UWHARRIE CAPITAL CORP SALES AGENCY AGREEMENT
EXHIBIT 1.1
, 2002
The Strategic Alliance Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
This letter agreement (this “Agreement”) sets forth and confirms the terms and conditions of the engagement of The Strategic
Alliance Corporation (“SAC”) by Uwharrie Capital Corp (the “Company”) as selling agent for the Company with respect to the Company’s proposed public offering (the “Offering”) of up to $7,012,500 of its common
stock, par value $1.25 per share (the “Shares”) at a price of $5.50 per share. The Offering will be made by means of a Prospectus (the “Prospectus”), which will be provided to SAC.
1. Representations and Warranties of the Company
The Company represents and warrants to, and agrees with SAC as follows:
(a) |
The Company has prepared and filed with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form SB-2 and amendments
thereto (the “Registration Statement”), including the Prospectus, for registration under the Securities Act of 1933, as amended (the “1933 Act”) of the offering and sale of the Shares. The Registration Statement has been declared
effective by the SEC and no stop order has been issued with respect thereto. The Prospectus accurately describes the Company and its business and properties, and does not and will not contain any untrue statements of material fact or omit to state
any material facts required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; |
(b) |
The Company is, and at all times during the Offering will be, a corporation duly organized, validly existing and in good standing under the laws of North
Carolina, with all power and authority to own, lease or operate its properties and conduct its business as described in the Prospectus; and is duly qualified to do business as a foreign corporation in each other jurisdiction in which it owns or
leases properties or conducts its business so as to require qualification and is in good standing in
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each such jurisdiction, except where failure to be so qualified would not have a material adverse effect on the condition, financial or otherwise, results of operations, affairs or business
prospects of the Company; |
(c) |
The Shares to be issued and sold by the Company hereunder, when issued and delivered against payment therefor as provided herein, will be duly and validly
authorized and issued, fully paid and nonassessable and will conform to the description thereof contained in the Prospectus; |
(d) |
Except as disclosed in the Prospectus or information incorporated therein by reference, there are no (i) outstanding securities or obligations of the Company
convertible into or exchangeable for any capital stock of the Company, (ii) warrants, rights or options to subscribe for or purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations or (iii)
obligations of the Company to issue any such convertible or exchangeable securities or obligations, or any such warrants, rights or options; |
(e) |
The Company has the full legal right, power and authority to enter into and perform this Agreement and to sell and deliver the Shares as provided in the
Prospectus and herein, this Agreement has been duly authorized by its Board of Directors and duly executed and delivered on behalf of the Company, and this Agreement is a valid, legal and binding obligation of the Company;
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(f) |
Other than filings with, and any necessary registrations or qualifications with the SEC, the National Association of Securities Dealers, Inc. (the
“NASD”) and applicable state securities and “Blue Sky” authorities, no consent, approval, authorization or order, registration or qualification of or with any court or governmental agency or body is required for the issuance and
sale of the Shares or for the consummation of the other transactions contemplated by this Agreement; |
(g) |
There are no contracts, agreements or understandings between the Company and any person which would give rise to a valid claim against the Company for a
brokerage commission, finder’s fee or other like payment in connection with the Offering of the Shares, other than compensation due and payable to SAC pursuant to this Agreement; |
(h) |
No action, suit or proceeding at law or in equity is pending or, to the Company’s knowledge, threatened to which the Company is a party, and no proceedings
are pending or, to the Company’s knowledge, threatened against or affecting the Company before or by any governmental official, commission, board or other administrative agency, (other than in connection with required regulatory approvals)
wherein an unfavorable decision, ruling or finding could have a material adverse effect on the consummation of this Agreement or the condition, financial or otherwise, results of operations, affairs or business prospects of the Company;
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(i) |
The Company has such permits, licenses, franchises and governmental and regulatory authorizations (“Permits”) as are necessary to own its properties
and conduct its business in the manner described in the Prospectus, subject to such qualifications as may be set forth in the Prospectus, and except where the failure to have such Permits would not have a material adverse effect on the consummation
of this Agreement or the condition, financial or otherwise, results of operations, affairs or business prospects of the Company; |
(j) |
Any historical financial statements (other than any pro forma financial statements) included in the Prospectus present fairly the financial position of the
Company as of the date indicated and the results of operations, equity and cash flows for the periods specified, and such financial statements have been prepared in conformity with generally accepted accounting principles applied on a basis that is
consistent in all material respects during the periods involved; |
