Exhibit 1.1
CALVARY BANCORP, INC.
UP TO 6,555,000 SHARES
Common Stock
(No Par Value Per Share)
$10.00 Per Share
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Calvary Bancorp, Inc., a Tennessee-chartered corporation (the "Company"),
and Calvary Banking, a Federally-chartered and federally insured mutual savings
bank (the "Bank"), hereby confirm, as of __________ __, 1997, their respective
agreements with Trident Securities, Inc. ("Trident"), a broker-dealer registered
with the Securities and Exchange Commission ("Commission") and a member of the
National Association of Securities Dealers, Inc., ("NASD"), as follows:
1. Introductory. The Bank intends to convert from a Federally-chartered
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mutual savings bank to a federally-chartered stock savings bank as a wholly
owned subsidiary of the Company (together with the Offerings, as defined below,
the issuance of shares of common stock of the Bank to the Company and the
incorporation of the Company, the "Conversion") pursuant to a plan of conversion
adopted on August 7, 1997 (the "Plan"). In accordance with the Plan the Company
is offering shares of its common stock, no par value per share (the "Shares" and
the "Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to certain depositors of the
Bank and to the Bank's tax-qualified employee benefit plans (i.e., the Bank's
Employee Stock Ownership Plan (the "ESOP")). Shares of the Common Stock not sold
in the Subscription Offering may be offered to the general public in a community
offering with preference given to natural persons (including individual
retirement and Xxxxx retirement accounts and personal trusts in which such
natural persons have substantial interests) residing in the Bank's "Local
Community" as defined in the Plan (the Subscription and Community Offerings are
sometimes referred to collectively as the "Offerings"), subject to the right of
the Company and the Bank, in their absolute discretion to reject orders in the
Community Offering in whole or in part. In the Offerings, the Company is
offering between 4,845,000 and 6,555,000 Shares, with the
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Page 2
possibility of offering up to 7,538,250 Shares without a resolicitation of
subscribers, as contemplated by the final regulations regarding mutual-to-stock
conversions of the Office of Thrift Supervision ("OTS"). Each Eligible Account
Holder and Supplemental Eligible Account Holder (each as defined in the Plan)
may purchase in the Subscription Offering the greater of $600,000 of the Common
Stock for a single account whether held jointly or individually, $600,000 of the
Common Stock when aggregated with purchases by an Associate of that person (as
defined in the Plan) or 15 times the product (rounded down to the next whole
number) obtained by multiplying the total number of shares of Conversion Stock
to be issued by a fraction of which the numerator is the amount of the Deposit
of the Eligible Account Holder or Supplemental Eligible Account Holder and the
denominator is the total amount of Qualifying Deposits of all Eligible Account
Holders or Supplemental Eligible Account Holders in the Bank on the Eligibility
Record Date; Other Members (as defined in the Plan) may purchase in the
Subscription Offering the greater of $600,000 of the Common Stock for a single
account whether held jointly or individually, $600,000 of the Common Stock when
aggregated with purchases by an Associate of that person (as defined in the
Plan) or 0.1 of 1% of the total offering of shares of Conversion Stock. Persons
purchasing shares of Common Stock in the Community Offering, together with
Associates of (as defined in the Plan) and persons Acting in Concert with such
persons (as defined in the Plan), may purchase in the Community Offering the
greater of $600,000 of the Common Stock for a single account whether held
jointly or individually, $600,000 of the Common Stock when aggregated with
purchases by an Associate of that person (as defined in the Plan), except that
the Tax-Qualified Employee Stock Benefit Plans may purchase up to 10/o of the
total shares of Conversion Stock to be issued in the Stock Conversion.
The Company and the Bank have been advised by Trident that it will utilize
its best efforts in assisting the Company and the Bank with the sale of the
Shares in the Offerings and, if deemed necessary by the Company in a syndicated
community offering. Prior to the execution of this Agreement, the Company has
delivered to Trident the Prospectus dated ____________ __, 1997 (as hereinafter
defined) and all supplements thereto to be used in the Offerings. Such
Prospectus contains information with respect to the Company, the Bank and the
Shares.
2. Representations and Warranties.
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(a) The Company and the Bank jointly and severally represent and
warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto,
on
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Form S-1 (No. 333- )), including a Prospectus relating to the
Offerings, for the registration of the Shares under the Securities
Act of 1933, as amended (the "Act"), and such registration statement
has become effective under the Act and no stop order has been issued
with respect thereto and no proceedings therefor have been initiated
or, to the Company's best knowledge, threatened by the Commission.
Except as the context may otherwise require, such registration
statement, as amended or supplemented, on file with the Commission at
the time the registration statement became effective, including the
Prospectus, financial statements, schedules, exhibits and all other
documents filed as part thereof as amended and supplemented, is
herein called the "Registration Statement," and the prospectus, as
amended or supplemented, on file with the Commission at the time the
Registration Statement became effective is herein called the
"Prospectus," except that if the prospectus filed by the Company with
the Commission pursuant to Rule 424(b) of the general rules and
regulations of the Commission under the Act (together with the
enforceable published policies and releases of the Commission
thereunder, the "SEC Regulations") differs from the form of
prospectus on file at the time the Registration Statement became
effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with or mailed for
filing to the Commission and shall include any amendments or
supplements thereto from and after their dates of effectiveness or
use, respectively. If any Shares remain unsubscribed following
completion of the Subscription Offering and the Community Offering,
the Company (i) will promptly file with the Commission a post-
effective amendment to such Registration Statement relating to the
results of the Subscription and the Community Offerings, any
additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for
filing to, the Commission a prospectus or prospectus supplement
containing information relating to the results of the Subscription
and the Community Offerings and pricing information to Rule 424(c)
of the SEC Regulations, in either case in a form reasonably
acceptable to the Company and Trident.
(ii) The Bank has filed an Application for the Mutual-to-Stock
Conversion, including exhibits (as amended or supplemented, the
"Application") with the OTS under Home Owners' Loan Act ("HOLA") and
the enforceable rules and regulations, including published policies
and actions, of the OTS thereunder (the "OTS Regulations"), which has
been approved by
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the OTS; and the Prospectus and the proxy statement for the
solicitation of proxies from members for the special meeting to
approve the Plan (the "Proxy Statement") included as part of the
Application have been approved for use by the OTS. No order has been
issued by the OTS preventing or suspending the use of the Prospectus
or the Proxy Statement, and no action by or before the OTS revolving
such approvals is pending or, to the Bank's best knowledge,
threatened.
