EXHIBIT 1.1
FORM OF PROPOSED AGENCY AGREEMENT AMONG FIRSTSPARTAN FINANCIAL CORP.,
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF SPARTANBURG AND
TRIDENT SECURITIES, INC.
FIRSTSPARTAN FINANCIAL CORP.
2,847,500 TO 3,852,500 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
PURCHASE PRICE: $20.00 PER SHARE
SALES AGENCY AGREEMENT
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
FirstSpartan Financial Corp., a Delaware corporation (the "Company"),
and First Federal Savings and Loan Association of Spartanburg, Spartanburg,
South Carolina, a federally chartered and insured mutual savings and loan
association (the "Association"), hereby confirm, as of _____________ __, 1997
their respective agreements with Trident Securities, Inc. ("Trident"), a
broker-dealer registered with the Securities and Exchange Commission
("Commission") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), as follows:
1. Introductory. The Association intends to convert from a federally
chartered mutual savings and loan association to a federally chartered capital
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 and the incorporation of the Company,
the "Conversion") pursuant to a plan of conversion adopted by the Association's
Board of Directors on February 4, 1997 (the "Plan"). In accordance with the
Plan, the Company is offering shares of its common stock, par value $.01 per
share (the "Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to certain depositors and
borrowers of the Association and to the Association's tax-qualified employee
benefit plans (I.E., the Association's Employee Stock Ownership Plan (the
"ESOP")). Any shares of the Common Stock not sold in the Subscription Offering
are being offered to the general public in a direct community offering (the
"Direct Community Offering"), with preference given to natural persons and the
trusts of natural persons who are permanent residents of Spartanburg County,
South Carolina (the "Local Community") (the Subscription and Direct Community
Offerings are sometimes referred to collectively as the "Subscription and Direct
Community Offering"), subject to the right of the Company and the Association,
in their absolute discretion, to reject orders in the Direct Community Offering
in whole or in part. It is anticipated that shares of Common Stock not
subscribed for in the Subscription and Direct Community Offering (if any) will
be offered to certain members of the general public on a best efforts basis by a
selling group of broker dealers managed by Trident in a syndicated offering
("Syndicated Community Offering") (the Subscription and Direct Community
Offering and the Syndicated Community Offering are referred to collectively as
the
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"Offerings"). In the Subscription Offering (and the Direct Community Offering
and the Syndicated Community Offering if applicable), the Company is offering
between 2,847,500 and 3,852,500 shares of Common Stock (the "Shares"), with the
possibility of offering up to 4,430,375 shares without a resolicitation of
subscribers, as contemplated by Title 12 of the Code of Federal Regulations,
Part 563b. With the exception of the ESOP, no individual person or other entity,
together with associates of and persons acting in concert with such person or
other entity, may purchase shares of Common Stock with an aggregate purchase
price of more than $325,000 in the Conversion. No person (including all persons
on a joint account), either alone or together with associates of or persons
acting in concert with such person, may purchase in the aggregate more than the
overall maximum purchase limitation of 1% of the total number of shares of
Common Stock issued in the Conversion (exclusive of any shares issued pursuant
to an increase in the estimated valuation range of up to 15%).
The Company and the Association have been advised by Trident that it
will utilize its best efforts to assist the Company with the sale of the Shares
in the Offerings. Prior to the execution of this Agreement, the Company has
delivered to Trident the Prospectus dated _______ __, 1997 (as hereinafter
defined) and all supplements thereto, if any, to be used in the Offerings have
also been delivered to Trident (or if after the date of this Agreement, will be
promptly delivered to Trident). Such Prospectus contains information with
respect to the Company, the Association and the Shares.
2. Representations and Warranties.
(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 S-1 (No. 333-23015), including a
Prospectus relating to the Offerings, for the registration of
the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement has become effective under
the Act and no stop order has been issued with respect thereto
and no proceedings therefor have been initiated or, to the
Company's best knowledge, threatened by the Commission. Such
registration statement, as amended or supplemented, on file
with the Commission at the time the registration statement
became effective, including the Prospectus, financial
statements, schedules, exhibits and all other documents filed
as part thereof, as amended and supplemented, is herein called
the "Registration Statement," and the prospectus, as amended
or supplemented, on file with the Commission at the time the
Registration Statement became effective is herein called the
"Prospectus," except that if the prospectus filed by the
Company with the Commission pursuant to Rule 424(b) of the
general rules
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and regulations of the Commission under the Act (the "SEC
Regulations") differs from the form of prospectus on file at
the time the Registration Statement became effective, the term
"Prospectus" shall refer to the Rule 424(b) prospectus from
and after the time it is filed with the Commission and shall
include any amendments or supplements thereto from and after
their dates of effectiveness or use, respectively. If any
Shares remain unsubscribed following completion of the
Offerings thereby requiring a resolicitation of subscribers,
the Company (i) will promptly file with the Commission a
post-effective amendment to such Registration Statement
relating to the results of the 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 the
Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and
the Community Offerings and pricing information pursuant to
Rule 424(c) of the SEC Regulations, in either case in a form
reasonably acceptable to the Company and Trident.
(ii) The Association has filed an Application for
Approval of Conversion on Form AC, including exhibits (as
amended or supplemented, the "Form AC" and together with the
Form H-(e)1-S referred to below, the "Conversion Application")
with the Office of Thrift Supervision (the "Office") under the
Home Owners' Loan Act, as amended (the "HOLA") and the
published rules and regulations, of the Office thereunder (the
"OTS Regulations"), which Form AC has been approved by the
Office; the Prospectus and the proxy statement for the
solicitation of proxies from members of the Association for
the special meeting to approve the Plan (the "Proxy
Statement") included as part of the Form AC have been approved
for use by the Office. No order has been issued by the Office
preventing or suspending the use of the Prospectus or the
Proxy Statement; and no action by or before the Office
revoking such approvals is pending or, to the Association's
best knowledge, threatened. The Company has filed with the
Office the Company's application on Form H-e(1)-S under the
savings and loan holding company provisions of the HOLA and
the regulations promulgated thereunder and will have received
as of the Closing Date, approval of its acquisition of the
Association from the Office.
