EXHIBIT 1.2
GREAT PEE DEE BANCORP, INC.
Up to 1,897,500 Shares of Common Stock
(Par Value $0.01 Per Share)
$10.00 Per Share
AGENCY AGREEMENT
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November ___, 1997
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Great Pee Dee Bancorp, Inc., a Delaware corporation ("Company"), and
First Federal Savings and Loan Association of Cheraw, a federally chartered and
insured mutual savings and loan association ("Association"), hereby confirm as
of the date above 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. Introduction. The Association intends to convert from a federally
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chartered mutual savings and loan association to a federally chartered stock
savings and loan association as a wholly- owned subsidiary of the Company
(together with the Offerings (as defined below), the issuance of shares of
common stock of the Association to the Company, the incorporation of the
Company, and the establishment and operation of the Foundation (as defined
below), collectively the "Conversion") pursuant to a plan of conversion adopted
by the Association's Board of Directors on July 14, 1997 ("Plan"). In accordance
with the Plan, the Company is offering up to 1,897,500 shares ("Shares") of its
common stock, par value $0.01 per share ("Common Stock"), pursuant to
nontransferable subscription rights in a subscription offering ("Subscription
Offering"), in order of priority, to (i) the Association's Eligible Account
Holders (as defined in the Plan), (ii) the Employee Stock Ownership Plan
("ESOP"), (iii) the Association's Supplemental Eligible Account Holders (as
defined in the Plan), (iv) the Association's Other Members (as defined in the
Plan), and (v) directors, officers and employees of the Association. Shares of
the Common Stock not sold in the Subscription Offering are being offered to the
general public in a community offering, with preference being given to natural
persons residing in Chesterfield County, South Carolina ("Association's Local
Community") ("Community Offering"), and, if necessary, through a syndicate of
NASD-registered broker-dealers managed by Trident in a syndicated community
offering ("Syndicated Community Offering"). The Community Offering and the
Syndicated Community Offering may commence any time during the Subscription
Offering
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or after the expiration of the Subscription Offering. The Subscription
Offering, the Community Offering and the Syndicated Community Offering are
collectively referred to as the "Offerings." Purchases of Shares in the
Offerings are subject to certain limitations and restrictions as described in
the Plan.
In addition, in connection with the Conversion and pursuant to the
terms of the Plan as described in the Prospectus, the Company has established a
charitable foundation ("Foundation"). Immediately following the consummation of
the Conversion, subject to the approval of the establishment of the Foundation
by the members of the Association and compliance with all conditions as may be
imposed by the OTS and any other regulatory authorities, the Company will
contribute 20,000 newly issued shares of Common Stock ("Foundation Shares") to
the Foundation.
The Company and the Association have been advised by Trident that it
intends to utilize its best efforts to assist the Company and the Association
with the sale of the Shares in the Subscription Offering and, if deemed
necessary, in the Community Offering and the Syndicated Community Offering.
2. Representations and Warranties.
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(a) The Company and the Association jointly and severally represent and
warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto, on
Form SB-2 (No. 333-_____), including a Prospectus, for the registration of the
Shares and the Foundation Shares under the Securities Act of 1933, as amended
("Securities Act"); and such registration statement has been declared effective
under the Securities 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 any
prospectus filed by the Company with the Commission pursuant to Rule 424(b) of
the general rules and regulations of the Commission under the Securities Act
(together with the published policies and actions of the Commission thereunder,
the "Securities Act 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 the Commission and shall include any amendments or supplements thereto from
and after their dates of effectiveness or use, respectively.
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(ii) The Association has filed an Application for Approval of
Conversion on Form AC, including exhibits (as amended or supplemented, the "Form
AC" or the "Conversion Application") with the Office of Thrift Supervision
("OTS") under the Home Owners' Loan Act, as amended ("HOLA"), and the rules and
regulations, including published policies and actions, of the OTS thereunder
(collectively, the "OTS Regulations"), which has been approved by the OTS; and
the Prospectus and the proxy statement for the solicitation of proxies from
members for the special meeting to approve the Plan ("Proxy Statement") included
as part of the Form AC 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 revoking such approvals is
pending or, to the Association's best knowledge, threatened. The Company has
filed with the OTS the Company's application on Form H-e(1)-S ("Holding Company
Application") promulgated under the savings and loan holding company provisions
of the HOLA and the regulations promulgated thereunder and has received approval
of its acquisition of the Association from the OTS.
(iii) As of the date hereof (i) the Registration Statement and the
Prospectus comply with the Securities Act and the Securities Act Regulations,
(ii) the Registration Statement does 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, in light of the circumstances under
which they were made, not misleading, and (iii) the Prospectus does 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 Association by or on behalf of Trident relating
to Trident expressly for use in the Registration Statement or Prospectus.
(iv) The Company has been duly incorporated as a Delaware corporation
and the Association has been duly organized 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 their jurisdiction of organization with full power
and authority to own its property and conduct its business as described in the
Registration Statement and Prospectus; the Association is a member in good
standing of the Federal Home Loan Bank of Atlanta; and the deposit accounts of
the Association are insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC") up to the
applicable legal limits. The Company is qualified to transact business as a
foreign corporation in the State of South Carolina. Each of the Company and the
Association is not required to be qualified to do business as a foreign
corporation in any jurisdiction where non-qualification would have a material
adverse effect on the financial condition, operations, business, properties or
assets of the Company and the Association, taken as a whole.
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(v) The Association 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 liens, charges, encumbrances or
restrictions, except for liens for taxes not yet due, except as described in the
Prospectus and except as do not in the aggregate have a material adverse effect
upon the financial condition, operations, business, properties or assets of the
Association; and all of the leases and subleases material to the financial
condition, operations, business, assets or properties of the Association, under
which it holds properties, including those described in the Prospectus, are in
full force and effect as described therein.