(iii) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (i) the Registration
Statement and the Prospectus (as amended or supplemented, if amended
or supplemented) complied with the Act and the SEC Regulations, (ii)
the Registration Statement (as amended or supplemented, if amended or
supplemented) did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii)
the Prospectus (as amended or supplemented, if amended or
supplemented) did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Representations or warranties in this subsection shall not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Bank relating to
Trident by or on behalf of Trident expressly for use in the
Registration Statement or Prospectus.
(iv) The Company has been duly incorporated as a Tennessee
corporation, and the Bank has been duly or as a mutual savings bank
under the laws of the United States, and each of them is validly
existing and in good standing under the laws of the jurisdiction of
its organization with full power and authority to own its property
and conduct its business as described in the Registration Statement
and Prospectus; the Bank is a member in good standing of the Federal
Home Loan Bank of Pittsburgh, and the deposit accounts of the Bank
are insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC") up
to the applicable legal limits. Each of the Company and the Bank is
not required to be qualified to do business as a foreign corporation
in any jurisdiction where nonqualification would have a material
adverse effect on the Company and the Bank, taken as a whole. The
Bank does not own equity securities of or an equity interest in any
business enterprise except as described in the Prospectus.
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Upon amendment of the Bank's charter and bylaws as provided in the
rules and regulations of the OTS and completion of the sale by the
Company of the Shares as contemplated by the Prospectus: (i) the Bank
will be converted pursuant to the Plan to a Federally-chartered
capital stock savings bank with full power and authority to own its
property and conduct its business as described in the Prospectus,
(ii) all of the authorized and outstanding capital stock of the Bank
will be owned of record and beneficially by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank. The
activities of the Bank are permissible to subsidiaries of a savings
and loan holding company by the rules, regulations, policies and
practices of the OTS.
(v) The Bank has good, marketable and insurable title to all
assets material to its business and to those assets described in the
Prospectus as owned by it, free and clear of all material liens,
charges, encumbrances or restrictions, except for liens for taxes not
yet due, except as described in the Prospectus and except as could
not in the aggregate have a material adverse effect upon the
operations or financial condition of the Bank- and all of the leases
and subleases material to the operations or financial condition of
the Bank, under which it holds properties, including those described
in the Prospectus, are in full force and effect as described therein.
(vi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary actions on the part of each
of the Company and the Bank, and this Agreement is a valid and
binding obligation with valid execution and delivery of each of the
Company and the Bank, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally or the
rights of creditors of depository institution holding companies the
accounts of whose subsidiaries are insured by the FDIC or by general
equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A of
the Federal Reserve Act, 12 U.S.C. Section 371c ("Section 23A")).
(vii) There is no litigation or governmental proceeding pending
or, to the best knowledge of the Company or the Bank, threatened or
involving the
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Company or the Bank or any of their respective assets which
individually or in the aggregate would reasonably be expected to have
a material adverse effect on the condition (financial or otherwise),
results of operations and business, including the assets and
properties, of the Company and the Bank, taken as a whole.
(viii) The Company and the Bank have received the opinions of
Breyer & Aguggia, Washington, D.C. with respect to federal tax
consequences of the Conversion, and of Bass, Xxxxx & Xxxx, P.C. with
respect to Tennessee income tax consequences of the Conversion, to
the effect that the Conversion will constitute a tax-free
reorganization under the Internal Revenue Code of 1986, as amended,
and will not be a taxable transaction for the Bank or the Company
under the laws of Tennessee, and the facts relied upon in such
opinions are accurate and complete.
(ix) Each of the Company and the Bank has all such corporate
power, authority, authorizations, approvals and orders as may be
required to enter into this Agreement and to carry out the provisions
and conditions hereof, subject to the limitations set forth herein
and subject to the satisfaction of certain conditions imposed by the
OTS in connection with its approval of the Application, and except as
may be required under the securities, or "blue sky" laws of various
jurisdictions, and in the case of the Company, as of the Closing
Date, will have such approvals and orders to issue and sell the
Shares to be sold by the Company as provided herein, and in the case
of the Bank, as of the Closing Date, will have such approvals and
orders to issue and sell the Shares of its Common Stock to be sold to
the Company as provided in the Plan, subject to the issuance of an
amended charter in the form required for Federally-chartered stock
savings banks (the "Stock Charter"), the form of which Stock Charter
has been approved by the OTS.
(x) Neither the Company nor the Bank is in violation of any
rule or regulation of the OTS that could reasonably be expected to
result in any enforcement action against the Company or the Bank or
their officers or directors that might have a material adverse effect
on the condition (financial or otherwise), operations, businesses,
assets or properties of the Company and the Bank, taken as a whole.
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(xi) The financial statements and any related notes or
schedules which are included in the Registration Statement and the
Prospectus fairly present the financial condition, income, equity and
cash flows of the Bank at the respective dates thereof and for the
respective periods covered thereby and comply as to form with the
applicable accounting requirements of the SEC Regulations and the
applicable regulations of the OTS. Such financial statements have
been prepared in accordance with generally accepted accounting
principles throughout the periods involved, except as set forth
therein, and such financial statements are consistent with financial
statements and other reports filed by the Bank with supervisory and
regulatory authorities except as such generally accepted accounting
principles may otherwise require. The tables in the Prospectus
accurately present the information purported to be shown thereby at
the respective dates thereof and for the respective periods therein.
(xii) There has been no material change in the condition
(financial or otherwise), results of operations or business,
including assets and properties, of the Company and the Bank, taken
as a whole, since the latest date as of which such condition is set
forth in the Prospectus, except as set forth therein, and the
capitalization, assets, properties and business of each of the
Company and the Bank conform to the descriptions thereof contained in
the Prospectus. Neither the Company nor the Bank has any material
liabilities of any kind, contingent or otherwise, except as set forth
in the Prospectus.
(xiii) There has been no breach or default (or the occurrence
of any event which, with notice or lapse of time or both would
constitute a default) under, or creation or imposition of any hen,
charge or other encumbrance upon any of the properties or assets of
the Company or the Bank pursuant to any of the terms, provisions or
conditions of, any agreement, contract, indenture, bond, debenture,
note, instrument or obligation to which the Company or the Bank is a
party or by which either of them or any of their respective assets or
properties may be bound or is subject, or violation of any
governmental license or any enforceable published law, administrative
regulation or order or court order, writ, injunction or decree, which
breach, default, encumbrance or violation would have a material
adverse effect on the condition (financial or otherwise), operations,
business, assets or properties of the Company and the Bank taken as a
whole- all agreements which are material to the condition (financial
or otherwise), results of operations or business of the Company and
the Bank taken as a whole are in full force and effect, and no party
to any such
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agreement has instituted or, to the best knowledge of the Company and
the Bank, threatened any action or proceeding wherein the Company or
the Bank would be alleged to be in default thereunder.
