatened.
(d) As of the date of the Prospectus, and at all times
subsequent thereto, through and including the Closing Date, the Registration
Statement (as amended) and the Prospectus (as amended or supplemented) did not
and will not contain 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, in light of the circumstances under which they were made, not
misleading. Representations and warranties in this subsection (d) shall not
apply to statements or omissions which relate to Trident and which were made
- 4 -
in reliance upon and in conformity with written information furnished to the
Company, the Bank or the MHC by or on behalf of Trident, expressly for use in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto).
(e) The MHC has filed with the OTS the Conversion Application.
The Conversion Application was approved by the OTS on ____________, 1997. No
stop order or equivalent order has been issued with respect to the Conversion
Application and, to the knowledge of the Company, the Bank and the MHC, no
proceedings therefor have been initiated or threatened by the OTS.
(f) The Conversion Application and all exhibits, amendments or
supplements thereto, comply in all material respects with the Conversion
Regulations. The Prospectus, which is included in the Conversion Application as
Item 3(b), has been approved for use by the OTS and such approval is in full
force and effect. All solicitation and marketing materials which are included in
the Conversion Application as Item 3(a) have been approved for use by the OTS
and such approval is in full force and effect. No order has been issued by the
OTS preventing or suspending the use of the Prospectus. No action by or before
the OTS revoking such approval is pending or, to the knowledge of the Company,
the Bank or the MHC, threatened.
(g) The Company has filed with the OTS the Holding Company
Application and such Application was approved by the OTS, on ____________, 1997.
The Holding Company Application, and all exhibits, amendments or supplements
thereto, comply in all material respects with applicable OTS regulations.
(h) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Tennessee with full
power and authority to own its properties and conduct its business as described
in the Registration Statement and the Prospectus. The Charter and Bylaws of the
Company comply in all material respects with applicable laws and regulations.
The Company has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business, except where
the failure to obtain such licenses, permits or authorizations would not have a
material adverse effect upon the business or operations of the Company. All of
such licenses, permits and other governmental authorizations are in full force
and effect, and the Company is in all material respects in compliance therewith.
The Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which its ownership of property or
leasing of property or the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such jurisdictions would
not have a material adverse effect on its condition, financial or otherwise, or
its business, operations or income on a consolidated basis.
(i) The Bank is a stock savings bank duly organized and
validly existing under the laws of the United States with full power and
authority to own its properties and conduct its business as described in the
Prospectus. The Charter and Bylaws of the Bank comply in all material respects
with applicable laws and regulations. The Bank has obtained all licenses,
permits and other governmental authorizations currently required for the conduct
of its business, except where the failure to obtain such licenses, permits or
authorizations would not have a material adverse effect upon the business or
operations of the Bank. All of such licenses, permits and other governmental
authorizations are in full force and effect, and the Bank is in all material
respects in compliance therewith. The deposit accounts of the Bank are insured
up to applicable limits by the FDIC. The Bank is a member of the Federal Home
Loan Bank (the "FHLB") of Cincinnati. The Bank is duly qualified as a foreign
corporation to transact business and is in good standing or is exempt from such
qualification in each jurisdiction in which its ownership of property or leasing
of property or the conduct of its business requires such qualification, unless
the failure to be so qualified in one or more of such jurisdictions would not
have a material
- 5 -
adverse effect on its condition, financial or otherwise, or its business,
operations or income on a consolidated basis.
(j) The MHC is a mutual holding company duly organized and
validly existing under the laws of the United States with full power and
authority to own its properties and conduct its business as described in the
Prospectus. The Charter and Bylaws of the MHC comply in all material respects
with applicable laws and regulations. The MHC has obtained all licenses, permits
and other governmental authorizations currently required for the conduct of its
business, except where the failure to obtain such licenses, permits or
authorizations would not have a material adverse effect upon the business or
operations of the MHC. All of such licenses, permits and other governmental
authorizations are in full force and effect, and the MHC is in all material
respects in compliance therewith. The MHC is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which its ownership of property or leasing of properties or the conduct of its
business requires such qualification, unless the failure to be so qualified in
one or more of such jurisdictions would not have a material adverse effect on
its condition, financial or otherwise, or its business, operations or income on
a consolidated basis.
(k) The authorized capital stock of the Bank consists of
2,000,000 shares of preferred stock, none of which are issued, and 8,000,000
shares of common stock, par value $1.00 per share, 135,000 of which are owned by
the MHC, free, clear and unencumbered, and 87,993 of which are owned of record
by Public Stockholders. All issuances and sales by the Bank of its securities
prior to the date hereof were either (i) registered under the 1933 Act, or (ii)
exempt from registration under the 1933 Act, and all such issuances and sales
complied in all respects with the provisions of all applicable federal and state
securities laws.
(l) The Plan has been duly and validly adopted by the Boards
of Directors of the Company, the Bank and the MHC. Prior to the Closing Date,
the Plan will be duly and validly approved by the members of the MHC and the
stockholders of the Bank.
(m) Prior to the Closing Date, the offer and sale of the
Shares will have been conducted in all material respects in accordance with the
Plan, the Conversion Regulations and all other applicable laws and regulations,
including all items, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company, the Bank and the MHC by the OTS, the
Commission or any other regulatory authority and in the manner described in the
Prospectus; provided, however, that no representation or warranty is made with
respect to any action on the part of Trident or its agents. As of the date of
this Agreement, to the knowledge of the Company, the Bank and the MHC, no person
has sought to obtain review of the final action of the OTS in approving the Plan
or the Conversion Application pursuant to the Home Owners' Loan Act (the "HOLA")
or any other statute or regulation.
(n) Except as disclosed in the Prospectus, neither the
Company, the Bank nor the MHC owns of record or beneficially any equity
securities of, or an equity interest in, any entity or business enterprise.
(o) The Company, the Bank and the MHC each has good title to
all assets material to its respective businesses and to those assets described
in the Prospectus as owned by it, free and clear of all material liens, charges,
encumbrances or restrictions, except as set forth in the Prospectus or as are
not materially significant or important in relation to the business of the
Company, the Bank and the MHC taken as a whole. All of the leases and subleases
material to the business of the Company, the Bank, and the MHC under which any
one of them holds property, including those set forth in the Prospectus, are in
full force and effect as described therein.