(vi) The Association has no direct or indirect subsidiaries.
(vii) 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 Association,
and this Agreement is a valid and binding obligation of each of the Company and
the Association, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or similar laws relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of insured financial institutions and their holding companies, the
accounts of whose subsidiaries are insured by the FDIC, by general equity
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law, or laws relating to the safety and soundness of
insured depository institutions and their affiliates, and except to the extent
that the provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy or by applicable law, including without limitation, Section 23A of
the Federal Reserve Act, 12 U.S.C. Section 371c (("Section 23A")).
(viii)Except as referred to in the Prospectus, there is no litigation
or governmental proceeding pending or, to the best knowledge of the Company or
the Association, threatened against or involving the Company or the Association,
or any of their respective assets which individually or in the aggregate would
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, business, assets or properties of the Company
or the Association, taken as a whole. (For purposes of this representation, any
litigation or governmental proceeding is not considered "threatened" unless the
potential litigation or governmental authority had manifested to the management
of the Company or the Association a present intention to initiate such
litigation or proceeding.).
(ix) The Company and the Association have received the opinions of
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. with respect to the federal income
tax consequences of the Conversion and the federal income tax consequences of
the Foundation, and of Xxxxx, Xxxx & Co., LLP, with respect to South Carolina
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 Association or
the Company under
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the laws of South Carolina; and the facts and representations made by the
Company and the Association and relied upon in rendering such opinions are
accurate and complete, and neither the Company nor the Association have taken
any action inconsistent therewith.
(x) Neither the Company nor the Association is in violation of any
rule or regulation of the OTS or the FDIC that could reasonably be expected to
result in any enforcement action against the Company or the Association, or
their officers or directors, that might have a material adverse effect on the
financial condition, operations, businesses, assets or properties of the Company
and the Association, taken as a whole.
(xi) Xxxxxxxx & Co. ("Xxxxxxxx"), the firm that prepared the
independent appraisal dated as of September 2, 1997, is independent with respect
to the Company and the Association within the meaning of the OTS Regulations.
The Company and the Association believe Xxxxxxxx to be experienced and expert in
rendering appraisals of thrift institutions, and nothing has come to the
attention of the Company and the Association which has caused them to believe
that the appraisal by Xxxxxxxx was not prepared in accordance with the
requirements of the OTS Regulations.
(xii) Xxxxx, Xxxx & Co., LLP, the firm that certified the financial
statements of the Association filed as part of the Registration Statement and
the Conversion Application, is independent with respect to the Company and the
Association as required by the Securities Act, the Securities Act Regulations,
the Code of Professional Ethics of the American Institute of Certified Public
Accountants, and Title 12 of the Code of Federal Regulations Parts 563c and 571,
and nothing has come to the attention of the Company and the Association which
has caused them to believe that such firm is not independent within the meaning
of such provisions.
(xiii)The financial statements and related notes which are included in
the Registration Statement and the Prospectus fairly present the financial
condition, earnings, equity and cash flows of the Association at the respective
dates thereof and for the respective periods covered thereby and comply as to
form with the applicable accounting requirements of the Securities Act
Regulations and the OTS Regulations. Such financial statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved, except as set forth
therein, and such financial statements are consistent with financial statements
and other reports filed by the Association with the OTS, except as GAAP may
otherwise require. The financial tables in the Prospectus accurately present the
information purported to be shown thereby at the respective dates thereof and
for the respective periods covered thereby.
(xiv) There has been no material change in the financial condition,
operations, business, assets or properties of the Company and the Association,
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
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capitalization, assets, properties and business of each of the Company and the
Association conform in all material aspects to the descriptions thereof
contained in the Prospectus. Neither the Company nor the Association has any
material liabilities of any kind, contingent or otherwise, except as set forth
in the Prospectus.
(xv) There has been no breach or default (or the occurrence of any
event which, with notice or lapse of time or both, would constitute a default)
under, or creation or imposition of any lien, charge or other encumbrance upon
any of the properties or assets of the Company or the Association 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 Association is a party or by which any of them or any of their respective
assets or properties may be bound or is subject, or violation of any
governmental license or permit or any enforceable published law, administrative
regulation or order or court order, writ, injunction or decree, which breach,
default, encumbrance or violation would have a material adverse effect on the
financial condition, operations, business, assets or properties of the Company
and the Association, taken as a whole; all agreements which are material to the
financial condition, results of operations or business of the Company and the
Association, taken as a whole, are in full force and effect, and no party to any
such agreement has instituted or, to the best knowledge of the Company and the
Association, threatened any action or proceeding wherein the Company or the
Association would be alleged to be in default thereunder.
(xvi) Neither the Company nor the Association is in violation of its
respective charter, certificate of incorporation or bylaws. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby (including the establishment and operation of the Foundation) do not
conflict with or result in a breach of the charter, certificate of incorporation
or bylaws of the Company or the Association (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 Association 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
Association is a party (other than the establishment of a liquidation account
pursuant to the Plan) or violate any governmental license or permit or any 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 Conversion Application), which breach,
default, encumbrance or violation would have a material adverse effect on the
financial condition, operations or business of the Company and the Association,
taken as a whole.
(xvii)Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as otherwise may be
indicated or contemplated
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therein, neither the Company nor the Association 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 not consistent with prior practices, which is
material in light of the business of the Company and the Association, taken as a
whole.
(xviii) The issuance and the sale of the Shares and the issuance of the
Foundation Shares 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 and the Foundation Shares is not subject to preemptive
rights, except for subscription rights to the Shares granted pursuant to the
Plan; and good title to the Shares and the Foundation Shares will be transferred
by the Company upon issuance thereof against payment therefor, free and clear of
all claims, encumbrances, security interests and liens against the Company
whatsoever. The issuance and sale of the capital stock of the Association to the
Company has been duly authorized by all necessary action of the Association and
the Company and the OTS (subject to the satisfaction of various conditions
imposed by the OTS in connection with its approvals of the Conversion
Application and the Holding Company Application), and such capital stock, when
issued in accordance with the terms of the Plan, will be fully paid and
nonassessable and will conform in all material respects to the description
thereof contained in the Prospectus.
