EXHIBIT 1.2
FIRST DEPOSIT BANCSHARES, INC.
1,071,000 to 1,449000 Shares
(as may be increased to 1,666,350 shares)
Common Stock
(No Par Value Per Share)
Purchase Price: $10.00 Per Share
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
First Deposit Bancshares, Inc., a Georgia corporation ("Company"), and
Xxxxxxx Federal Bank, A Federal Savings Bank, a federally chartered and insured
savings bank ("Bank," in mutual or stock form as the context may require),
hereby confirm, as of May ___, 1999, their respective agreements with Trident
Securities, Inc. together with its successors and assigns as contemplated in
Section 13 hereof (collectively, "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 Bank intends to convert from a federally chartered
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mutual savings bank to a federally chartered capital stock savings bank as a
wholly owned subsidiary of the Company (together with the Offerings, as defined
below, the issuance of shares of common stock of the Bank to the Company and the
incorporation of the Company, the "Conversion") pursuant to a plan of conversion
adopted by the Bank's Board of Directors on February 9, 1999 and amended on
March 31, 1999 and April 26, 1999 ("Plan"). In accordance with the Plan, the
Company is offering shares of its common stock, no par value per share ("Common
Stock"), pursuant to nontransferable subscription rights in a subscription
offering ("Subscription Offering") to certain depositors and borrowers of the
Bank and to the Bank's tax-qualified employee benefit plans (i.e., the Bank's
Employee Stock Ownership Plan ("ESOP")). Any shares of the Common Stock not
sold in the Subscription Offering are being offered to the general public in a
Community Offering ("Community Offering"), with preference given to natural
persons who are permanent residents of Xxxxxxx and Paulding Counties, Georgia
("Local Community") (the Subscription and Community Offerings are sometimes
referred to collectively as the "Subscription and Community Offering"), subject
to the right of the Company and the Bank, in their absolute discretion, to
reject orders in the Community Offering in whole or in part. It is anticipated
that shares of Common Stock not subscribed for in the Subscription and 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 to be
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May , 1999
Page 2
formed and managed by Trident in a syndicated offering ("Syndicated Community
Offering") (the Subscription and Community Offering and the Syndicated Community
Offering are referred to collectively as the "Offerings"). In the Subscription
Offering (and the Community Offering and the Syndicated Community Offering, if
applicable), the Company is offering between 1,071,000 and 1,449,000 shares of
Common Stock ("Shares"), with the possibility of offering up to 1,666,350 shares
without a resolicitation of subscribers, as contemplated by Part 563b of Title
12 of the Code of Federal Regulations. Except for the ESOP, no person may
purchase shares with an aggregate purchase price of more than $375,000 and no
person or entity, together with associates of and persons acting in concert with
such person or other entity, may purchase more than $750,000 of Common Stock.
Trident has advised the Company and the Bank 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 May ___, 1999 (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 Bank and
the Shares.
2. Representations and Warranties.
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(a) The Company and the Bank (including Pinehurst Properties, L.L.C.
("Subsidiary") in each instance where the Bank is referenced, unless
clearly inapplicable) 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. 333-74637), including a prospectus relating to the
Offerings, for the registration of the Shares under the Securities Act
of 1933, as amended ("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. Except as the
context may otherwise require, such registration statement, as amended
or supplemented, on file with the Commission at the time the
registration statement became effective, including the prospectus,
financial statements, schedules, exhibits and all other documents
filed as part thereof, as amended and supplemented, is herein called
the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration
Statement became effective is herein called the "Prospectus," except
that if the prospectus filed by the Company with the Commission
pursuant to Rule 424(b) of the general rules and regulations of the
Commission under the Act ("SEC Regulations") differs from the form of
prospectus on file at the time the Registration Statement became
effective, the term "Prospectus"
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May , 1999
Page 3
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 Subscription Offering and, if any, the Community
Offering, the Company (i) will, if required by SEC Regulations,
promptly file with the Commission a post-effective amendment to such
Registration Statement relating to the results of the Subscription
Offering and, if any, the Community Offering, 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 Bank 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
("Office") under the Home Owners' Loan Act, as amended ("HOLA") and
the enforceable rules and regulations, including published policies
and actions, of the Office thereunder ("OTS Regulations"), which has
been approved by the Office; the Prospectus and the proxy statement
for the solicitation of proxies from members of the Bank for the
special meeting to approve the Plan ("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 Bank'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 OTS Regulations, which
has been conditionally approved.
(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 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
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May , 1999
Page 4
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 about Trident
furnished to the Company or the Bank by or on behalf of Trident
expressly for use in the Registration Statement or Prospectus.