- 6 -
(p) This Agreement has been duly and validly authorized,
executed and delivered by the Company, the Bank and the MHC. Assuming due
execution and delivery by Trident, this Agreement constitutes the valid and
legally binding obligation of the Company, the Bank and the MHC enforceable
against them 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 or by general
equity principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(q) The Company, the Bank and the MHC have received the
opinion of Housley Kantarian & Xxxxxxxxx, P.C., special counsel to the Company,
the Bank and the MHC ("Special Counsel"), to the effect that the Conversion will
constitute a tax-free reorganization under the Internal Revenue Code of 1986, as
amended (the "Code"), and the opinion of Xxxxxx, Spain & Company, P.C., to the
effect that the Conversion will not be a taxable transaction under the laws of
the State of Tennessee. The facts relied upon by such firms as set forth in such
opinions are accurate and complete as of the date of such opinions.
(r) The Company, the Bank and the MHC have all such power,
authority, authorizations, approvals and orders as may be required to enter into
this Agreement, to perform all of their respective obligations hereunder and to
consummate the transactions contemplated hereby. Without limiting the generality
of the foregoing sentence, on or before the Closing Date, the Company will have
the power, authority, authorizations, approvals and orders to issue and sell the
Shares in accordance with this Agreement, the Plan and the Prospectus.
(s) Neither the Company, the Bank nor the MHC is in violation
of any rule or regulation of the OTS or the FDIC or any other agency which might
materially and adversely affect the condition (financial or otherwise),
operations, businesses, assets or properties of the Company, the Bank and the
MHC taken as a whole. Neither the Company, the Bank nor the MHC is subject to
any directive from the OTS or the FDIC (or their predecessors) or any other
agency to make any change in the method of conducting its business or affairs.
Each of the Company, the Bank and the MHC has conducted its business in material
compliance with all applicable statutes and regulations (including, without
limitation, all regulations, decisions, directives and orders of the FHLB of
Cincinnati, the OTS and the FDIC, or their predecessors). Except as set forth in
the Registration Statement and the Prospectus, there is not pending or, to the
knowledge of the Company, the Bank or the MHC, threatened any litigation,
charge, investigation, action, suit or proceeding before or by any court,
regulatory authority or governmental agency or body which, individually or in
the aggregate, might materially affect the performance of the terms and
conditions of this Agreement or the consummation of the transactions
contemplated hereby or which, individually or in the aggregate, might result in
any material adverse change in the condition (financial or otherwise), business
or results of operations of the Company, the Bank and the MHC, taken as a whole.
(t) The statements of financial condition of the Bank as of
December 31, 1996 and 1995, and the related statements of income, changes in
stockholders' equity and cash flows of the Bank for each of the years ended
December 31, 1996 and 1995, which were examined and reported upon by Xxxxxx,
Spain & Company, P.C., independent certified public accountants, and complete
copies of which are included in the Registration Statement and the Prospectus,
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be otherwise noted in the footnotes
thereto) and fairly present the financial position of the Bank at such dates and
the results of its operations, its stockholders' equity and its cash flows for
such periods. The statement of financial condition as of June 30, 1997, of the
Bank and the related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the six months ended June 30, 1997 and 1996,
- 7 -
complete copies of which are included in the Registration Statement and the
Prospectus, have been prepared in conformity with generally accepted accounting
principles for interim financial statements applied on a consistent basis
(except as may be otherwise noted in the footnotes thereto) and fairly present
the financial position of the Bank at such date and the results of its
operations, its stockholders' equity and its cash flows for such periods. The
tabular information in the Prospectus fairly presents the information purported
to be shown thereby at the respective dates and for the respective periods
covered thereby.
(u) The capitalization, assets, properties and business of the
Company, the Bank and the MHC conform in all material respects to the
descriptions thereof contained in the Prospectus as of the dates specified.
Since such dates, there have been no material adverse changes in either the
condition (financial or otherwise) of the Company, the Bank and the MHC taken as
a whole, or in the assets, properties, operations or earnings of the Company,
the Bank and the MHC, taken as a whole. The Company, the Bank and the MHC, taken
as a whole, have no material contingent liabilities of any kind, except as set
forth in the Prospectus.
(v) No material default exists, and no event has occurred
which, with notice or lapse of time, or both, would constitute a default, on the
part of the Company, the Bank or the MHC, in the due performance and observance
of any term, covenant or condition of any agreement which is material to the
condition (financial or otherwise) of the Company, the Bank, and the MHC, taken
as a whole. Such agreements are in full force and effect. No other party to any
such agreement has instituted or, to the knowledge of the Company, the Bank or
the MHC, threatened any action or proceeding wherein the Company, the Bank or
the MHC is alleged to be in default thereunder.
(w) Neither the Company, the Bank nor the MHC is in violation
of its respective Charter or Bylaws or in default in any respect in the
performance of any material obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness by which it is
bound, except where such default would not materially and adversely affect the
condition (financial or otherwise) or operations of the Company, the Bank and
the MHC, taken as a whole. The execution, delivery and performance of this
Agreement by the Company, the Bank and the MHC and the consummation of the
transactions contemplated hereby do not and will not (i) violate or conflict
with the Charter or Bylaws of the Company, the Bank or the MHC, as applicable,
or (ii) in any respect violate, conflict with or constitute a breach of, or a
default (or an event which, with notice or lapse of time, or both, would
constitute a default), except where such violation, conflict, breach or default
would not materially and adversely affect the condition (financial or otherwise)
or operations of the Company, the Bank and the MHC, taken as a whole under (I)
any agreement, indenture or other instrument by which the Company, the Bank or
the MHC is bound, or (II) any governmental license or permit or any law,
administrative regulation or authorization, approval, court decree, injunction
or order.
(x) Subsequent to the respective dates as of which information
is given in the Prospectus and before the Closing Date, except as otherwise may
be specifically provided for in this Agreement, neither the Company, the Bank
nor the MHC will (i) issue any securities or incur any liability or obligation,
direct or contingent for borrowed money, except (I) the shares of common stock
to be issued by the Company in the Conversion and (II) borrowings from the FHLB
of Cincinnati and other borrowings and liabilities in the ordinary course of
business, including, but not limited to, borrowings in the form of deposits, or
(ii) enter into any other transaction not it the ordinary course of business
which is material in light of the businesses and properties of the Company, the
Bank and the MHC, taken as a whole.
- 8 -
(y) On the Closing Date, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization."
(z) When issued in accordance with the terms of the Plan, the
Shares will be validly issued, fully paid and nonassessable, will conform in all
material respects to the description thereof set forth in the Registration
Statement and the Prospectus and will be issued in compliance in all material
respects with all applicable securities laws. The issuance of the Shares is not
subject to preemptive rights. Upon issuance of the Shares thereof against
payment therefor, purchasers shall have good title to such Shares free and clear
of all claims, encumbrances, security interests and liens caused or created by
any act or omission of the Company whatsoever. The certificates evidencing the
Shares will conform in all material respects to the requirements of applicable
laws and regulations.
