1
EXHIBIT 1.2
HCB BANCSHARES, INC.
UP TO 2,645,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
$10.00 PER SHARE
SALES AGENCY AGREEMENT
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
HCB Bancshares, Inc., an Oklahoma-chartered corporation (the
"Company"), and Heartland Community Bank, a federally chartered and insured
mutual savings bank (the "Bank"), hereby confirm, as of ______ __, 1997, their
respective agreements with Trident Securities, Inc. ("Trident"), a
broker-dealer registered with the Securities and Exchange Commission
("Commission") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), as follows:
1. Introductory. The Bank intends to convert from a
federally chartered mutual savings bank to a federally chartered stock savings
bank as a wholly owned subsidiary of the Company (together with the Offerings,
as defined below, the issuance of shares of common stock of the Bank to the
Company and the incorporation of the Company, the "Conversion") pursuant to an
amended plan of conversion adopted by the Bank (the "Plan"). In accordance
with the Plan, the Company is offering shares of its common stock, par value
$.01 per share (the "Shares" and the "Common Stock"), pursuant to
nontransferable subscription rights in a subscription offering (the
"Subscription Offering") to certain depositors and borrowers of the Bank and
the Bank's subsidiary capital stock savings bank (the "Subsidiary") and to the
Company's and the Bank's tax-qualified employee benefit plans (i.e., the
Company's Employee Stock Ownership Plan (the "ESOP")). Shares of the Common
Stock not sold in the Subscription Offering may be offered to the general
public in a community offering, with preference given to natural persons and
trusts of natural persons permanently residing in Calhoun, Cleveland, Dallas,
Drew, Grant Ouachita and Pulaski counties in Arkansas (the "Local Community")
(the "Community Offering" and together with the Subscription Offering the
"Offerings"), subject to the right of the Company and the Bank, in their
absolute discretion, to reject orders in the Community Offering in whole or in
part. In the Offerings, the Company is offering between 1,700,000 and
2,300,000 Shares, with the possibility of offering up to 2,645,000 Shares
without a resolicitation of subscribers, as contemplated by Title 12 of the
Code of Federal Regulations, Part 563b. In the Subscription Offering, each
eligible subscriber may subscribe for up to 20,000 shares of Common Stock per
qualifying deposit or loan account, provided that the aggregate maximum amount
of the Common Stock to be issued in the Conversion that may be purchased
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Trident Securities, Inc.
Sales Agency Agreement
Page 2
by any person, together with associates, or group of persons acting in concert
(other than the ESOP), is 25,000 shares.
The Company and the Bank have been advised by Trident that it
will utilize its best efforts in assisting the Company and the Bank with the
sale of the Shares in the Offerings. Prior to the execution of this Agreement,
the Company has delivered to Trident the Prospectus dated ______ __, 1997 (as
hereinafter defined) and all supplements thereto to be used in the Offerings.
Such Prospectus contains information with respect to the Company, the Bank and
the Shares.
2. Representations and Warranties.
(a) The Company and the Bank jointly and
severally represent and warrant to Trident as follows (all
representations and warranties with respect to the Subsidiary
(as hereafter defined) as of any date or for any period before
May 7, 1996 being to the best of their knowledge):
(i) The Company has filed with the
Commission a registration statement, including
exhibits and an amendment or amendments thereto, on
Form SB-2 (No. 333-19093), 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. 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 the Registration Statement and
the Prospectus 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 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 file with, or mail for
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Trident Securities, Inc.
Sales Agency Agreement
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filing to, the Commission such prospectus or
prospectus supplement containing information relating
to the results of the Subscription and Community
Offerings and pricing information as may be required
by Rule 424(c) of the Regulations, in either case in
a form reasonably acceptable to the Company and
Trident.
(ii) The Bank has filed an Application
for Approval of Conversion on Form AC, including
exhibits (as amended or supplemented, the "Form AC"
and together with the Form H-(e)1-S referred to
below, the "Conversion Application") with the Office
of Thrift Supervision (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
conditionally 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 Bank's best knowledge, threatened.
The Company has filed with the Office the Company's
application on Form H-(e)2 promulgated under the
savings and loan holding company provisions of the
HOLA and the regulations promulgated thereunder and
has received conditional approval of its acquisition
of the Bank 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 Bank
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 an Oklahoma corporation, the Bank has
been duly organized as a mutual savings bank under
the laws of the United States, the Subsidiary has
been duly organized as a stock savings bank under the
laws of the United States and each of them is validly
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Trident Securities, Inc.
Sales Agency Agreement
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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 Bank and the Subsidiary are
members in good standing of the Federal Home Loan
Bank of Dallas; and the deposit accounts of the Bank
and the Subsidiary 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
Arkansas. Except as noted above, neither the
Company, the Bank nor the Subsidiary 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, the
Bank and the Subsidiary taken as a whole. The Bank
does not own equity securities of or an equity
interest in any business enterprise other than the
Subsidiary, Heritage Banc Holding, Inc. and HCB
Properties, Inc. and except as described in the
Prospectus. Upon amendment of the Bank's charter and
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 Bank will be converted pursuant to the Plan to a
federally chartered capital stock savings bank with
full power and authority to own its property and
conduct its business as described in the Prospectus,
(ii) all of the authorized and outstanding capital
stock of the Bank will be owned of record and
beneficially by the Company, and (iii) the Company
will have no direct subsidiaries other than the Bank.
(v) Each of the Bank and the Subsidiary
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 reasonably be expected to
have a material adverse effect upon the operations or
financial condition of the Bank and the Subsidiary,
taken as a whole; and all of the leases and subleases
material to the operations or financial condition of
the Bank and the Subsidiary, under which they hold
properties, including those described in the
Prospectus, are in full force and effect as described
therein.
(vi) The 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 Bank, and this Agreement
is a valid and binding obligation with valid
execution and delivery of each of the Company and the
Bank, enforceable in accordance with its terms
(except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization
or similar laws relating to or affecting the
enforcement of creditors' rights generally or the
rights of creditors of savings and loan holding
companies the accounts of whose subsidiaries are
insured by the
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Trident Securities, Inc.