(iii) At the date of the Prospectus and at all times
subsequent thereto through and including the Closing Date (i)
the Registration Statement and the Prospectus (as amended or
supplemented, if amended or supplemented) complied and will
comply as to form in all material respects with the Act and
the SEC Regulations, (ii) the Registration Statement (as
amended or supplemented, if amended or supplemented) did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make
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the statements therein not misleading, and (iii) the
Prospectus (as amended or supplemented, if amended or
supplemented) did not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Representations or warranties in this subsection
shall not apply to statements or omissions made in reliance
upon information furnished to the Company or the Association
relating to Trident by or on behalf of Trident expressly for
use in the Registration Statement or Prospectus.
(iv) The Company is duly incorporated as a Delaware
corporation, the Association's sole subsidiary, First Spartan
Service Corporation (the "Subsidiary"), has been duly
incorporated as a South Carolina corporation, and the
Association has been duly organized as a mutual savings and
loan association under the laws of the United States, and each
of them is validly existing and in good standing under the
laws of the jurisdiction of its organization with full power
and authority to own its property and conduct its business as
described in the Prospectus; the Association is a member of
the Federal Home Loan Bank of Atlanta; and the Association is
an insured depository institution under the provisions of
Section 4(a) of the Federal Deposit Insurance Act, as amended
("FDIA"), with deposit accounts insured by the Savings
Association Insurance Fund ("SAIF") administered by the
Federal Deposit Insurance Corporation ("FDIC") up to the
applicable legal limits. Each of the Company, the Association
and the Subsidiary 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
Company, the Association and the Subsidiary, taken as a whole.
The Association does not own equity securities of or an equity
interest in any business enterprise other than the Subsidiary,
except as described in the Prospectus. Upon amendment of the
Association's charter and bylaws as provided in the OTS
Regulations and completion of the sale by the Company of the
Shares as contemplated by the Prospectus, (i) the Association
will be converted pursuant to the Plan to a federally
chartered capital stock savings and loan association 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, and
(iii) the Company will have no direct subsidiaries other than
the Association.
(v) Each of the Association and the Subsidiary has
good and marketable title to all assets material to its
business and to those assets described in the Prospectus as
owned by it, free and clear of all material liens, charges,
encumbrances or restrictions, except for liens for taxes not
yet due, except as
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described in the Prospectus and except as do not in the
aggregate have a material adverse effect upon the operations
or financial condition of the Association and the Subsidiary,
taken as a whole; and all of the leases and subleases material
to the operations of the Association and the Subsidiary, under
which they hold properties, including those described in the
Prospectus, are in full force and effect as described therein.
(vi) The Association and the Subsidiary have obtained
all licenses, permits and other governmental authorizations
currently required for the conduct of their business, all such
licenses, permits and other governmental authorizations are in
full force and effect and the Association and the Subsidiary
are in all material respects complying therewith, except where
the failure to hold such licenses, permits or governmental
authorizations or the failure to so comply would not have a
material adverse effect on the Company, the Association and
the Subsidiary, taken as a whole.
(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 with valid
execution and delivery 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 or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and loan
holding companies the accounts of whose subsidiary are insured
by the FDIC or by general equity principles, regardless of
whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent that the provisions
of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A of the Federal
Reserve Act, 12 U.S.C. Section 371c ("Section 23A")).
(viii) 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,
the Association, the Subsidiary 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 and business, including the
assets and properties, of the Company, the Association and the
Subsidiary, taken as a whole.
(ix) The Company and the Association have received
the opinions of Breyer & Aguggia with respect to federal
income tax consequences of the Conversion, and of Deloitte &
Touche LLP, with respect to South Carolina tax
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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
the laws of South Carolina, and the facts relied upon in such
opinions are accurate and complete.
(x) Each of the Company and the Association has all
such corporate power, authority, authorizations, approvals and
orders as may be required to enter into this Agreement and to
carry out the provisions and conditions hereof, subject to the
limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the Office in connection with
its approvals of the Form AC and the Application H-(e)1-S, and
except as may be required under the securities, or "blue sky,"
laws of various jurisdictions, and in the case of the Company,
as of the Closing Date, will have such approvals and orders to
issue and sell the Shares to be sold by the Company as
provided herein, and in the case of the Association, as of the
Closing Date, will have such approvals and orders to issue and
sell the Shares of its Common Stock to be sold to the Company
as provided in the Plan, subject to the issuance of an amended
charter in the form required for federally chartered capital
stock savings and loan associations (the "Stock Charter"), the
form of which Stock Charter has been approved by the Office.
(xi) Neither the Company, the Association nor the
Subsidiary is in violation of any rule or regulation of the
Office or the FDIC that could reasonably be expected to result
in any enforcement action against the Company, the
Association, the Subsidiary or their officers or directors
that would have a material adverse effect on the financial
condition, operations, businesses, assets or properties of the
Company, the Association and the Subsidiary, taken as a whole.
(xii) The consolidated financial statements and the
related notes which are included in the Registration Statement
and are part of the Prospectus fairly present the consolidated
financial condition, income, retained earnings and cash flows
of the Association and the Subsidiary at the respective dates
thereof and for the respective periods covered thereby and
comply as to form in all material respects with the applicable
accounting requirements of the SEC Regulations and the
applicable accounting regulations of the Office. Such
financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth therein,
and such financial statements are in all material respects
consistent with financial statements and other reports filed
by the Association with supervisory and regulatory authorities
except as such generally accepted accounting principles may
otherwise require. The tables in the Prospectus accurately
present the information
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purported to be shown thereby at the respective dates thereof
and for the respective periods therein.
(xiii) There has been no material change in the
financial condition, results of operations or business,
including assets and properties, of the Company, the
Association and the Subsidiary, taken as a whole, since the
latest date as of which such condition is set forth in the
Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the
Company, the Association and the Subsidiary conform in all
material respects to the descriptions thereof contained in the
Prospectus. None of the Company, the Association or the
Subsidiary has any material liabilities of any kind,
contingent or otherwise, except as set forth in the
Prospectus.