(aa) Neither the Company, the Bank nor the MHC has: (i) placed
any securities within the last 18 months (except for notes to evidence bank
loans and mortgage-backed securities in the ordinary course of business); (ii)
had any material dealings within the 12 months prior to the date hereof with any
member of the NASD, or any person related to or associated with such member,
other than discussions and meetings relating to the proposed Conversion and
routine purchases and sales of securities for or from its portfolio; (iii) an
officer or director who has any affiliation with the NASD; (iv) entered into a
financial or management consulting agreement, except as contemplated hereunder
or (iv) engaged any intermediary between Trident and the Company in connection
with any offering of the Shares, and no person is being compensated in any
manner for such service.
(bb) Appropriate arrangements for placing the funds received
from subscriptions for Shares in a segregated interest-bearing account with the
Bank until all Shares are paid for (the "Escrow Account") have been made, with
provision (i) for prompt refund to subscribers if the transactions contemplated
by the Plan and the Prospectus are otherwise not consummated or (ii) for
delivery to the Company if the transactions contemplated by the Plan and the
Prospectus are consummated.
(cc) No approval of any regulatory, supervisory or other
public authority is required in connection with the execution and delivery of
this Agreement or the issuance and sale of the Shares, except the approval of
the OTS and the Commission, the approval of the reasonableness of Trident's
compensation by the NASD, and as may be otherwise required under the securities
laws of various states.
(dd) All contracts and other documents required to be filed as
exhibits to the Conversion Application and the Registration Statement have been
filed with the OTS and the Commission, respectively.
(ee) Xxxxxx, Spain & Company, P.C., the public accounting firm
which has certified the financial statements of the Bank included in the
Prospectus, are independent certified public accountants within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants.
(ff) Since January 1, 1986, each of the Company, the Bank and
the MHC has (i) timely filed all required federal and state tax returns and no
deficiency has been asserted with respect to such returns by any taxing
authorities, (ii) paid all taxes that have become due, and (iii) made adequate
reserves for similar current tax liabilities, except where the 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 (financial or
otherwise) or operations of the Company, the Bank and the MHC taken as a whole.
- 9 -
(gg) The records of account holders, depositors, borrowers and
other members of the Bank delivered to Trident by the Bank or its agent for use
in connection with the Conversion are believed to be reliable and accurate in
all material respects.
(hh) Xxxxxxxx & Company (the "Appraiser"), the corporation
which prepared an appraisal of the estimated pro forma fair market value of the
Bank and the MHC, is independent with respect to each of them within the meaning
of the Conversion Regulations.
(ii) The Company, the Bank and the MHC are in compliance in
all material respects with applicable financial record keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970 as
amended, and the regulations and rules thereunder.
(jj) All supplemental sales literature, including but not
limited to, marketing materials, used by the Company in connection with the
Offerings, which is required by the Conversion Regulations to be filed with the
OTS or by the 1933 Act Regulations to be filed with the Commission, has been
filed with and cleared by the OTS and the SEC.
(kk) To their knowledge, the Company, the Bank and the MHC are
in compliance with all laws, rules and regulations relating to environmental
protection, and neither the Company, the Bank nor the MHC has been notified or
is otherwise aware that any of them is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any similar state law, except for
violations which, if asserted, would not have a material adverse affect on the
Company, the Bank and the MHC, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending, or, to the best
knowledge of the Company, the Bank and the MHC threatened against the Company,
the Bank or the MHC relating to environmental protection, nor does the Company,
the Bank or the MHC have any reason to believe any such proceedings may be
brought against any of them. To the knowledge of the Company, the Bank and the
MHC, 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 occurred on, at or
about any of the facilities or properties owned or leased by the Company, the
Bank or the MHC.
(ll) Neither the Company, the Bank, the MHC, nor the employees
of the Company, the Bank or the MHC has made any payment of funds of the
Company, the Bank or the MHC as a loan for the purchase of the Shares or made
any other payment of funds prohibited by law, and no funds have been set aside
to be used for any payment prohibited by law.
Any certificate signed by an officer of the Company, the Bank or the
MHC and delivered to Trident or its counsel that refers to this Agreement and is
referred to therein as a "representation" or "warranty" shall be deemed to be a
representation and warranty by the Company, the Bank and the MHC, respectively,
to Trident and its counsel as to the matters covered thereby, with the same
effect as if such representation and warranty was set forth herein.
Trident represents and warrants to the Company, the Bank and the MHC
that:
(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and the NASD.
- 10 -
(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, the Bank and the MHC hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of 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 5 and 6 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 to which Trident is a party or by which it or its property is bound.
(vi) Any funds received by Trident to purchase Shares 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 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 (provided that for this purpose, Trident
shall not regard any action as "threatened" unless the Commission, the NASD, or
any state securities commission or such court has manifested to the management
of Trident or to its counsel the present intention to initiate such action or
proceeding).
3. Covenants and Agreements. The Company, the Bank and the MHC covenant
------------------------
and agree that:
(a) The Company will deliver to Trident, from time to time,
such number of copies of the Prospectus as Trident may reasonably request. The
Company hereby authorizes and directs Trident to use the Prospectus in any
lawful manner in connection with the offer and sale of the Shares.
(b) The MHC will notify Trident immediately upon obtaining
knowledge of the following, and confirm the notice in writing: (i) when any
amendment to the Conversion Application is filed with the OTS or when any
supplement to the Prospectus is filed with the OTS; (ii) of the issuance
- 11 -
by the OTS of any stop order relating to the Conversion Application or the
Prospectus or of the initiation or the threat of any proceedings for such
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 OTS relating to the Conversion
Application or the Prospectus. In the event the OTS enters a stop order relating
to the Conversion Application or the Prospectus at any time, the MHC will make
every reasonable effort to obtain the lifting of such order at the earliest
possible moment.
(c) The Company will notify Trident immediately upon obtaining
knowledge of the following, and confirm the notice in writing: (i) when any
amendment to the Registration Statement is filed with the Commission or when any
supplement to the Prospectus is filed with the Commission; (ii) of the issuance
by the Commission of any stop order relating to the Registration Statement or
the Prospectus or of the initiation or the threat of any proceedings for such
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 Commission relating to the
Registration Statement or the Prospectus. In the event the Commission enters a
stop order relating to the Registration Statement or the Prospectus at any time,
the Company will make every reasonable effort to obtain the lifting of such
order at the earliest possible moment.