(xix) 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 and the Foundation Shares, except such
approvals as have been obtained and except for the declaration of effectiveness
of any required post-effective amendment by the Commission and approval thereof
by the OTS, the issuance of the Association's Federal Stock Charter by the OTS
and as may be required under the "blue sky" or securities laws of various
jurisdictions.
(xx) All contracts and other documents required to be filed as
exhibits to the Registration Statement, the Conversion Application or the
Holding Company Application have been filed with the Commission or the OTS or
both, as the case may be.
(xxi) The Company and the Association have timely filed all required
federal, state and local tax returns, and no deficiency has been asserted with
respect to such returns by any taxing authorities, and the Company and the
Association have paid all taxes that have become due and, to the best of their
knowledge, have made adequate reserves for accrued 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 financial
condition or results of operations of the Company and the Association, taken as
a whole.
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(xxii) All of the loans represented as assets of the Association as of
the most recent date for which financial condition data is 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 and Section
563.99), real estate settlement procedures, consumer credit protection, equal
credit opportunity and all disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a material adverse effect on the
Company and the Association, taken as a whole.
(xxiii) The records of Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members (as those terms are defined in the Plan)
delivered to Trident by the Association or its agent for use during the
Conversion have been reviewed by the Association and are believed to be
accurate, reliable and complete and Trident shall have no liability to any
person relating to the reliability, accuracy or completeness of such records or
for any denial or allocation of a subscription to purchase shares to any person
based upon such records.
(xxiv) Neither the Company nor the Association has made any payment of
funds of the Company or the Association prohibited by law, and no funds of the
Company or the Association have been set aside to be used for any payment
prohibited by law.
(xxv) To the best knowledge of the Company and the Association, the
Company and the Association are in compliance with all laws, rules and
regulations relating to environmental protection and neither the Company nor the
Association 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 Association, 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 Association, threatened against the
Company or the Association relating to environmental protection. To the best
knowledge of the Company and the Association, no disposal, release or discharge
of hazardous or toxic substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may be defined under federal,
state or local law, has been caused by the Company or the Association or, to the
best knowledge of the Company and the Association, and except as already
disclosed in the Prospectus, has occurred on, in or at any of the facilities or
properties owned or leased by the Company or the Association or in which the
Company or the Association has a security interest, except such disposal,
release or discharge which would not have a material adverse effect on the
financial condition, operations, business, assets or properties of the Company,
the Association or the subsidiary, taken as a whole.
(xxvi) All documents delivered by the Association or the Company or
their representatives in connection with the issuance and sale of the Common
Stock, except for those documents that were prepared by parties other than the
Bank, the Company or their representatives, were, on the dates on which they
were delivered, true, complete and correct.
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(b) Trident represents and warrants to the Company and the
Association that:
(i) Trident is registered as a broker-dealer 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
Association hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Trident, and this Agreement is
a legal, valid and binding obligation of Trident, enforceable in accordance with
its terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of creditors of
registered broker-dealers accounts of whose may be protected by the Securities
Investor Protection Corporation or by general equity principles, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
and except to the extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy).
(iv) Trident and, to Trident's best 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 in which the Company is relying on
such registration for the sale of the Shares, and will remain so registered
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 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) All 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 ("Exchange Act").
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(vii) No action or proceeding against Trident before the Commission,
the NASD, any state securities commission, or any state or federal court is
pending or, to Trident's best knowledge, threatened concerning Trident's
activities as a broker-dealer.
3. Engagement of Trident; Sale and Delivery of the Shares. On the
------------------------------------------------------
basis of the representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company and the Association hereby
engage Trident as their agent to utilize its best efforts to assist the Company
with the Company's sale of the Shares in the Offerings, and Trident hereby
accepts such engagement. The engagement of Trident hereunder shall terminate (a)
forty-five (45) days after the Subscription and Community Offering closes,
unless the Company and the Association, 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 892,500 Shares
(or such lesser amount as the OTS may permit) within the period herein provided,
this Agreement shall terminate, and the Company and the Association shall refund
promptly to any persons who have subscribed for any of the Shares, the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the other party hereunder, except as set forth in Sections 6, 8, 9 and 10
hereof. Appropriate arrangements for placing the funds received from
subscriptions for Shares in special interest-bearing accounts with the
Association until all Shares are sold and paid for will be 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 or as soon as possible
following the Closing Date against payment to the Company by any means
authorized pursuant to the Prospectus, at the principal office of the Company,
000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx, or at such other place as shall be
agreed upon between the parties hereto. The date upon which the Company shall
release or deliver the Shares sold in the Offerings, in accordance with the
terms hereof, is herein called the "Closing Date."
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 Association for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) Trident will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgements of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident
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will debit accounts of such subscribers on the third business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms together with such funds to the Association 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.
Trident shall receive the following compensation and expense
reimbursement for its services hereunder:
(a) (i) a management fee of $10,000, (ii) a commission equal
to 2% of the aggregate dollar amount of the Shares sold in the
Subscription Offering and Community Offering (excluding Shares sold to
the Association's directors, executive officers, the ESOP, and
associates (as defined in the Plan) of the Association's directors and
executive officers, and (iii) a commission to be agreed upon by Trident
and the Company for Shares sold by other member firms of the NASD
through a selected dealers arrangement in the Syndicated Community
Offering, which aggregate commission shall be determined at the
discretion of the Company and the Association with the advice of
Trident. All such fees shall be paid to Trident in next-day funds on
the Closing Date.