(xiv) 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, the Association or
the Subsidiary pursuant to any of the terms, provisions or
conditions of, any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the
Company, the Association or the Subsidiary 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, the Association and the Subsidiary
taken as a whole; all agreements which are material to the
financial condition, results of operations or business of the
Company, the Association and the Subsidiary 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, the Association or the Subsidiary, threatened any
action or proceeding wherein the Company, the Association or
the Subsidiary would be alleged to be in default thereunder.
(xv) None of the Company, the Association or the
Subsidiary is in violation of its respective certificate of
incorporation or charter or bylaws. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby by the Company and the Association do not
conflict with or result in a breach of the certificate of
incorporation or charter or bylaws of the Company, the
Association (in either mutual or stock form) or the Subsidiary
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
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creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the
Company, the Association or the Subsidiary 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, the Association
or the Subsidiary is a party or violate any governmental
license or permit or any enforceable published law,
administrative regulation or order or court order, writ,
injunction or decree (subject to the satisfaction of certain
conditions imposed by the Office 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, the Association and the Subsidiary,
taken as a whole.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus and prior to the Closing Date, except as otherwise
may be indicated or contemplated therein, none of the Company,
the Association or the Subsidiary 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 in the ordinary course of business,
or entered into any other transaction not in the ordinary
course of business and consistent with prior practices, which
is material in light of the business of the Company, the
Association and the Subsidiary, taken as a whole.
(xvii) Upon consummation of the Conversion, the
authorized, issued and outstanding equity capital of the
Company shall be within the range as set forth in the
Prospectus under the caption "Capitalization," and no Common
Stock of the Company shall be outstanding immediately prior to
the Closing Date; the issuance and the sale of the Shares have
been duly authorized by all necessary corporate action of the
Company and approved by the Office and, when issued in
accordance with the terms of the Plan in exchange for the
consideration therefor, the Shares shall be validly issued,
fully paid and nonassessable and shall conform in all material
respects to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to
preemptive rights, except as set forth in the Prospectus; and
good title to the Shares will be transferred by the Company to
the purchasers thereof upon issuance thereof against payment
therefor, free and clear of all claims, encumbrances, security
interests and liens against the Company whatsoever. The
certificates representing the Shares will conform in all
material respects with the requirements of applicable laws and
regulations. The issuance and sale of the capital stock of the
Association to the Company has been duly authorized by all
necessary corporate action of the Association and the Company
and appropriate regulatory authorities (subject to the
satisfaction of various conditions imposed by the Office in
connection with its approval of the Conversion Application),
and such capital stock, when issued in
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accordance with the terms of the Plan, will be fully paid and
nonassessable and will confirm in all material respects to the
description thereof contained in the Prospectus.
(xviii) No approval of any regulatory or supervisory
or other public authority is required in connection with the
execution and delivery of this Agreement or the issuance of
the Shares, except for the declaration of effectiveness of any
required post-effective amendment by the Commission and
approval thereof by the Office and approval of the Company's
application on Form H-(e)1-S by the Office, the issuance of
the Stock Charter by the Office and as may be required under
the securities laws of various jurisdictions.
(xix) All contracts and other documents required to
be filed as exhibits to the Registration Statement or the
Conversion Application have been filed with the Commission
and/or the Office, as the case may be.
(xx) Deloitte & Touche LLP, which has audited the
consolidated financial statements of the Association at
September 30, 1996 and 1995 and for the years ended September
30, 1996, 1995 and 1994 included in the Prospectus, is an
independent public accountant with respect to the Company and
the Association within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations,
Section 571.2(c)(3).
(xxi) For the past five years, the Company, the
Association and the Subsidiary have timely filed all required
federal, state and local franchise tax returns, and no
deficiency has been asserted with respect to such returns by
any taxing authorities, and the Company, the Association and
the Subsidiary have paid all taxes that have become due and,
to the best of their knowledge, have made adequate reserves
for known future tax liabilities, except where any failure to
make such filings, payments and reserves, or the assertion of
such a deficiency, would not have a material adverse effect on
the financial condition of the Company, the Association and
the Subsidiary, taken as a whole.
(xxii) All of the loans represented as assets of the
Association on the most recent statement of financial
condition of the Association 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
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asserted, would not have a material adverse effect on the
Company, the Association and the Subsidiary, taken as a whole.
(xxiii) The records of account holders, depositors,
borrowers and other members of the Association delivered to
Trident by the Association or its agent for use during the
Conversion have been prepared or reviewed by the Association
and, to the best knowledge of the Company and the Association,
are reliable and accurate.
(xxiv) None of the Company, the Association, the
Subsidiary or the employees of the Company, the Association or
the Subsidiary, has made any payment of funds of the Company,
the Association or the Subsidiary prohibited by law, and no
funds of the Company, the Association or any Subsidiary 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, the Association and the Subsidiary
are in compliance with all laws, rules and regulations
relating to the discharge, storage, handling and disposal of
hazardous or toxic substances, pollutants or contaminants and
neither the Company nor the Association believes that the
Company, the Association or the Subsidiary are 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, the
Association and the Subsidiary, 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, the Association
or the Subsidiary relating to the discharge, storage, handling
and disposal of hazardous or toxic substances, pollutants or
contaminants. 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, the Association or the Subsidiary or, to the best
knowledge of the Company or the Association, has occurred on,
in or at any of the facilities or properties of the Company,
the Association or the Subsidiary, except such disposal,
release or discharge which would not have a material adverse
effect on the Company, the Association and the Subsidiary,
taken as a whole.
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(b) Trident represents and warrants to the Company
and the Association that:
(i) Trident is registered as a broker-dealer with the
Commission and a member of the NASD, 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 the accounts of whom 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) Each of Trident and its employees, and to
Trident's knowledge, its agents and representatives who shall
perform any of the services required hereunder to be performed
by Trident shall be duly authorized and shall have all
licenses, approvals and permits necessary to perform such
services, and Trident is a registered selling agent in the
jurisdictions listed in Exhibit A hereto and will remain
registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until
the Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by
Trident, the fulfillment of the terms set forth herein and the
consummation of the transactions contemplated hereby shall not
violate or conflict with the corporate charter or bylaws of
Trident or violate, conflict with or constitute a breach of,
or default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, any material
agreement, indenture or other instrument by which Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or
court decree, injunction or order.