Sales Agency Agreement
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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, the Bank or the Subsidiary,
threatened against or involving the Company, the
Bank, the Subsidiary or any of their respective
assets which individually or in the aggregate would
reasonably be expected to have a material adverse
effect on the condition (financial or otherwise),
results of operations and business, including the
assets and properties, of the Company, the Bank and
the Subsidiary, taken as a whole.
(viii) The Company and the Bank have
received the opinion of Housley Kantarian &
Xxxxxxxxx, 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 Gaunt & Co., LTD to the effect that the
Conversion will not be a taxable transaction for the
Bank or the Company under the income tax laws of
Arkansas, and the facts relied upon in such opinions
are accurate and complete.
(ix) Each of the Company and the Bank has
all such corporate power, authority, authorizations,
approvals and orders as may be required to enter into
this Agreement and to carry out the provisions and
conditions hereof, subject to the limitations set
forth herein and subject to the satisfaction of
certain conditions imposed by the Office in
connection with its approvals of the Form AC and the
Application H-(e)2, and except as may be required
under the securities laws of various jurisdictions,
and in the case of the Company, as of the Closing
Date, will, to the actual knowledge of the Bank, have
such authorizations, approvals and orders to issue
and sell the Shares to be sold by the Company as
provided herein, and in the case of the Bank, as of
the Closing Date, will, to the knowledge of the
Company, have such authorizations, 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 banks (the "Stock Charter"), the form of
which Stock Charter has been approved by the Office.
(x) Neither the Company, the Bank nor
the Subsidiary is in violation of any rule or
regulation of the Office or the FDIC that could
reasonably be expected to result in any enforcement
action against the Company, the Bank, the Subsidiary
or their officers or directors that could reasonably
be expected to have a material adverse effect on the
condition (financial or otherwise), operations,
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Trident Securities, Inc.
Sales Agency Agreement
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businesses, assets or properties of the Company, the
Bank and the Subsidiary, 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, equity and cash flows of the Bank
and its subsidiaries 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
Bank with supervisory and regulatory authorities
except as such generally accepted accounting
principles may otherwise require. The tables in the
Prospectus accurately present in all material
respects 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, the Bank and the
Subsidiary, taken as a whole, since the latest date
as of which such information is set forth in the
Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of
each of the Company, the Bank and the Subsidiary
conform in all material respects to the descriptions
thereof contained in the Prospectus. None of the
Company, the Bank or the Subsidiary 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, the Bank or the Subsidiary
pursuant to any of the terms, provisions or
conditions of, any agreement, contract, indenture,
bond, debenture, note, instrument or obligation to
which the Company, the Bank or the Subsidiary is a
party or by which any of them or any of their
respective assets or properties may be bound or 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, the Bank and the
Subsidiary taken as a whole; all agreements which are
material to the condition (financial or otherwise),
results
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Trident Securities, Inc.
Sales Agency Agreement
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of operations or business of the Company, the Bank
and the Subsidiary taken as a whole are in full force
and effect, and no party to any such agreement has
instituted or, to the best knowledge of the Company
and the Bank, threatened any action or proceeding
wherein the Company, the Bank or the Subsidiary would
be alleged to be in default thereunder.
(xiv) None of the Company, the Bank or the
Subsidiary is in violation of its respective charter
or bylaws. The execution and delivery hereof, the
fulfillment of the terms set forth herein and the
consummation of the transactions contemplated hereby
by the Company and the Bank do not conflict with or
result in a breach of the charter or bylaws of the
Company, the Bank (in either mutual or stock form) or
the Subsidiary or constitute a material breach of or
default (or an event which, with notice or lapse of
time or both, would constitute a default) under, give
rise to any right of termination, cancellation or
acceleration contained in, or result in the creation
or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of
the Company, the Bank or the Subsidiary pursuant to
any of the terms, provisions or conditions of, any
material agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which
the Company, the Bank or the Subsidiary is a party or
violate any governmental license or permit or any
enforceable published law, administrative regulation
or order or court order, writ, injunction or decree
(subject to the satisfaction of certain conditions
imposed by the Office in connection with its approval
of the Conversion Application), which breach,
default, encumbrance or violation could reasonably be
expected to have a material adverse effect on the
condition (financial or otherwise), operations or
business of the Company, the Bank and the Subsidiary
taken as a whole.
(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, none of the
Company, the Bank or the Subsidiary has issued any
securities which will remain issued at the Closing
Date or incurred any liability or obligation, direct
or contingent, or borrowed money, except 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, the Bank and the
Subsidiary, 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
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Trident Securities, Inc.
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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 Bank to the Company
has been duly authorized by all necessary action of
the Bank 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)2 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.
(xix) Gaunt & Co., LTD, which has audited
the financial statements of the Bank at June 30, 1995
and 1996 and for the years ended June 30, 1996, 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, the Bank and the
Subsidiary have timely filed all required federal,
state and local franchise tax returns, and no
deficiency has been asserted with respect to such
returns by any taxing authorities, and the Company,
the Bank and the Subsidiary 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,
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Trident Securities, Inc.
Sales Agency Agreement
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or the assertion of such a deficiency, would not have
a material adverse effect on the condition of the
Company, the Bank and the Subsidiary taken as a
whole.
(xxi) All of the loans represented as
assets of the Bank (including the Subsidiary) on the
most recent financial statements of the Bank included
in the Prospectus meet or are exempt from all
requirements of federal, state or local law
pertaining to lending, including without limitation
truth in lending (including the requirements of
Regulation Z and 12 C.F.R. Part 226 and Section
563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all
disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a
material adverse effect on the Company, the Bank and
the Subsidiary taken as a whole.
(xxii) The records of account holders,
depositors, borrowers and other members of the Bank
or, as applicable, the Subsidiary, delivered to
Trident by the Bank or its agent for use during the
Conversion have been prepared or reviewed by or for
the Bank and, to the best knowledge of the Company
and the Bank, are reliable and accurate.