(iv) The Company is duly incorporated as a Georgia corporation
and the Bank is 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 the jurisdiction of its organization with
full power and authority to own its property and conduct its business
as described in the Prospectus; the Bank is a member of the Federal
Home Loan Bank of Atlanta; and the deposit accounts of the Bank are
insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC") up
to the applicable limits. Neither the Company nor the Bank is
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 and the Bank, taken as a whole. The Bank does
not own equity securities of or an equity interest in any business
enterprise, except as described in the Prospectus. Upon amendment of
the Bank'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 and the Plan, (i) the Bank will convert to a federally
chartered capital stock savings bank with full power and authority to
own its property and conduct its business as described in the
Prospectus, (ii) all of the authorized and outstanding capital stock
of the Bank will be owned of record and beneficially by the Company,
and (iii) the Company will have no direct subsidiaries other than the
Bank.
(v) The Subsidiary is the only subsidiary of the Company and is
the duly authorized successor to Pinehurst Corp.; the Subsidiary is
duly organized as a Georgia limited liability company and 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 Subsidiary is
not required to be qualified to do business as a foreign limited
liability company in any jurisdiction where non-qualification would
have a material adverse effect on the Subsidiary.
(vi) The Bank 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 liens, charges,
encumbrances or restrictions, except as described in the Prospectus
and except as would not in the aggregate have a material adverse
effect on the Bank; and all of the leases and subleases material to
the operations or financial condition of the Bank, under which it
holds properties, including those described in the Prospectus, are in
full force and effect as described therein.
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May , 1999
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(vii) 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 liens, charges,
encumbrances or restrictions, except as described in the Prospectus
and except as would not in the aggregate have a material adverse
effect on the Subsidiary; and all of the leases and subleases material
to the operations or financial condition of the Subsidiary, under
which it holds properties, including those described in the
Prospectus, are in full force and effect as described therein.
(viii) The Bank has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business, all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in all
material respects complying therewith, except where the failure to
hold or comply with such licenses, permits or governmental
authorizations would not have a material adverse effect on the Company
and the Bank, taken as a whole.
(ix) The Subsidiary has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business, all such licenses, permits and other governmental
authorizations are in full force and effect and the Subsidiary is in
all material respects complying therewith, except where the failure to
hold or comply with such licenses, permits or governmental
authorizations would not have a material adverse effect on the
Subsidiary.
(x) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part
of each of the Company and the Bank, and this Agreement has been
validly executed and delivered by, and is a valid and binding
obligation of, each of the Company and the Bank, enforceable in
accordance with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization 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")).
(xi) There is no litigation or governmental proceeding pending
or, to the best knowledge of the Company or the Bank, threatened
against or involving the Company, the Bank, or any of their respective
assets which individually or in the aggregate would reasonably be
expected to have a material adverse effect on the
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May , 1999
Page 6
condition (financial or otherwise), results of operations assets or
properties of the Company and the Bank, taken as a whole.
(xii) The Company and the Bank have received the opinion of
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, counsel to the Company and the
Bank, with respect to federal 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; the Company and the Bank have received the opinion of Xxxxxxx
& Xxxxxxx, LLC with respect to the Georgia tax consequences of the
Conversion, to the effect that the Conversion will not be a taxable
transaction for the Bank or the Company under the laws of Georgia; and
the facts and representations upon which such entities relied upon in
rendering their respective opinion are accurate and complete.
(xiii) Each of the Company and the Bank has all such corporate
power, authority, authorizations, approvals and orders as may be
required to enter into this Agreement and to carry out the provisions
and conditions hereof, subject to the limitations set forth herein and
subject to the satisfaction of certain conditions imposed by the
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 "blue
sky" laws of various jurisdictions, and in the case of the Company, as
of the Closing Date, will have such approvals and orders to issue and
sell the Shares to be sold by the Company as provided herein, and in
the case of the Bank, as of the Closing Date, will have such approvals
and orders to issue and sell the shares of its common stock to be sold
to the Company as provided in the Plan, subject to the issuance of an
amended charter in the form required for federally chartered capital
stock savings banks ("Stock Charter"), the form of which Stock Charter
has been filed with the Form AC and approved by the Office.
(xiv) Neither the Company nor the Bank 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
Bank, or their officers or directors that would have a material
adverse effect on the condition (financial or otherwise), results of
operations, businesses, assets or properties of the Company and the
Bank, taken as a whole.
(xv) The consolidated financial statements and the related notes
or schedules 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 Bank 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
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May , 1999
Page 7
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 Bank with supervisory and regulatory
authorities except as such generally accepted accounting principles
may otherwise require. The tables in the Prospectus accurately
present the information purported to be shown thereby at the
respective dates thereof and for the respective periods therein.