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(vi) All funds received by Trident to purchase the
Shares will be handled in accordance with Rule 15c2-4 under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(vii) There is not now pending or, to Trident's best
knowledge, threatened against Trident any action or proceeding
before the Commission, the NASD, any state securities
commission or any state or federal court concerning Trident's
activities as a broker-dealer.
3. Employment 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 employ
Trident as their agent to utilize its best efforts in assisting the Company with
the Company's sale of the Shares in the Offerings. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Offerings close,
unless the Company and the Association, with the approval of the Office, are
permitted to extend such period of time, (b) upon consummation of the
Conversion, or (c) upon termination of the Conversion, whichever date shall
first occur.
In the event the Company is unable to sell a minimum of 2,847,500
shares of Common Stock (or such lesser amount as the Office 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 accrued 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 and 9 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Shares as described in the Prospectus will
be made prior to the commencement of the Subscription and Direct Community
Offering, with provision for prompt refund to the purchasers as set forth above,
or for delivery to the Company if all Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the offices of Breyer & Aguggia, Washington, D.C. or at such other place as
shall be agreed upon between the parties hereto. The date upon which Trident is
paid the compensation due hereunder is herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the aggregate 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
Trident Securities, Inc.
Sales Agency Agreement
Page 13
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 third business day following such confirmation, (iii)
Trident 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.
In addition to the expenses specified in Section 6 hereof, Trident
shall receive the following compensation for its services hereunder:
(a) A commission equal to 1.35% of the aggregate dollar
amount of Common Stock sold in the Subscription
Offering and Community Offering to investors who
reside in the State of South Carolina and a
commission equal to 1.15% of the aggregate dollar
amount of Common Stock sold in the Subscription
Offering and Community Offering to investors residing
outside the State of South Carolina. No commissions
shall be payable on Shares purchased by the
Association's officers, directors, employees or their
"associates", as such term is defined in the Plan, or
employee benefit plans. Further, all commissions
shall be based on the amount of stock sold; however,
fees shall be capped at the midpoint of the estimated
valuation range as set forth on the cover page of the
Prospectus. In addition, in the event that the
Offerings are closed above the midpoint of the
Estimated Valuation Range, the above described fee
schedule will be applied on a pro rata basis as if
the Offerings had closed at the midpoint of the
Estimated Valuation Range. For stock sold by other
NASD member firms under selected dealer's agreements,
the commission shall not exceed a fee to be agreed
upon by Trident and the Company and the Association
to reflect market requirements at the time of the
stock allocation in a Syndicated Community Offering.
(b) Trident shall be reimbursed for reasonable allocable
expenses, including but not limited to travel,
communications, legal fees and expenses and postage,
incurred by it whether or not the Offerings are
successfully completed; provided, however, that
neither the Company nor the Association shall pay or
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
Trident Securities, Inc.
Sales Agency Agreement
Page 14
of this Agreement. Trident's reimbursable out of
pocket expenses will not exceed $10,000, and its
reimbursable legal fees will not exceed $35,000.
Trident will use its best efforts to ensure that the
expenses of its counsel are reasonable. Full payment
to defray Trident's reimbursable expenses shall be
made in next-day funds on the Closing Date or, if the
Conversion is not completed and is terminated for any
reason, within ten (10) business days of receipt by
the Company of a written request from Trident for
reimbursement of its expenses. Trident acknowledges
receipt of $10,000 advance payment from the
Association which shall be credited against the total
reimbursement due Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of
Trident for allocable expenses provided in the
immediately preceding paragraph (b), in the event
that a resolicitation 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 the immediately
preceding paragraph (b) above have been exhausted and
subject to the following: Such reimbursement shall be
in amount equal to the product obtained by dividing
$10,000 (original out-of-pocket expenses) by the
total number of days of the unextended Subscription
Offering (calculated from the date of the Prospectus
to the intended close of the Subscription Offering as
stated in the Prospectus) and multiplying such
product by the number of days of the extension (that
number of days from the date of the supplemental
prospectus used in the extended Subscription Offering
to the closing of the extension of the Subscription
Offering described in such supplemental prospectus).
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Association
shall also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their attorneys' fees, NASD filing fees,
and attorneys' fees relating to any required state securities laws research and
filings, telephone charges, air freight, rental equipment, supplies, transfer
agent charges, fees relating to auditing and accounting and costs of printing
all documents necessary in connection with the Conversion.
Trident Securities, Inc.
Sales Agency Agreement
Page 15
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 2,847,500
and a maximum of 3,852,500 Shares, with the possibility of offering up to
4,430,375 Shares (except as the Office may permit to be decreased or increased)
in the Subscription and Direct Community Offering, and if necessary, the
Syndicated Community Offering. 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) The Company shall deliver to Trident, from time to time,
such number of copies of the Prospectus as Trident reasonably may
request. The Company authorizes Trident to use the Prospectus in any
lawful manner in connection with the offer and sale of the Shares.
(b) The Company will notify Trident or its counsel immediately
upon discovery, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement becomes
effective or any supplement to the Prospectus has been filed, (ii) of
the issuance by the Commission of any stop order relating to the
Registration Statement or of the initiation or the threat of any
proceedings for that purpose, (iii) of the receipt of any notice with
respect to the suspension of the 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.
(c) During the time when the Prospectus is required to be
delivered under the Act, the Company will comply so far as it is able
with all requirements imposed upon it by the Act, as now in effect and
hereafter amended, and by the SEC Regulations, as from time to time in
force, so far as necessary to permit the continuance of offers and
sales of or dealings in the Shares in accordance with the provisions
hereof and the Prospectus. If during the period when the Prospectus is
required to be delivered in connection with the offer and sale of the
Shares any event relating to or affecting the Company, the Association
and the Subsidiary, taken as a whole, shall occur as a result of which
it is necessary, in the opinion of counsel for the Company and the
Association after consultation with 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 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
Trident Securities, Inc.