(d) During the time when the Prospectus is used in connection
with the offer and sale of the Shares, the Company, the Bank and the MHC will
comply in all material respects with all applicable requirements of the 1933 Act
and the 1933 Act Regulations, as now in effect and as hereafter amended, as from
time to time in force, so far as is 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 used in
connection with the offer and sale of the Shares, any event relating to or
affecting the Company, the Bank or the MHC shall occur as a result of which it
is necessary, in the reasonable opinion of counsel for the Company, the Bank or
the MHC and counsel for Trident, 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 the Prospectus is delivered to a purchaser of the Shares,
the Company, the Bank and the MHC shall forthwith 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 reasonably satisfactory
to counsel for Trident) which shall amend or supplement the Prospectus so that,
as amended or supplemented, the Prospectus will not contain any 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, the Bank and the MHC will not file or use any amendment or supplement
to the Conversion Application, the Registration Statement or the Prospectus of
which Trident has not first been furnished a copy or as to which Trident shall
reasonably object after having been furnished such copy. For the purpose of this
subsection (d), the Company, the Bank and the MHC shall furnish such information
with respect to themselves as Trident from time to time reasonably may request.
(e) The Company 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 state securities or "blue sky" laws of such jurisdictions as
Trident and the Company may agree upon; provided, however, that the Company will
not be obligated to qualify as a foreign corporation under the laws of any such
jurisdiction. In each jurisdiction in which such qualification or registration
will be effected, the Company, unless Trident agrees that such action is not
necessary or advisable in connection with the distribution of the Shares, will
file and make such statements or reports as are, or reasonably may be, required
by the laws of such jurisdiction.
- 12 -
(f) The Company shall file with the Commission a registration
statement for the Shares under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the completion of the Conversion
and such registration statement will become effective upon filing with the
Commission, and the Company will maintain the effectiveness of such registration
under Section 12(g) of the Exchange Act for not less than three years or such
shorter period as may be permitted by law.
(g) For a period of three years from the date of this
Agreement or for such shorter period of time during which the Company has a
class of securities registered under the Exchange Act, the Company will furnish
the following to Trident:
(i) As soon as publicly available after the end of each
fiscal year, a copy of the Annual Report of the Company to stockholders for such
year;
(ii) 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 stockholders; and
(iii) From time to time, such other public information
concerning the Bank and the Company as Trident may reasonably request.
(h) The Company and the Bank will use the net proceeds from
the sale of the Shares in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(i) The Company will not deliver the Shares until each and
every condition set forth in Section 4 hereof has been satisfied in full, unless
such condition is waived in writing by Trident.
(j) The Company, the Bank and the MHC 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."
(k) The liquidation account for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the requirements of the OTS and such Eligible
Account Holders and Supplemental Eligible Account Holders who continue to
maintain their savings accounts in the Bank will have an inchoate interest in
their pro rata portion of the liquidation account which shall have a priority
superior to that of the holders of the Shares in the event of a complete
liquidation of the Bank.
(l) The Company and the Bank will not sell, issue, contract to
sell or otherwise dispose of, for a period of 90 days after the Closing Date,
without Trident's prior written consent, any shares of common stock other than
(i) the Shares, (ii) the shares of common stock to be issued to the Bank's
Public Stockholders in exchange for their shares of Bank Common Stock or (iii)
other than in connection with any plan or arrangement described in the
Prospectus, including existing stock benefit plans.
(m) The Company will use its best efforts to (i) encourage and
assist a market maker to establish and maintain a market for the Shares and (ii)
list the Shares on a national or regional securities exchange or on The Nasdaq
Stock Market or over-the-counter through the National Daily Quotation System
"Pink Sheets" published by the National Quotation Bureau, Inc. effective on or
prior to the Closing Date.
- 13 -
(n) The Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares in the Offerings on an interest-bearing basis at the rate
described in the Prospectus until the Closing Date and satisfaction of all
conditions precedent to the release of the Bank's obligation to refund payments
received from persons subscribing for or ordering Shares in the Offerings in
accordance with the Plan and as described in the Prospectus or until refunds of
such funds have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as described in the
Prospectus. The Bank will maintain such records of all funds received to permit
the funds of each subscriber to be separately insured by the FDIC (to the
maximum extent allowable) and to enable the Bank to make the appropriate refunds
of such funds in the event that such refunds are required to be made in
accordance with the Plan and as described in the Prospectus.
(o) The Company will promptly take all necessary action to
register as a savings and loan holding company under the HOLA within 90 days of
the Closing Date or as a bank holding company under the Bank Holding Company Act
of 1956, as amended ("BHCA") pursuant to the requirements of the BHCA.
(p) Neither the Company, the Bank nor the MHC will amend the
Plan without notifying Trident prior thereto.
(q) The Company, the Bank and the MHC shall assist Trident, if
necessary, in connection with the allocation of the Shares in the event of an
oversubscription and shall provide Trident with any information necessary to
assist the Company in allocating the Shares in such event ("Allocation
Instructions"), and to the knowledge of the Company, the Bank and the MHC, such
information shall be accurate and reliable in all respects.
4. Conditions of Trident's Obligations. The obligations of Trident set
-----------------------------------
forth in this Agreement 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 accuracy of the statements of officers and directors of the
Company, the Bank and the MHC made pursuant to the provisions hereof, to the
performance by the Company, the Bank and the MHC of their respective covenants
and obligations hereunder and to the following additional conditions:
(a) On the Closing Date, the Company, the Bank and the MHC
will have satisfied the conditions precedent to, and will have conducted the
Conversion in all material respects in accordance with, the Plan, the Conversion
Regulations and all applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and conditions precedent to the
Conversion imposed by the OTS.
(b) The Registration Statement shall have been declared effective
by the Commission and the Conversion Application approved by the OTS not later
than 5:30 p.m. on the date of this Agreement or, with Trident's consent, at a
later time and date. At the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission or
any state authority, and no order or other action suspending the authorization
of the Prospectus or the consummation of the Conversion shall have been issued
or proceedings therefor initiated or, to the knowledge of the Company, the Bank
or the MHC, threatened by the Commission, the OTS, the FDIC, or any state
authority.
(c) On the Closing Date, Trident shall receive an opinion of
Special Counsel as to matters of the Federal law of the United States and the
Tennessee Business Corporation Act and an
- 14 -
opinion of __________ as to matters of Tennessee law, each dated as of the
Closing Date, addressed to Trident, in form and substance reasonably
satisfactory to Trident and substantially to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the Tennessee Business Corporation Act
and its Charter and Bylaws comply in all material respects with the Tennessee
Business Corporation Act.
(ii) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as such properties and
business are described in the Registration Statement and the Prospectus.
(iii) The Bank is a stock savings bank validly existing under the
Home Owners' Loan Act with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus. To the
actual knowledge of Special Counsel, the Bank has obtained all federal banking
licenses, permits and other federal banking governmental authorizations
currently required for the conduct of its business as described in the
Prospectus, all of which are in full force and effect, except where the failure
to obtain such licenses, permits or governmental authorizations would not have a
material adverse effect on the Company, the Bank and the MHC taken as a whole.