(xvi) There has been no material change in the financial
condition, results of operations or business, including assets and
properties, of the Company and the Bank, taken as a whole, since the
latest date as of which such condition is set forth in the Prospectus,
except as set forth therein; and the capitalization, assets,
properties and business of each of the Company and the Bank conform to
the descriptions thereof contained in the Prospectus. Neither the
Company nor the Bank has any material liabilities of any kind,
contingent or otherwise, except as set forth in the Prospectus.
(xvii) 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 Bank pursuant to any of the terms, provisions or
conditions of, any agreement, contract, indenture, bond, debenture,
note, instrument or obligation to which the Company or the Bank is a
party or by which 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 condition (financial or otherwise),
results of operations, businesses, assets or properties of the Company
and the Bank, taken as a whole; all agreements which are material to
the financial condition, results of operations or business, assets or
properties of the Company or the Bank are in full force and effect,
and no party to any such agreement has instituted or, to the best
knowledge of the Company or the Bank, threatened any action or
proceeding wherein the Company or the Bank would be alleged to be in
default thereunder.
(xviii) Neither the Company nor the Bank is in violation of its
respective articles of incorporation, charter or bylaws. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company and the Bank do not
conflict with or result in a breach of the respective articles of
incorporation, charter or bylaws of the Company or the Bank (in either
mutual or stock form) or constitute a material breach of or default
(or an event which,
Trident Securities, Inc.
May , 1999
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with notice or lapse of time or both, would constitute a default)
under, give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or imposition of
any lien, charge or other encumbrance upon any of the properties or
assets of the Company or the Bank pursuant to any of the terms,
provisions or conditions of, any material agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which
the Company or the Bank is a party or violate any governmental license
or permit or any enforceable published law, administrative regulation
or order or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Office in connection
with its approval of the Conversion Application), which breach,
default, encumbrance or violation would have a material adverse effect
on the Company and the Bank, taken as a whole.
(xix) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and prior to the
Closing Date (as hereinafter defined), except as otherwise may be
indicated or contemplated therein, neither the Company nor the Bank
has issued any securities which will remain issued and outstanding at
the Closing Date or incurred any liability or obligation, direct or
contingent, or borrowed money, except liabilities, obligations or
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 and the Bank, taken as a whole.
(xx) Upon consummation of the Conversion, the authorized, issued
and outstanding equity capital of the Company shall be within the
range set forth in the Prospectus under the caption "Capitalization,"
and no capital 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 the Bank and approved by the Office and, when issued and
paid for in accordance with the terms of the Plan, shall be validly
issued, fully paid and nonassessable and shall conform to the
description thereof contained in the Prospectus; the issuance of the
Shares is not subject to preemptive rights, except as set forth in the
Prospectus; and good title to the Shares will be transferred by the
Company 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 Bank to the Company has been duly
authorized by all necessary corporate action of the Bank and the
Company and has been approved by the Office (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 accordance with the terms of the
Trident Securities, Inc.
May , 1999
Page 9
Plan, will be fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus.
(xxi) No approval of any regulatory or supervisory or other
public authority is required of the Company or the Bank 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
H-(e)1-S, the issuance of the Stock Charter by the Office and as may
be required under the "blue sky" laws of various jurisdictions.
(xxii) 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 or the Office, as the case may be.
(xxiii) Xxxxxxx & Xxxxxxx, LLC, which has audited the
consolidated financial statements of the Bank at December 31, 1998 and
1997 and for the years ended December 31, 1998 and 1997 included in
the Prospectus, is an independent public accountant with respect to
the Company and the Bank 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).
(xxiv) For the past five years, or in the case of the Company,
such lesser period corresponding to the Company's existence, the
Company and the Bank 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 Bank
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 Company and the Bank, taken as a whole.
(xxv) All of the loans represented as assets of the Bank on the
most recent consolidated statement of financial condition of the Bank
included in the Prospectus meet or are exempt from all requirements of
federal, state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of Regulation
Z and 12 C.F.R. Part 226 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 Bank, taken as a whole.
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May , 1999
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(xxvi) To the best knowledge of the Company and the Bank, the
records of account holders, depositors and other members of the Bank
delivered to Trident by the Bank or its agent for use during the
Conversion are reliable and accurate.
(xxvii) Neither the Company nor the Bank nor, to the best
knowledge of the Company and the Bank, the employees of the Company or
the Bank, has made any payment of funds of the Company or the Bank
prohibited by law, and no funds of the Company or the Bank have been
set aside to be used for any payment prohibited by law.
(xxviii) To the best knowledge of the Company and the Bank, the
Company and the Bank are in compliance with all laws, rules and
regulations relating to the discharge, storage, handling and disposal
of hazardous or toxic substances, pollutants or contaminants and
neither the Company nor the Bank believes that the Company and
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 Bank,
taken as a whole. There are no actions, suits, regulatory
investigations or other proceedings pending or, to the best knowledge
of the Company or the Bank, threatened against the Company or the Bank
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 Bank, 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 Bank or, to the best knowledge of the
Company or the Bank, has occurred on, in or at any of the facilities
or properties of the Company or the Bank, except such disposal,
release or discharge which would not have a material adverse effect on
the Company and the Bank, taken as a whole.