Sales Agency Agreement
Page 16
satisfactory to counsel for Trident) which shall amend or supplement
the Prospectus so that, as amended or supplemented, the Prospectus
shall not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser of the Shares, not misleading.
The Company will not file or use any amendment or supplement to the
Registration Statement or the Prospectus of which Trident has not first
been furnished a copy or to which Trident shall reasonably object after
having been furnished such copy. For the purposes of this subsection
the Company and the Association shall furnish such information with
respect to themselves as Trident from time to time may reasonably
request.
(d) The Company has taken or will take all reasonably
necessary action as may be required to qualify or register the Shares
for offer and sale by the Company under the securities or blue sky laws
of such jurisdictions as Trident and either the Company or its counsel
may agree upon; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the
laws of any such jurisdiction. In each jurisdiction where such
qualification or registration shall be effected, the Company, unless
Trident agrees that such action is not necessary or advisable in
connection with the distribution of the Shares, shall file and make
such statements or reports as are, or reasonably may be, required by
the laws of such jurisdiction.
(e) Appropriate entries will be made in the financial records
of the Association sufficient to establish a liquidation account upon
consummation of the Conversion for the benefit of eligible account
holders and supplemental eligible account holders in accordance with
the requirements of the Office.
(f) The Company will file a registration statement for the
Common Stock under Section 12(g) of the Exchange Act prior to
completion of the stock offering pursuant to the Plan and shall request
that such registration statement be effective upon completion of the
Conversion. The Company shall maintain the effectiveness of such
registration for a minimum period of three years or for such shorter
period as may be required by applicable law.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the regulations
promulgated under the Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following
the effective date (as defined in said Rule 158) of the Registration
Statement.
Trident Securities, Inc.
Sales Agency Agreement
Page 17
(h) For a period of three (3) years from the date of this
Agreement (unless the Common Stock shall have been deregistered under
the Exchange Act), the Company will furnish to Trident, as soon as
publicly available after the end of each fiscal year, a copy of its
annual report to shareholders for such year; and the Company will
furnish to Trident (i) as soon as publicly available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, and (ii)
from time to time, such other public information concerning the Company
as Trident may reasonably request.
(i) The Company shall use the net proceeds from the sale of
the Shares consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and
every condition set forth in Section 7 hereof has been satisfied,
unless such condition is waived by Trident.
(k) The Company 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 such information
shall be accurate and reliable. Trident shall be entitled to rely on
such instructions and shall have no liability in respect of its
reliance thereon, including without limitation, no liability for or
related to any denial or grant of a subscription in whole or in part.
(l) The Company and the Association will take such actions and
furnish such information as are reasonably requested by Trident in
order for Trident to ensure compliance with the NASD's "Interpretation
Relating to Free-Riding and Withholding."
(m) At the Closing Date, the Company and the Association will
have completed the conditions precedent to, and shall have conducted
the Conversion in all material respects in accordance with, the Plan,
the OTS Regulations and all other applicable laws, regulations,
published decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed by the
Office.
6. Payment of Expenses. Whether or not the Conversion is consummated,
the Company and the Association shall pay or reimburse Trident for (a) all
filing fees paid or incurred by Trident in connection with all filings with the
NASD with respect to the Subscription and Community Offerings and, (b) in
addition, if the Company is unable to sell a minimum of 2,847,500 shares of
Common Stock or such lesser amount as the Office may permit or the Conversion is
otherwise terminated, the Company and the Association shall reimburse Trident
Trident Securities, Inc.
Sales Agency Agreement
Page 18
for allocable expenses incurred by Trident relating to the offering of the
Shares as provided in Section 3 hereof; provided, however, that neither the
Company nor the Association shall pay or 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.
7. Conditions of Trident's Obligations. Except as may be waived by
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties 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
opinions of Breyer & Aguggia, special counsel for the Company and the
Association, or Xxxx, Xxxxx, Xxxxxxxx & Xxxxxxx, local counsel to the
Association ("Local Counsel"), dated the Closing Date, addressed to
Trident, in form and substance reasonably satisfactory to counsel for
Trident and to the effect that:
(i) The Company has been duly incorporated, and each
of the Company and the Subsidiary is a corporation validly
existing in good standing under the laws of its jurisdiction
of incorporation, and the Association is validly existing as a
mutual savings and loan association under the laws of the
United States, each with full power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) each of the Company, the Association and the
Subsidiary has been qualified to do business and, to such
counsel's knowledge, is in good standing as a foreign
corporation in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business
requires such qualification or, if not so qualified and in
good standing, failure to so qualify would not have any
material adverse effect on the Company, the Association and
the Subsidiary, taken as a whole;
(iii) the Association is a member of the Federal Home
Loan Bank of Atlanta, and the deposit accounts of the Bank are
insured by the SAIF up to the applicable legal limits;
(iv) to the knowledge of such counsel, the activities
of each of the Association and the Subsidiary as such
activities are described in the Prospectus are permitted under
federal and Delaware law to subsidiaries of a Delaware
Trident Securities, Inc.