(b) Reimbursement for reasonable out-of-pocket allocable
expenses, including but not limited to travel, food, lodging and legal
fees, incurred by it whether or not the Offerings are successfully
completed; provided, however, that reimbursable legal fees will not
exceed $27,500 and that other reimbursable expenses will not exceed
$10,000, and, provided further, that neither the Company nor the
Association shall reimburse Trident for any of the foregoing expenses
accrued after Trident shall have notified the Company or the
Association of its election to terminate this Agreement pursuant to
Section 11 hereof or after such time as the Company or the Association
shall have given notice in accordance with Section 12 hereof that
Trident is in breach of this Agreement. Full reimbursement of Trident
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
detailing allocable expenses from Trident for reimbursement of such
expenses. Trident acknowledges receipt of a $10,000 advance payment
from the Association, which shall be credited against the total
reimbursement due Trident hereunder. In the event this Agreement is
terminated pursuant to Section 11 hereof, Trident shall be reimbursed
only for its actual allocable expenses.
(c) Reimbursement for any expenses of the Company and the
Association set forth in Section 6 hereof to the extent paid by Trident
on behalf of the Company and the Association. Full reimbursement 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)
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business days of receipt by the Company and the Association of a
written request for such reimbursement detailing such reimbursements.
Notwithstanding the limitations on reimbursement of Trident for its
allocable expenses provided in subsection (b) above and notwithstanding any
reimbursement of Trident pursuant to subsection (c) above, in the event that a
resolicitation or other event causes the Offerings to be extended beyond their
original expiration date, Trident shall be reimbursed for its reasonable
allocable expenses incurred during such extended period, provided that the
allowance for allocable expenses provided for in subsection (b) above has been
exhausted and subject to the following: such reimbursement shall be in an amount
equal to the product obtained by dividing $37,500 (the reimbursable expenses and
legal fees limitation set forth in Section (b) above 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).
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 1,402,500 and a maximum of 1,897,500 Shares, subject to adjustment up to
2,182,125 Shares (except as the OTS may permit to be decreased or increased) in
the Offerings. The Shares are to be offered to the public at the price set forth
on the cover page of the Prospectus and the first page of this Agreement.
5. Further Agreements. The Company and the Association jointly and
------------------
severally covenant and agree that:
(a) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus and through and including the
Closing Date, except as otherwise may be indicated or contemplated therein,
neither the Company nor the Association will issue any securities which will
remain issued at the Closing Date or incur any liability or obligation, direct
or contingent, or borrow money, except borrowings or liabilities in the ordinary
course of business, or enter into any other transaction not in the ordinary
course of business and consistent with prior practices, which is material in
light of the financial condition, operations, business, properties or assets of
the Company and the Association, taken as a whole.
(b) If any Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offering, the Company (i) will, if
deemed necessary, 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
Trident Securities, Inc.
Page 13
or prospectus supplement containing information relating to the results of the
Subscription and Community Offerings and pricing information pursuant to Rule
424(c) of the Securities Act Regulations, in either case in a form reasonably
acceptable to the Company and Trident.
(c) Upon consummation of the Conversion (including the
establishment and operation of the Foundation), the authorized, issued and
outstanding equity capital of the Company shall be within the range as set forth
in the Prospectus under the caption "Capitalization," and no Common Stock of the
Company shall be outstanding immediately prior to the Closing Date (other than
shares of Common Stock issued in connection with the initial capitalization of
the Company, which shares will be canceled upon consummation of the Conversion);
and the certificates representing the Common Stock will conform in all material
respects with the requirements of applicable laws and OTS Regulations.
(d) Upon consummation of the Conversion, the Foundation will be
duly incorporated and validly existing as a non-stock corporation in good
standing under the laws of the State of Delaware with corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; the Foundation will not be a savings and loan
holding company within the meaning of 12 C.F.R. Section 574.2(q) as a result of
the issuance of the Foundation Shares in accordance with the terms of the Plan
and in the amounts as described in the Prospectus; no approvals are required to
establish the Foundation and to contribute the shares of Common Stock thereto as
described in the Prospectus other than those set forth in the OTS approval of
the Conversion Application; except as specifically disclosed in the Prospectus
and the Proxy Statement, there are no agreements and/or understandings, written
or oral, between the Company and/or the Savings Bank and the Foundation with
respect to the control, directly or indirectly, over the voting or the
acquisition or disposition of the Foundation Shares; at the time of the
Conversion, the Foundation Shares will have been duly authorized for issuance
and, when issued and contributed by the Company pursuant to the Plan, will be
duly and validly issued and fully paid and non-assessable; and the issuance of
the Foundation Shares is not subject to preemptive or similar rights.
(e) At all times subsequent to the date of the Prospectus through
and including the Closing Date (i) the Registration Statement and the Prospectus
will comply with the Securities Act and the Securities Act Regulations, (ii) the
Registration Statement will 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, in light of the circumstances under which they were
made, not misleading, and (iii) the Prospectus will 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. (Further agreements 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
Association
Trident Securities, Inc.
Page 14
relating to Trident by or on behalf of Trident expressly for use in the
Registration Statement or Prospectus.).
(f) Upon amendment of the Association's charter and bylaws as
provided in the OTS Regulations and completion of the sale and issuance of the
Shares and the issuance of the Foundation Shares by the Company as contemplated
by the Prospectus, (i) the Association 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 Association will
be owned of record and beneficially by the Company, (iii) the Company will have
no direct subsidiaries other than the Association, and (iv) the Foundation will
be duly incorporated and validly existing as a non-stock corporation in good
standing under the laws of the State of Delaware.
(g) 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.
(h) The Company will notify Trident immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement becomes effective or any supplement to the Prospectus has been filed,
(ii) of the issuance by the Commission of any stop order relating to the
Registration Statement or of the initiation or the threat of any proceedings for
that purpose, (iii) of the receipt of any notice with respect to the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, and
(iv) of the receipt of any comments from the staff of the Commission relating to
the Registration Statement. If the Commission enters a stop 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.