(b) Trident represents and warrants to the Company and the Bank 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 Bank hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of Trident,
and this Agreement is a legal, valid and
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May , 1999
Page 11
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 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 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 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, except for such violations, conflicts,
breaches or defaults that would not have a material adverse effect on
Trident.
(vi) All funds received by Trident to purchase the Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended ("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 Bank hereby employ Trident
as their agent to utilize its best efforts in assisting the Company with the
sale of the Shares by the Company in the Offerings. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Offerings close,
Trident Securities, Inc.
May , 1999
Page 12
unless the Company and the Bank, with the approval of the Office, are permitted
to extend such period of time, or (b) upon consummation of the Conversion,
whichever date shall first occur.
If the Company is unable to sell a minimum of 1,071,000 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 Bank shall
refund promptly to any person who has 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(a) and 9 hereof.
Appropriate arrangements for placing the funds received from subscriptions for
Shares in a special interest-bearing account with the Bank until all Shares are
sold and paid for were made prior to the commencement of the Subscription and
Community Offering, with provision for prompt refund to the purchasers as set
forth above, or for delivery to the Company if all Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company 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 Bank for deposit in a segregated account or
(b) to solicit indications of interest in which event (i) Trident will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgments of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the 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 Bank on or before
twelve noon on the next business day following the debit date for deposit in a
segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder and reimbursement
of expenses:
(a) (i) a management fee of forty thousand dollars ($40,000), (ii) a
commission equal to 1.65% of the aggregate dollar amount of
Common Stock sold in the Subscription and Community Offering,
excluding any shares of Common
Trident Securities, Inc.
May , 1999
Page 13
Stock sold to the Bank's directors, executive officers,
"associates" (as defined in the Plan) of the Bank's directors and
executive officers, and the ESOP; and (iii) if applicable, for
any stock sold in the Syndicated Community Offering by other NASD
member firms under selected dealer's agreements, the commission
shall not exceed a fee to be agreed upon jointly by Trident and
the Bank to reflect market requirements at the time of a stock
allocation in the Syndicated Community Offering. All such fees
are to be payable in same-day funds to Trident on the Closing
Date.
(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 Bank shall pay or reimburse Trident
for any of the foregoing expenses accrued after Trident shall
have notified the Company or the Bank of its election to
terminate this Agreement pursuant to Section 11 hereof or after
such time as the Company or the Bank shall have given notice in
accordance with Section 12 hereof that Trident is in breach of
this Agreement. Trident's reimbursable out of pocket expenses
will not exceed $10,000, excluding legal fees. Full payment to
defray Trident's reimbursable expenses shall be made in next-day
funds on the Closing Date or, if the Conversion is not completed
and is terminated for any reason, within ten (10) business days
of receipt by the Company of a written request from Trident for
reimbursement of its expenses. Trident acknowledges receipt of
$10,000 advance payment from the Bank which shall be 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 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 reimbursable out-
of-pocket expenses, excluding legal fees) 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).
Trident Securities, Inc.
May , 1999
Page 14
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their 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.
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 1,071,000
and a maximum of 1,449,000 Shares, with the possibility of offering up to
1,666,350 Shares (except as the Office may permit to be decreased or increased)
in the Subscription and Community Offerings, 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 Bank (including the
------------------
Subsidiary in each instance where the Bank is referenced, unless clearly
inapplicable) 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 time.
(c) During the time when the Prospectus is required to be delivered
under the Act, the Company will comply with all requirements imposed upon
it by the Act, as now in effect and hereafter amended, and by the SEC
Regulations and the OTS 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
Trident Securities, Inc.
May , 1999
Page 15
and sale of the Shares, any event relating to or affecting the Company or
the Bank shall occur as a result of which it is necessary, in the opinion
of counsel for Trident, with concurrence of counsel of the Company, to
amend or supplement the Prospectus in order to make the Prospectus not
false or misleading as to a material fact 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 promptly a reasonable number
of copies of an amendment or amendments or of a supplement or supplements
to the Prospectus (in form and substance satisfactory to counsel for
Trident) which shall amend or supplement the Prospectus so that, as amended
or supplemented, the Prospectus shall not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time
the Prospectus is delivered to a purchaser of the Shares, not misleading.
The Company will not file or use any amendment or supplement to the
Registration Statement or the Prospectus of which Trident has not first
been furnished a copy or to which Trident shall reasonably object after
having been furnished such copy. For the purposes of this subsection the
Company and the Bank shall furnish such information with respect to
themselves as Trident from time to time may reasonably request.