The deposit accounts of the Bank are insured up to applicable limits by the
FDIC, and the Bank is a member of the FHLB of Cincinnati.
(iv) The MHC is a mutual holding company validly existing under the
Home Owners' Loan Act with full corporate power and authority to own its
properties and conduct its business as such properties and business are
described in the Prospectus. To the actual knowledge of Special Counsel, the MHC
has obtained all federal banking licenses, permits and other federal banking
governmental authorizations currently required for the conduct of its business
as described in the Prospectus, all of which are in full force and effect,
except where the failure to obtain such licenses, permits or governmental
authorizations would not have a material adverse effect on the Company, the Bank
and the MHC taken as a whole.
(v) Upon consummation of the Conversion, the Bank will have
authorized and outstanding common stock within the range set forth in the
Prospectus and the description of such common stock in the Prospectus is
accurate in all material respects.
(vi) The Plan complies in all material respects with the Conversion
Regulations (or appropriate waivers have been obtained) and has been duly and
validly approved and adopted by the Boards of Directors of the Company, the Bank
and the MHC, the members of the MHC and the stockholders of the Bank. To the
knowledge of Special Counsel, no person has sought to obtain review of the final
action of the OTS in approving the Plan or the Conversion Application pursuant
to the HOLA or any other applicable statute or regulation.
(vii) To the actual knowledge of Special Counsel, the Conversion will
not result in the termination of the insurance of the Bank's accounts by the
FDIC. To the actual knowledge of Special Counsel, no proceedings for the
termination or revocation of FDIC insurance of accounts are pending or
threatened. The description of the liquidation account as set forth in the
Prospectus under the caption "Liquidation Rights" has been reviewed by Special
Counsel and, insofar as it constitutes a description of applicable law, is
accurate in all material respects.
(viii) This Agreement has been duly and validly executed and delivered
by each of the Company, the Bank and the MHC. The execution and delivery of this
Agreement by the
- 15 -
Company, the Bank and the MHC and the consummation of the Conversion and
Reorganization have been duly and validly authorized by all necessary corporate
action on the part of each of the Company, the Bank and the MHC. This Agreement
(assuming due execution and delivery by Trident) is a legal, valid and binding
obligation of each of the Company, the Bank and the MHC, enforceable against
each of them in accordance with its terms, except as the enforceability thereof
may be limited (A) by bankruptcy, insolvency, moratorium, reorganization or
other similar laws now or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors of savings
institutions whose accounts are insured by the FDIC or savings and loan holding
companies, the accounts of whose subsidiaries are insured by the FDIC, (B) by
general equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law or (C) laws relating to the
safety and soundness of insured depository institutions and their affiliates,
and except to the extent that the provisions of Sections 5 and 6 hereof may be
unenforceable as against public policy or applicable law, as to which no opinion
need be rendered it being understood, however, that the foregoing shall mean
only that if there is a default in performance of an obligation (a) if a failure
to pay or other damage can be shown and (b) if the defaulting party can be
brought into a court which will hear the case and apply the governing law, then
subject to the availability of defenses and the aforesaid exceptions, the court
will provide a money damage (or perhaps injunctive relief or specific
performance) remedy.
(ix) Each of the Company, the Bank and the MHC has all such
corporate power and authority to perform all of their respective obligations
under Section 3 of this Agreement and to consummate the Conversion. Subject to
the satisfaction of the conditions to the OTS' approval of the Conversion
Application and the Holding Company Application, (A) the Company has the
corporate power and authority, to enable the Company to offer, issue and sell
the Shares in accordance with the Plan and the Prospectus, (B) the OTS has
approved the Holding Company Application and issued its order of approval under
the savings and loan holding company provisions of the HOLA, and (C) no action
has been taken, and to the actual knowledge of Special Counsel, none is pending
or threatened, to revoke any such authorization or approval.
(x) Except as set forth in the Prospectus, to the actual knowledge
of Special Counsel (A) there is not pending or threatened any litigation,
charge, investigation, action, suit or proceeding before or by any court,
regulatory authority or governmental agency or body which would have a material
adverse effect on the condition (financial or otherwise), business or results of
operations of the Company, the Bank and the MHC taken as a whole, (B) neither
the Company, the Bank nor the MHC is in violation of its respective Charter or
Bylaws and (C) no material default exists, and no event has occurred which, with
notice or lapse of time, or both, would constitute a default, on the part of
either the Company, the Bank or the MHC in any material respect in the
performance of any material obligation, agreement or condition contained in any
material contract or agreement, indenture or other instrument filed as an
exhibit to the Registration Statement, except where such a violation would not
have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company, the Bank and the MHC taken as
a whole.
(xi) The execution, delivery and fulfillment of the terms of this
Agreement and the consummation of the Conversion (A) do not and will not violate
or conflict with the respective Charter or Bylaws of the Company, the Bank and
the MHC or (B) to the knowledge of Special Counsel, in any material respect,
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 (I) any
material agreement, indenture or other instrument filed as an exhibit to the
Registration Statement or (II) any federal banking law (except as may be
otherwise required under the securities or "blue sky" laws of various
jurisdictions in which the Shares are offered and as may be required under the
rules and regulations of the NASD), except where such violation, conflict,
breach or default would not have a material adverse effect on the
- 16 -
condition (financial or otherwise), business or results of operations of the
Company, the Bank and the MHC taken as a whole.
(xii) At the time of the consummation of the Conversion, the Shares
subscribed for will have been duly and validly authorized for issuance by all
necessary corporate action on the part of the Company. Assuming compliance with
applicable state securities or "blue sky" laws, the Shares to be issued and sold
by the Company, when the purchase orders have been accepted and the purchase
price for the Shares has been paid in money as specified in the Registration
Statement, will be validly issued and outstanding, fully paid and
non-assessable. Upon the payment of the purchase price in money as specified in
the Registration Statement and upon compliance with the other terms and
conditions of the orders, the purchasers shall receive good title with respect
to the Shares thereto purchased, free and clear of all claims, encumbrances,
security interests and liens caused or created by any act or omission of the
Company whatsoever. Except for the subscription rights under the Plan and
options issued under the 1993 Stock Option Plan or as otherwise disclosed in the
Prospectus, there are no preemptive or other rights to subscribe for or to
purchase Shares, or any restriction upon the voting of any common shares of the
Company. The terms and provisions of the Shares conform, in all material
respects, to the description thereof contained in the Registration Statement and
the Prospectus, and certificates evidencing the Shares are in due and proper
form under Tennessee law.