(k) |
To the best knowledge of the Company after due inquiry, no officer, director or 5% shareholder of the Company is affiliated with a member of the NASD except for
Xxxxxxx X. Xxxxxx, President and Chief Executive Officer of SAC, Xxxxx X. Xxxx, Chief Executive Officer of the Company, Xxxxxx Xxxxxx, Vice President of SAC, Xxxxxx X. X’Xxxxx, Vice President of SAC, and Xxxxxxx X. Xxxxxxxxxxxx, Vice President
of SAC; |
(l) |
The Company is not in default in the performance of any obligation, agreement or condition contained in any agreement by which the Company is bound. Neither the
execution and delivery of this Agreement nor the consummation of the transactions herein contemplated, nor compliance with the terms and provisions hereof, conflict with or result in a breach of, or default under, any of the terms, provisions or
conditions of the Articles of Incorporation or Bylaws of the Company or any agreement or instrument to which the Company is a party or by which it is bound, or any order, rule or regulation applicable to the Company of any court or any governmental
body or administrative agency having jurisdiction over the Company; |
(m) |
The Company is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940; |
(n) |
The Company agrees as follows: |
(i) |
The Company will notify SAC immediately, and confirm such notice in writing, of the receipt of any comments from any state securities commission or regulatory
authority that relate to the Prospectus or any amendment thereto or requests by any state securities commission or regulatory authority for amendments to the Prospectus or for additional information; |
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(ii) |
The Company will use the net proceeds from the sale of the Shares received by it in the manner specified in the Prospectus under the caption “Use of
Proceeds;” and |
(iii) |
For three years from the date of this Agreement, the Company will furnish to SAC copies of all reports and communications (financial or otherwise) furnished by
the Company to its shareholders, copies of all publicly availabile reports or financial statements filed with the regulatory agencies as soon as such are available (except for quarterly Call Reports), and such other publicly available documents,
reports and information concerning the business and financial condition of the Company as SAC may reasonably request; and |
(o) |
The Company acknowledges and agrees that SAC and its affiliates may, from time to time, have relationships and engagements with the Company or other parties
including, but not limited to, its customers, suppliers, creditors, potential investors and investors. Such engagements and relationships may include, but are not limited to, the following: (i) loans, other extensions of credit or financial
accommodations; (ii) treasury and cash management services; (iii) acting in various capacities in connection with private or public placement of debt and/or equity; (iv) acting as trustee or otherwise performing fiduciary services for the Company or
such other parties or in connection with transactions in which the Company is involved or may have an interest, including without limitation any employee benefit plan or trust; (v) any and all forms of depository services; (vi) any and all other
services or products which may be offered or provided by SAC or any of its affiliated companies; and (vii) other services or products customarily provided from time to time by financial institutions. The Company waives any and all conflicts of
interest, which may result from SAC dealing in any of the aforesaid capacities. Specifically, the Company waives any conflict that may arise on account of, or in connection with SAC’s engagement pursuant to this Agreement. The Company
acknowledges that SAC and its affiliates may, in the course of such other relationships, acquire information about the Company or such other parties but SAC shall have no obligation to disclose such information, or the fact that it has such
information in its possession, to the Company or to use such information on the Company’s behalf. |
2. Services to be Provided by SAC
In connection with this
Agreement, the scope of SAC’s services shall include the following:
(a) |
Commencing on _________ (the “Commencement Date”) and continuing until such time as the Offering is terminated by the Company, SAC shall serve as the
selling agent for the Company and will act on a best efforts basis. The Company acknowledges that SAC may enter into selected dealer agreements with other registered broker-dealers, with Company’s express written permission, (the
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“Selected Dealers”) for the sale of the Shares and that no such contractual arrangements shall violate or conflict with the terms of this Agreement; and |
(b) |
SAC shall perform its duties pursuant to this Agreement in compliance with all applicable federal and state securities laws, and shall solicit subscriptions for
the Shares only by means of the Prospectus and only in such jurisdictions specified by the Company and in which the Company may make such offers and sales. |
In exchange for the services of SAC pursuant to this Agreement, the Company agrees to pay SAC a selling commission of 3.0% for the gross dollar amount received by the
Company for each Share sold by any registered representatives of SAC or the Selected Dealers. The Company shall also pay SAC a nonrefundable financial advisory fee of $25,000. The aggregate amount of such selling commissions, if any, shall be paid
no later than ten (10) days after the completion of the Offering. However, SAC shall not receive any selling commission for Shares sold to (1) organizers or founders of Cabarrus Bank & Trust Company, (2) directors, officers, any of their
affiliates of the Company or any of its subsidiaries, or (3) any related interests of any persons set forth under clause (2) above.