(d) The Company has taken or will take all 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
Bank sufficient to establish a liquidation account for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders in
accordance with the requirements of the 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
Conversion 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 SEC Regulations) covering a twelve-month
period beginning not later than the first day of the
Trident Securities, Inc.
May , 1999
Page 16
Company's fiscal quarter next following the effective date (as defined in
said Rule 158) of the Registration Statement.
(h) For a period of three (3) years from the date of this Agreement
(unless the Common Stock shall have been 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 in writing 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") 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, except for such liability contemplated
under Section 8(b) of this Agreement.
(l) The Company and the Bank 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 Bank will have completed
the conditions precedent to, and shall have conducted the Conversion in all
material respects in accordance with, the Plan, the OTS Regulations and all
other applicable laws, regulations, published decisions and orders,
including all terms, conditions, requirements and provisions precedent to
the Conversion imposed by the Office, or appropriate waivers shall have
been obtained.
6. Payment of Expenses. Whether or not the Conversion is consummated,
-------------------
the Company and the Bank shall pay or reimburse Trident for (a) all filing fees
paid or incurred by Trident in
Trident Securities, Inc.
May , 1999
Page 17
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 1,071,000 Shares of Common Stock or such lesser amount as the Office
may permit or the Conversion is otherwise terminated, the Company and the Bank
shall reimburse Trident 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 Bank shall pay or reimburse Trident for any of
the foregoing expenses accrued after Trident shall have notified the Company or
the Bank of its election to terminate this Agreement pursuant to Section 11
hereof or after such time as the Company or the Bank shall have given notice in
accordance with Section 12 hereof that Trident is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
-----------------------------------
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinion
of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and substance
satisfactory to Trident and to the effect that:
(i) The Company is a corporation in existence under the laws of
the State of Georgia, and the Bank is a mutual savings bank in
existence under the laws of the Untied States, each having the
corporate power to execute, deliver and perform its respective
obligations under this Agreement and to carry on its business as now
conducted and as described in the Prospectus.
(ii) The Subsidiary is a limited liability company in existence
under the laws of the State of Georgia and is the successor entity to
Pinehurst Corp., with the power to perform its obligations and carry
on its business as now conducted and as described in the Prospectus;
(iii) The Bank 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) The activities of the Bank as described in the Prospectus
are permitted under federal and Georgia law to subsidiaries of a
Georgia business corporation;
(v) To the best knowledge of such counsel, the Subsidiary is the
only subsidiary corporation of the Bank; and the activities of the
Subsidiary are permitted under federal law to subsidiaries of a
federally-chartered savings bank;
Trident Securities, Inc.
May , 1999
Page 18
(vi) The Plan complies with, and, to the best knowledge of such
counsel, the Conversion has been effected in all material respects in
accordance with, the HOLA and the OTS Regulations; to the best
knowledge of such counsel, 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 by the Company or the Bank, have been
complied with by the Company and the Bank in all material respects;
and, to the best 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;
(vii) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus;
(viii) The Company has authorized the issuance and sale of the
Shares by all necessary corporate action ; the Shares, upon receipt
of payment and issuance in accordance with the terms of the Plan, will
be validly issued, fully paid, nonassessable and, except as disclosed
in the Prospectus, free of preemptive rights; and purchasers of the
Shares from the Company, upon issuance thereof against payment
therefor, will acquire such Shares free and clear of all claims,
encumbrances, security interests and liens created by the Company;
(ix) The form of certificate used to evidence the Shares is in
proper form and complies in all material respects with the applicable
requirements of Georgia law the regulations of the Office;
(x) The Bank has authorized the sale of its capital stock to the
Company by all necessary corporate action, which sale has been
approved by the Office, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of the Plan and the
Prospectus, will be validly issued, fully paid and nonassessable and
owned of record and beneficially by the Company;
(xi) Subject to the satisfaction of the conditions to the
Office's approval of the Conversion Application and the issuance by
the Office of the Bank's Stock Charter, no consent, approval,
authorization or other action by, or filing or registration with, any
governmental agency is required to be obtained or made by the Company
or the Bank for the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the Conversion;
(xii) The Company and the Bank have authorized the execution,
delivery and performance of this Agreement by all necessary corporate
action;
Trident Securities, Inc.
May , 1999
Page 19
(xiii) The Plan has been duly adopted by the requisite vote of
the Board of Directors of the Bank and by the requisite vote of the
Board of Directors of the Company; and the Plan has been approved by
the requisite vote of the eligible voting member of the Bank at a duly
called meeting.