(xiv) Neither the Company nor the Bank is in violation of its
respective articles of incorporation or charter or bylaws. The
execution and delivery hereof and the consummation of the transactions
contemplated hereby by the Company and the Bank do not conflict with
or result in a breach of the articles of incorporation or charter or
bylaws of the Company or the Bank (in either mutual or stock form) or
constitute a material breach of or default (or an event which, with
notice or lapse of time or both, would constitute a default) under,
give rise to any right of termination, cancellation or acceleration
contained in, or result in the creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the Company or the Bank pursuant to any of the terms, provisions or
conditions of any material agreement, contract indenture, bond,
debenture, note, instrument or obligation to which the Company or the
Bank is a party or violate any governmental license or permit or any
enforceable published law, administrative regulation or order or court
order, writ, injunction or decree (subject to the satisfaction of
certain conditions imposed by the OTS in connection with its approval
of the Application), which breach, default, encumbrance or violation
would have a material adverse effect on the condition (financial or
otherwise), operations or business of the Company and the Bank taken
as a whole.
(xv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and prior to the
Closing Date (as hereinafter defined), except as otherwise may be
indicated or contemplated therein, none of the Company or the Bank has
issued any securities which will remain issued at the Closing Date or
incurred any liability or obligation direct or contingent or borrowed
money, except borrowings or liabilities in the ordinary course of
business, or entered into any other transaction not in the ordinary
course of business and consistent with prior practices, which is
material in light of the business of the Company and the Bank, taken
as a whole.
(xvi) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range as set forth in the Prospectus under the caption
"Capitalization," and no Common
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Stock of the Company shall be outstanding immediately prior to the
Closing Date, the issuance and the sale of the Shares of the Company
have been duly authorized by all necessary action of the Company and
approved by the OTS and, when issued in accordance with the terms of
the Plan and paid for, shall be validly issued, fully paid and
nonassessable and shall conform to the description thereof contained in
the Prospectus; the issuance of the Shares is not subject to preemptive
rights, except as set forth in the Prospectus; and good title to the
Shares will be transferred by the Company upon issuance thereof against
payment therefor, free and clear of all claim encumbrances, security
interests and liens against the Company whatsoever. The certificates
representing the Shares will conform in all material respects with the
requirements of applicable laws and regulations. The issuance and sale
of the capital stock of the Bank to the Company has been duly
authorized by all necessary action of the Bank and the Company and
appropriate regulatory authorities (subject to the satisfaction of
various conditions imposed by the OTS in connection with its approval
of the Application), and such capital stock, when issued in accordance
with the term of the Plan, will be fully paid and nonassessable and
will conform in all material respects to the description thereof
contained in the Prospectus.
(xvii) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except for
such approvals as have been obtained, the declaration of effectiveness
of any required post-effective amendment by the Commission and approval
thereof by the OTS, the issuance of the Stock Charter by the OTS and as
my be required under the securities laws of various jurisdictions.
(xviii) All contracts and other documents required to be filed
as exhibits to the Registration Statement or the Application have been
filed with the Commission or the OTS, as the case may be.
(xix) Xxxxxxx, Xxxxx & Xxxxx, P.C., which has audited the
financial statements of the Bank as of December 31, 1996 and 1995
included in the Prospectus, is an independent public accountant within
the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
(xx) For the past five years, the Company and the Bank have
timely filed all required federal, state and local income or franchise
tax returns, and no
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deficiency has been asserted with respect to such returns by any taxing
authorities, and the Company and the Bank have paid all taxes that have
become due and, to the best of the knowledge of the Company and the
Bank, the Company and the Bank have made adequate reserves for similar
future tax liabilities, except where any failure to make such filings,
payments and reserves, or the assertion of such a deficiency, would not
have a material adverse effect on the condition of the Company and the
Bank taken as a whole.
(xxi) All of the loans represented as assets of the Bank on
the most recent financial statements of the Bank included in the
Prospectus meet or are exempt from all requirements of federal, state or
local law pertaining to lending, including without limitation truth in
lending (including the requirements of Regulation Z and 12 C.F.R. Part
226), real estate settlement procedures, consumer credit protection,
equal credit opportunity and all disclosure laws applicable to such
loans, except for violations which, if asserted, would not have a
material adverse effect on the Company and the Bank taken as a whole.
(xxii) The records of account holders, depositors, borrowers
and other members of the Bank delivered to Trident by the Bank or its
agent for use during the Conversion have been prepared or reviewed by the
Bank and, to the best knowledge of the Company and the Bank, are reliable
and accurate.
(xxiii) None of the Company or the Bank, or, to the best
knowledge of the Company and the Bank the employees of the Company or the
Bank, has made any payment of funds of the Company or the Bank prohibited
by law, and no funds of the Company or the Bank have been set aside to be
used for any payment prohibited by law.
(xxiv) To the best knowledge of the Company and the Bank, the
Company and the Bank are in compliance with all laws, rules and
regulations relating to the discharge, storage, handling and disposal of
hazardous or toxic substances, pollutants or contaminants and neither the
Company nor the Bank believes that the Company or the Bank is subject to
liability under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any similar law, except for
violations which, if asserted, would not have a material adverse effect
on the Company and the Bank, taken as a whole. There are no actions,
suits, regulatory investigations or other proceedings pending or, to the
best knowledge of the Company or the Bank, threatened against the
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Company or the Bank to the discharge, storage, handling and disposal of
hazardous or toxic substances, pollutants or contaminants. To the best
knowledge of the Company and the Bank, no disposal release or discharge
of hazardous or discharge of hazardous or toxic substances, pollutants or
contaminants, including petroleum and gas products, as any of such terms
may be defined under federal state or local law, has been caused by the
Company or the Bank or, to the best knowledge of the Company or the Bank,
has occurred on, in or at any of the facilities or properties of the
Company or the Bank, except such disposal, release or discharge which
would not have a material adverse effect on the Company and the Bank,
taken as a whole.
(xxv) At the Closing Date (as defined in Section 3 hereof),
the Company and the Bank will have completed the conditions precedent to,
and shall have conducted the Conversion in all material respects in
accordance with, the Plan, the OTS Regulations and all other applicable
laws, regulations, published decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion
imposed by the OTS.