Sales Agency Agreement
Page 19
business corporation and the Association does not have any
subsidiaries other than the Subsidiary;
(v) the Plan complies with and, to the knowledge of
such counsel, the Conversion has been effected in all material
respects in accordance with the HOLA and the OTS Regulations;
to such counsel's knowledge, all of the terms, conditions,
requirements and provisions with respect to the Plan and the
Conversion imposed by the Office, except with respect to the
filing or submission of certain required post-Conversion
reports or other materials by the Company or the Association,
have been complied with by the Company and the Association in
all material respects; and, to the knowledge of such counsel,
no person has sought to obtain regulatory or judicial review
of the final action of the Office in approving the Plan;
(vi) the Company has authorized Common Stock as set
forth in the Registration Statement and the Prospectus, and
the description of the Common Stock in the Registration
Statement and the Prospectus is accurate in all material
respects;
(vii) the issuance and sale of the Shares have been
duly authorized by all necessary corporate action on the part
of the Company; the Shares, upon receipt of payment and
issuance in accordance with the terms of the Plan and this
Agreement, will be validly issued, fully paid, nonassessable
and, except as disclosed in the Prospectus, free of preemptive
rights, and to the knowledge of such counsel, good title
thereto shall be transferred by the Company free and clear of
all claims, encumbrances, security interests and liens against
the Company;
(viii) the certificates for the Shares comply in all
material respects with the applicable requirements of Delaware
law;
(ix) 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 the
Company and have received the approval of the Office, and such
capital stock, upon receipt of payment and issuance in
accordance with the terms of the Plan, will be validly issued,
fully paid and nonassessable and owned of record by the
Company;
(x) subject to the satisfaction of the conditions to
the Office's approval of the Conversion Application, no
further approval, authorization, consent or other order of any
public board or body is required in connection with the
execution and delivery of this Agreement, the issuance of the
Shares and the
Trident Securities, Inc.
Sales Agency Agreement
Page 20
consummation of the Conversion, except as may be required
under the "blue sky" or state securities laws of various
jurisdictions as to which counsel need express no opinion;
(xi) the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have
been duly 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 bankruptcy, insolvency, moratorium, reorganization,
receivership, conservatorship or similar laws relating to or
affecting the enforcement of creditors' rights generally or
the rights of creditors of depository institutions whose
accounts are insured by the FDIC or savings and loan holding
companies the accounts of whose subsidiary are insured by the
FDIC or by general equity principles, regardless of whether
such enforceability is considered in a proceeding in equity or
at law, and except to the extent that the provisions of
Sections 8 and 9 hereof may be unenforceable as against public
policy or pursuant to Section 23A, as to which no opinion need
be rendered);
(xii) to the knowledge of such counsel, there are no
material legal or governmental proceedings pending or
threatened against or involving the assets of the Company, the
Association or the Subsidiary (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, the Association or the Subsidiary, or to such
counsel, a present intention to initiate such litigation or
proceeding);
(xiii) to the knowledge of such counsel, there are no
statutes or regulations required to be described or disclosed
in the Prospectus which are not so described or disclosed;
(xiv) the statements in the Prospectus under the
captions "Dividend Policy," "Regulation," "Taxation,"
"Restrictions on Acquisition of the Holding Company,
"Registration Requirements" and "Description of Capital Stock
of the Holding Company" and in response to Items 7(d)(1), 7(g)
and 7(i) of Form PS of the Office's conversion regulations,
insofar as they are, or refer to, statements of law or legal
conclusions, have been prepared or reviewed by such counsel
and are correct in all material respects;
(xv) the Form AC has been approved by the Office, and
the Prospectus and the Proxy Statement have been authorized
for use by the Office; the
Trident Securities, Inc.
Sales Agency Agreement
Page 21
Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission; and no
proceedings are pending by or before the Commission or the
Office seeking to revoke or rescind the orders declaring the
Registration Statement effective or approving the Conversion
Application or, to the knowledge of such counsel, 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); and the
Office has issued its letter of approval in connection with
the Application H-(e)1-S under the savings and loan holding
company provisions of the HOLA and the regulations thereunder;
(xvi) the execution and delivery by the Company and
the Association of, and performance by the Company and the
Association of their obligations under, this Agreement, do not
(i) violate the certificate of incorporation, charter or
bylaws of the Company, the Association (in either mutual or
stock form) or the Subsidiary, (ii) to the knowledge of such
counsel, 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 material lien,
charge or other encumbrance upon any of the properties or
assets of the Company, the Association or the Subsidiary
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, the
Association or the Subsidiary is a party or (iii) violate the
HOLA or the OTS Regulations or, to such counsel's knowledge,
any existing material obligation of the Company, the
Association or the Subsidiary under any court order, writ,
injunction or decree that specifically name the Company, the
Association or the Subsidiary and that are specifically
directed to any of them or their property (subject to the
satisfaction of certain conditions imposed by the Office in
connection with its approval of the Conversion Application);
(xvii) The Conversion Application, the Registration
Statement, the Prospectus and the Proxy Statement comply as to
form in all material respects with the requirements of the Act
and the SEC Regulations, the HOLA and the OTS Regulations
(except as to financial statements, notes to financial
statements, financial tables and other financial and
statistical data and the appraisal included therein, as to
which no opinion need be expressed); to the knowledge of such
counsel all documents and exhibits required to be filed with
the Conversion Application and the Registration Statement have
been so filed; the description in the Conversion Application
and the Registration Statement of such documents and
Trident Securities, Inc.
Sales Agency Agreement
Page 22
exhibits is accurate in all material respects; and to the
knowledge of such counsel, there are no contracts or other
documents of a character required to be described in the
Conversion Application, the Registration Statement or the
Prospectus which have not been described therein;
(xviii) to the knowledge of such counsel, the
Association and the Subsidiary have obtained all licenses,
permits and other governmental authorizations currently
required for the conduct of their business as such business is
described in the Prospectus, all such licenses, permits and
other governmental authorizations are in full force and effect
and the Association and the Subsidiary are in all material
respects complying therewith, except where the failure to hold
such licenses, permits or governmental authorizations or the
failure to hold such licenses, permits or governmental
authorizations or the failure to so comply would not have a
material adverse effect on the Company, the Association and
the Subsidiary, taken as a whole; and
(xix) to the knowledge of such counsel, there has
been no material breach of any provision of the Company's, the
Association's or the Subsidiary's certificate of
incorporation, charter or bylaws or breach or default (or the
occurrence of any event which, with notice or lapse of time or
both, would constitute a default) under any agreement,
contract, indenture, debenture, bond, note, instrument or
obligation to which the Company, the Association or the
Subsidiary is a party or by which any of them or any of their
respective assets or properties may be bound, or any
governmental license or permit, or a violation of any
enforceable published law, administrative regulation or order,
or court order, writ, injunction or decree which breach,
default, encumbrance or violation would have a material
adverse effect on the condition (financial or otherwise),
operations, business, assets or properties of the Company, the
Association and the Subsidiary, taken as a whole;
In rendering such opinions, such counsel may rely as to
matters of fact on certificates of officers and directors of the
Company, the Association and the Subsidiary 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 opinions may
be governed by, and interpreted in accordance with, the Legal Opinion
Accord (the "Accord") of the ABA Section of Business Law (1991), and,
as a consequence, references in such opinions to such counsel's
"knowledge" may be limited to "actual knowledge" as defined in the
Accord (or knowledge based on certificates). Such opinions may be
limited to present statutes, regulations and judicial interpretations
and to facts as they presently exist; in rendering such opinions, such
counsel need assume no obligation to revise or supplement them should
the present laws be changed by legislative or regulatory action,
judicial
Trident Securities, Inc.