(xxiii) None of the Company, the Bank, the
Subsidiary or the employees of the Company, the Bank
or the Subsidiary, has made any payment of funds to
the Company, the Bank or the Subsidiary prohibited by
law, and no funds of the Company, the Bank or the
Subsidiary have been set aside to be used for any
payment prohibited by law.
(xxiv) To the best knowledge of the Company
and the Bank, the Company, the Bank and the
Subsidiary are in compliance with all laws, rules and
regulations relating to environmental protection, and
neither the Company nor the Bank has reasonable cause
to believe that the Company, the Bank or the
Subsidiary 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, could
not reasonably be expected to have a material adverse
effect on the Company, the Bank and the Subsidiary,
taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings
pending or, to the best knowledge of the Company or
the Bank, threatened against the Company, the Bank or
the Subsidiary relating to environmental protection.
To the best knowledge of the Company and the Bank, no
disposal, release or discharge of hazardous or toxic
substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may
be defined under federal, state or local law, has
been caused by the Company, the Bank or the
Subsidiary or, to the best knowledge of the Company
or the Bank, has occurred on, in or at any of the
facilities or properties of the Company, the Bank or
the Subsidiary, except such disposal, release or
discharge which would
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Trident Securities, Inc.
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not have a material adverse effect on the Company,
the Bank and the Subsidiary, taken as a whole.
(xxv) At the Closing Date, the Company and
the Bank will have completed the conditions precedent
to, and shall have conducted the Conversion in all
material respects in accordance with, the Plan, the
OTS Regulations and all other applicable laws,
regulations, published decisions and orders,
including all terms, conditions, requirements and
provisions precedent to the Conversion imposed by the
Office.
(b) Trident represents and warrants to the
Company and the Bank 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 Bank hereunder.
(iii) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly and validly
authorized by all necessary action on the part of
Trident, and this Agreement is a legal, valid and
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.
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(v) The execution and delivery of this
Agreement by Trident, the fulfillment of the terms
set forth herein and the consummation of the
transactions contemplated hereby shall not violate or
conflict with the corporate charter or bylaws of
Trident or violate, conflict with or constitute a
breach of, or default (or an event which, with notice
or lapse of time, or both, would constitute a
default) under, any material agreement, indenture or
other instrument by which Trident is bound or under
any governmental license or permit or any law,
administrative regulation, authorization, approval or
order or court decree, injunction or order.
(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.
3. Employment of Trident; Sale and Delivery of the
Shares. On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the Company and the
Bank hereby employ Trident as their agent to utilize its best efforts in
assisting the Company with the Company's sale of the Shares in the Subscription
Offering and Community Offering and any Selected Dealer Offering (as hereafter
defined). The employment of Trident hereunder shall terminate (a) forty-five
(45) days after the Subscription and Community Offering closes, unless the
Company and the Bank, with the approval of the Office, are permitted to extend
such period of time, or (b) upon consummation of the Conversion, whichever date
shall first occur.
In the event the Company is unable to sell a minimum of
1,700,000 Shares (or such lesser amount as the Office may permit) within the
period herein provided, this Agreement shall terminate, and the Company and the
Bank shall refund promptly to any 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 and 9 hereof. Appropriate arrangements for placing the funds
received from subscriptions for Shares in special interest-bearing accounts
with the Bank until all Shares are sold and paid for were made prior to the
commencement of the Subscription and Community Offering, with provision for
prompt refund to the purchasers as set forth above, or for delivery to the
Company if all Shares are sold.
If all conditions precedent to the consummation of the
Conversion are satisfied, including the sale of all Shares required by the Plan
to be sold, the Company agrees to issue or have issued such Shares and to
release for delivery certificates to subscribers thereof for such Shares
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Trident Securities, Inc.
Sales Agency Agreement
Page 12
on the Closing Date against payment to the Company by any means authorized
pursuant to the Prospectus, at the principal office of the Company or at such
other place as shall be agreed upon between the parties hereto. The date upon
which Trident is paid the compensation due hereunder is herein called the
"Closing Date."
Trident agrees either (a) upon receipt of 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 Bank 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 timely debit accounts of such subscribers ("debit date") following
receipt of the confirmation referred to in (i), and (iv) Trident will forward
completed order forms together with such funds to the Bank on or before twelve
noon on the next business day following the debit date for deposit in a
segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
In addition to the expenses specified in Section 6 hereof,
Trident shall receive the following compensation for its services hereunder:
(a) (i) a commission equal to 1.30% of the
aggregate dollar amount of Common Stock sold to investors who
reside in the Bank's Local Community, a commission equal to
1.10% on sales to investors residing in the counties
contiguous to the Bank's Local Community, a commission equal
to 0.95% on sales to investors residing in other counties
within the state of Arkansas and a commission equal to 0.65%
on sales to investors residing outside the state of Arkansas,
excluding shares purchased by officers, directors, employees
or their associates or employee benefit plans and, (ii) if
applicable, a commission, not to exceed 4.5%, 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 commissions
shall be based on the amount of Common Stock sold; however,
fees shall be capped based on the sale of shares of Common
Stock at the midpoint of the final appraised value not to
exceed $18 million. In the event that shares of Common Stock
are sold in excess of the midpoint appraised value, as capped,
the above described fee schedule will be applied on a pro rata
basis as if the Offering had closed at the midpoint. All such
fees are to be payable in next-day funds to Trident on the
Closing Date.
(b) Trident shall be reimbursed for allocable
out-of-pocket 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 $25,000
(excluding reasonable out of pocket expenses), that
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Trident Securities, Inc.
Sales Agency Agreement
Page 13
all other reimbursable expenses will not exceed $10,000 and
that neither the Company nor the Bank shall pay or reimburse
Trident for any of the foregoing expenses accrued after
Trident shall have notified the Company or the Bank of its
election to terminate this Agreement pursuant to Section 11
hereof or after such time as the Company or the Bank shall
have given notice in accordance with Section 12 hereof that
Trident is in breach of this Agreement. Full payment to
defray Trident's reimbursable expenses shall be made in
next-day funds on the Closing Date or, if the Conversion is
not completed and is terminated for any reason, within ten
(10) business days of receipt by the Company of a written
request from Trident for reimbursement of its expenses.
Trident acknowledges receipt of $10,000 advance payment from
the Bank which shall be credited against the total
reimbursement due Trident hereunder.
(c) Notwithstanding the limitations on reimbursement
of Trident for allocable out-of-pocket 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 out-of-pocket expenses
incurred during such extended period, provided that the
allowance for allocable out-of-pocket expenses provided for in
the immediately preceding paragraph (b) above has been
exhausted and subject to the following. Such reimbursement
shall not exceed an amount equal to the product obtained by
dividing $10,000 (original out-of-pocket expenses) by the
total number of days of the unextended Subscription Offering
(calculated from the date of the Prospectus to the intended
close of the Subscription Offering as stated in the
Prospectus) and multiplying such product by the number of days
of the extension (that number of days from the date of the
supplemental prospectus used in the extended Subscription
Offering to the closing of the extension of the Subscription
Offering described in such supplemental prospectus).
The Company shall pay any stock issue and transfer taxes which
may be payable with respect to the sale of the Shares. The Company and the
Bank shall also pay all expenses of the Conversion incurred by them or on their
prior approval including but not limited to their attorneys' fees, NASD filing
fees, and their attorneys' fees relating to any required state securities laws
research and filings, telephone charges, air freight, rental equipment,
supplies, transfer agent charges, fees relating to auditing and accounting and
costs of printing all documents necessary in connection with the Conversion.
4. Offering. Subject to the provisions of Section 7
hereof, Trident is assisting the Company on a best efforts basis in offering a
minimum of 1,700,000 and a maximum of 2,300,000 Shares, with the possibility of
offering up to 2,645,000 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.
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Trident Securities, Inc.
Sales Agency Agreement
Page 14
5. Further Agreements. The Company and the Bank jointly
and severally covenant and agree that:
(a) The Company shall deliver to Trident, from
time to time, such number of copies of the Prospectus as
Trident reasonably may request. The Company authorizes
Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident immediately
upon discovery, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement
becomes effective or any supplement to the Prospectus has been
filed, (ii) of the issuance by the Commission of any stop
order relating to the Registration Statement or of the
initiation or the threat of any proceedings for that purpose,
(iii) of the receipt of any notice with respect to the
suspension of the qualification of the Shares for offering or
sale in any jurisdiction, and (iv) of the receipt of any
comments (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 with
all requirements imposed upon it by the Act, as now in effect
and hereafter amended, and by the SEC Regulations, as from
time to time in force, so far as necessary to permit the
continuance of offers and sales of or dealings in the Shares
in accordance with the provisions hereof and the Prospectus.
If during the period when the Prospectus is required to be
delivered in connection with the offer and sale of the Shares
any event relating to or affecting the Company, the Bank and
the Subsidiary, 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
15
Trident Securities, Inc.
Sales Agency Agreement
Page 15
of this subsection the Company and the Bank shall furnish such
information with respect to themselves as Trident from time to
time may reasonably request.
(d) The Company and the Bank 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 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 Bank sufficient to establish a
liquidation account for the benefit of eligible account
holders and supplemental eligible account holders in
accordance with the requirements of the Office.
(f) The Company will file a registration
statement for the Common Stock under Section 12(g) of the
Exchange Act, prior to completion of the stock offering
pursuant to the Plan and shall request that such registration
statement be effective upon or before 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 permitted 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.
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Trident Securities, Inc.
Sales Agency Agreement
Page 16
(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 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 Bank will take such
actions and furnish such information as are reasonably
requested by Trident in order for Trident to ensure compliance
with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
6. Payment of Expenses. Whether or not the Conversion
is consummated, the Company and the Bank shall pay or reimburse Trident for (a)
all filing fees paid or incurred by Trident in 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 1,700,000 Shares or such lesser
amount as the Office may permit or the Conversion is otherwise terminated, the
Company and the Bank shall reimburse Trident for allocable out-of-pocket
expenses incurred by Trident relating to the offering of the Shares as provided
in Section 3 hereof; provided, however, that neither the Company nor the Bank
shall pay or reimburse Trident for any of the foregoing expenses accrued after
Trident shall have notified the Company or the Bank of its election to
terminate this Agreement pursuant to Section 11 hereof or after such time as
the Company or the Bank shall have given notice in accordance with Section 12
hereof that Trident is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may
be waived by Trident, the obligations of Trident as provided herein shall be
subject to the accuracy of the representations and warranties contained in
Section 2 hereof as of the date hereof and as of the Closing Date, to the
performance by the Company and the Bank of their obligations hereunder and to
the following conditions:
(a) At the Closing Date, Trident shall receive
the favorable opinion of Housley Kantarian & Xxxxxxxxx, P.C.,
special counsel for the Company and the Bank, dated the
Closing Date, addressed to Trident, in form and substance as
set forth in Exhibit B hereto.
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Trident Securities, Inc.
Sales Agency Agreement
Page 17
(b) At the Closing Date, Trident shall receive
the favorable opinion of Xxxxxx X. Xxxxx, attorney at law,
counsel to the Bank, dated the Closing Date, addressed to
Trident, in form and substance as set forth in Exhibit C
hereto.
(c) At the Closing Date, Trident shall receive
the letter of Housley Kantarian & Xxxxxxxxx, P.C., special
counsel for the Company and the Bank, dated the Closing Date,
addressed to Trident, in form and substance as set forth in
Exhibit D hereto.
(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 Bank 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 adverse change in the condition, financial or
otherwise, business or results of operations of the Company,
the Bank and the Subsidiary, taken as a whole, since the
latest date as of which such condition is set forth in the
Prospectus, except as referred to therein; (ii) there shall
have been no transaction entered into by the Company, the Bank
or the Subsidiary after the latest date as of which the
financial condition of the Company, the Bank or the Subsidiary
is set forth in the Prospectus other than transactions
referred to or contemplated therein, transactions in the
ordinary course of business, and transactions which are not
materially adverse to the Company, the Bank and the
Subsidiary, taken as a whole; (iii) none of the Company, the
Bank or the Subsidiary shall have received from the Office or
the Commission any direction (oral or written) to make any
change in the method of conducting their respective businesses
which is material to the business of the Company, the Bank and
the Subsidiary, taken as a whole, with which they have not
complied; (iv) no action, suit or proceeding, at law or in
equity or before or by any federal or state commission, board
or other administrative agency, shall be pending or threatened
against the Company, the Bank or the Subsidiary or affecting
any of their respective assets, wherein an unfavorable
decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or
income of the Company, the Bank and the Subsidiary, taken as a
whole; and (v) the Shares shall have been qualified or
registered for offering and sale by the Company under the
securities 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
Bank, dated the Closing Date, to the effect that: (i) they
have examined the Prospectus and, at the time the Prospectus
became authorized by the Company for use, the
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Trident Securities, Inc.
Sales Agency Agreement
Page 18
Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading with respect to the
Company or the Bank; (ii) since the date the 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 Bank 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 Bank; (iv) a copy of the letter from the
appropriate Oklahoma 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
Oklahoma governmental authority; and, (vi) if available, a
copy of the letter from the Office approving the Bank's Stock
Charter.
(h) As soon as available after the Closing Date,
Trident shall receive a certified copy of the Bank'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 Gaunt
& Co., LTD, 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 Gaunt & Co., LTD, independent certified public
accountants, dated the Closing Date and addressed to Trident
and the Company, confirming and updating the statements made
by them in the letter delivered by them
19
Trident Securities, Inc.
Sales Agency Agreement
Page 19
pursuant to the preceding subsection as of a specified date
not more than five (5) days prior to the Closing Date.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel.
Any certificates signed by an officer or director of the Company, the Bank or
the Subsidiary prepared for Trident's reliance and delivered to Trident or to
counsel for Trident shall be deemed a representation and warranty by the
Company, the Bank and the Subsidiary to Trident as to the statements made
therein. If any condition to Trident's obligations hereunder to be fulfilled
prior to or at the Closing Date is not so fulfilled, Trident may terminate this
Agreement or, if Trident so elects, may waive any such conditions which have
not been fulfilled, or may extend the time of their fulfillment. If Trident
terminates this Agreement as aforesaid, the Company and the Bank shall
reimburse Trident for its expenses as provided in Section 3(b) hereof.
8. Indemnification.
(a) The Company and the Bank jointly and
severally agree to indemnify and hold harmless Trident, its
officers, directors and employees and each person, if any, who
controls Trident within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, against any and all
loss, liability, claim, damage and expense whatsoever and
shall further promptly reimburse such persons for any legal or
other expenses reasonably incurred by each or any of them in
investigating, preparing to defend or defending against any
such action, proceeding or claim (whether commenced or
threatened) arising out of or based upon any misrepresentation
by the Company or the Bank in this Agreement or any breach of
warranty by the Company or the Bank with respect to this
Agreement or arising out of or based upon any untrue or
alleged untrue statement of a material fact or the omission or
alleged omission of a material fact required to be stated or
necessary to make not misleading any statements contained in
(i) the Registration Statement or the Prospectus or (ii) any
application (including the Form AC and the Form H-(e)2 or
other document or communication (in this Section 8
collectively called "Application") prepared or executed by or
on behalf of the Company, the Bank or the Subsidiary or based
upon written information furnished by or on behalf of the
Company, the Bank or the Subsidiary, whether or not filed in
any jurisdiction, to effect the Conversion or qualify the
Shares under the securities laws thereof or filed with the
Office or the Commission, unless such statement or omission
was made in reliance upon and in conformity with written
information furnished to the Company, the Bank or the
Subsidiary 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.
(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
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Trident Securities, Inc.
Sales Agency Agreement
Page 20
holders, depositors, borrowers and other members of the Bank
or, as applicable, the Subsidiary delivered to Trident by the
Bank or its agents for use during the Conversion.
(c) Trident agrees to indemnify and hold harmless
the Company, the Bank and the Subsidiary, their officers,
directors and employees and each person, if any, who controls
the Company, the Bank and the Subsidiary within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to
the same extent as the foregoing indemnity from the Company
and the Bank to Trident, but only with respect to (A)
statements or omissions, if any, made in the Prospectus or any
amendment or supplement thereof, in any Application or to a
purchaser of the Shares in reliance upon, and in conformity
with, written information furnished to the Company or the Bank
with respect to Trident by or on behalf of Trident expressly
for use in the Prospectus or in any Application; (B) any
misrepresentation or breach of warranty by Trident in Section
2(b) of this Agreement; or (C) any liability of the Company or
the Bank which is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have
principally and directly resulted from 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; but the omission so to notify the
indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein
and, to the extent that it may wish, jointly with the other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than the reasonable
cost of investigation except as otherwise provided herein. In
the event the indemnifying party elects to assume the defense
of any such action and retain counsel acceptable to the
indemnified party, the indemnified party may retain additional
counsel, but shall bear the fees and expenses of such counsel
unless (i) the indemnifying party shall have specifically
authorized the indemnified party to retain such counsel or
(ii) the parties to such suit include such indemnifying party
and the indemnified party, and such indemnified party shall
have been advised by counsel that one or more material legal
defenses may be available to the indemnified party which may
not be available to the indemnifying party, in which case the
indemnifying party shall not be entitled to assume the defense
of such suit notwithstanding the indemnifying party's
obligation to bear the fees and expenses of such counsel. An
indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this
Section 8 if
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Trident Securities, Inc.
Sales Agency Agreement
Page 21
any settlement of any such action is effected without such
indemnifying party's consent. To the extent required by law,
this Section 8 is subject to and limited by the provisions of
Section 23A.
9. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 8 above is for any reason held to be unavailable to
Trident, the Company and/or the Bank other than in accordance with its terms,
the Company or the Bank and Trident shall contribute to the aggregate losses,
liabilities, claims, damages, and expenses of the nature contemplated by said
indemnity agreement incurred by the Company or the Bank and Trident (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Bank on the one hand and Trident on the other from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above, but also the
relative fault of the Company or the Bank on the one hand and Trident on the
other hand in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Bank on the one hand and Trident on the other shall be deemed
to be in the same proportions as the total net proceeds from the Conversion
received by the Company and the Bank bear to the total fees received by Trident
under this Agreement. The relative fault of the Company or the Bank 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 Bank 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 Bank and Trident agree that it would not
be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by the indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 9, Trident shall not be required to contribute any amount in excess of
the amount by which fees owed Trident pursuant to this Agreement exceeds the
amount of any damages which Trident has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. To the extent required
by law, this Section 9 is subject to and limited by the provisions of Section
23A.
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Trident Securities, Inc.
Sales Agency Agreement
Page 22
10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company and the Bank and Trident and the
representation and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. Trident may terminate this Agreement by
giving the notice indicated below in this Section at any time after this
Agreement becomes effective as follows:
(a) If any domestic or international event or act
or occurrence has materially disrupted the United States
securities markets such as to make it, in Trident's reasonable
opinion, impracticable to proceed with the offering of the
Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become
involved in a war or major hostilities; or if a general
banking moratorium has been declared by a state or federal
authority which has a material effect on the Bank or the
Conversion; or if a moratorium in foreign exchange trading by
major international banks or persons has been declared; or if
there shall have been a material change in the capitalization,
condition or business of the Company, or if the Bank shall
have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act, whether or not said loss shall have
been insured; or if there shall have been a material change in
the condition or prospects of the Company or the Bank.
(b) If Trident elects to terminate this Agreement
as provided in this Section, the Company and the Bank shall be
notified promptly by Trident by telephone or telegram,
confirmed by letter.
(c) If this Agreement is terminated by Trident
for any of the reasons set forth in subsection (a) above, and
to fulfill its obligations, if any, pursuant to Sections 3, 6,
8(a) and 9 of this Agreement and upon demand, the Company and
the Bank shall pay Trident the full amount so owing
thereunder.
(d) The Bank may terminate the Conversion in
accordance with the terms of the Plan. Such termination shall
be without liability to any party, except that the Company and
the Bank and Trident shall be required to fulfill their
obligations pursuant to Sections 3(b), 3(c), 6, 8 and 9 of
this Agreement.
(e) The Bank may terminate this agreement with
respect to Trident if there shall have been a material breach
of this Agreement by Trident.
23
Trident Securities, Inc.
Sales Agency Agreement
Page 23
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 Elias, Matz, Xxxxxxx
& Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., 00xx Xxxxx, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxxx X. Xxxxxxxx, Esquire) and if sent to the Company, the Bank or
the Subsidiary, shall be mailed, delivered or telegraphed and confirmed to HCB
Bancshares, Inc., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000-0000, Attention:
Xxxx X. Xxxxxxx, President (with a copy to Housley Kantarian & Xxxxxxxxx, P.C.,
Suite 700, 0000 00xx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention: Xxxx X.
Xxxxxxxxx, Esquire).
13. Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, Trident, the Company, the Bank and the
controlling and other persons referred to in Section 8 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or
claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
14. Construction. Unless governed by preemptive federal
law, this Agreement shall be governed by and construed in accordance with the
substantive laws of Arkansas.
15. Amendment. This Agreement may be amended only by a
subsequent writing signed by all of the parties hereto.
16. 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.
24
Trident Securities, Inc.
Sales Agency Agreement
Page 24
Please acknowledge your agreement to the foregoing by signing
below and returning to the Company one copy of this letter.
HCB BANCSHARES, INC. HEARTLAND COMMUNITY BANK
By: By:
------------------------------------- -----------------------------
Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx
President and Chief Executive Officer President and Chief Executive
Officer
Date: , 1997 Date: , 1997
------ -- ------- --
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
----------------------------
Date: , 1997
------ --
25
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below: --
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
listed below: ---
Alaska
Hawaii
Montana
South Dakota
Utah
26
Exhibit B
________ ___, 1997
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
RE: HCB Bancshares, Inc.
Ladies and Gentlemen:
We are rendering this opinion to you in our capacity as
special counsel for Heartland Community Bank, a federally chartered mutual
savings bank (the "Bank") and HCB Bancshares, Inc., an Oklahoma corporation
(the "Company"), pursuant to Section 7(a) of the Sales Agency Agreement dated
March ___, 1997 (the "Agreement") between the Bank, the Company and you, with
respect to services rendered by you to the Bank and the Company in connection
with the offering of shares of the Company's common stock, par value $.01 per
share (the "Shares"), to be issued upon the Bank's conversion to a federally
chartered stock savings bank. While this firm represents the Bank and the
Company in connection with specific legal matters as to which we are consulted
by them, we do not perform or provide legal or litigation services to the Bank
or the Company in connection with the day-to-day operations of either of their
businesses or routine legal proceedings related thereto.
This opinion is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business Law (1991). As a consequence, this 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 this opinion. Terms
used herein which are defined in the Agreement or the Accord shall have the
respective meanings set forth in the Agreement or the Accord, unless otherwise
defined herein.
27
Trident Securities, Inc.
________ ___, 1997
Page 2
In addition, with your consent and for purposes of this
opinion we have relied without further inquiry on our part upon the factual
representations made by the Bank and the Company in Section 2 of the Agreement.
The law covered by the opinions expressed herein is limited to
federal law and Oklahoma corporate law, and we express no opinion as to federal
or state choice of law matters. We also note that our firm does not require
lawyers to be qualified to practice law in Oklahoma.
Based upon and subject to the foregoing, it is our opinion
that:
(i) The Company has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, the Bank is validly existing as a savings bank
in mutual form under the laws of the United States, and the Subsidiary is
validly existing as a savings bank in stock form under the laws of the United
States, each with full corporate power and authority to own its properties and
conduct its business as such properties and business are described in the
Prospectus;
(ii) the Bank and the Subsidiary are
members of the Federal Home Loan Bank of Dallas, and the deposit accounts of
the Bank and the Subsidiary are insured by the SAIF up to the applicable legal
limits;
(iii) to our actual knowledge, the
activities of each of the Bank and the Subsidiary as such activities are
described in the Prospectus are permitted under federal and Oklahoma law to
subsidiaries of an Oklahoma business corporation, and to our actual knowledge
the Bank does not have any subsidiaries other than the Subsidiary, Heritage
Banc Holding, Inc., and HCB Properties, Inc.;
(iv) the Plan complies with, and to our
actual knowledge the Conversion has been effected in all material respects in
accordance with, the HOLA and the OTS Regulations; to our actual 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 Bank, have been complied with by the Company and the Bank;
and, to our actual knowledge, 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
28
Trident Securities, Inc.
________ ___, 1997
Page 3
of payment and issuance in accordance with the terms of the Plan and the
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 Oklahoma law;
(viii) the issuance and sale of the capital
stock of the Bank to the Company have been duly authorized by all necessary
corporate action of the Bank 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 our actual knowledge, 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 federal governmental
board or body is required in connection with the execution and delivery of the
Agreement and the consummation of the Conversion, except with respect to the
issuance to the Bank of the Stock Charter by the Office and as may be required
under the securities laws of various jurisdictions and except as may be
required under the rules and regulations of the NASD;
(x) the execution and delivery of the
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 Bank;
(xi) the statements in the Prospectus and
incorporated by reference in the Proxy Statement under the captions
"Regulation," "Taxation," "Dividends," "Certain Restrictions on Acquisition of
the Company and the Bank," "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 no opinion is expressed), have
been prepared or reviewed by us and are correct in all material respects;
(xii) 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 our actual
knowledge, 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 our actual knowledge,
are contemplated or threatened;
29
Trident Securities, Inc.
________ ___, 1997
Page 4
(xiii) the execution and delivery of the
Agreement and the consummation of the Conversion by the Company and the Bank do
not conflict with or result in a breach of the certificate of incorporation,
charter or bylaws of the Company, the Bank (in either mutual or stock form) or
the Subsidiary; and
(xiv) 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 no opinion is expressed); to our 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 these documents and
exhibits are accurate in all material respects.
This opinion speaks only as of the date hereof, and we assume
no obligation to advise you of any changes in the foregoing subsequent to the
delivery of this opinion. This opinion is limited to present statutes,
regulations and judicial interpretations and to facts as they presently exist;
in rendering this opinion, we assume no obligation to revise or supplement it
should present laws be changed by legislative or regulatory action, judicial
decision or otherwise; we express no view, opinion or belief with respect to
whether any pending or proposed legislation, if enacted, or any regulations or
any policy statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the validity of the
execution and delivery by the Company and the Bank of the Agreement or the
issuance of the Shares; and we can give no assurance that our opinion would not
be different after any change in any applicable statutes, regulations or
judicial interpretations occurring after the date hereof.
This opinion has been prepared solely for your use in
connection with the issuance and sale of the Shares under the Agreement and
should not be relied upon by any other person or entity for any other purpose
and should not be used, circulated, quoted, in whole or in part, or otherwise
referred to, nor be filed with or furnished to any governmental agency or other
person or entity (except that a copy may be furnished to your counsel for the
Conversion), without the prior written consent of this firm.
Very truly yours,
HOUSLEY KANTARIAN & XXXXXXXXX, P.C.
By:
-----------------------------------
Xxxx X. Xxxxxxxxx
30
EXHIBIT C
[XXXXXX X. XXXXX, P.A. LETTERHEAD]
_________________ ____, 1997
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Re: HCB Bancshares, Inc.
Dear Sirs:
Please be advised that I am local counsel for HCB Bancshares, Inc.,
(the "Company") and Heartland Community Bank (the "Bank") in connection with
the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, and the offering in connection
with the conversion of the Bank from a federally chartered mutual savings bank
to a federally chartered capital stock savings bank, and the issuance of the
Bank's capital stock to the Company pursuant to the Bank's plan of conversion
adopted by the Bank's board of directors on November 21, 1996. Terms used
herein which are defined in the Agreement (defined below) shall have the
respective meanings set forth in the Agreement, unless otherwise defined
herein.
Pursuant to Section 7(b) of the Sales Agency Agreement between the
Bank, the Company and Trident Securities, Inc., dated March _, 1997 (the
"Agreement") it is my opinion that:
The Agreement is a legal, valid and binding obligation of each of the
Company and the Bank, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization, 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
enforce-
31
ability is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 thereof may be unenforceable as
against public policy or pursuant to Section 23A of the Federal Reserve Act, as
to which no opinion is rendered).
To my actual knowledge, the Bank, and the Bank's subsidiary capital
stock savings bank (the "Subsidiary) have obtained all licenses, permits and
other governmental authorizations currently required for the conduct of their
respective business as such business is described in the Prospectus, all such
licenses, permits and other governmental authorizations are in full force and
effect, and the Bank and the Subsidiary are in all material respects complying
therewith, except where the failure to obtain and hold such licenses, permits
or governmental authorizations or the failure to so comply would not have a
material adverse effect on the Company, the Bank and the Subsidiary, taken as a
whole.
There are no material legal or governmental proceedings pending or, to
my actual knowledge, threatened against or involving the assets of the Company,
the Bank or the Subsidiary (for this purpose I do not regard any litigation or
governmental procedure to be "threatened" unless the potential litigant or
government authority has manifested to the management of the Company, the Bank
or the Subsidiary, or to me, a present intention to initiate such litigation or
proceeding).