(b) Trident represents and warrants to the Company and the Bank that:
(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and the NASD.
(ii) Trident is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to provide the services to be
furnished to the Company and the Bank hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all action on the part of Trident, and this
Agreement is a legal, valid and binding obligation of Trident,
enforceable in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors
of registered broker-dealers accounts of whose may be protected by the
Securities Investor Protection Corporation or by general equity
principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law, and except to the extent that the
provisions of Sections 8 and 9 hereof may be
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enforceable as against public policy or pursuant to Section 8 and 9
hereof may be unenforceable as against public policy or pursuant to
Section 23A).
(iv) Each of Trident and, to Trident's knowledge, its
employees, agents and representatives who shall perform any of the
services required hereunder to be performed by Trident shall be duly
authorized and shall have all licenses, approvals and permits
necessary to perform such services, and Trident is a registered
selling agent in the jurisdictions listed in Exhibit A hereto and will
remain registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until the
Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by Trident,
the fulfillment of the terms set forth herein and the consummation of
the transactions contemplated hereby shall not violate or conflict
with the corporate charter or bylaws of Trident or violate, conflict
with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both would constitute a default) under,
any material agreement, indenture or other instrument by which Trident
is bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) Any funds received by Trident to purchase Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's knowledge,
threatened against Trident any action or proceeding before the
Commission, the NASD, any state or any state or federal court
concerning Trident's activities as a broker-dealer.
3. Employment of Trident: Sale and Delivery of the Shares. On the basis
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of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank hereby employ Trident
as their agent to utilize its best efforts in assisting the Company with the
Company's sale of the Shares in the Subscription Offering and Community
Offering. The employment of Trident hereunder shall terminate (a) forty-five
(45) days after the Subscription and Community Offering closes, unless the
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Company and the Bank, with the approval of the OTS, are permitted to extend such
period of time, or (b) upon consummation of the Conversion, whichever date shall
first occur.
In the event the Company is unable to sell a minimum of 4,845,000 Shares
(or such lesser amount as the OTS may permit) within the period herein provided,
this Agreement shall terminate, and the Company and the Bank shall refund
promptly to any persons who have subscribed for any of the Prospectus, and no
party to this Agreement shall have any obligation to the other party hereunder,
except as set forth in Section 6, 8 and 9 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Shares in special interest-
bearing accounts with the Bank until all Shares are sold and paid for were made
prior to the commencement of the Subscription and Community Offering, with
provision for prompt refund to the purchasers as set forth above, or for
delivery to the Company if all Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxx 00000 or at such other place as shall be agreed upon between the
parties hereto. The date upon which the Company shall release the Shares sold
in the Offerings in accordance with the terms hereof is herein called the
"Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the offering price of the Common Stock ordered on or
before twelve noon on the next business day following receipt or execution of an
order form by Trident to the Bank for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) Trident will subsequently
contact any potential subscriber indicating interest to confirm the interest and
give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgments of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the fifth business day ("debit date")
following receipt of the confirmation referred to in (i) and (iv) Trident will
forward completed order forms together with such funds to the Bank on or before
twelve noon on the next business day following the debit date for deposit in a
segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
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In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder:
(a) (i) a proxy solicitation and conversion center management fee in
the amount of $10,000, (ii) a commission equal to one and one half percent
(1.5%) of the aggregate dollar amount of capital stock sold in the
subscription and community offerings, excluding any shares of conversion
stock sold to the Bank's directors, executive officers and the ESOP.
Additionally, commissions will be excluded on those shares sold to
Associates (as defined in the Plan) of the Bank's directors and executives
officers, and (iii) for stock sold by other NASD member firms under
selected dealer's agreements, the commission shall not exceed a fee to be
agreed upon jointly by Trident, the Company and the Bank to reflect market
requirements at the time of the stock allocation in a Syndicated Community
Offering. All such fees are to be payable in next-day funds to Trident on
the Closing Date.
(b) Trident shall be reimbursed for allocable expenses, including but
not limited to travel, communications, legal fees and expenses and postage,
incurred by it whether or not the Offerings are successfully completed;
provided, however, that neither the Company nor the Bank shall pay or
reimburse Trident for any of the foregoing expenses accrued after Trident
shall have notified the Company or the Bank of its election to terminate
this Agreement pursuant to Section 11 hereof or after such time as the
Company or the Bank shall have given notice in accordance with Section 12
hereof that Trident is in breach of this Agreement. Trident's reimbursable
out of pocket expenses will not exceed $10,000 and its reimbursable legal
fees will not exceed $30,000 (excluding out of pocket expenses). Full
payment to defray Trident's reimbursable expenses shall be made in next-day
funds on the Closing Date or, if the Conversion is not completed and is
terminated for any reason, within ten (10) business days of receipt by the
Company of a written request from Trident for reimbursement of its
expenses. Trident acknowledges receipt of $10,000 advance payment from the
Bank which shall be for reimbursement for expenses incurred by Trident
hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in the immediately preceding paragraph (b), in
the event that a resolicitation, for a reason other than failure to obtain
sufficient orders to reach the minimum of the estimated price range
established in the Conversion, or other event causes the Offerings to be
extended beyond their original expiration date, Trident shall be reimbursed
for its allocable expenses incurred during such extended period, provided
that the allowance for allocable expenses provided for in the immediately
Trident Securities, Inc.
Sales Agency Agreement
Page 15
preceding paragraph (b) above have been exhausted and subject to the
following. Such reimbursement shall be in amount equal to the product
obtained by dividing $10,000 (original out-of-pocket expenses) by the total
number of days of the unextended Subscription Offering (calculated from the
date of the Prospectus to the intended close of the Subscription Offering
as stated in the Prospectus) and multiplying such product by the number of
days of the extension (that number of days from the date of the
supplemental prospectus used in the extended Subscription Offering to the
closing of the extension of the Subscription Offering described in such
supplemental prospectus.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their attorney's fees, NASD filing fees,
and attorneys' fees relating to any required state securities laws research and
filings, telephone charges, air freight, rental equipment, supplies, transfer
agent charges, fees relating to auditing and accounting and costs of printing
all documents necessary in connection with the Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
--------
assisting the Company on a best efforts basis in offering a minimum of 4,845,000
and a maximum of 6,555,000 Shares, with the possibility of offering up to 7,538,
250 Shares (except as the OTS may permit to e decreased or increased) in the
Subscription and Community Offerings. The Shares are to be offered to the
public at the price set forth on the cover page of the Prospectus and the first
page of this Agreement.