(xiv) The statements in the Prospectus under the captions
"Dividend Policy," "Regulation and Supervision," "Federal and State
Taxation," "Acquiring Xxxxxxx Federal or First Deposit,"
"Registration Requirements" and "Description of Capital Stock of First
Deposit," insofar as they are, or refer to, statements of law or legal
conclusions (excluding financial data included therein or omitted
therefrom, as to which an opinion need not be expressed), have been
prepared or reviewed by such counsel and are accurate in all material
respects;
(xv) The Conversion Application, the Registration Statement, the
Prospectus and the Proxy Statement, in each case as amended or
supplemented, comply as to form in all material respects with the
requirements of the Act, the SEC Regulations, the HOLA and the OTS
Regulations, as the case may be (except as to information with respect
to Trident included therein and financial statements, notes to
financial statements, financial tables and other financial and
statistical data, including the appraisal, included therein or omitted
therefrom, as to which no opinion need be expressed); to the best of
such counsel's 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 in all material respects.
(xvi) 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 Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission; 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 best of
such counsel's 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 Bank, or to such counsel, a present intention to
initiate such litigation or proceeding);
(xvii) The execution and delivery of this Agreement, and the
consummation of the Conversion by the Company and the Bank, do not
violate any provision of the Articles of Incorporation, Charter or
Bylaws of the Company or the Bank, do not violate or constitute a
breach of or default under any contract, agreement or
Trident Securities, Inc.
May , 1999
Page 20
instrument described in the Prospectus, and, to the best knowledge of
such counsel, do not violate any applicable law, regulation or any
judgment or order of any government, governmental instrumentality or
court that is binding on the Company or the Bank or any of its assets,
properties or operations;
(xviii) To the best knowledge of such counsel, the Company, the
Bank and the Subsidiary have obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
respective 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 Company, the Bank 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 Bank and the Subsidiary, taken as a whole;
(xix) To the best of such counsel's knowledge, there is no
action, suit proceedings, inquiry or investigation before or by any
court or governmental agency or body, now pending or threatened,
against either the Company, the Bank or the Subsidiary;
(xx) This agreement has been duly executed and delivered by the
Company and the Bank and is enforceable against the Bank and the
Company;
(xxi) To the best of such counsel's knowledge, the execution and
delivery of this Agreement and the consummation of the Conversion by
the Company and the Bank do not 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 Bank pursuant to any of the terms,
provisions or conditions of, any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company or the
Bank is a party or violate any governmental license or permit or any
enforceable published law, administrative regulation or order or court
order, writ, injunction or decree (except as may be required under the
Georgia "blue sky" laws as to which no opinion need be expressed),
which breach, default, encumbrance or violation would have a material
adverse effect on the Company and the Bank, taken as a whole; and
(xxii) To the best knowledge of such counsel, there has been no
material breach of any provision of the Company's, the Bank's or the
Subsidiary's respective articles 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)
Trident Securities, Inc.
May , 1999
Page 21
under any agreement, contract, indenture, debenture, bond, note,
instrument or obligation to which the Company, the Bank 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 Company, the Bank and the Subsidiary,
taken as a whole.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of officers and directors of the Company, the Bank and the
Subsidiary and certificates of public officials delivered pursuant to this
Agreement. 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 Bank.
Such opinion may 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, such opinion may be rendered subject to the qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord. Further, references in such opinion
to such counsel's "knowledge" may be limited to "actual knowledge" as defined in
the Accord (or knowledge based on certificates). In addition, the "General
Qualifications" set forth in the Accord and other customary assumptions and
limitations may apply to such opinion. Such opinion may be limited to present
statutes, regulations and judicial interpretations and to facts as they
presently exist; in rendering such opinion, such counsel need assume no
obligation to revise or supplement them should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise; and such
counsels need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company and the Bank of this Agreement or the issuance of the Shares.
(b) At the Closing Date, Trident shall receive the letter of Xxxxxx
Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, special counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and substance
satisfactory to Trident and to the effect that: based on such counsel's
participation in conferences with representatives of the Company, the Bank,
the independent appraiser, the independent certified public accountants,
Trident and its counsel, review of documents and understanding of
applicable law (including the requirements of Form SB-2 and the character
of the Registration Statement contemplated thereby) and the experience such
counsel has gained in its practice under the Act, nothing has come to such
counsel's attention that would lead it to believe that the Registration
Statement, as amended (except as to information in respect 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 or omitted therefrom, 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
Trident Securities, Inc.