Sales Agency Agreement
Page 23
decision or otherwise; and such counsel need express no view, opinion
or belief with respect to whether any proposed or pending legislation,
if enacted, or any regulations or any policy statements issued by any
regulatory agency, whether or not promulgated pursuant to any such
legislation, would affect the validity of the execution and delivery by
the Company and the Association of this Agreement or the issuance of
the Shares.
(b) At the Closing Date, Trident shall receive the letter of
Breyer & Aguggia, 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
no facts have come to such counsel's attention that would lead it to
believe that the Registration Statement, as amended (except as to
information in respect of Trident contained therein and except as to
the appraisal, financial statements, notes to financial statements,
financial tables and other financial and statistical data contained
therein, as to which such counsel need express no comment), at the time
it became effective contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, or that
the Prospectus, as amended (except as to information in respect of
Trident contained therein and except as to the appraisal, financial
statements, notes to financial statements, financial tables and other
financial and statistical data contained therein as to which such
counsel need express no comment), as of its date and at the Closing
Date, contained any untrue statement of 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 making this statement such counsel may state that it has not
undertaken to verify independently the information in the Registration
Statement or Prospectus and, therefore, does not assume any
responsibility for the accuracy or completeness thereof).
(c) Counsel for Trident shall have been furnished such
documents as they reasonably may require for the purpose of enabling
them to review or pass upon the matters required by Trident, and for
the 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) At the Closing Date, Trident shall receive such opinion of
Housley Kantarian & Xxxxxxxxx, P.C., counsel for Trident, with respect
to such matters as Trident may reasonably request, and such counsel
shall have received such documents, papers and records as they may
request for the purpose of enabling them to pass upon such matters.
Trident Securities, Inc.
Sales Agency Agreement
Page 24
(e) Prior to and at the Closing Date, in the reasonable
opinion of Trident, (i) there shall have been no material change in the
financial condition, business or results of operations of the Company,
the Association and the Subsidiary, taken as a whole, since the latest
date as of which such condition is set forth in the Prospectus, except
as referred to therein; (ii) there shall have been no transaction
entered into by the Company, the Association or the Subsidiary after
the latest date as of which the financial condition of the Company, the
Association or the Subsidiary 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, the Association and the Subsidiary, taken as a whole;
(iii) none of the Company, the Association or the Subsidiary shall have
received from the Office or Commission any direction (oral or written)
to make any change in the method of conducting their respective
businesses which is material to the business of the Company, the
Association and the Subsidiary, 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, the Association or the Subsidiary 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, the Association and the
Subsidiary, taken as a whole; and (v) the Shares shall have been
qualified or registered for offering and sale by the Company under the
securities or blue sky laws of such jurisdictions as Trident and the
Company shall have agreed upon.
(f) 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, at the time
the Prospectus became authorized by the Commission and the Office for
use, the Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading with respect to the Company, the Association or
the Subsidiary; (ii) since the date the Prospectus became authorized by
the Commission and the Office for use, no event has occurred which
should have been set forth in an amendment or supplement to the
Prospectus which has not been so set forth, including specifically, but
without limitation, any material change in the business, financial
condition or results of operations of the Company, the Association or
the Subsidiary, and the conditions set forth in clauses (ii) through
(iv) inclusive of subsection (e) of this Section 7 have been satisfied;
(iii) to the best knowledge of such officers, no order has been issued
by the Commission or the Office to suspend the Subscription Offering or
the Community Offering or the effectiveness of the Registration
Statement, and no action for such purposes has been instituted or
threatened by the Commission or the Office; (iv) to the best knowledge
of such officers, no person has sought to obtain review of the final
actions of the Office approving the
Trident Securities, Inc.
Sales Agency Agreement
Page 25
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.
(g) At the Closing Date, Trident shall receive, among other
documents, (i) copies of the letters from the Office authorizing the
use of the Prospectus and the Proxy Statement, (ii) a copy of the order
of the Commission declaring the Registration Statement effective; (iii)
copies of the letters from the Office evidencing the corporate
existence of the Association; (iv) 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;
(v) a copy of the Company's certificate of incorporation certified by
the appropriate Delaware governmental authority; and, (vi) if
available, a copy of the letter from the Office approving the
Association's Stock Charter.
(h) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Association's Stock Charter executed by
the Office.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Deloitte & Touche LLP,
independent certified public accountants, addressed to Trident and the
Company, in substance and form satisfactory to counsel for Trident,
with respect to the financial statements and certain financial
information contained in the Prospectus.
(j) At the Closing Date, Trident shall receive a letter in
form and substance satisfactory to Trident from Deloitte & Touche LLP,
independent certified public accountants, dated the Closing Date and
addressed to Trident and the Company, confirming the statements made by
them in the letter delivered by them pursuant to the preceding
subsection as of a specified date not more than five (5) days prior to
the Closing Date.
(k) At the Closing Date, the Company and the Association shall
have completed the conditions precedent to, and shall have conducted
the Conversion in all material respects in accordance with, the Plan
and the OTS Regulations and all other applicable laws, regulations,
decisions and orders, including all terms, conditions, requirements and
provisions precedent to the Conversion and the approval of the
Conversion Application imposed upon them by the Office.