(i) During the time when a prospectus is required to be delivered
under the Securities Act, the Company will comply with all requirements imposed
upon it by the Securities Act and by the Securities Act Regulations 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 Association,
taken as a whole, shall occur as a result of which it is necessary, in the
reasonable opinion of counsel for Trident, to amend or supplement the Prospectus
in order to make the Prospectus not false or misleading in light of the
circumstances existing at the time 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 reasonably 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
Trident Securities, Inc.
Page 15
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 unless
Trident has been first furnished a copy or if Trident shall reasonably object
after having been furnished such copy. For the purposes of this subsection the
Company and the Association shall furnish such information with respect to
themselves as Trident from time to time may reasonably request.
(j) The Company and the Association 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 the Company or its counsel may agree upon;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation to do business under the laws of any such jurisdiction. In
each jurisdiction where such qualification or registration shall be effected,
the Company, unless Trident agrees that such action is not necessary or
advisable in connection with the distribution of the Shares, shall file and make
such statements or reports as are, or reasonably may be, required by the laws of
such jurisdiction.
(k) Appropriate entries will be made in the financial records of
the Association to establish a liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders (as those terms are
defined in the Plan) in accordance with the OTS Regulations.
(l) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act prior to completion of the
Offerings 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.
(m) 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 Securities Act Regulations) 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.
(n) For a period of three (3) years from the date of this
Agreement, 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.
Page 16
(o) The Company shall use the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus.
(p) The Company shall not deliver the Shares and issue the Foundation
Shares until each and every condition set forth in Section 7 hereof has been
satisfied, unless such condition is waived in writing by Trident.
(q) The Company shall advise Trident, if necessary, as to the allocation
of deposits, in the case of Eligible Account Holders and Supplemental 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
the Allocation Instructions shall be accurate, reliable and complete. Trident
shall be entitled to rely on the Allocation 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.
(r) The Company and the Association will take such actions and furnish
such information as are reasonably requested by Trident in order for Trident to
comply with the NASD's "Interpretation Relating to Free-Riding and Withholding."
(s) At the Closing Date, the Company and the Association will have
completed the conditions precedent to, and shall have conducted the Conversion
(including the establishment and operation of the Foundation) in all material
respects in accordance with, the Plan, OTS Regulations and all other applicable
laws, regulations, published decisions and orders, including all terms,
conditions, requirements and provisions precedent imposed by the OTS.
(t) The Company will use its best efforts to obtain approval for and
maintain quotation of its shares of common stock on the Nasdaq stock market
effective on or prior to the Closing Date.
6. Payment of Expenses. Subject to Section 3(c) hereof, whether or not
-------------------
the Conversion is consummated, the Company and the Association shall pay the
following expenses: (a) all regulatory filing fees, including but not limited to
those payable to the Commission, OTS, "blue sky" authorities and the NASD
(including fees payable to the NASD for Trident's filing pursuant to the NASD
Corporate Finance Rule), (b) all stock issue and transfer taxes which may be
payable with respect to the sale of the Shares, (c) attorneys' fees of the
Company and the Association, (d) attorneys' fees relating to any required "blue
sky" laws research and filings, (e) telephone charges, (f) air freight, (g)
rental equipment, (h) supplies, (i) transfer agent and registrar fees and
expenses, (j) auditing and accounting fees and expenses, (k) costs of printing
and mailing all documents necessary in connection with the Conversion, and (l)
slide production expenses in connection with any community investor meetings to
be held by Trident.
Trident Securities, Inc.
Page 17
7. Conditions of Trident's Obligations. Except as may be waived in
-----------------------------------
writing by Trident, the obligations of Trident as provided herein shall be
subject to the accuracy of the representations and warranties contained in
Section 2 hereof as of the date hereof and as of the Closing Date, to the
performance by the Company and the Association of their obligations hereunder,
and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable
opinion of Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., special counsel for
the Company and the Association, dated the Closing Date, addressed to
Trident, in form and substance reasonably satisfactory to counsel for
Trident and stating that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
and the Association is validly existing in good standing as a mutual
savings bank 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) the Association is a member of the Federal Home Loan Bank of
Atlanta, and the deposit accounts of the Association are insured by the
SAIF up to the applicable legal limits; and no action or proceeding to
suspend or revoke such membership or insurance coverage is pending or, to
such counsel's Actual Knowledge, threatened;
(iii) the activities of the Association as described in the
Prospectus are permitted under the HOLA and OTS Regulations;
(iv) to such counsel's Actual Knowledge, the Association has no
direct or indirect subsidiary corporations;
(v) the Foundation has been duly incorporated and is validly
existing as a non-stock corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus; the Foundation is not a savings and loan holding company within
the meaning of 12 C.F.R. Section 574.2(q) as a result of the issuance of
the Foundation Shares to it in accordance with the terms of the Plan and in
the amounts as described in the Prospectus; no approvals are required to
establish the Foundation and to contribute the Foundation Shares thereto as
described in the Prospectus other than those set forth in the OTS approval
related thereto.
(vi) the Company and the Association are duly qualified to do
business and are 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, unless
Trident Securities, Inc.
Page 18
the failure to be so qualified would not have a material adverse effect on
the Company and the Association, taken as a whole.