3. Payment of Offering Expenses
In addition to the amounts set
forth in Section 2, above, the Company is expected to be responsible for the following expenses of the Offering:
(a) |
the fees and disbursements of the independent accountants and counsel retained by the Company and other related expenses in connection with the Offering;
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(b) |
the cost of printing and distributing the Prospectus and Blue Sky memoranda and all other documents relating to the Offering; |
(c) |
the fees and disbursements of the Company’s counsel in connection with state Blue Sky filings; |
(d) |
the filing fees of the SEC, the NASD, and state Blue Sky filing fees, as applicable; |
(e) |
any costs associated with preparing any stock certificates, as well as any transfer agent’s or registrar’s fees; |
(f) |
any costs, including but not limited to printing, postage and designing, associated with marketing and advertising related to the Offering;
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(g) |
any miscellaneous travel and informational meeting expenses for the Company associated with the Offering; and |
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(h) other usual and customary expenses.
4. Indemnification and Contribution
(a) |
The Company agrees to indemnify and hold harmless SAC, and each person, if any, who controls SAC within the meaning of Section 15 of the Securities Act of 1933
as amended (the “1933 Act”), against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel’s fees) arising out of or based upon the engagement of SAC as selling agent
hereunder, and will reimburse SAC and each such controlling person for any legal or other expenses reasonably incurred by SAC or any such controlling person in connection with investigating or defending any such loss, claim, damage, liability or
action, provided that the Company will not be responsible for any losses, claims, damages, liabilities or expenses that are finally judicially determined to have resulted primarily from SAC’s bad faith or gross negligence.
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(b) |
If any action or claim shall be brought or asserted against SAC or any person controlling SAC in respect of which indemnity may be sought from the Company, SAC
or such controlling person shall promptly notify the Company in writing, enclosing copies of all papers served on or delivered to such party. The failure to notify an indemnifying party shall not relieve the indemnified party from any liability
hereunder to the extent it is not materially prejudiced as a result of such failure. SAC or any such controlling person shall have the right to employ separate counsel in any such action and to participate in the defense thereof, and the fees and
expenses of such counsel shall be at the expense of the Company and shall be promptly reimbursed by the Company. No indemnified party shall settle, compromise or consent to the entry of any judgment with respect to any litigation, any investigation
or proceeding by any governmental agency or body, commenced or threatened, or claim whatsoever in respect of which indemnification or contribution can be sought under this Section 4 (whether or not the indemnified parties are actual or potential
parties thereto), unless the indemnified party gives prior written notification to the indemnifying party and such settlement, compromise or consent does not include any statement or admission of fault, culpability or failure to act on behalf of, or
with respect to, any indemnified party. |
(c) |
SAC agrees individually, and not jointly with any other selling agent for the Shares, to indemnify and hold harmless the Company and its respective directors
and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934, as amended against, any and all losses, liabilities, claims, damages and expenses to which the
Company or such persons may become subject if such losses, liabilities, claims, damages or expenses arise solely out of, or are based solely on, any untrue or alleged untrue statement of material fact contained in the Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon, the omission |
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of a material fact required to be stated therein, or necessary to make the statements therein not misleading, but only if such untrue statement or omission or alleged omission was made in the
Prospectus (as amended or supplemented) based upon and in conformity with written information furnished to the Company by SAC, specifically for use in the Prospectus. |
(d) |
If the indemnification provided for in this Section 4 is unavailable to an indemnified party under paragraphs (a), (b) or (c) hereof in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and SAC on the other from the Offering or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of SAC on the other in connection with the
statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and SAC on the other shall be
deemed to be in the same proportion as the total net proceeds received by the Company from the Shares sold in the Offering (before deducting expenses), and the total commissions received by SAC. The relative fault of the Company on the one hand and
of SAC on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Company, or by SAC, and
the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. |
The Company on the one hand and SAC on the other agree that it would not be just and equitable if contribution to be made pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with defending any such
action or claim. Notwithstanding the provisions of this Section 4, SAC shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares sold by it exceeds the amount of any damages that SAC 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 was not guilty of such fraudulent misrepresentation.