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, satisfactory to Trident. 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
Trident Securities, Inc.
Sales Agency Agreement
Page 26
made therein. If any condition to Trident's obligations hereunder to be
fulfilled prior to or at the Closing Date is not so fulfilled, Trident may
terminate this Agreement or, if Trident so elects, may waive any such conditions
which have not been fulfilled, or may extend the time of their fulfillment. If
Trident terminates this Agreement as aforesaid, the Company and the Association
shall reimburse Trident for its expenses as provided in Sections 3(b) and 6
hereof.
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 Act or Section 20(a) of the Exchange Act,
against any and all loss, liability, claim, damage and expense
whatsoever and shall further promptly reimburse such persons for any
legal or other expenses reasonably incurred by each or any of them in
investigating, preparing to defend or defending against any such
action, proceeding or claim (whether commenced or threatened) arising
out of or based upon (A) any misrepresentation by the Company or the
Association in this Agreement or any breach of warranty by the Company
or the Association with respect to this Agreement or arising out of or
based upon any untrue or alleged untrue statement of a material fact or
the omission or alleged omission of a material fact required to be
stated or necessary to make not misleading any statements contained in
(i) the Registration Statement or the Prospectus or (ii) any
application (including the Form AC and the Form H-(e)1-S) 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 the Subsidiary or based upon information furnished by or
on behalf of the Company, the Association or the Subsidiary, whether or
not filed in any jurisdiction, to effect the Conversion or qualify the
Shares under the securities laws thereof or filed with the Office or
Commission, unless such statement or omission was made in reliance upon
and in conformity with information furnished to the Company, the
Association or the Subsidiary with respect to Trident by or on behalf
of Trident expressly for use in the Registration Statement, the
Prospectus or any amendment or supplement thereof or in any
Application, as the case may be, or (B) the participation by Trident in
the Conversion, provided, however, that this indemnification agreement
will not apply to any loss, liability, claim, damage or expense found
in a final judgment by a court of competent jurisdiction to have
resulted primarily from the bad faith, willful misconduct or gross
negligence of any party who may otherwise be entitled to
indemnification pursuant to this Section 8(a). This indemnity shall be
in addition to any liability the Company and the Association may have
to Trident otherwise.
(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 account holders, depositors, borrowers and other
members of the Association delivered to Trident by the Association or
its agents for use during the Conversion. This indemnity shall be
Trident Securities, Inc.
Sales Agency Agreement
Page 27
in addition to any liability the Company and the Association may have
to Trident otherwise.
(c) Trident agrees to indemnify and hold harmless the Company,
the Association and the Subsidiary, their officers, directors and
employees and each person, if any, who controls the Company, the
Association and the Subsidiary within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Association to Trident,
but only with respect to (A) statements or omissions, if any, made in
the Prospectus or any amendment or supplement thereof, in any
Application or to a purchaser of the Shares in reliance upon, and in
conformity with, information furnished to the Company, the Association
or the Subsidiary with respect to Trident by or on behalf of Trident
expressly for use in the Prospectus or in any Application; (B) any
misrepresentation by Trident in Section 2(b) of this Agreement; or (C)
any liability of the Company or the Association which is found in a
final judgment by a court of competent jurisdiction (not subject to
further appeal) to have principally and directly resulted from gross
negligence or willful misconduct of Trident, provided, however, that
this indemnification agreement will not apply to any loss, liability,
claim, damage or expense found in a final judgment by a court of
competent jurisdiction to have resulted primarily from the bad faith,
willful misconduct or gross negligence of any party who may otherwise
be entitled to indemnification pursuant to this Section 8(c).
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with the other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable cost of
investigation except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified
party may retain additional counsel, but shall bear the reasonable 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
Trident Securities, Inc.
Sales Agency Agreement
Page 28
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 reasonable fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought
shall not be liable to indemnify an indemnified party under this
Section 8 if any settlement of any such action is effected without such
indemnifying party's consent. To the extent required by law, this
Section 8 is subject to and limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to Trident, the Company
and/or the Association other than in accordance with its terms, the Company or
the Association and Trident shall contribute to the aggregate losses,
liabilities, claims, damages, and expenses of the nature contemplated by said
indemnity agreement incurred by the Company or the Association and 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 hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Association, on the one hand, and Trident on the other,
shall be deemed to be in the same proportions as the total net proceeds from the
Conversion received by the Company and the Association bear to the total fees
and expenses 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
Trident Securities, Inc.
Sales Agency Agreement
Page 29
the amount by which fees owed Trident pursuant to this Agreement exceeds the
amount of any damages which Trident has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. To the extent required by law, this
Section 8 is subject to and limited by the provisions of Section 23A.
10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company and the Association and Trident and the
representations 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 South Carolina 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 adverse change in the capitalization, financial
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.
(b) If Trident elects to terminate this Agreement as provided
in this Section, the Company and the Association shall be notified
promptly by Trident by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the
reasons set forth in subsection (a) above, and to fulfill its
obligations, if any, pursuant to Sections 3, 6, 8(a), 8(b) 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.
Sales Agency Agreement
Page 30
(d) 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) and 9 of this Agreement.
12. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or faxed 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 Housley Kantarian & Xxxxxxxxx, P.C., 0000 00xx
Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxx, Esquire) and
if sent to the Company, the Association or the Subsidiary, shall be mailed,
delivered or telegraphed and confirmed to FirstSpartan Financial Corp., First
Federal Savings and Loan Association of Spartanburg, 000 X. Xxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxxxx, President
and Chief Executive Officer (with a copy to Breyer & Aguggia, 0000 X Xxxxxx,
X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxxx,
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 governed by preemptive federal law, this
Agreement shall be governed by and construed in accordance with the substantive
laws of South 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.
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
FIRSTSPARTAN FINANCIAL CORP. FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF SPARTANBURG
By:___________________ By:_______________________
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
President and Chief President and Chief
Executive Officer Executive Officer
Date:___________________ Date:_____________________
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:_____________________
Date:___________________
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below:
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