(vii) to such counsel's Actual Knowledge, the Association has
obtained all licenses, permits and other governmental authorizations
required for the conduct of its business as described in the Prospectus,
except where the failure to obtain such licenses, permits or governmental
authorizations would not have a material adverse effect on the financial
condition, operations, business, properties or assets of the Company and
the Association, taken as a whole; to such counsel's Actual Knowledge, all
of the leases and subleases material to the business of the Association
under which the Association holds properties are in full force and effect;
the Association is not in violation of its charter or, to such counsel's
Actual Knowledge, its bylaws;
(viii) the Plan has been duly adopted by the Boards of Directors of
the Association and the Company and the members of the Association; the
Plan complies with, and to such counsel's Actual Knowledge, the Conversion
(including the establishment and operation of the Foundation) has been
effected in all material respects in accordance with, the HOLA, the OTS
Regulations and applicable OTS approvals issued thereunder; to such
counsel's Actual Knowledge, all of the terms, conditions, requirements and
provisions with respect to the Plan and the Conversion (including the
establishment and operation of the Foundation) imposed by the OTS, except
with respect to the Conversion Application and the filing or submission of
certain required post-Conversion reports by the Company or the Association,
have been complied with by the Company and the Association; and, to such
counsel's Actual Knowledge, no person has sought to obtain regulatory or
judicial review of the final action of the OTS in approving the Plan;
(ix) the Company has authorized Common Stock as set forth in the
Registration Statement and the Prospectus, and the description thereof in
the Registration Statement and the Prospectus is accurate and complete in
all material respects;
(x) the issuance and sale of the Shares and the issuance of the
Foundation Shares have been duly and validly authorized by all necessary
corporate action on the part of the Company; the Shares and the Foundation
Shares, upon receipt of consideration and issuance in accordance with the
terms of the Plan and this Agreement, will be validly issued, fully paid,
nonassessable and, except as disclosed in the Prospectus, 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;
(xi) the certificates for the Common Stock are in due and proper
form and comply in all material respects with applicable Delaware law and
OTS Regulations;
Trident Securities, Inc.
Page 19
(xii) the issuance and sale of the capital stock of the Association
to the Company have been duly authorized by all necessary corporate action
of the Association 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
good title thereto shall be transferred by the Association free and clear
of all claims, encumbrances, security interests and liens created by the
Association;
(xiii) subject to the satisfaction of the conditions to the OTS
approval of the Conversion Application and the Holding Company Application,
no further approval, authorization, consent or other order of any
regulatory agency is required in connection with the execution and delivery
of this Agreement, the issuance and sale of the Shares and the Foundation
Shares and the consummation of the Conversion (including the establishment
and operation of the Foundation), except with respect to the issuance to
the Association's Federal Stock Charter by the OTS, and except as may be
required under the "blue sky" securities laws of various jurisdictions and
the regulations of the NASD (as to which no opinion need be rendered);
(xiv) the execution and delivery of this Agreement and the
consummation of the Conversion (including the establishment and operation
of the Foundation) have been duly and validly authorized by all necessary
corporate action on the part of each of the Company and the Association;
and this Agreement is a legal, valid and binding obligation of each of the
Company and the Association, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, receivership, conservatorship or
other 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 savings and loan holding
companies the accounts of whose subsidiaries are insured by the FDIC; (ii)
general equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, or (iii) laws relating to
the safety and soundness of insured depository institutions and their
affiliates, and except to the extent that the provisions of Sections 8 and
9 hereof may be unenforceable as against public policy or applicable law,
including but not limited to, Section 23A of the Federal Reserve Act, as
amended);
(xv) except as set forth in the Prospectus, there are no legal or
governmental proceedings pending or, to such counsel's Actual Knowledge,
threatened against or involving the assets of the Company or the
Association which would have a material adverse effect on the Company and
the Association, taken as a whole (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 Association, or to such
counsel, a present intention to initiate such litigation or proceeding);
Trident Securities, Inc.
Page 20
(xvi) the statements in the Prospectus under the captions
"Regulation," "Taxation," "Dividends," "Certain Restrictions on Acquisition
of the Holding Company," "Description of Capital Stock," and "The
Conversion," insofar as they are, or refer to, statements of law or legal
conclusions (excluding financial or statistical data or stock valuation
information included therein, as to which an opinion need not be
expressed), have been prepared or reviewed by such counsel and are accurate
and complete in all material respects;
(xvii) the Form AC has been approved by the OTS, and the Prospectus
and the Proxy Statement have been authorized for use by the OTS; the
Registration Statement has been declared effective by the Commission; 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 or approving the Conversion Application or, to such counsel's
Actual Knowledge, are contemplated or threatened (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
Association, or to such counsel, a present intention to initiate such
litigation or proceeding);
(xviii) the execution and delivery of this Agreement and the
consummation of the Conversion (including the establishment and operation
of the Foundation) do not conflict with or result in a breach of the
charter, certificate of incorporation or bylaws of the Company or the
Association (in either mutual or stock form), or, to such counsel's Actual
Knowledge, constitute a 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
Association 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 Association is a party (other
than the establishment of the liquidation account pursuant to the Plan) or
violate any governmental license or permit or any 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 Conversion Application and the Holding Company
Application), which breach, default, encumbrance or violation would have a
material adverse effect on the financial condition, operations, business,
assets or properties of the Company and the Association, taken as a whole;
(xix) there has been no breach of any provision of the Company's or
the Association's charter or certificate of incorporation, as the case may
be; to such counsel's Actual Knowledge, bylaws or breach or default (or the
occurrence of any event which,
Trident Securities, Inc.