5. Further Agreements. The Company and the Bank jointly and severally
------------------
covenant and agree that:
(a) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident immediately upon discovery, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective or any supplement to the
Prospectus has been filed, (ii) of the issuance by the Commission of any
stop order relating to the Registration Statement or of the initiation or
the threat of any proceedings for that purpose, (iii) of the receipt of any
notice with respect to the suspension of the
Trident Securities, Inc.
Sales Agency Agreement
Page 16
qualification of the Shares for offering or sale in any jurisdiction, and
(iv) of the receipt of any comments from staff of the Commission relating
to the Registration Statement. If the Commission enters a stop order
relating to the Registration Statement at any time, the Company will make
every reasonable effort to obtain the lifting of such order at the earliest
possible moment.
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter
amended, and by the SEC Regulations, as from time to time in force, so far
as necessary to permit the continuance of offers and sales of or dealings
in the Shares in accordance with the provisions hereof and the Prospectus.
If during the period when the Prospectus is required to be delivered in
connection with the offer and sale of the Shares any event relating to or
affecting the Company and the Bank, taken as a whole, shall occur as a
result of which it is necessary, in the opinion of counsel for Trident,
with the concurrence of counsel to the Company, to amend or supplement the
Prospectus in order to make the Prospectus not false or misleading in light
of the circumstances existing at the time it is delivered to a purchaser of
the Shares, the Company forthwith shall prepare and furnish to Trident a
reasonable number of copies of an amendment or amendments or of a
supplement or supplements to the Prospectus (in form and substance
satisfactory to counsel for Trident) which shall amend or supplement the
Prospectus so that, as amended or supplemented, the Prospectus shall not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser of the Shares, not misleading. The Company will not file or use
any amendment or supplement to the Registration Statement or the Prospectus
of which Trident has not first been furnished a copy or to which Trident
shall reasonably object after having been furnished such copy. For the
purposes of this subsection the Company and the Bank shall furnish such
information with respect to themselves as Trident from time to time may
reasonably request. The Company shall reimburse Trident for its costs,
including legal expenses, in connection with any amendment or supplement to
the Registration Statement or Prospectus with respect to any event
described in this paragraph.
(d) The Company and the Bank have taken or will take all
reasonably necessary action as may be required to qualify or register
the Shares for offer and sale by the Company under the securities or
blue sky laws of such jurisdictions as Trident and either the Company
or its counsel may agree upon;
Trident Securities, Inc.
Sales Agency Agreement
Page 17
provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction. In each jurisdiction where such qualification or
registration shall be effected, the Company, unless Trident agrees
that such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or
reports as are, or reasonably may be, required by the laws of such
jurisdiction.
(e) Appropriate entries will be made in the financial records of
the Bank sufficient to establish a liquidation account for the benefit
of eligible account holders and supplemental eligible account holders
in accordance with the requirements of the OTS.
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act, prior to completion of
the stock offering pursuant to the Plan and shall request that such
registration statement be effective upon completion of the Conversion.
The Company shall maintain the effectiveness of such registration for
a minimum period of three years or for such shorter period as may be
required by applicable law.
(g) The Company will make generally available to its security
holders, as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the regulations
promulgated under the Act) covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next
following the effective date (as defined in said Rule 158) of the
Registration Statement.
(h) For a period of three (3) years from the date of this
Agreement (unless the Common Stock shall have been reregistered under
the Exchange Act), the Company will furnish to Trident, as soon as
publicly available after the end of each fiscal year, a copy of its
annual report to shareholders for such year, and the Company will
furnish to Trident (i) as soon as publicly available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, and (ii)
from time to time, such other public information concerning the
Company as Trident may reasonably request.
Trident Securities, Inc.
Sales Agency Agreement
Page 18
(i) The Company shall use the net proceeds from the sale of the
Shares consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless
such condition is waived by Trident.
(k) The Company or its agent (other than Trident) shall advise
Trident, if necessary, as to the allocation of deposits, in the case
of eligible account holders, and votes, in the case of other members,
and of the Shares in the event of an oversubscription and shall
provide Trident final instructions as to the allocation of the Shares
("Allocation Instructions") in such event and such information shall
be accurate and reliable. Trident shall be entitled to rely on such
instructions and shall have no liability in respect of its reliance
thereon, including without limitation, no liability for or related to
any denial or grant of a subscription in whole or in part.
(l) The Company and the Bank will take such actions and furnish
such information as are reasonably requested by Trident to ensure
compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
6. Payment of Expenses. Whether or not the Conversion is
-------------------
consummated, the Company and the Bank shall pay or reimburse Trident for
(a) all filing fees paid or incurred by Trident in connection with all
filings with the NASD with respect to the Subscription and Community
Offerings, and (b) in addition, if the Company is unable to sell a minimum
of 4,845,000 Shares or such lesser amount as the OTS may permit or the
Conversion is otherwise terminated, the Company and the Bank shall
reimburse Trident fro allocable expenses incurred by Trident relating to
the offering of the Shares as provided in Section 3 hereof; provided,
however, that neither the Company nor the Bank shall pay or reimburse
Trident for any of the foregoing expenses accrued after Trident shall have
notified the Company or the Bank of its election to terminate this
Agreement pursuant to Section 11 hereof or after such time as the Company
or the Bank shall have given notice in accordance with Section 12 hereof
that Trident is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
-----------------------------------
Trident, the obligations of Trident as provided herein shall be subject to
the accuracy of the representations and warranties covered in Section 2
hereof as of the date hereof
Trident Securities, Inc.
Sales Agency Agreement
Page 19
and as of the Closing Date, to the performance by the Company and the Bank
of their obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable
opinions of Breyer & Aguggia, special counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and the Bank is validly existing
as a mutual savings bank in good standing under the laws of the
United States, each with full power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) each of the Company and the Bank has been qualified to
do business and, to such counsel's knowledge, is in good standing
as a foreign corporation in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business
requires such qualification or, if not so qualified and in good
standing, failure to so qualify would not have any material
adverse effect on the Company and the Bank, taken as a whole;
(iii) the Bank is a member of the Federal Home Loan Bank of
Cincinnati, and the deposit accounts of the Bank are insured by
the SAIF up to the applicable legal limits.
(iv) to the knowledge of such counsel, the activities of the
Bank as such activities are described in the Prospectus are
permitted under federal and Tennessee law to subsidiaries of a
Tennessee business corporation, and the Bank does not have any
subsidiaries;
(v) to the knowledge of such counsel, the Bank has obtained
all licenses, permits and other governmental authorizations
currently required for the conduct of its business as such
business is described in the Prospectus, all such licenses,
permits and other governmental authorizations are in full force
and effect and the Bank is in all material respects complying
therewith, except where the failure to hold such
Trident Securities, Inc.