(xiii) Except where appropriate waivers have been received and with
respect to certain post-Conversion reports and any other actions required to be
performed after the Closing Date, the Company, the Bank, and the MHC have, in
all material respects, satisfied, to the actual knowledge of Special Counsel,
the conditions of approval of the Conversion Application and the Holding Company
Application contained in the approval letters dated __________ ____, 1997 and
__________ ____, 1997, respectively.
(xiv) 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 and sale of the Shares, except (i) the approval of the
OTS, (ii) the approval of the Commission, (iii) as may be otherwise required
under the securities laws of various jurisdictions and (iv) as may be required
under the rules and regulations of the NASD.
(xv) The statements in the Prospectus under the captions "Dividend
Policy," "The Conversion," "Regulation," "Taxation," "Restrictions on
Acquisition of the Company" and "Description of Capital Stock of the Company,"
insofar as they are, or refer to, statements of law or legal conclusions, have
been prepared or reviewed by Special Counsel and are correct in all material
respects.
(xvi) Special Counsel has been advised by the Staff of the
Commission that the Registration Statement is effective under the 1933 Act and,
to the knowledge of Special Counsel, no stop order suspending the effectiveness
has been issued under the 1933 Act and no proceedings therefor been initiated or
threatened by the Commission.
(xvii) The Conversion Application has been approved by the OTS, and
the Prospectus has been authorized for use by the OTS. To the actual knowledge
of Special Counsel, no proceedings are pending by or before the OTS seeking to
revoke or rescind the orders declaring the Conversion Application or the
Prospectus effective and no such proceedings are, to Special Counsel's
knowledge, contemplated or threatened.
(xviii) The Conversion Application and the Prospectus (in each case as
amended or supplemented, if so amended or supplemented) comply as to form in all
material respects
- 17 -
with the requirements of the Conversion Regulations and the rules and
regulations of the OTS, except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data and stock
valuation information and information with respect to Trident included therein,
as to which an opinion need not be expressed. The Registration Statement and the
Prospectus (in each case as amended or supplemented, if so amended or
supplemented) comply as to form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations except as to financial statements,
notes to financial statements, financial tables and other financial and
statistical data and stock valuation information and information with respect to
Trident included therein, as to which an opinion need not be expressed. To the
actual knowledge of Special Counsel, all documents and exhibits required to be
filed with the Conversion Application and the Registration Statement (in each
case as amended or supplemented, if so amended or supplemented) have been so
filed or a waiver from such filing has been obtained. The description in the
Conversion Application and the Registration Statement of such documents and
exhibits is accurate in all material respects and presents fairly the
information required to be shown.
In giving the foregoing opinion, Special Counsel may rely, as to matters of
fact, on certificates of officers of the Company, the Bank and the MHC and on
certificates of public officials delivered pursuant hereto and as to matters
particularly within the knowledge and scope of representation of local counsel,
on the opinion of qualified local counsel satisfactory to Trident; provided,
however, that Special Counsel shall state that Special Counsel has no reason to
believe that it and Trident are not justified in relying on the opinion of such
local counsel. For purposes of the opinion, Special Counsel may assume that any
agreement is the valid and binding obligation of any parties to such agreement
other than the Company, the Bank and the MHC.
Such opinion of Special Counsel shall be governed by, and interpreted in
accordance with, the Legal Opinion Accord of the American Bar Association
Section of Business Law (1991) (the "Accord"), and references in such opinion to
Special Counsel's "actual knowledge" may be limited to "actual knowledge" as
defined in the Accord. Such opinion may be limited to present statutes,
regulations and judicial interpretations and to facts as they presently exist.
In rendering such opinion, Special Counsel need assume no obligation to revise
or supplement it should the present laws be changed by legislative or regulatory
action, judicial decision or otherwise, and Special Counsel need express no
view, opinion or belief with respect to whether any proposed or pending
legislation, if enacted, or any proposed or pending regulations or policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company, the Bank and the MHC of this Agreement or the issuance of the
Shares.
(c) On the Closing Date, Trident shall receive a letter of Special
Counsel, dated as of the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to Trident, to the effect that, during the
preparation of the Registration Statement, and the Prospectus, such counsel
participated in conferences with management of, and the independent public
accountants for, the Bank and representatives of Trident and its counsel, and
while such counsel has not undertaken to determine independently, and does not
assume the responsibility for, the accuracy, completeness or fairness of the
statements in the Registration Statement, such counsel may state that based upon
such conferences, nothing has come to Special Counsel's attention that would
lead it to believe that the Registration Statement, as amended or supplemented
(except as to information solely with respect to Trident included therein, and
except as to the financial statements, notes to financial statements, financial
tables and other financial and statistical data and stock valuation information
contained therein, as to which Special Counsel need express no view), at the
time it became effective and at the time any post-effective amendment thereto
became effective, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements made therein, not
- 18 -
misleading, or that the Prospectus, as amended (except as to information solely
with respect to Trident included therein, and except as to financial statements,
notes to financial statements, financial tables and other financial and
statistical data and stock valuation information contained therein, as to which
Special Counsel need express no view), as of its date and on the date hereof
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Counsel for Trident shall have been furnished such documents as
such counsel reasonably may require for the purpose of enabling such counsel 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 Boards of Directors of the Company, the Bank and
the MHC regarding the authorization of this Agreement and the transactions
contemplated hereby.
(e) Prior to and at the Closing Date, in the reasonable opinion of
Trident: (i) there shall have been no material adverse change in the financial
or other condition of the Company, the Bank or the MHC from that as of 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 material transaction entered
into by the Company, the Bank or the MHC from the latest date as of which the
financial condition of the Company, the Bank and the MHC is set forth in the
Prospectus, other than transactions referred to or contemplated therein and
transactions in the ordinary course of business; (iii) the Company, the Bank or
the MHC shall not have received from the OTS any direction (oral or written) to
make any material change in the method of conducting their respective businesses
with which it has not complied (which direction if any, shall have been
disclosed to Trident) or which materially and adversely would affect the
business, operations, financial condition or income of the Company, the Bank and
the MHC taken as a whole; (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, or before any arbitrator or arbitrators, shall be pending
or, to the knowledge of the Company, the Bank or the MHC, threatened against the
Company, the Bank or the MHC or affecting any of their respective assets wherein
an unfavorable decision, ruling or finding materially and adversely would affect
the business, operations, financial condition or income of the Company, the Bank
and the MHC taken as a whole; and (v) the Shares shall have been qualified or
registered for offering and sale by the Company under the securities or "blue
sky" laws of each jurisdiction upon which Trident and the Company shall have
agreed.