Page 21
with notice or lapse of time or both, would constitute a default) by the
Company or the Association under any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company or the
Association is a party or by which any of them or any of their respective
assets or properties may be bound, which breach or default would have a
material adverse effect on the financial condition, operations, business,
assets or properties of the Company and the Association, taken as a whole;
(xx) at the time the Conversion Application was approved by the OTS
and the Registration Statement was declared effective by the Commission,
the Conversion Application and the Registration Statement (including the
Prospectus and the Proxy Statement contained therein), complied as to form
in all material respects with the requirements of the Securities Act, the
HOLA, the Securities Act Regulations and the OTS Regulations, as the case
may be (except as to information provided in writing by Trident with
respect to Trident included therein and financial statements, notes to
financial statements, financial tables and other financial and statistical
data and stock valuation information included therein, as to which no
opinion need be rendered); to such counsel's Actual Knowledge, all
documents and exhibits required to be filed with the Conversion Application
and the Registration Statement have been so filed; and the descriptions in
the Conversion Application and the Registration Statement of such documents
and exhibits are accurate and complete in all material respects; and
(xxi) upon the effectiveness of the Association's stock charter and
bylaws in accordance with applicable regulations and completion of the sale
by the Company of the Shares and the issuance of the Foundation Shares as
contemplated by the Prospectus and the Plan, (i) the Association will be
converted to a permanent capital stock savings bank under the laws of the
United States with full power and authority to own its property and conduct
its business as described in the Prospectus, (ii) all of the outstanding
capital stock of the Association will be owned of record and, to such
counsel's Actual Knowledge, beneficially by the Company, free and clear of
all liens, charges, encumbrances and restrictions, and (iii) the Foundation
will be duly incorporated and validly existing as a non-stock corporation
in good standing under the laws of the State of Delaware.
In rendering such opinion, such counsel may rely as to certain
matters of fact on certificates of executive officers and directors of the
Company and the Association 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 agreement other than the
Company and the Association. Such opinion shall be governed by, and
interpreted in accordance with, the Legal Opinion Accord ("Accord") of the
ABA Section of Business Law (1991), and, as a consequence, references in
such opinion to such counsel's "Actual Knowledge" shall be as such term is
defined in the Accord (or knowledge based on certificates). The opinion of
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. shall cover
Trident Securities, Inc.
Page 22
matters of federal law, Delaware General Business Corporation La, and the
laws of the State of South Carolina. With respect to matters of South
Carolina law, such counsel may rely upon the opinion of
______________________, ___________, South Carolina, which opinion shall be
in form and substance satisfactory to Trident and its counsel. For purposes
of such opinion, no proceeding shall be deemed to be pending, no order or
stop order shall be deemed to be issued, and no action shall be deemed to
be instituted unless, in each case, a director or executive officer of the
Company or the Association, or its counsel, shall have received a copy of
such proceeding, order, stop order or action. Such opinion may be limited
to statutes, regulations and judicial interpretations and to facts as they
exist as of the date of such opinions. In rendering such opinion, such
counsel need assume no obligation to revise or supplement it should such
statutes, regulations and judicial interpretations be changed by
legislative or regulatory action, judicial decision or otherwise. Such
counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any regulatory agency, whether
or not promulgated pursuant to any such legislation, would affect the
validity of the execution and delivery by the Company and the Association
of this Agreement or the issuance of the Shares and the Foundation Shares.
(b) At the Closing Date, Trident shall receive the letter of Xxxx
Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., special counsel for the Company and
the Association, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the effect
that: (i) based on such counsel's participation in conferences with
representatives of the Company, the Association, its counsel, the
independent appraiser, the independent certified public accountants,
Trident and its counsel, review of documents and applicable law (including
the requirements of Form SB-2 and Form AC) and the experience such counsel
has gained in its practice under the Securities Act (relying as to factual
matters on certificates of officers and other written factual
representations by the Company and the Association), nothing has come to
such counsel's attention that would lead it to believe that the
Registration Statement, as amended or supplemented (except as to
information in respect of 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 view), 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, in light of the
circumstances under which they were made, not misleading, and that the
Prospectus, as amended or supplemented (except as to information in respect
of 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 view), as of its date and at the Closing
Date, contained any untrue
Trident Securities, Inc.
Page 23
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading (in issuing such letter, such counsel may
indicate that it has not confirmed the accuracy or completeness of or
otherwise verified the factual information contained in the Registration
Statement or the Prospectus and that it 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 sale of the Shares as herein contemplated and related
proceedings, and for the purpose of evidencing the accuracy, completeness
or satisfaction of any of the representations, warranties or conditions
herein contained, including but not limited to, resolutions of the Board of
Directors of the Company and the Association 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
financial condition, business, operations, assets or properties of the
Company and the Association, taken as a whole, since the latest date as of
which such condition is set forth in the Prospectus, except as referred to
or contemplated therein; (ii) there shall have been no transaction entered
into by the Company or the Association after the latest date as of which
the financial condition of the Company or the Association 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 Association, taken as a whole; (iii)
none of the Company or the Association shall have received from the OTS or
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 Association, 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
Association 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 Association, taken as a whole; and (v) the Shares and the
Foundation Shares shall have been qualified or registered for offering 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 Association, dated the Closing Date, to the effect
that: (i) they have examined the Prospectus and the Prospectus does not
contain an untrue statement of a material fact or
Trident Securities, Inc.
Page 24
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 Association; (ii) no event
has occurred since the date of the Prospectus which should have been set
forth in an amendment or supplement to the Prospectus which has not been so
set forth, including specifically, but without limitation, any material
adverse change in the business, financial condition, operations, assets or
properties of the Company or the Association and, the conditions set forth
in clauses (ii) through (iv) inclusive of subsection (d) of this Section 7
have been satisfied; (iii) no order has been issued by the Commission or
the OTS to suspend the Offerings or the effectiveness of the Prospectus,
and, to the best knowledge of such officers, 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 and the establishment of the
Foundation, (ii) a copy of the order of the Commission declaring the
Registration Statement effective; (iii) copy of the certificate from the
OTS evidencing the corporate existence of the Association; (iv) copy of the
certificate from the FDIC evidencing the insured status of the Association,
(v) a copy of the letter from the appropriate Delaware authority evidencing
the incorporation (and, if generally available from such authority, good
standing) of the Company; (vi) a copy of the Company's certificate of
incorporation certified by the appropriate Delaware governmental authority;
and (vii) a copy of the letter from the OTS approving the Association's
Federal Stock Charter.