May , 1999
Page 22
amended or supplemented (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 or omitted therefrom as to which such
counsel need express no comment), at the time the Prospectus was filed with
the Commission under Rule 424(b), 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 contained in this Agreement,
including but not limited to, resolutions of the Board of Directors of the
Company and the Bank regarding the authorization, execution and delivery of
this Agreement and the transactions contemplated by the Plan and this
Agreement.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material change in the condition
(financial or otherwise), business or results of operations of the Company
and the Bank, taken as a whole, since the latest date as of which
information is set forth in the Prospectus, except as referred to therein;
(ii) there shall have been no transaction entered into by the Company or
the Bank after the latest date as of which the financial condition of the
Company or the Bank is set forth in the Prospectus other than transactions
referred to or contemplated therein, transactions in the ordinary course of
business, and transactions which are not material to the Company and the
Bank, taken as a whole; (iii) neither the Company nor the Bank shall have
received from the Office or the 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 and the Bank, taken as a
whole, with which they have not complied; (iv) no action, suit or
proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or
threatened against the Company or the Bank or affecting any of their
respective assets, wherein an unfavorable decision, ruling or finding would
have a material adverse effect on the Company and the Bank, taken as a
whole; and (v) the Shares shall have been qualified or registered for
offering and sale by the Company under the "blue sky" laws of such
jurisdictions as Trident and the Company shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company and the Bank, dated the Closing Date, to the effect that: (i)
they have examined the Prospectus and, at the
Trident Securities, Inc.
May , 1999
Page 23
time the Registration Statement was declared effective by the Commission
and at the time the Prospectus was authorized by 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 or the Bank; (ii) since the date the
Registration Statement was declared effective by the Commission and since
the date the Prospectus became authorized by 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, condition
(financial or otherwise) or results of operations of the Company or the
Bank, and the conditions set forth in clauses (ii) through (v) inclusive of
subsection (d) of this Section 7 have been satisfied; (iii) no order has
been issued by the Commission or the Office to suspend the Offering or the
effectiveness of the Prospectus, and no action for such purposes has been
instituted or, to the best knowledge of such officers, 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 and
division 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 Office authorizing the use of the
Prospectus and the Proxy Statement and the approval of the Conversion
Application (ii) a copy of the order of the Commission declaring the
Registration Statement effective; (iii) a copy of the letter from the
Office evidencing the corporate existence of the Bank; (iv) a copy of the
letter from the appropriate Georgia authority evidencing the incorporation
(and, if generally available from such authority, good standing) of the
Company; (v) a copy of the Company's articles of incorporation certified by
the appropriate Georgia governmental authority; (vi) a copy of the letter
from the Office approving the Bank's Stock Charter; (vii) copy of the
certificate from the FDIC certifying to the insured status by the Bank; and
(viii) copy of the letter to FHLB of Atlanta evidencing the Bank's
membership therein.
(g) As soon as available after the Closing Date, Trident shall receive
a certified copy of the Bank's Stock Charter as executed by the Office.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Xxxxxxx & Xxxxxxx, LLC, independent
certified public accountants, addressed to Trident, the Company and the
Bank, in substance and form satisfactory to Trident, with respect to the
consolidated financial statements of the Bank and other financial
information contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to Trident from Xxxxxxx & Xxxxxxx, LLC, independent
certified public
Trident Securities, Inc.
May , 1999
Page 24
accountants, dated the Closing Date and addressed to Trident, the Company
and the Bank, confirming the statements made by them in the letter
delivered by them pursuant to the preceding subsection as of a specified
date not more than five (5) business days prior to the Closing Date.
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. Any certificates
signed by an officer or director of the Company or the Bank prepared for
Trident's reliance and delivered to Trident or to counsel for Trident shall be
deemed a representation and warranty by the Company and the Bank to Trident as
to the statements made therein. If any condition to Trident's obligations
hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled,
Trident may terminate this Agreement or, if Trident so elects, may waive any
such conditions which have not been fulfilled, or may extend the time of their
fulfillment. If Trident terminates this Agreement as aforesaid, the Company and
the Bank shall reimburse Trident for its expenses as provided in Section 3(b)
hereof.
8. Indemnification.
---------------
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Trident, its officers, directors, employees and agents
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 (i) any misrepresentation by
the Company or the Bank in this Agreement or any breach of warranty by the
Company or the Bank 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 (A) the
Registration Statement or the Prospectus or (B) 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 or the Bank or based upon information furnished
by or on behalf of the Company or the Bank, 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 or the Bank with respect to Trident by
or on behalf of Trident expressly for use in the Prospectus or any
amendment or supplement thereof or in any Application, as the case may be,
or (ii) 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
Trident Securities, Inc.
May , 1999
Page 25
or gross negligence of Trident or any other 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 Bank may
otherwise have to Trident.
(b) The Company shall indemnify and hold harmless Trident, its
officers, directors, employees and agents 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 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 Bank delivered to Trident by
the Bank or its agents for use during 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 principally and directly from the bad faith,
willful misconduct or gross negligence of Trident or any other party who
may otherwise be entitled to indemnification pursuant to this Section 8(b).