(f) At the Closing Date, Trident shall receive a certificate of the
President and the Principal Financial Officer of each of the Company, the Bank
and the MHC (hereinafter referred to as the "Officers") on behalf of the
Company, the Bank and the MHC, dated the Closing Date, to the effect that: (i)
the Officers have carefully examined the Prospectus and, at the time the
Prospectus became authorized for use, the Prospectus did not contain any 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; (ii) since the date the Prospectus became authorized
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,
without limitation, any material adverse change in the business, financial
condition, income or operations of the Bank; (iii) since the date the Prospectus
became authorized for use, the conditions set forth in clauses (ii) through (iv)
inclusive of subsection (e) of this Section 4 have been satisfied; (iv) no order
has been issued by the Commission or the OTS to suspend the effectiveness of the
Prospectus or to terminate the Offerings and, to the knowledge of the Officers,
no action for such purposes has been instituted or threatened by the Commission
or the OTS; (v) to the knowledge of the Officers, no person has sought to obtain
review of the final action of the OTS approving the Plan pursuant to Section
5(i)(2)(B) of the HOLA; and (vi) all of the representations and warranties
- 19 -
contained in Section 2 hereof are true and correct with the same force and
effect as though expressly made on the Closing Date and all of the covenants and
obligations of the Company, the Bank and the MHC set forth in this Agreement
have been fulfilled.
(g) At the Closing Date, Trident shall, if it has not already
received, receive, among other documents, (i) a copy of the order from the
Commission declaring the Registration Statement effective; (ii) a copy of the
letters from the OTS approving the Conversion Application and authorizing the
use of the Prospectus; and (iii) a copy of the letter from the OTS approving the
Holding Company Application.
(h) Concurrently with the execution of this Agreement, Trident shall
have received a letter from Xxxxxx, Spain & Company, P.C., independent certified
public accountants, dated the date hereof and addressed to Trident, in substance
and form reasonably 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 reasonably satisfactory to counsel for Trident from Xxxxxx, Spain &
Company, P.C., independent certified public accountants, dated the Closing Date
and addressed to Trident, 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) business days prior to the Closing Date.
(j) All opinions, certificates, letters and documents prepared for
Trident's reliance shall be in compliance with the provisions hereof only if
they are, in the reasonable opinion of Trident, satisfactory to Trident. Any
certificates signed by an officer or director of the Company, the Bank or the
MHC prepared for Trident's reliance and delivered to Trident or to counsel for
Trident that specifically references this Agreement, shall be deemed a
representation and warranty by the Company, the Bank and the MHC to Trident as
to the statements made therein. If any condition to Trident's obligations
hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled,
Trident may terminate this Agreement or, if Trident so elects, may waive any
such conditions which have not been fulfilled, or may extend the time of their
fulfillment. If Trident terminates this Agreement in accordance with the
foregoing, the Bank shall reimburse Trident for its accountable expenses as
provided in Section 1 hereof.
5. Indemnification.
---------------
(a) The Company, the Bank and the MHC, jointly and severally,
hereby 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 1933 Act or Section 20(a) of the Exchange Act:
(i) Against any and all loss, liability, claim, damage and
expense whatsoever, including but not limited to, legal fees and expenses,
reasonably incurred by any of them in investigating, preparing to defend or
defending against any action, proceeding or claim (whether commenced or
threatened) (A) arising out of or based upon any breach of any representation or
warranty by the Company, the Bank or the MHC contained in this Agreement, (B)
arising out of or based upon the failure of the Company, the Bank or the MHC to
fulfill any covenant or obligation set forth in this Agreement, or (C) arising
out of or based upon any untrue or alleged untrue statement of a material fact
or the omission or alleged omission of a material fact required to be stated or
necessary to make not misleading any statements contained in (I) the
Registration Statement, the Conversion Application, the Holding Company
Application or the Prospectus or (II) any other document or communication
prepared or executed by or on behalf of the Company, the Bank or the MHC and
based upon written information
- 20 -
furnished by or on behalf of the Company and the Bank or the MHC with the
consent of the Company, the Bank or the MHC to qualify the Shares under the
securities laws of the United States or any state or filed with the Commission
or the OTS (in this Section 5, collectively called the "Application"), unless
such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company, the Bank or the MHC with respect
to Trident by or on behalf of Trident expressly for use in the Registration
Statement, Conversion Application, the Holding Company Application, the Proxy
Statement, the Prospectus or any Application, or any amendment or supplement
thereof. This indemnity shall be in addition to any liability the Company, the
Bank or the MHC may have to Trident otherwise;
(ii) Against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any untrue
statement or omission referenced in subsection (i) of this Section 6(a), or any
alleged untrue statement or omission referenced in subsection (i) of this
Section 6(a), if such settlement is effected with the prior written consent of
the Company, the Bank or the MHC; and
(iii) Against any and all loss, liability, claim, damage and
expense whatsoever arising out of (A) the Allocation Instructions or (B) any
records of any account holders, depositors, borrowers and other members of the
Bank delivered to Trident by the Bank or its agents for use during the
Conversion.
(b) Trident hereby agrees to indemnify and hold harmless the Company,
the Bank and the MHC, their respective officers, directors and the employees and
each person, if any, who controls the Company, the Bank or the MHC within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the Exchange Act to
the same extent as the foregoing indemnity from the Company, the Bank and the
MHC to Trident, but only with respect to (A) statements or omissions, if any,
made in the Prospectus, the Proxy Statement, the Registration Statement, the
Conversion Application, the Holding Company Application or the Application, as
amended or supplemented, in reliance upon, and in conformity with, written
information furnished to the Company, the Bank or the MHC with respect to
Trident by or on behalf of Trident expressly for use in the Prospectus, the
Proxy Statement, the Registration Statement, the Conversion Application, the
Holding Company Application or the Application, as amended or supplemented; or
(B) 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.
(c) Promptly after receipt by an indemnified party under this
Section 5 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 5, notify the indemnifying party of the commencement thereof;
provided, however, that the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party unless the failure to provide such notice to the indemnifying
party results in the forfeiture by such party of substantial rights or defenses.
In case any such action is brought against any indemnified party, and the
indemnified party notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that the indemnifying party may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than the reasonable cost of
- 21 -
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. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel) that said firm may
retain) for all indemnified parties in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this Section 5 if any
settlement of any such action is effected without such indemnifying party's
consent.
