EXHIBIT 1.2
Southern Community Bancshares, Inc.
_______ to ________ Shares
Common Stock
(Par Value $0.01 Per Share)
$________ Per Share
SALES AGENCY AGREEMENT
----------------------
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Southern Community Bancshares, Inc., a Delaware corporation (the
"Company"), and First Federal Savings & Loan Association of Cullman, a federally
chartered and insured mutual savings and loan association (the "Association"),
hereby confirm, as of _________, 1996, 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 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 on June 10, 1996, as
amended (the "Plan"). In accordance with the Plan, the Company is offering
shares of its common stock, par value $0.01 per share (the "Shares" and the
"Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to (a) eligible depositors
of the Association as of Xxxxx 00, 0000, (x) the Company's Employee Stock
Ownership Plan (the "ESOP"), (c) eligible depositors of the Association as of
September 30, 1996 and (d) members of the Association eligible to vote at the
special meeting of the Association held on __________, 1996. Shares of the
Common Stock not sold in the Subscription Offering may be offered to the general
public in a community offering, with preference being given to natural persons
and trusts of natural persons who are permanent "residents" of Cullman County,
Alabama (the "Local Community") (the "Community Offering", and together with the
Subscription Offering the "Offerings"), subject to the right of the Company and
the Association, in their absolute discretion, to reject orders in the Community
Offering in whole or in part. It is anticipated that shares of the Common Stock
not otherwise subscribed for in the Subscription and Community Offerings may be
offered at the discretion of the Company to certain members of the general
public as part of a community offering on a best efforts basis by a selling
group of selected broker-dealers to be managed by Trident Securities, Inc. (the
"Syndicated Community Offering"). In the Offerings, the
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Company is offering between _______ and _______ Shares, with the possibility of
offering up to _______ Shares without a resolicitation of subscribers, as
contemplated by Title 12 of the Code of Federal Regulations, Part 563b. No
Eligible Account Holder, Supplemental Eligible Account Holder or Other Member
and no person, individually or together with associates of and persons acting in
concert with such person, may purchase more than an amount of Common Stock in
the Conversion as stated in Sections 5 and 9 of the Plan.
The Company and the Association have been advised by Trident that it
will utilize its best efforts in assisting the Company and the Association with
the sale of the Shares in the Offerings and, if deemed necessary by the Company,
in a syndicated community offering. Prior to the execution of this Agreement,
the Company has delivered to Trident the Prospectus dated _______________ (as
hereinafter defined) and all supplements thereto to be used in the Offerings.
Such Prospectus contains information with respect to the Company, the
Association and the Shares.
2. Representations and Warranties.
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(a) The Company and the Association jointly and severally
represent and warrant to Trident that:
(i) The Company has filed with the Commission a
registration statement, including exhibits and an amendment or amendments
thereto, on Form SB-2 (Registration No. 333-12373), including a Prospectus
relating to the Offerings, for the registration of the Shares under the
Securities Act of 1933, as amended (the "Act"); and such registration statement
has become effective under the Act and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or, to the
Company's best knowledge, threatened by the Commission. The Company is eligible
to use Form SB-2 for the offering of the Shares. Except as the context may
otherwise require, such registration statement, as amended or supplemented, on
file with the Commission at the time the registration statement became
effective, including the Prospectus, financial statements, schedules, exhibits
and all other documents filed as part thereof, as amended and supplemented, is
herein called the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration Statement
became effective is herein called the "Prospectus," except that if the
prospectus filed by the Company with the Commission pursuant to Rule 424(b) of
the general rules and regulations of the Commission under the Act (together with
the enforceable published policies and actions of the Commission thereunder, the
"SEC Regulations") differs from the form of prospectus on file at the time the
Registration Statement became effective, the term "Prospectus" shall refer to
the Rule 424(b) prospectus from and after the time it is filed with or mailed
for filing to the Commission and shall include any amendments or supplements
thereto from and after their dates of effectiveness or use, respectively. If any
Shares remain unsubscribed following completion of the Subscription Offering and
the Community Offering, the Company (i) will, if required by the SEC
Regulations, promptly file with the Commission a post-effective amendment to
such Registration Statement relating to the results of the Subscription and the
Community Offerings, any additional information with respect to the proposed
plan of distribution and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Subscription and Community Offerings and pricing
information pursuant to Rule 424(c) of the Regulations, in either case in a form
reasonably acceptable to the Company and Trident.
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(ii) The Association has filed an Application for Approval
of Conversion on Form AC, including exhibits (as amended or supplemented, the
"Form AC" 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 enforceable rules and
regulations, including published policies and actions, of the Office thereunder
(the "OTS Regulations"), which has been approved by the Office; and the
Prospectus and the proxy statement for the solicitation of proxies from members
for the special meeting to approve the Plan (the "Proxy Statement") included as
part of the 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 promulgated
under the savings and loan holding company provisions of the HOLA and the
regulations promulgated thereunder and has received approval of its acquisition
of the Association from the 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 with the Act and the SEC Regulations, (ii) the
Registration Statement (as amended or supplemented, if amended or supplemented)
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) the Prospectus (as amended or supplemented, if
amended or supplemented) did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Representations or warranties in this subsection shall not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Association relating to
Trident by or on behalf of Trident expressly for use in the Registration
Statement or Prospectus.
(iv) The Company has been duly incorporated as a Delaware
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 Registration Statement and Prospectus; the
Association is a member in good standing of the Federal Home Loan Bank of
Atlanta; and the deposit accounts of the Association are insured by the Savings
Association Insurance Fund ("SAIF") administered by the Federal Deposit
Insurance Corporation ("FDIC") up to the applicable legal limits. The Company is
qualified to do business as a foreign corporation in the State of Alabama.
Except as noted above, neither the Company nor the Association 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
Association, taken as a whole. The Association does not own equity securities of
or an equity interest in any business enterprise. Upon amendment of the
Association's charter and
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bylaws as provided in the rules and regulations of the Office 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) The Association has good, marketable and insurable
title to all assets material to its business and to those assets described in
the Prospectus as owned by it, free and clear of all material liens, charges,
encumbrances or restrictions, except for liens for taxes not yet due, except as
described in the Prospectus and except as could not in the aggregate have a
material adverse effect upon the operations or financial condition of the
Association, taken as a whole; and all of the leases and subleases material to
the operations or financial condition of the Association, under which it holds
properties, including those described in the Prospectus, are in full force and
effect as described therein.
(vi) The 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
subsidiaries are insured by the FDIC or by general equity principles, regardless
of whether such enforceability is considered in a proceeding in equity or at
law, and except to the extent that the provisions of Sections 8 and 9 hereof may
be unenforceable as against public policy or pursuant to Section 23A of the
Federal Reserve Act, 12 U.S.C. Section 371c ("Section 23A")).
(vii) There is no litigation or governmental proceeding
pending or, to the best knowledge of the Company or the Association, threatened
against or involving the Company, the Association, or any of their respective
assets which individually or in the aggregate would reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
results of operations and business, including the assets and properties, of the
Company and the Association, taken as a whole.
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(viii) The Company and the Association have received the
opinion of Xxxx, Xxxxxxxxxxx & Xxxxxx, P.C., to the effect that the Conversion
will constitute a tax-free reorganization under the Internal Revenue Code of
1986, as amended, and the opinion of Miller, Hamilton, Xxxxxx & Xxxx, L.L.C. to
the effect that the Conversion will not be a taxable transaction for the
Association or the Company under the income tax laws of Alabama, and the facts
relied upon in such opinions are accurate and complete.
(ix) 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, to the actual
knowledge of the Association, 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, to the knowledge of the Company, have
such approvals and orders to issue and sell the Shares of its Common Stock to be
sold to the Company as provided in the Plan, subject to the issuance of an
amended charter in the form required for federally chartered stock savings and
loan association (the "Stock Charter"), the form of which Stock Charter has been
approved by the Office.
(x) Neither the Company nor the Association 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, or their officers or directors that could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), operations, businesses, assets or properties of the Company and the
Association, taken as a whole.
(xi) The consolidated financial statements and any
related notes or schedules which are included in the Registration Statement and
the Prospectus fairly present the consolidated financial condition, income,
retained earnings and cash flows of the Association at the respective dates
thereof and for the respective periods covered thereby and comply as to form
with the applicable accounting requirements of the 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 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 purported to be shown thereby at the respective dates thereof and
for the respective periods therein.
(xii) There has been no material change in the condition
(financial or otherwise), results of operations or business, including assets
and properties, of the Company and
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the Association, taken as a whole, since the latest date as of which such
condition is set forth in the Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the Company and the
Association conform in all material respects to the descriptions thereof
contained in the Prospectus. Neither the Company nor the Association has any
material liabilities of any kind, contingent or otherwise, except as set forth
in the Prospectus.
(xiii) There has been no breach or default (or the
occurrence of any event which, with notice or lapse of time or both, would
constitute a default) under, or creation or imposition of any lien, charge or
other encumbrance upon any of the properties or assets of the Company or the
Association pursuant to any of the terms, provisions or conditions of, any
agreement, contract, indenture, bond, debenture, note, instrument or obligation
to which the Company or the Association is a party or by which any of them or
any of their respective assets or properties may be bound or is subject, or
violation of any governmental license or permit or any enforceable published
law, administrative regulation or order or court order, writ, injunction or
decree, which breach, default, encumbrance or violation would have a material
adverse effect on the condition (financial or otherwise), operations, business,
assets or properties of the Company and the Association taken as a whole; all
agreements which are material to the condition (financial or otherwise), results
of operations or business of the Company and the Association taken as a whole
are in full force and effect, and no party to any such agreement has instituted
or, to the best knowledge of the Company and the Association, threatened any
action or proceeding wherein the Company or the Association would be alleged to
be in default thereunder.
(xiv) Neither the Company nor the Association is in
violation of its respective charter or bylaws. The execution and delivery hereof
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 charter or
bylaws of the Company or the Association (in either mutual or stock form) or
constitute a material breach of or default (or an event which, with notice or
lapse of time or both, would constitute a default) under, give rise to any right
of termination, cancellation or acceleration contained in, or result in the
creation or imposition of any lien, charge or other encumbrance upon any of the
properties or assets of the Company or the Association pursuant to any of the
terms, provisions or conditions of, any material agreement, contract, indenture,
bond, debenture, note, instrument or obligation to which the Company or the
Association is a party 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 condition (financial or otherwise), operations or
business of the Company and the Association taken as a whole.
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(xv) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus and prior to
the Closing Date (as hereinafter defined), except as otherwise may be indicated
or contemplated therein, neither the Company nor the Association has issued any
securities which will remain issued at the Closing Date or incurred any
liability or obligation, direct or contingent, or borrowed money, except
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 Association, taken as a whole.
(xvi) Upon consummation of the Conversion, the
authorized, issued and outstanding equity capital of the Company shall be within
the range as set forth in the Prospectus under the caption "Capitalization," and
no Common Stock of the Company shall be outstanding immediately prior to the
Closing Date; the issuance and the sale of the Shares of the Company have been
duly authorized by all necessary action of the Company and approved by the
Office and, when issued in accordance with the terms of the Plan and paid for,
shall be validly issued, fully paid and nonassessable and shall conform to the
description thereof contained in the Prospectus; the issuance of the Shares is
not subject to preemptive rights, except as set forth in the Prospectus; and
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 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 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 accordance with the terms of the Plan, will be
fully paid and nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus.
(xvii) No approval of any regulatory or supervisory or
other public authority is required in connection with the execution and delivery
of this Agreement or the issuance of the Shares, except for 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.
(xviii) 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.
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(xix) Xxxxxx Xxxxxxxx LLP, which has audited the
financial statements of the Association at September 30, 1995 and 1994 and for
each of the two years ended September 30, 1995 and 1994 included in the
Prospectus, is an independent public accountant within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public Accountants
and Title 12 of the Code of Federal Regulations, Section 571.2(c)(3).
(xx) The Company and the Association 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 and the Association have paid all taxes that have become due and, to
the best of their knowledge, have made adequate reserves for similar future tax
liabilities, except where any failure to make such filings, payments and
reserves, or the assertion of such a deficiency, would not have a material
adverse effect on the condition of the Company and the Association taken as a
whole.
(xxi) All of the loans represented as assets of the
Association on the most recent financial statements 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 asserted, would not have a material adverse effect on the
Company and the Association taken as a whole.
(xxii) 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.
(xxiii) None of the Company, the Association, or the
employees of the Company or the Association has made any payment of funds to the
Company or the Association prohibited by law, and no funds of the Company or the
Association have been set aside to be used for any payment prohibited by law.
(xxiv) To the best knowledge of the Company and the
Association, the Company and the Association are in compliance with all laws,
rules and regulations relating to environmental protection and neither the
Company nor the Association believes that the Company or the Association is
subject to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar law, except
for violations which, if asserted, would not have a material adverse effect on
the Company and the Association, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending or, to the best knowledge
of the Company or the Association, threatened against the Company and the
Association relating to environmental protection. To the best knowledge of the
Company and the Association, no disposal, release or discharge of hazardous or
toxic substances,
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pollutants or contaminants, including petroleum and gas products, as any of such
terms may be defined under federal, state or local law, has been caused by the
Company or the Association or, to the best knowledge of the Company or the
Association, has occurred on, in or at any of the facilities or properties of
the Company or the Association, except such disposal, release or discharge which
would not have a material adverse effect on the Company and the Association,
taken as a whole.
(xxv) 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.
(b) Trident represents and warrants to the Company and the
Association that:
(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and the NASD.
(ii) Trident is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to provide the services to be furnished to the
Company and the Association hereunder.
(iii) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of Trident, and this
Agreement is a legal, valid and binding obligation of Trident, enforceable in
accordance with its terms (except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or similar laws relating
to or affecting the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts of whose may be protected by the
Securities Investor Protection Corporation or by general equity principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law, and except to the extent that the provisions of Sections 8 and
9 hereof may be unenforceable as against public policy or pursuant to Section
23A).
(iv) Each of Trident and, to Trident's knowledge, its
employees, agents and representatives who shall perform any of the services
required hereunder to be performed by Trident shall be duly authorized and shall
have all licenses, approvals and permits necessary to perform such services, and
Trident is a registered selling agent in the jurisdictions listed in Exhibit A
hereto and will remain registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until the Conversion is
consummated or terminated.
(v) The execution and delivery of this Agreement by
Trident, the fulfillment of the terms set forth herein and the consummation of
the transactions contemplated hereby shall not violate or conflict with the
corporate charter or bylaws of Trident or violate,
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conflict with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, any
material agreement, indenture or other instrument by which Trident is bound or
under any governmental license or permit or any law, administrative regulation,
authorization, approval or order or court decree, injunction or order.
(vi) Any funds received by Trident to purchase Common
Stock will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's
knowledge, threatened against Trident any action or proceeding before the
Commission, the NASD, any state securities commission or any state or federal
court concerning Trident's activities as a broker-dealer.
(viii) Trident shall comply with all applicable state and
federal securities laws and regulations of the Office in performing its duties
pursuant to this Agreement.
(ix) Trident shall perform the services to be provided
pursuant to this Agreement in a prompt and commercially reasonable manner.
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 Subscription Offering and Community
Offering. The employment of Trident hereunder shall terminate (a) forty-five
(45) days after the Subscription and Community Offering closes, unless the
Company and the Association, 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.
In the event the Company is unable to sell a minimum of __________
Shares (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 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 special interest-bearing accounts with the
Association 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
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Closing Date against payment to the Company by any means authorized pursuant to
the Prospectus, at the principal office of the Company at 000 0xx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx 00000 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 executed order forms of
subscribers to forward, for deposit in a segregated account, the offering price
of the Common Stock ordered on or before twelve noon on the next business day
following receipt or execution of an order form by Trident to the Association or
(b) to solicit indications of interest in which event (i) Trident will
subsequently contact any potential subscriber indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgements of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the fifth business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms together with such funds to the 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) (i) a commission equal to 2% of the aggregate dollar amount
of Common Stock sold in the Offerings, excluding any shares of Common Stock sold
to the Association's directors, executive officers, and the ESOP, as well as
"associates" (as defined in the Plan) of the Association's directors and
executive officers and (ii) a commission, not to exceed 5.5%, to be agreed upon
by Trident and the Company for Shares sold by other member firms of the NASD
through a selected dealers arrangement (the "Selected Dealer Offering"). All
such fees are to be payable in next-day funds to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses,
including but not limited to travel, communications, legal fees and postage,
incurred by it whether or not the Offerings are successfully completed;
provided, however, that reimbursable legal fees will not exceed $30,000
(excluding reasonable out of pocket expenses), that other reimbursable expenses
will not exceed $10,000 and 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. 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
Trident Securities, Inc.
Sales Agency Agreement
Page 12
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 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 not exceed an amount equal to the product obtained by
dividing $_______ (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.
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
________ and a maximum of _______ Shares, with the possibility of offering up to
_______ Shares (except as the Office may permit to be decreased or increased) in
the Subscription and Community Offerings. The Shares are to be offered to the
public at the price set forth on the cover page of the Prospectus and the first
page of this Agreement.
5. Further Agreements. The Company and the 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 Registration Statement and the Prospectus as
Trident reasonably may request. The Company authorizes Trident to use the
Prospectus in any lawful manner in connection with the offer and sale of the
Shares.
(b) The Company will notify Trident immediately upon discovery,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective or any supplement to the Prospectus has
been filed, (ii) of the issuance by the Commission
Trident Securities, Inc.
Sales Agency Agreement
Page 13
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
(other than those of a non-substantive nature) 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 a prospectus is required to be
delivered under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter amended,
and by the SEC Regulations, as from time to time in force, so far as necessary
to permit the continuance of offers and sales of or dealings in the Shares in
accordance with the provisions hereof and the Prospectus. If during the period
when the Prospectus is required to be delivered in connection with the offer and
sale of the Shares any event relating to or affecting the Company and the
Association, taken as a whole, shall occur as a result of which it is necessary,
in the opinion of counsel for Trident, with the concurrence of counsel to the
Company, to amend or supplement the Prospectus in order to make the Prospectus
not false or misleading in light of the circumstances existing at the time it is
delivered to a purchaser of the Shares, the Company forthwith shall prepare and
furnish to Trident a reasonable number of copies of an amendment or amendments
or of a supplement or supplements to the Prospectus (in form and substance
satisfactory to counsel for Trident) which shall amend or supplement the
Prospectus so that, as amended or supplemented, the Prospectus shall not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time the Prospectus is delivered to a purchaser of the Shares,
not misleading. The Company will not file or use any amendment or supplement to
the Registration Statement or the Prospectus of which Trident has not first been
furnished a copy or to which Trident shall reasonably object after having been
furnished such copy. For the purposes of this subsection the Company and the
Association shall furnish such information with respect to themselves as Trident
from time to time may reasonably request.
(d) The Company and the Association have taken or will take all
reasonably necessary action as may be required to qualify or register the Shares
for offer and sale by the Company under the securities or blue sky laws of such
jurisdictions as Trident and the Company 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 for the benefit
of eligible account holders and supplemental eligible account holders in
accordance with the requirements of the Office.
Trident Securities, Inc.
Sales Agency Agreement
Page 14
(f) The Company will file a registration statement for the
Common Stock under Section 12(g) of the Exchange Act, prior to completion of the
stock offering pursuant to the Plan and shall request that such registration
statement be effective upon completion of the Conversion. The Company shall
maintain the effectiveness of such registration for a minimum period of three
years or for such shorter period as may be required by applicable law.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the regulations promulgated under the Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date (as defined in said Rule 158)
of the Registration Statement.
(h) For a period of three (3) years from the date of this
Agreement (unless the Common Stock shall have been 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."
Trident Securities, Inc.
Sales Agency Agreement
Page 15
(m) The Company will file with the Commission the required
Reports on Form SR and will file with the appropriate state securities
commissions any sales and other reports required by the rules and regulations of
such agencies and will supply copies to Trident.
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)
if the Company is unable to sell a minimum of ________ Shares or such lesser
amount as the Office may permit or the Conversion is otherwise terminated, the
Company and the Association 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
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
opinion of Xxxx, Xxxxxxxxxxx & Xxxxxx, P.C., special counsel for the Company and
the Association, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and the Association is validly existing as a
savings and loan association in mutual form in good standing under the laws of
the United States, each with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) the Association is a member of the Federal Home
Loan Association of Atlanta, and the deposit accounts of the Association are
insured by the SAIF up to the applicable legal limits;
(iii) to the actual knowledge of such counsel, the
activities of the Association as such activities are described in the prospectus
are permitted under federal and Delaware law to subsidiaries of a Delaware
business corporation and the Association does not have any subsidiaries;
Trident Securities, Inc.
Sales Agency Agreement
Page 16
(iv) the Plan complies with, and to such counsel's
knowledge, 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; and, to the actual 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;
(v) the Company has authorized Common Stock as set
forth in the Registration Statement and the Prospectus, and the description of
such Common Stock in the Registration Statement and the Prospectus is accurate
in all material respects;
(vi) the issuance and sale of the Shares have been duly
and validly authorized by all necessary corporate action on the part of the
Company; the Shares, upon receipt of payment and issuance in accordance with the
terms of the Plan and this Agreement, will be validly issued, fully paid,
nonassessable and, 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;
(vii) the form of certificate used to evidence the Shares
is in proper form and complies in all material respects with applicable Delaware
law;
(viii) 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 and, to the actual knowledge of such counsel,
beneficially by the Company;
(ix) 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 and the
consummation of the Conversion, except with respect to the issuance to the
Association of the Stock Charter by the Office and as may be required under the
"blue sky" laws of various jurisdictions and except as may be required under the
rules and regulations of the NASD;
(x) the execution and delivery of this Agreement and
the consummation of the Conversion have been duly and validly authorized by all
necessary corporate action on the part of each of the Company and the
Association;
Trident Securities, Inc.
Sales Agency Agreement
Page 17
(xi) 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 subsidiaries are insured by the FDIC or by
general equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except to the extent that
the provisions of Sections 8 and 9 hereof may be unenforceable as against public
policy or pursuant to Section 23A, as to which no opinion need be rendered);
(xii) the statements in the Prospectus and incorporated
by reference in the Proxy Statement under the captions "Regulation," "Taxation,"
"Dividend Policy," "Certain Anti-takeover Provisions in the Certificate of
Incorporation and Bylaws" and "Description of Capital Stock," insofar as they
are, or refer to, statements of law or legal conclusions (excluding financial
data included therein, as to which an opinion need not be expressed), have been
prepared or reviewed by such counsel and are correct in all material respects;
(xiii) 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; and to the actual knowledge of such
counsel, 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 actual knowledge of
such counsel, are contemplated or threatened;
(xiv) the execution and delivery of this Agreement and
the consummation of the Conversion by the Company and the Association do not
conflict with or result in a breach of the certificate of incorporation, charter
or bylaws of the Company or the Association (in either mutual or stock form);
and
(xv) the Conversion Application, the Registration
Statement, the Prospectus and the Proxy Statement, in each case as amended,
comply as to form in all material respects with the requirements of the Act, the
HOLA, the SEC Regulations and the OTS Regulations, as the case may be (except as
to information with respect to Trident included therein and financial
statements, notes to financial statements, financial tables and other financial
and statistical data, including the appraisal, included therein, as to which an
opinion need not be expressed); to such counsel's actual knowledge, all
documents and exhibits required to be filed with the Conversion Application and
the Registration Statement have been so filed and the descriptions in the
Conversion Application and the Registration Statement of such documents and
exhibits are accurate in all material respects.
Trident Securities, Inc.
Sales Agency Agreement
Page 18
In rendering such opinions, such counsel may rely as to matters of fact
on certificates of officers and directors of the Company and the Association and
certificates of public officials delivered pursuant hereto. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company and the Association. Such opinion 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, such
opinion is subject to the qualifications, exceptions, definitions, limitations
on coverage and other limitations, all as more particularly described in the
Accord, and it should be read in conjunction therewith. In addition, the General
Qualifications set forth in the Accord apply to the opinions set forth in such
opinion. Such opinion may also be subject to such qualifications, exceptions and
assumptions as are necessary, customary or acceptable to Trident and its
counsel. 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 it
should the present laws be changed by legislative or regulatory action, judicial
decision or otherwise; and such counsel need express no view, opinion or belief
with respect to whether any proposed or pending legislation, if enacted, or any
regulations or any policy statements issued by any regulatory agency, whether or
not promulgated pursuant to any such legislation, would affect the validity of
the execution and delivery by the Company and the Association of this Agreement
or the issuance of the Shares.
(b) At the Closing Date, Trident shall receive the favorable
opinion of St. Xxxx & St. Xxxx, counsel to the Association, dated the Closing
Date, addressed to Trident, in form and substance reasonably satisfactory to
counsel for Trident and to the effect that:
(i) to the knowledge of such counsel, the Association
has obtained all licenses, permits and other governmental authorizations
currently required for the conduct of its business as such business is described
in the Prospectus, all such licenses, permits and other governmental
authorizations are in full force and effect and the Association is 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 and the Association,
taken as a whole;
(ii) there are no material legal or governmental
proceedings pending or, to the knowledge of such counsel, threatened against or
involving the assets of the Company or the Association (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);
(iii) to the knowledge of such counsel, the execution and
delivery of this Agreement and the consummation of the Conversion by the Company
and the Association do not constitute a material breach of or default (or an
event which, with notice or lapse of time or both,
Trident Securities, Inc.
Sales Agency Agreement
Page 19
would constitute a default) under, give rise to any right of termination,
cancellation or acceleration contained in, or result in the creation or
imposition of any lien, charge or other encumbrance upon any of the properties
or assets of the Company or the Association pursuant to any of the terms,
provisions or conditions of, any material agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company or the
Association is a party 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 condition (financial or otherwise), operations,
business, assets or properties of the Company and the Association taken as a
whole; and
(iv) to the knowledge of such counsel, there has been no
material breach of any provision of the Company's or the Association'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, bond, debenture,
note, instrument or obligation to which the Company or the Association is a
party or by which any of them or any of their respective assets or properties
may be bound, or any governmental license or permit, or a violation of any
enforceable published law, administrative regulation or order, or court order,
writ, injunction or decree which breach, default, encumbrance or violation would
have a material adverse effect on the condition (financial or otherwise),
operations, business, assets or properties of the Company and the Association
taken as a whole;
Trident Securities, Inc.
Sales Agency Agreement
Page 20
In rendering such opinions, such counsel may rely as to matters of fact
on certificates of officers and directors of the Company and the Association and
certificates of public officials delivered pursuant hereto. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company and the Association. Such opinion 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 opinion to such counsel's "knowledge" may be limited to
"actual knowledge" as defined in the Accord (or knowledge based on
certificates). Such opinion is subject to the qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and it should be read in conjunction
therewith. In addition, the General Qualifications set forth in the Accord apply
to the opinions set forth in such opinion. Such opinion may also be subject to
such qualifications, exceptions and assumptions as are necessary, customary or
acceptable to Trident and its counsel. 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 it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise; and such
counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company and the Association of this Agreement or the issuance of the
Shares.
(c) At the Closing Date, Trident shall receive the letter of Xxxx,
Xxxxxxxxxxx & Xxxxxx, P.C., special counsel for the Company and the Association,
dated the Closing Date, addressed to Trident, in form and substance reasonably
satisfactory to counsel for Trident and to the effect that: (i) based on such
counsel's participation in conferences with representatives of the Company, the
Association, its counsel, the independent appraiser, the independent certified
public accountants, Trident and its counsel, review of documents and
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 or supplemented (except as to information in respect of
Trident contained therein and except as to the financial statements, notes to
financial statements, financial tables and other financial and statistical data
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 or supplemented (except as to information in respect of Trident
contained therein and except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data 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
Trident Securities, Inc.
Sales Agency Agreement
Page 21
information in the Registration Statement or Prospectus and, therefore, does not
assume any responsibility for the accuracy of completeness or fairness thereof),
and (ii) based on such counsel's participation in conferences with
representatives of the Company and the Association concerning the Association,
the Company, and their counsel, St. Xxxx & St. Xxxx, nothing has come to such
counsel's attention that would lead it to believe that Trident should not rely
on the legal opinion of St. Xxxx & St. Xxxx delivered under Section 7(b) hereof
(in making this statement, Xxxx, Xxxxxxxxxxx & Xxxxxx, P.C. may state that its
members are not licensed to practice law in Alabama, it has not undertaken to
research legal matters or issues involved in the opinion of St. Xxxx & St. Xxxx
and it has not undertaken to verify independently factual information relied
upon in such opinion and, therefore, it does not render any opinion with respect
to such opinion and it does not assume responsibility for the accuracy or
completeness of such opinion).
(d) 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.
(e) 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
Association, taken as a whole, since the latest date as of which such condition
is set forth in the Prospectus, except as referred to therein; (ii) there shall
have been no transaction entered into by the Company or the Association after
the latest date as of which the financial condition of the Company or the
Association is set forth in the Prospectus other than transactions referred to
or contemplated therein, transactions in the ordinary course of business, and
transactions which are not materially adverse to the Company and the
Association, taken as a whole; (iii) neither the Company nor the Association
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 and the Association,
taken as a whole, with which they have not complied; (iv) no action, suit or
proceeding, at law or in equity or before or by any federal or state commission,
board or other administrative agency, shall be pending or threatened against the
Company or the Association or affecting any of their respective assets, wherein
an unfavorable decision, ruling or finding would have a material adverse effect
on the business, operations, financial condition or income of the Company and
the Association, taken as a whole; and (v) the Shares 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
Trident Securities, Inc.
Sales Agency Agreement
Page 22
Prospectus became authorized by the Company for use, the Prospectus did not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading with respect to the Company or the
Association; (ii) since the date the Prospectus became authorized by the Company
for use, no event has occurred which should have been set forth in an amendment
or supplement to the Prospectus which has not been so set forth, including
specifically, but without limitation, any material change in the business,
condition (financial or otherwise) or results of operations of the Company or
the Association, 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 Prospectus, 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 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
appropriate federal governmental authority.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Xxxxxx Xxxxxxxx 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 counsel for Trident from Xxxxxx Xxxxxxxx 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.
Trident Securities, Inc.
Sales Agency Agreement
Page 23
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Association
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and the
Association to Trident as to the statements made therein. If any condition to
Trident's obligations hereunder to be fulfilled prior to or at the Closing Date
is not so fulfilled, Trident may terminate this Agreement or, if Trident so
elects, may waive 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 Section 3(b) hereof.
8. Indemnification.
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(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, including reasonable
legal fees and expenses, 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") (excluding for this purpose the
valuation dated October 18, 1996, prepared by Xxxxxxxx & Co., LLP) prepared or
executed by or on behalf of the Company or the Association or based upon written
information furnished by or on behalf of the Company or the Association, 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
written information furnished to the Company or the Association with respect to
Trident by or on behalf of Trident expressly for use in the Prospectus or any
amendment or supplement thereof or in any Application, as the case may be, and
except to the extent that such liability is the direct result of Trident's
negligence or misconduct.
(b) The Company shall indemnify and hold Trident harmless for
any liability whatsoever arising out of (i) the Allocation Instructions or (ii)
any records of account holders, depositors, borrowers and other members of the
Association delivered to Trident by the Association or its agents for use during
the Conversion, except to the extent that such liability is the direct result of
Trident's negligence or misconduct.
(c) Trident agrees to indemnify and hold harmless the Company
and the Association, their officers, directors and employees and each person, if
any, who controls the
Trident Securities, Inc.
Sales Agency Agreement
Page 24
Company and the Association 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 including reasonable legal fees and expenses,
arising out of or based upon (A) statements or omissions, if any, made in the
Prospectus or any amendment or supplement thereof, in any Application or to a
purchaser of the Shares in reliance upon, and in conformity with, written
information furnished to the Company or the Association with respect to Trident
by or on behalf of Trident expressly for use in the Prospectus or in any
Application; (B) any misrepresentation or breach of warranty by Trident in
Section 2(b) of this Agreement or the material breach by Trident of any other
provision of this Agreement; or (C) any act or omission of Trident in connection
with this Agreement constituting gross negligence or willful misconduct of
Trident.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof.
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with the other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than the reasonable cost of investigation except as
otherwise provided herein. In the event the indemnifying party elects to assume
the defense of any such action and retain counsel acceptable to the indemnified
party, the indemnified party may retain additional counsel, but shall bear the
fees and expenses of such counsel unless (i) the indemnifying party shall have
specifically authorized the indemnified party to retain such counsel or (ii) the
parties to such suit include such indemnifying party and the indemnified party,
and such indemnified party shall have been advised by counsel that one or more
material legal defenses may be available to the indemnified party which may not
be available to the indemnifying party, in which case the indemnifying party
shall not be entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such counsel.
An indemnifying party against whom indemnity may be sought shall not be liable
to indemnify an indemnified party under this Section 8 if any settlement of any
such action is effected without such indemnifying party's consent. 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
Trident Securities, Inc.
Sales Agency Agreement
Page 25
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 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 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 received by Trident under
this Agreement. The relative fault of the Company or the Association on the one
hand and Trident on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Association or by Trident and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Association and Trident agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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 Association and Trident and the
representation and warranties of the Company and the Association and of Trident
set forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Association
or any controlling person or indemnified party referred to in Section 8 hereof,
and shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Association and any such controlling persons shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
Trident Securities, Inc.
Sales Agency Agreement
Page 26
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 a material effect on the Association or the
Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have been a
material change in the capitalization or financial condition 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) and 9 of this Agreement and upon demand,
the Company and the Association shall pay Trident the full amount so owing
thereunder.
(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 telegraphed and confirmed to Trident Securities, Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Mr. R. Xxx
Xxxxxxx, Xx. (with a copy to Miller, Hamilton, Xxxxxx & Xxxx, L.L.C., Xxxx
Xxxxxx Xxx 00, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Esquire)
and if sent to the Company or the Association, shall be mailed, delivered or
telegraphed and confirmed to First Federal Savings & Loan Association of
Cullman, Attention: Xxxxxxx X. Xxxxx, President (with a copy to St. Xxxx & St.
Xxxx, 000 Xxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. St.
Xxxx, IV, Esquire and Xxxx, Xxxxxxxxxxx & Xxxxxx, P.C., 0000 Xxx Xxxxxx, X.X.,
Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx X. Xxxxx, 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
Trident Securities, Inc.
Sales Agency Agreement
Page 27
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 Alabama.
15. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 28
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
SOUTHERN COMMUNITY FIRST FEDERAL SAVINGS & LOAN
BANCSHARES, INC. ASSOCIATION OF CULLMAN
By:__________________________ By:__________________________
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
President and Chief Executive Officer President
Date: ______, 1996 Date: _________, 1996
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By: __________________
Date: __________, 1996