Sales Agency Agreement
Page 20
licenses, permits or governmental authorizations or the failure
to so comply would not have a material adverse effect on the
Company and the Bank, taken as a whole;
(vi) the Plan complies with, and, to the knowledge of such
counsel, the Conversion of the Bank from a Federally-chartered
mutual savings bank to a Federally-chartered stock savings bank
and the creation of the Company as a holding company for the Bank
have been effected in all material respects in accordance with,
the laws of the State of Tennessee and the OTS Regulations
(except for compliance with certain post-closing conditions
imposed by the OTS as to which no opinion need be rendered); to
such counsel's knowledge, all of the terms, conditions,
requirements and provisions with respect to the Plan and the
Conversion imposed by the OTS, except with respect to the filing
or submission of certain required post-Conversion reports or
other materials by the Company or the Bank, have been complied
with by the Company and the Bank; and, to the knowledge of such
counsel, no person has sought to obtain regulatory or judicial
review of the final action of the OTS in approving the
Application;
(vii) the Company and Bank have authorized Common Stock as
set forth in the Registration Statement and the Prospectus, and
the description of such Common Stock in the Registration
Statement and the Prospectus is accurate in all material
respects;
(viii) the issuance and sale of the Shares have been duly
and validly authorized by all necessary corporate action on the
part of the Company; the Shares, upon receipt of payment and
issuance in accordance with the terms of the Plan and this
Agreement, will be validly issued, fully paid, nonassessable and
free of preemptive rights, and good title thereto shall be
transferred by the Company free and clear of all claims,
encumbrances, security interests and liens created by the
Company.
(ix) the certificates for the Shares are in proper forms and
comply in all material respects with applicable Tennessee law;
Trident Securities, Inc.
Sales Agency Agreement
Page 21
(x) the issuance and sale of the capital stock of the Bank
to the Company have been duly authorized by all necessary
corporate action of the Bank and the Company and have received
the approval of the OTS, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of the Plan,
will be validly issued, fully paid and nonassessable and owned of
record and, to the knowledge of such counsel, beneficially by the
Company.
(xi) subject to the satisfaction of the conditions to the
OTS' approval of the Application, no further approval,
authorization, consent or other order of any federal banking or
securities agency or the OTS or any other public Tennessee board
or body is required in connection with the execution and delivery
of this Agreement, the issuance of the Shares and the
consummation of the Conversion, except with respect to the
issuance to the Bank of the Stock Charter by the OTS and as may
be required under the "blue sky" laws of various jurisdictions;
(xii) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly and validly
authorized by all necessary corporate action on the part of each
of the Company and the Bank; and this Agreement is a legal, valid
and binding obligation of each of the Company and the Bank;
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization, receivership, conservatorship or
similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of
depository institutions whose accounts are insured by the FDIC or
depository institution holding companies the accounts of whose
subsidiaries are insured by the FDIC or by general equity
principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, or by laws
relating to the safety and soundness of insured depository
institutions and their affiliates, and except to the extent that
the provisions of Section 8 and 9 hereof may be unenforceable as
against public policy or applicable law, including but not
limited to Section 23A, as to which no opinion need be rendered);
(xiii) to such counsel's knowledge, there are no material
legal or governmental proceedings pending or threatened against
or involving
Trident Securities, Inc.
Sales Agency Agreement
Page 22
the assets of the Company or the Bank (provided that for this
purpose such counsel need not regard any litigation or
governmental procedure to be "threatened" unless the potential
litigant or government authority has manifested to the management
of the Company or the Bank, or to such counsel, a present
intention to initiate such litigation or proceeding);
(xiv) the statements in the Prospectus under the captions
"Regulation," "Taxation," "Dividend Policy," "Restrictions or
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 (excluding financial data included therein,
as to which an opinion need not be expressed), have been prepared
or reviewed by such counsel and are correct in all material
respects;
(xv) the Application has been approved by the OTS, and the
Prospectus and the Proxy Statement have been authorized for use
by the OTS; the Registration Statement and any post-effective
amendment thereto has been declared effective by the Commission;
except as to any necessary qualifications or registration under
the securities laws of the jurisdictions in which the Shares were
offered, no further approval of any governmental authority is
required for the issuance and sale of the Shares (subject to the
satisfaction of certain conditions imposed by the OTS in
connection with its approval of the Application, and no
proceedings are pending by or before the Commission or the OTS
seeking to revoke or rescind the orders declaring the
Registration Statement effective, approving the Application, or,
to the knowledge of such counsel, are contemplated or threatened;
(xvi) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the Bank do not
conflict with or result in a breach of the articles of
incorporation or bylaws of the Company or the Bank (in either
mutual or stock form), or, to the best knowledge of such counsel,
constitute a material breach or of default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or
imposition of any lien, charge or other encumbrance upon any of
the properties or assets of the Company or the Bank pursuant to
any of the
Trident Securities, Inc.
Sales Agency Agreement
Page 23
terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note instrument or
obligation to which the Company or the Bank is a party (other
than the establishment of the liquidation account pursuant to the
Plan) or violate any governmental license or permit or any
enforceable published law, administrative regulation or order or
court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the OTS in
connection with its approval of the Application), which breach,
default, encumbrance or violation would have a material adverse
effect on the condition (financial or otherwise), operations,
business, assets or properties of the Company and the Bank taken
as a whole;
(xvii) to the knowledge of such counsel, there has been no
material breach of any provision of the Company's or the Bank's
articles of incorporation or charter or bylaws or breach or
default (or the occurrence of any event which, with notice or
lapse of time or both, would constitute a default) under any
agreement, contract, indenture, bond, debenture, note, instrument
or obligation to which the Company or the Bank is a party or by
which either of them or any of their respective assets or
properties may be bound or is subject, or violation of any
governmental license or permit, or a violation of any enforceable
published law, administrative regulation or order, or court
order, writ, injunction or decree which breach, default,
encumbrance or violation would have a material adverse effect on
the condition (financial or otherwise), operations, business,
assets or properties of the Company and the Bank taken as a
whole; and,
(xviii) the Application, the Registration Statement, the
Prospectus and the Proxy Statement, in each case as amended,
comply as to form in all material respects with the requirements
of the Act, the HOLA, the SEC Regulations and the OTS
Regulations, as the case may be (except as to information with
respect to Trident included therein and financial statements,
notes to financial statements, financial tables and other
financial and statistical data, including the appraisal and
related stock valuation information, included therein, as to
which an opinion need not be expressed); to such counsel's
knowledge, all documents and exhibits required to be filed with
the Application, and
Trident Securities, Inc.