(g) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Association's Federal Stock Charter as
executed by the OTS.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Xxxxx, Xxxx & Co., LLP, independent
certified public accountants, addressed to Trident, in substance and form
reasonably satisfactory to counsel for Trident, with respect to the
financial statements of the Association and certain financial information
contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance reasonably satisfactory to counsel for Trident from Xxxxx, Xxxx &
Co., LLP, independent certified public accountants, dated the Closing Date
and addressed to Trident, confirming the statements made by them in the
letter delivered by them pursuant to the
Trident Securities, Inc.
Page 25
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 Association
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
Association to Trident as to the statements made therein. If any condition to
Trident's obligations hereunder to be fulfilled prior to or at the Closing Date
is not so fulfilled, Trident may terminate this Agreement or, if Trident so
elects, may waive in writing any such conditions which have not been fulfilled,
or may extend the time of their fulfillment.
8. Indemnification.
---------------
(a) The Company and the Association 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 Securities 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 action, proceeding or claim (whether commenced or threatened) arising out of
or based upon (A) (i) 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 they
were made, not misleading in (i) the Registration Statement or the Prospectus
(ii) any application (including the Form AC) or other document or communication
(in this Section 8 collectively called "Application") prepared or executed by or
on behalf of the Company, the Association or based upon written information
furnished by or on behalf of the Company or the Association, filed in any
jurisdiction to register or qualify the Shares under the securities laws thereof
or filed with the OTS or Commission with respect to the offering of the Shares,
unless such statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Company or the Association with
respect to Trident by or on behalf of Trident expressly for use in the
Prospectus or any amendment or supplement thereof or in any Application, as the
case may be, or (B) the Conversion (including the establishment and operation of
the Foundation) or the engagement of Trident hereunder; provided, however, that
such indemnification shall be unavailable if such action, proceeding or claim
arises as a result of Trident's gross negligence, bad faith or willful
misconduct.
(b) The Company shall indemnify and hold Trident harmless for any
liability whatsoever arising out of (i) the Allocation Instructions or (ii) any
records of Eligible Account
Trident Securities, Inc.
Page 26
Holders, Supplemental Eligible Account Holders and Other Members (as those terms
are defined in the Plan) delivered to Trident by the Association or its agents
for use during the Conversion.
(c) Trident agrees to indemnify and hold harmless the Company and the
Association, their officers, directors and employees and each person, if any,
who controls the Company and the Association within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, to the same extent as
the foregoing indemnity from the Company and the Association to Trident, but
only with respect to 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, information furnished in
writing to the Company or the Association with respect to Trident by or on
behalf of Trident expressly for use in the Prospectus or any amendment or
supplement thereof or in any Application.
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of any action, proceeding or claim (whether commenced or threatened)
such indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party of
such action, proceeding or claim; 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. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for all indemnified parties in connection with any one action,
proceeding, 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. An indemnifying party against whom indemnity may
be sought shall not be liable to indemnify an indemnified party under this
Section 8 if any
Trident Securities, Inc.
Page 27
settlement of any such action is effected without such indemnifying party's
consent. To the extent applicable, this Section 8 is subject to and limited by
public policy and the provisions of applicable law, including but not limited
to, 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 Association other than in accordance with its terms, the Company and
the Association or Trident shall contribute to the aggregate losses,
liabilities, claims, damages, and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Association or Trident (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Association, 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 Association, on the one hand, and
Trident, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Association, on the one hand, and Trident, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
Conversion received by the Company and the Association bear to the total fees
received by Trident under this Agreement. The relative fault of the Company or
the Association, 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 Association
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 Association 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 Securities Act)
shall be entitled to contribution from any person who is not guilty of such
Trident Securities, Inc.
Page 28
fraudulent misrepresentation. To the extent applicable, this Section 9 is
subject to and limited by public policy and the provisions of applicable law,
including but not limited to, Section 23A.
10. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company and the Association and Trident and the
representation and warranties of the Company and the Association 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 Association
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 Association 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 Association or the Conversion; or if
a moratorium in foreign exchange trading by major international banks or persons
has been declared; or if there shall have been a material change in the
capitalization, condition or business of the Company, or if the Association
shall have sustained a material or substantial loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act,
whether or not said loss shall have been insured; or if there shall have been a
material change in the condition or prospects of the Company or the Association.
(b) Any party hereto may terminate this Agreement by giving notice
pursuant to Section 12 hereof of a material breach of this Agreement by the
other party at any time after this Agreement becomes effective.
(c) If this Agreement is terminated as provided in this Section 11, the
party terminating this Agreement shall notify the non-terminating party promptly
by telephone or telegram, confirmed by letter.
(d) If this Agreement is terminated by Trident for any of the reasons set
forth in subsection (a) above, and to fulfill its obligations, if any, pursuant
to Sections 3, 6, 8(a) and 9 of this Agreement and upon demand, the Company and
the Association shall pay Trident the full amount so owing thereunder.
Trident Securities, Inc.
Page 29
(e) The Association may terminate the Conversion in accordance with the
terms of the Plan. Such termination shall be without liability to any party,
except that the Company and the Association shall be required to fulfill their
obligations pursuant to Sections 3(b), 3(c), 6, 8(a), 9 and 10 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 Breyer & Aguggia, 0000 X Xxxxxx, X.X., Xxxxx 000
Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxxx, Esquire) and if sent
to the Company or the Association, shall be mailed, delivered or telegraphed and
confirmed to First Federal Savings and Loan Association of Cheraw, 000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, President
(with a copy to Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxxx
Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxx Xxxxxx, Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company, the Association 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 preempted by 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.
Page 30
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
GREAT PEE DEE BANCORP, INC.
By:
----------------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHERAW
By:
----------------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Agreed to and accepted as of
the date first written above:
TRIDENT SECURITIES, INC.
By:
-----------------------------------
Name:
Title:
