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EXHIBIT 1.2
CAROLINA FIRST BANCSHARES, INC.
SALES AGENCY AGREEMENT
October __, ▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇ & ▇▇.
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter sets forth and confirms the terms and conditions of the
engagement (the "Agreement") of ▇.▇. ▇▇▇▇▇▇▇▇ & Co. ("Bradford") by Carolina
First Bancshares, Inc. (the "Company") as non-exclusive selling agent of the
Company with respect to the Company's proposed public offering (the "Offering")
of its common stock (the "Common Stock"). The Offering will be made by means of
a prospectus (the "Prospectus"), which will be provided to Bradford.
1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with Bradford as
follows:
(a) The Prospectus does not and will not contain any untrue statements
of material fact or omit to state any material facts required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Company is a corporation validly existing and in good standing
under the laws of the state of its incorporation; has full corporate and other
power and authority under such laws to own its properties and conduct its
business as described in the Prospectus; and is duly qualified to do business as
a foreign corporation in each other jurisdiction in which it owns or leases
properties or conducts its business so as to require qualification and is in
good standing in each such jurisdiction, except where failure to be so qualified
would not have a material adverse effect on the condition, financial or
otherwise, results of operations, affairs or business prospects of the Company.
(c) The shares of common stock to be issued and sold by the Company
hereunder (the "Shares"), when issued and delivered against payment therefor as
provided
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herein, will be duly and validly authorized and issued and fully paid and will
conform to the description thereof contained in the Prospectus.
(d) Except as disclosed in the Prospectus or information incorporated
therein by reference, there are no (i) outstanding securities or obligations of
the Company convertible into or exchangeable for any capital stock of the
Company, (ii) warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations or (iii) obligations of the Company to issue any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
(e) The Company has the full legal right, power and authority to enter
into and perform this Agreement and to sell and deliver the Shares as provided
herein, and this Agreement has been duly authorized by its Board of Directors
and duly executed and delivered on behalf of the Company.
(f) Other than filings with, and any necessary registrations,
qualifications or exemptions from the Securities and Exchange Commission and
applicable state securities and "blue sky" authorities, no consent, approval,
authorization or order, registration or qualification of or with any court or
governmental agency or body is required for the issuance and sale of the Shares
or for the consummation of the other transactions contemplated by this
Agreement.
(g) Except as provided in Section 2(a), there are no contracts,
agreements or understandings between the Company and any person which would give
rise to a valid claim against the Company for a brokerage commission, finder's
fee or other like payment in connection with the offering of the Shares, other
than compensation due and payable to Bradford, Interstate/▇▇▇▇▇▇▇ ▇▇▇▇
Corporation and any other selling agents for the Shares named by the Company.
(h) No action, suit or proceeding at law or in equity is pending or, to
the Company's knowledge, threatened to which the Company is a party, and no
proceedings are pending or, to the Company's knowledge, threatened against or
affecting the Company before or by any governmental official, commission, board
or other administrative agency, (other than in connection with required
regulatory approvals) wherein an unfavorable decision, ruling or finding could
have a material adverse effect on the consummation of this Agreement or the
condition, financial or otherwise, results of operations, affairs or business
prospects of the Company.
(i) The Company has such permits, licenses, franchises and governmental
and regulatory authorizations ("permits") as are necessary to own its properties
and conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus, and except where the
failure to have such permits would not have a material adverse effect on the
consummation of this Agreement or the
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condition, financial or otherwise, results of operations, affairs or business
prospects of the Company.
(j) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940.
(k) The Company agrees as follows:
(i) The Company will notify Bradford immediately, and confirm
such notice in writing, of the receipt of any comments from any state
securities commission or regulatory authority that relate to the
Prospectus or any amendment thereto or requests by any state securities
commission or regulatory authority for amendments to the Prospectus or
amendments or supplements to the Prospectus or for additional
information;
(ii) The Company will use the net proceeds from the sale of
the Shares received by it in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(iii) The Company will supply Bradford with such number of
Prospectuses as Bradford shall reasonably request;
(iv) For three years from the date of this Agreement, the
Company will furnish to Bradford copies of all reports and
communications (financial or otherwise) furnished by the Company to its
stockholders, copies of all reports or financial statements filed with
the regulatory agencies as soon as such are available, and such other
publicly available documents, reports and information concerning the
business and financial condition of the Company as ▇▇▇▇▇▇▇▇ ▇▇▇
reasonably request.
2. Services to be Provided by Bradford.
In connection with this Agreement, the scope of Bradford's services
shall include, but not be limited to, the following:
(a) Pursuant to this Agreement, Bradford will serve as a selling agent
for the Company on a non-exclusive basis and will offer up to 100,000 Shares for
sale, on a reasonable efforts basis. Bradford acknowledges that the Company may
contract with other selling agents for the sale of the Shares and may reallocate
unsold Shares among selling agents and that no such contractual arrangements
shall violate or conflict with the terms of this Agreement.
(b) With respect to its efforts as a selling agent, Bradford will
employ all reasonable efforts to achieve a broad, retail distribution of the
Shares, including, without limitation, the following: (1) limiting the maximum
number of Shares to be purchased by
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an individual in the Offering to 1,000 Shares; (2) selling at least 33% of the
Shares to persons not presently Company shareholders; and (3) selling a minimum
of 20,000 Shares to Cabarrus County residents.
(c) Bradford will perform its duties pursuant to this Agreement in
compliance with all applicable federal and state securities laws, and will offer
and sell the Shares only by means of the Prospectus and only in such
Jurisdictions specified by the Company and in which such offers and sales may be
made lawfully.
In exchange for the services of Bradford pursuant to this Agreement,
the Company agrees to pay Bradford a selling commission of $.80 for each Share
sold by Bradford as selling agent. The selling commission shall be payable at
such time as the subscription Shares sold by Bradford as selling agent are
accepted by and payment in full is received therefor by the Company. The
Company shall make and pay all NASD and SEC and blue sky filings and fees.
3. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless Bradford, and
each person, if any, who controls Bradford within the meaning of Section 15 of
the Securities Act of 1933 as amended (the "1933 Act"), against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation and counsel's fees) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any breach of this Agreement except insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission made by
any means by Bradford or its agents, directors or employees in connection with
the offer and sale of the Common Stock. The foregoing indemnity shall not, with
respect to untrue statements or omissions in the Prospectus, inure to the
benefit of Bradford, or any affiliate or person who controls Bradford, from whom
the person asserting any such loss, liability, claim, damage or expense
purchased any of the Shares that are the subject hereof, if such person was not
sent or given a copy of the Prospectus (as amended or supplemented).
(b) If any action or claim shall be brought or asserted against
Bradford or any person controlling Bradford in respect of which indemnity may be
sought from the Company, Bradford or such controlling person shall promptly
notify the Company in writing, enclosing copies of all papers served on or
delivered to such party, and the Company shall assume the defense thereof,
including the employment of one counsel for all of Bradford and the payment of
all expenses. The failure to notify an indemnifying party shall not relieve the
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result of such failure. Bradford or any such
controlling
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person shall have the night to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the sole expense of Bradford or such controlling person unless (i)
the employment thereof has been specifically authorized in advance by the
Company in writing, (ii) the Company failed to assume the defense and employ
counsel as described above or (iii) the named parties to any such action
(including any impleaded parties) include both Bradford or such controlling
person and the Company, and Bradford or such controlling person shall have been
advised by such counsel that there may be one or more legal defenses available
to it that are different from or in addition to those available to the Company
(in which case, if Bradford or such controlling person notifies the Company in
writing that it elects to employ separate counsel at the expense of the Company,
the Company shall not have the right to assume the defense of such action on
behalf of Bradford or such controlling person). No indemnified party shall
settle, compromise or consent to the entry of any judgment with respect to any
litigation, any investigation or proceeding by any governmental agency or body,
commenced or threatened, or claim whatsoever in respect of which indemnification
or contribution can be sought under this Section 3 (whether or not the
indemnified parties are actual or potential parties ), unless the indemnified
party gives prior written notification to the indemnifying party and such
settlement, compromise or consent does not include any statement or admission of
fault, culpability or failure to act on behalf of, or with respect to, any
indemnified party.
(c) Bradford agrees individually, and not jointly with any other
selling agent for the Shares, to indemnify and hold harmless the Company and its
respective directors and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the Securities
Exchange Act of 1934, as amended against, any and all loss, liability, claim,
damage and expenses described in the indemnity contained in subsection (a) of
this Section 3 but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions made in the Prospectus (as amended or
supplemented) based upon information furnished to the Company by Bradford.
(d) If the indemnification provided for in this Section 3 is
unavailable to an indemnified party under paragraphs (a), (b) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and Bradford on the other from the Offering 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 on
the one hand and of Bradford on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and Bradford on the other shall
be deemed to be in the same proportion as the total net proceeds received by the
Company from the Shares sold by Bradford in the Offering
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(before deducting expenses), and the total selling commission received by
Bradford. The relative fault of the Company on the one hand and of Bradford 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 to state a
material fact relates to information supplied by the Company, or by Bradford,
and the parties relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company on the one hand and Bradford on the other agree that it
would not be just and equitable if contribution to be made pursuant to this
Section 3 were determined by pro rata allocation or by any other method of
allocation that 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 and
expenses 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 such indemnified party in connection with defending any
such action or claim. Notwithstanding the provisions of this Section 3, Bradford
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Shares sold by it exceeds the amount of any damages
that Bradford 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 ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
4. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other
statements of the Company set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of Bradford or the Company or controlling person of the
Company, and shall survive delivery of and payment for the Shares.
5. Governing Law; Assignments.
This Agreement shall be governed by the laws of the State of North
Carolina. Neither party may assign this Agreement without the prior written
consent of the other party.
6. Counterparts.
This Agreement may be executed in one of more counterparts, and when a
counterpart has been executed by each party hereto all such counterparts taken
together shall constitute one and the same Agreement. Signatures sent by
facsimile shall have the same effect as if manually signed copies had been
delivered, and shall be binding upon the parties.
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7. No Personal Liability.
In no event shall any officer or director of the Company have any
personal liability to Bradford or to any other person under this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
shall become a binding agreement between the Company and Bradford.
Very truly yours,
CAROLINA FIRST BANCSHARES, INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇, III
President
CONFIRMED AND ACCEPTED,
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
By:
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Name:
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Title:
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