Sales Agency Agreement
Page 24
the Registration Statement have been so filed, and the
descriptions in the Application and the Registration Statement of
such documents and exhibits are accurate in all material
respects.
In rendering such opinions, such counsel may rely as to matters of
fact on certificates of officers and directors of the Company and the Bank
and certificates of public officials delivered pursuant hereto. Such
counsel may assume that any agreement is the valid and binding obligation
of any parties to such parties to such agreement other than the Company and
the Bank. Such opinions may be governed by, and interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business Law (1991), and, as a consequence, references in such opinions to
such counsel's "knowledge" may be limited to "actual knowledge" as defined
in the Accord (or knowledge based on certificates). Such opinions may be
limited to present statutes, regulations and judicial interpretations and
to facts as they presently exist; in rendering such opinions, such counsel
need assume no obligation to revise or supplement them should the present
laws be changed by legislative or regulatory action, judicial decision or
otherwise; and such counsel need express no view, opinion or belief with
respect to whether any proposed or pending legislation, if enacted, or any
regulations or any policy statements issued by any regulatory agency,
whether or not promulgated pursuant to any such legislation, would affect
the validity of the execution and delivery by the Company and the Bank of
this Agreement or the issuance of the Shares.
(b) At the Closing Date, Trident shall receive the letters of Breyer &
Aguggia , special counsel for the Company and the Bank, dated the Closing
Date, addressed to Trident, in form and substance reasonably satisfactory
to counsel for Trident and to the effect that based on such counsel's
participation in conferences with representatives of the Company, the Bank,
its counsel, the independent appraiser, the independent certified public
accountants, Trident and its counsel, review of documents and understanding
of applicable law (including the requirements of Form S-1) and the
experience such counsel has gained in its practice under the Act, nothing
has come to such counsel's attention that would lead it to believe that the
Registration Statement, as amended (except as to information in respect to
Trident contained 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 such counsel need express no comment), at the time it became
effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements made therein not misleading, or that the Prospectus, as
amended (except as to information in respect of
Trident Securities, Inc.
Sales Agency Agreement
Page 25
Trident contained 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 such
counsel need express no comment), as of its date and at the Closing Date,
contained any untrue statement of material fact or omitted 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 (in making
this statement such counsel may state that it has not undertaken to verify
independently the information in the Registration Statement or Prospectus
and, therefore, does not assume any responsibility for the accuracy or
completeness thereof).
(c) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or
pass upon the matters required by Trident, and for the purposes of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained, including but
not limited to, resolutions of the Board of Directors of the Company and
the Bank regarding the authorization of this Agreement and the transactions
contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material adverse change in the
condition, financial or otherwise, business or results of operations of the
Company and the Bank, taken as a whole, since the latest date as of which
such condition is set forth in the Prospectus, except as referred to
therein: (ii) there shall have been no transaction entered into by the
Company or the Bank after the latest date as of which the financial
condition of the Company or the Bank is set forth in the Prospectus other
than transactions referred to or contemplated therein, transactions in the
ordinary course of business, and transactions which are not material to the
Company and the Bank, taken as a whole; (iii) none of the Company or the
Bank shall have received from the OTS, the FDIC or the Commission any
directive (oral or written) to make any change in the method of conducting
their respective businesses which is material to the business of the
Company and the Bank, taken as a whole, with which they have not complied;
(iv) no action, suit or proceeding, at law or in equity or before or by any
federal or state commission, board or other administrative agency, shall be
pending or threatened against the Company or the Bank or affecting any of
their respective assets, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the business, operations,
financial condition or income of the Company and the Bank, taken as a
whole; and (v) the Shares shall have been qualified or registered for
offering
Trident Securities, Inc.
Sales Agency Agreement
Page 26
and sale by the Company under the securities or blue sky laws of such
jurisdictions as Trident and the Company shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company and the Bank, dated the Closing Date, to the effect that: (i)
they have examined the Prospectus and, at the time the Prospectus became
authorized by the Company for use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading with respect to the Company or the
Bank; (ii) since the date the Prospectus became authorized by the Company
for use, no event has occurred which should have been set forth in an
amendment or supplement to the Prospectus which has not been so set forth,
including specifically, but not limitation, any material change in the
business, condition (financial or otherwise) or results of operations of
the Company or the Bank and, the conditions set forth in clauses (ii)
through (iv) inclusive of subsection (d) of this Section 7 have been
satisfied; (iii) to the best knowledge of such officers, no order has been
issued by the Commission or the OTS to suspend the Subscription Offering or
the Community Offering or the effectiveness of the Prospectus, and no
action for such purposes has been instituted or threatened by the
Commission or the OTS; (iv) to the best knowledge of such officers, no
person has sought to obtain review of the final actions of the OTS
approving the Plan; and (v) all of the representations and warranties
contained in Section 2 of this Agreement are true and correct, with the
same force and effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident shall receive, among other documents,
(i) copies of the letters from the OTS authorizing the use of the
Prospectus and the Proxy Statement, (ii) a copy of the Order of the
commission declaring the Registration Statement effective; (iii) copies of
the letters from the OTS evidencing the corporate existence of the Bank;
(iv) a copy of the letter from the appropriate Tennessee authority
evidencing the incorporation (and, if generally available from such
authority, good standing) of the Company; (v) a copy of the Company's
articles of incorporation certified by the appropriate Tennessee
governmental authority; and (vi) if available, a copy of the letter from
the OTS approving the Bank's Stock Charter.
(g) As soon as available after the Closing Date, Trident shall receive
a certified copy of the Bank's Stock Charter executed by the appropriate
official of the OTS.
Trident Securities, Inc.
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(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Xxxxxxx, Xxxxx & Xxxxx, P.C.,
independent certified public accountants, addressed to Trident and the
Company, in substance and form satisfactory to counsel for Trident, with
respect to the financial statements and certain financial information
contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Xxxxxxx, Xxxxx & Xxxxx,
P.C., independent certified public accountants, dated the Closing Date and
addressed to Trident and the Company, confirming the statements made by
them in the letter delivered by them pursuant to the preceding subsection
as of a specified date not more than five (5) days prior to the Closing
Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel.