This indemnity shall be in addition to any liability the Company and the
Bank may otherwise have to Trident.
(c) Trident agrees to indemnify and hold harmless the Company and the
Bank, their officers, directors and employees and each person, if any, who
controls the Company and the Bank within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Bank to Trident, but only with
respect to (i) statements or omissions, if any, made in the Prospectus or
any amendment or supplement thereof, in any Application or to a purchaser
of the Shares in reliance upon, and in conformity with, written information
furnished to the Company or the Bank with respect to Trident by Trident
expressly for use in the Prospectus or in any Application; (ii) any
misrepresentation by Trident in Section 2(b) of this Agreement; or (iii)
any liability of the Company or the Bank which is found in a final judgment
by a court of competent jurisdiction (not subject to further appeal) to
have resulted principally and directly from gross negligence, bad faith or
willful misconduct of Trident.
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify 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
Trident Securities, Inc.
May , 1999
Page 26
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than the reasonable cost of investigation except
as otherwise provided herein. In the event the indemnifying party elects to
assume the defense of any such action and retain counsel acceptable to the
indemnified party, the indemnified party may retain additional counsel, but
shall bear the fees and expenses of such counsel unless (i) the
indemnifying party shall have specifically authorized the indemnified party
to retain such counsel or (ii) the parties to such suit include such
indemnifying party and the indemnified party, and such indemnified party
shall have been advised by counsel that one or more material legal defenses
may be available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying party's
consent. To the extent required by law, this Section 8 is subject to and
limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the Company and/or
the Bank other than in accordance with its terms, the Company or the Bank and
Trident shall contribute to the aggregate losses, liabilities, claims, damages,
and expenses of the nature contemplated by said indemnity agreement incurred by
the Company or the Bank and Trident (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Bank, on the one
hand, and Trident, on the other hand, from the offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the Company or
the Bank, on the one hand, and Trident, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Bank, on
the one hand, and Trident, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the Conversion received by the Company
and the Bank bear to the total fees and expenses received by Trident under this
Agreement. The relative fault of the Company or the Bank, on the one hand, and
Trident, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Bank or by Trident and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
Trident Securities, Inc.
May , 1999
Page 27
The Company and the Bank and Trident agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. To the extent required by law, this Section 9 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 Bank and Trident and the
representations and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. Trident may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in Trident's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become involved in a war
or major hostilities; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the Bank or
the Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have
been a material change in the capitalization, financial condition or
business of the Company, or if the Bank shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall
have been insured; or if there shall have been a material change in the
condition, financial or otherwise, or prospects of the Company or the Bank.
Trident Securities, Inc.
May , 1999
Page 28
(b) If Trident elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by Trident by
telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, and to fulfill their obligations, if
any, pursuant to Sections 3, 6, 8(a) and 9 of this Agreement and upon
demand, the Company and the Bank shall pay Trident the full amount so owing
thereunder.
(d) The Bank may terminate the Conversion in accordance with the terms
of the Plan. Such termination shall be without liability to any party,
except that the Company and the Bank shall be required to fulfill their
obligations pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of this
Agreement.
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or 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 Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, Esquire) and if
sent to the Company or the Bank, shall be mailed, delivered or telegraphed and
confirmed to Xxxxxxx Federal Bank, A Federal Savings Bank, 0000 Xxxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000-0000, Attention: J. Xxxxx Xxxxxxx, President
of the Company and the Bank (with a copy to Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The undersigned consent to the assignment of rights and obligations of Trident
Securities, Inc. hereunder to McDonald Investments Inc.
14. Construction. This Agreement shall be governed by and construed in
------------
accordance with the substantive laws of North Carolina regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
15. Counterparts and Definitions. 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. Any initially capitalized terms not defined herein shall have the
meanings ascribed thereto in the Prospectus.
Trident Securities, Inc.
May , 1999
Page 29
* * *
[Signature page follows]
Trident Securities, Inc.
May , 1999
Page 30
Please acknowledge your agreement to the foregoing as of the date above
written by signing below and returning to the Company one copy of this letter.
FIRST DEPOSIT BANCSHARES, INC. XXXXXXX FEDERAL BANK,
A FEDERAL SAVINGS BANK
By: By:
-------------------------- ----------------------------
J. Xxxxx Xxxxxxx J. Xxxxx Xxxxxxx
President President
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
--------------------------
R. Xxx Xxxxxxx, Xx.
Managing Director
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
--
listed below:
Alabama Montana
Xxxxxx Xxxxxxxx
Arizona Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of Columbia North Dakota (Trident Securities, Inc.
only, no agents)
Florida Ohio
Georgia Oklahoma
Idaho Oregon
Illinois Pennsylvania
Indiana Rhode Island
Iowa South Carolina
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
---
listed below:
Hawaii
South Dakota