To my actual knowledge, the execution and delivery of the Agreement and
the consummation of the Conversion by the Company and the Bank do not
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, the Bank or the Subsidiary pursuant to
any of the terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or obligation to which
the Company, the Bank or the Subsidiary is a party or violate any governmental
license or permit or any enforceable published law, administrative regulation
or order or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Office in connection with its
approval of the Conversion Application), which breach, default, encumbrance or
32
violation would have a material adverse effect on the condition (financial or
otherwise), operations, business, assets or properties of the Company, the Bank
and the Subsidiary taken as a whole.
To my actual knowledge, there has been no material breach of any
provision of the Company's, the Bank's or the Subsidiary's certificate of
incorporation, charter or bylaws or breach or default (or the occurrence of any
event which, with notice or lapse of time or both, would constitute a default)
under any agreement, contract, indenture, bond, debenture, note, instrument or
obligation to which the Company, the Bank or the Subsidiary is a party or by
which any of them or any of their respective assets or properties may be bound,
or any governmental license or permit, or a violation of any enforceable
published law, administrative regulation or order, or court order, writ,
injunction or decree which breach, default, encumbrance or violation would have
a material adverse effect on the condition (financial or otherwise), operations
business, assets or properties of the Company, the Bank and the Subsidiary
taken as a whole.
This letter and opinion has been prepared solely for your use in
connection with the issuance and sale of all of the shares under the Agreement
and should not be relied upon by any other person or entity for any other
person and should not be used, circulated, quoted, in whole or in part, or
otherwise referred to, nor to be complied with nor furnished to governmental
agency or other person or entity without the prior written consent of this
firm.
Sincerely,
XXXXXX X. XXXXX, P.A.
Xxxxxx X. Xxxxx
RSL:bb
33
Exhibit D
________ ___, 1997
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
RE: HCB Bancshares, Inc.
Ladies and Gentlemen:
We have acted as special counsel for HCB Bancshares, Inc. (the
"Company") and Heartland Community Bank (the "Bank") in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's Registration Statement on Form SB-2 (No. 333-19093)
(the "Registration Statement"), and the prospectus contained in such
Registration Statement (the "Prospectus"), relating to the offering of
2,000,000 shares, subject to adjustment, of the Company's common stock, par
value $0.01 per share, in subscription and, if applicable, community offerings
in connection with the conversion of the Bank from a federally chartered mutual
savings bank to a federally chartered capital stock savings bank, and the
issuance of the Bank's capital stock to the Company pursuant to the Bank's plan
of conversion adopted by the Bank's Board of Directors on November 21, 1996.
This letter is being delivered pursuant to Section 7(c) of the Sales Agency
Agreement dated March ___, 1997 (the "Agreement"), between the Company, the
Bank and you. All references in this letter to instruments and other defined
terms shall mean the instruments and other terms as defined in the Agreement,
except as otherwise defined herein.
Because the primary purpose of our professional engagement by
the Company and the Bank in connection with the Conversion was not to establish
or to confirm factual matters, or financial, accounting or statistical matters,
and because of the wholly or partially non-legal character of many of the
statements contained in the Registration Statement and the Prospectus, we are
not passing herein upon and do not herein assume any responsibility for the
accuracy,
34
Trident Securities, Inc.
________ ___, 1997
Page 2
completeness or fairness of statements contained in the Registration Statement
or the Prospectus and make no representation herein that we have independently
verified the accuracy, completeness or fairness of such statements. Without
limiting the foregoing, we assume no responsibility for, and have not
independently verified, the accuracy, completeness or fairness of the financial
statements and schedules and other financial and statistical data included in
the Registration Statement, and we have not examined the accounting, financial
or statistical records from which such financial statements, schedules and data
are derived. We note that, although certain portions of the Registration
Statement (including financial statements and schedules) have been included
therein on the authority of "experts" within the meaning of the Securities Act,
we are not such experts with respect to any portion of the Registration
Statement, including without limitation such financial statements or schedules
or the other financial or statistical data included therein.
In the course of acting pursuant to our engagement by the
Company and the Bank, we participated in conferences, either in person or by
telephone, with representatives of the Company and the Bank, their counsel,
representatives of the independent appraiser, representatives of the
independent certified public accountants for the Company and the Bank, officers
and representatives of Trident and your counsel, during which conferences the
contents of the Registration Statement and related matters were discussed. In
addition, we reviewed copies of the exhibits filed with the Registration
Statement, as furnished to us by the Company and the Bank, certain minutes of
meetings of the Board of Directors of the Company and the Bank and the members
of the Bank (as deemed appropriate by us), and files and documents made
available to us by the Company and the Bank. We have also relied on written
statements of officers of the Company and the Bank covering certain of such
matters.
Based on our participation in the above-mentioned conferences,
our review of the documents described above, and our understanding of
applicable law (including the requirements of Form SB-2 and the character of
the Registration Statement contemplated thereby) and the experience we have
gained in our practice under the Securities Act, we advise you that nothing has
come to our attention that would lead us to believe that the Registration
Statement, as amended (except as to information regarding you 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 we express no view), at the time it became effective contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein
not misleading, or that the Prospectus, as amended (except as to information
regarding you included therein, and except as to financial statements, notes to
financial statements, financial tables and other financial and statistical data
contained therein as to which we express no view), as of its date and on the
date hereof, 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.
35
Trident Securities, Inc.
________ ___, 1997
Page 3
This letter has been prepared solely for your use in
connection with the issuance and sale of the Shares under the Agreement and
should not be relied upon by any other person or entity for any other purpose
and should not be used, circulated, quoted, in whole or in part, or otherwise
referred to, nor be filed with or furnished to any governmental agency or other
person or entity (except that a copy may be furnished to your counsel for the
Conversion), without the prior written consent of this firm.
Very truly yours,
HOUSLEY KANTARIAN & XXXXXXXXX, P.C.
By:
----------------------------------
Xxxx X. Xxxxxxxxx