Any certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and the
Bank to Trident as to the statements made therein. If any condition to
Trident's obligations hereunder to be fulfilled prior to or at the Closing Date
is not so fulfilled, Trident may terminate this Agreement or, if Trident so
elects, may waive any such conditions which have not been fulfilled, or may
extend the time of their fulfillment. If Trident terminates this Agreement as
aforesaid, the Company and the Bank shall reimburse Trident for its expenses as
provided in Section 3(b) hereof.
8. Indemnification.
---------------
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Trident, its officers, directors and employees and each
person, if any, who controls Trident within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever and shall further promptly
reimburse such persons for any legal or other expenses reasonably incurred
by each or any of them in investigating, preparing to defend or defending
against any such action, proceeding or claim (whether commenced or
threatened) arising out of or based upon (A) any 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 the statements, in
light of the circumstances under which
Trident Securities, Inc.
Sales Agency Agreement
Page 22
they were made, not misleading, contained in (i) the Registration Statement
or the Prospectus or (ii) any application (including the Application) or
other document or communication (in this Section 8 collectively called
"Applications") prepared or executed by or on behalf of the Company or the
Bank or based upon written information furnished by or on behalf of the
Company or the Bank, filed in any jurisdiction, to effect the Conversion or
qualify the Shares under the securities laws thereof or filed with the OTS
or the Commission with respect to the Conversion, unless such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company or the Bank with respect to Trident by
or on behalf of Trident expressly for use in the Prospectus or any
amendment or supplement thereof or in any of the Applications, as the case
may be, or (B) the participation by Trident in the Conversion. This
indemnity shall be in addition to any liability the Company and the Bank
may have to Trident otherwise. This indemnity shall not be applicable with
respect to any loss, liability, claim, damage or expense whatsoever if it
is determined by final judgment of a court having jurisdiction over the
matter that such loss, liability, claim, damage or expense was primarily
the result of Trident's willful misconduct or gross negligence.
(b) The Company shall indemnify and hold Trident harmless of any
liability whatsoever arising out of (i) the Allocation Instructions or (ii)
any records of account holders, depositors, borrowers and other members of
the Bank delivered to Trident by the Bank or its agents for use during the
Conversion.
(c) Trident agrees to indemnify and hold harmless the Company and the
Bank, their officers, directors and employees and each person, if any, who
controls the Company and the Bank within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Bank to Trident, but only with
respect to (A) statements or omissions, if any, made in the Prospectus or
any amendment or supplement thereof, in any Application or to a purchaser
of the Shares in reliance upon, and in conformity with, written information
furnished to the Company or the Bank with respect to Trident by or on
behalf of Trident expressly for use in the Prospectus or in any of the
Applications; 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 primarily resulted from gross negligence or
willful misconduct of Trident.
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify
Trident Securities, Inc.
Sales Agency Agreement
Page 29
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 8.
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with the other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than the reasonable cost of investigation except as
otherwise provided herein. In the event the indemnifying party elects to
assume the defense of any such action and retain counsel acceptable to the
indemnified party, the indemnified party may retain additional counsel, but
shall bear the fees and expenses of such counsel unless (i) the
indemnifying party shall have specifically authorized the indemnified party
to retain such counsel or (ii) the parties to such suit include such
indemnifying party and the indemnified party, and such indemnified party
shall have been advised by counsel that one or more material legal defenses
may be available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying party's
consent. In no event shall the indemnifying parties be liable for the fees
and expenses of more than one separate firm of attorneys for each
indemnified party in connection with any one action, proceeding, claim or
suit or separate but similar or related actions, proceedings or claims in
the same jurisdiction arising out of the same general allegations or
circumstances unless such indemnified parties receive an opinion of counsel
that they need separate representation because of potential conflicts of
interest between such indemnified parties or because some indemnified
parties have claims or defenses which are not shared by other indemnified
parties. To the extent required by law, this Section 8 is subject to and
limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the Company and/or
the Bank other than in
Trident Securities, Inc.
Sales Agency Agreement
Page 30
accordance with its terms, the Company or the Bank and Trident shall contribute
to the aggregate losses, liabilities, claims, damages, and expenses of the
nature contemplated by said indemnity agreement incurred by the Company or the
Bank and Trident (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Bank on the one hand and
Trident on the other from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above, but also the relative fault of the Company or the Bank
on the one hand and Trident on the other hand in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Bank on the one hand and Trident on the
other shall be deemed to be in the same proportions as the total net proceeds
from the Conversion received by the Company and the Bank bear to the total fees
received by Trident under this Agreement. The relative fault of the Company or
the Bank on the one hand and Trident on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Bank or by Trident and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Bank and Trident agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The extent required by law, this Section 9 is subject to and
limited by public policy and applicable law, including but not limited to the
provisions of Section 23A.
Trident Securities, Inc.
Sales Agency Agreement
Page 31
10. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company and the Bank and Trident and the
representation and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. Trident may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in Trident's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become involved in a war
or major hostilities; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the Bank or
the conversion, or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have
been a material adverse change in the capitalization, condition or business
or prospects of the Company, or if the Bank shall have sustained a material
or substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall
have been insured.
(b) If Trident elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by Trident by
telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, and to fulfill its obligations, if any,
pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement and upon
demand, the Company and the Bank shall pay Trident the full amount so owing
thereunder.
(d) The Bank may terminate the Conversion in accordance with the terms
of the Plan. Such termination shall be without liability to any party,
except that the
Trident Securities, Inc.
Sales Agency Agreement
Page 32
Company and the Bank shall be required to fulfill their obligations
pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement.
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Mr. R. Xxx
Xxxxxxx, Xx. (with a copy to Peabody & Xxxxx, 0000 00xx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X. Xxxxxxx, Esquire) and if sent to
the Company or the Bank, shall be mailed, delivered or telegraphed and confirmed
to Calvary Bancorp, Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxx
00000 (with a copy to Breyer & Aguggia, Suite 470 East, 0000 X Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxx, Xx., Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Construction. Unless governed by preemptive federal law, this
------------
Agreement shall be governed by and construed in accordance with the substantive
laws of North Carolina.
15. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 33
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
CALVARY BANCORP, INC.
By:
------------------
Xx X. Xxxxxxx, Xx.
President and Chief Executive Officer
Date:
------------------
CALVARY BANKING
By:
------------------
Xx X. Xxxxxxx, Xx.
President and Chief Executive Officer
Date:
------------------
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
------------------
R. Xxx Xxxxxxx, Xx.
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
--
listed below:
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Delaware Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
---
listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