6. Contribution.
------------
(a) The parties agree that the provisions of this Section 6 shall
apply to the fullest extent permitted by Sections 23A and 23B of the Federal
Reserve Act. In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in Section 5 hereof is for any
reason held to be unavailable to Trident other than in accordance with its
terms, the Company, the MHC and the Bank on the one hand and Trident on the
other shall contribute to the aggregate losses, liabilities, claims, damages,
and expenses of the nature contemplated by such indemnity incurred by the
Company, the Bank and/or the MHC and Trident (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the Bank
and/or the MHC, 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, the Bank and/or the MHC, on the one hand, and Trident, on
the other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Bank and/or the MHC, on the one hand, and Trident, on the other, shall be deemed
to be in the same proportions as the total proceeds from the sale of the Shares
(before deducting expenses) received by the Company, the Bank and/or the MHC
bear to the total fees received by Trident under this Agreement. The relative
fault of the Company, the Bank and/or the MHC, 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, the Bank and/or the MHC or by Trident, the relative intent of the
parties, the knowledge of the parties, access to information and opportunity to
correct or prevent such statement or omission.
(b) The Company, the Bank, the MHC and Trident agree that it would
not be just and equitable if contribution pursuant to this Section 6 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 such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, Trident shall not be required to contribute any amount in excess of
the amount by which fees owed Trident pursuant to this Agreement
- 22 -
exceed 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 0000 Xxx) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation.
7. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company, the Bank and the MHC and of Trident and
the representations and warranties of the Company, the Bank and the MHC 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, the Bank or the
MHC or any controlling person or indemnified party referred to in Section 5
hereof, and shall survive any termination of this Agreement and/or the issuance
of the Shares. Any successor or assign of Trident, the Company, the Bank or the
MHC, any controlling person and any legal representative of Trident, the
Company, the Bank or the MHC shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations contained in this
Agreement.
8. Termination.
-----------
(a) The obligations of Trident pursuant to this Agreement shall
terminate upon the earliest to occur of (i) completion, termination or
abandonment of the Plan by the Company, the Bank or the MHC, (ii) termination of
the Offerings, or (iii) 45 days after the completion of the Offerings unless
extended by agreement of all parties.
(b) Notwithstanding the foregoing, Trident may terminate this
Agreement by giving notice at any time after this Agreement becomes effective,
as follows:
(i) If the obligations of Trident cannot, in the reasonable
opinion of Trident, be fulfilled because of the material breach of any of the
representations or warranties contained in Section 2 hereof, the failure by the
Company, the Bank or the MHC to perform their covenants and obligations under
this Agreement or the failure of the Company, the MHC or the Bank to fulfill any
of the other conditions set forth under Section 4 hereof.
(ii) If any domestic or international event or act or
occurrence has materially disrupted the United States securities markets, such
as to make impracticable, in the reasonable opinion of Trident, proceeding with
the Offerings; or if trading on the New York Stock Exchange shall have been
suspended or if limits in prices or volumes or the manner of trading shall have
been imposed by the New York Stock Exchange; 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; or if a moratorium
in foreign exchange trading by major international banks or persons has been
declared; or if there shall have been a material adverse change in the
capitalization, condition or business of the Company, the Bank or the MHC; or if
the Company, the Bank or the MHC shall have sustained a material or substantial
loss by, but not limited to, 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 MHC; or if Trident
elects to terminate this Agreement under any other Section of this Agreement.
(iii) If Trident elects to terminate this Agreement as
provided in this Section 8(b), the Company, the MHC and the Bank shall be
notified promptly by Trident by telephone or telegram, confirmed by letter.
- 23 -
(c) (i) The Company, the Bank or the MHC may terminate this
Agreement by giving notice of a material breach of this Agreement by Trident at
any time after this Agreement becomes effective.
(ii) If the Company, the Bank or the MHC elects to terminate
this Agreement as provided in this Section 8(c), Trident shall be notified
promptly by the Company, the Bank or the MHC by telephone or telegram, confirmed
by letter.
(d) If this Agreement is terminated for any of the reasons set forth
in this Section 8, the Company, the MHC or the Bank shall reimburse Trident for
any expenses incurred by Trident which are reimbursable in accordance with
Section 1 hereof.
9. 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 by
letter to:
Mr. R. Xxx Xxxxxxx
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
0000 X Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
If sent to the Company, the MHC or the Bank, shall be mailed, delivered or
telegraphed and confirmed by letter to:
Xx. Xxxxxx X. Xxxxxx
Lexington First Federal Savings Bank
00 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx
Xxxxxxx Kantarian & Xxxxxxxxx, P.C.
Suite 700
0000 00xx Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
10. Parties. The Company, the Bank and the MHC shall be entitled to
-------
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of Trident when the same shall have been given by the
undersigned. Trident shall be entitled to act and rely on any request, notice,
consent, waiver, or agreement purportedly given on behalf of the Company, the
Bank or the MHC, when
- 24 -
the same shall have been given by the undersigned or any other officer of the
Company, the Bank or the MHC. This Agreement shall inure solely to the benefit
of, and shall be binding upon, Trident, the Company, the Bank, the MHC and the
controlling persons and indemnified parties referred to in Section 5 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.
11. Closing. At the Closing, Trident shall submit a list of the
-------
persons subscribing for the Shares and the number of Shares so subscribed. The
Company, the Bank or the MHC shall deliver to Trident in immediately available
funds the commissions and remaining expenses due and owing to Trident as set
forth in Section 1 hereof, and the opinions and certificates required hereby and
other documents deemed reasonably necessary by Trident shall be executed and
delivered to effect the sale of the Shares as contemplated hereby and pursuant
to the terms of the Prospectus.
12. Partial Invalidity. In the event that any term, provision or
------------------
covenant of this Agreement or the application thereof to any circumstance or
situation shall be invalid or unenforceable in whole or in part, the remainder
hereof and the application of such term, provision or covenant to any other
circumstance or situation shall not be affected thereby, and each term,
provision or covenant of this Agreement shall be valid and enforceable to the
full extent permitted by law.
13. Construction. This Agreement shall be construed in accordance
------------
with the internal laws of the State of Tennessee (without regard to Tennessee
conflicts of laws principles).
14. 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.
- 25 -
If the foregoing correctly sets forth the understanding between Trident and
the Company, the Bank and the MHC please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between Trident and the Company, the Bank and the MHC.
Very truly yours,
COMMUNITY NATIONAL CORPORATION
By:
-------------------------------
Xxxxxx X. Xxxxxx
President
LEXINGTON FIRST FEDERAL SAVINGS BANK
By:
-------------------------------
Xxxxxx X. Xxxxxx
President
LEXINGTON FIRST FEDERAL MUTUAL
HOLDING COMPANY
By:
-------------------------------
Xxxxxx X. Xxxxxx
President
Accepted as of the date first above written:
TRIDENT SECURITIES, INC.
By:
------------------------
Xxxxxxx X. Xxxxxxx
its
---------------------
- 26 -