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5. Confidentiality; Nonsolicitation
SAC agrees not to use for any purpose or disclose to any person or entity any confidential information regarding the Company acquired
while performing the services pursuant to this Agreement. The term “confidential information” as used in this Agreement includes, but is not limited to, records, lists, and knowledge of the Company’s customers, shareholders,
suppliers, methods of operation, processes, and trade secrets, as the same may exist from time to time.
During
the term and after termination of this Agreement for any reason whatsoever, SAC shall not solicit, induce or attempt to induce any past or current customer of the Company (a) to cease doing business in whole or in part with or through the Company,
or (b) with any other person, firm, partnership, corporation, or other entity which performs or provides services materially similar to or competitive with those provided by the Company.
6. Termination for Cause by the Company
The Company may terminate this Agreement (i) immediately without notice upon the occurrence of any action by SAC which would entitle any Federal or State regulatory body to impose significant administrative or regulatory sanctions or
penalties against the Company or SAC, or upon the commencement of any civil, criminal, or administrative proceeding by any Federal or State regulatory body against the Company, or (ii) upon a material breach of any provision of this Agreement by SAC
which breach is not cured within five (5) business days after written notice of the breach is given to SAC.
7. Termination for Cause by SAC
SAC may terminate this Agreement
(i) immediately without notice upon the occurrence of any action by the Company which would entitle any Federal or State regulatory body to impose significant administrative or regulatory sanctions or penalties against the Company or SAC, or upon
the commencement of any civil, criminal, or administrative proceeding by any Federal or State regulatory body against SAC, or (ii) upon a material breach of any provision of this Agreement by the Company which breach is not cured within five (5)
business days after written notice of the breach is given to the Company.
8. Compliance with Certain Privacy
Provisions
SAC and the Company shall share information pertaining the services provided under this Agreement
only in such a manner as permitted by 15 USC §§ 6801 through 6809, as may be amended from time to time, and the regulations adopted pursuant thereto.
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9. Representations, Warranties and Agreements to Survive Delivery
The representations, warranties, indemnities, agreements and other statements of the Company set forth in or
made pursuant to this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of SAC or the Company or controlling person of the Company, and shall survive delivery of and payment for the
Shares.
10. Governing Law; Assignments
This Agreement shall be governed by the laws of the State of North Carolina. The Company and SAC each hereby waives any right to a trial by jury with respect to any claim
or action arising out of the engagement of SAC under this Agreement. The Company hereby consents to the jurisdiction of any state or federal court of competent jurisdiction sitting within the area comprising the Middle District of North Carolina as
well as to the jurisdiction of all courts from which an appeal may be taken from such courts, for the purpose of any litigation, proceeding or other action arising out of the Company’s obligations under or with respect to this Agreement, and
expressly waives any and all objections the Company may have as to venue in any of such courts. Neither party may assign this Agreement without the prior written consent of the other party.
11. Counterparts
This
Agreement may be executed in one of more counterparts, and when a counterpart has been executed by each party hereto all such counterparts taken together shall constitute one and the same Agreement. Signatures sent by facsimile shall have the same
effect as if manually signed copies had been delivered, and shall be binding upon the parties.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this shall become a binding agreement between the Company and SAC.
Very truly yours,
UWHARRIE CAPITAL CORP | ||
By: |
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Xxxxx X. Xxxx Chief Executive
Officer |
Confirmed and Accepted this
day of , 2002
The Strategic Alliance Corporation
By: |
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Xxxxxxx X. Xxxxxx | ||
President and Chief Executive Officer |
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