EXHIBIT 1.2
DUTCHFORK BANCSHARES, INC.
Up to 1,560,550 Shares
of
Common Stock
(Par Value $0.01 Per Share)
$10.00 Per Share
SALES AGENCY AGREEMENT
----------------------
May __, 2000
Trident Securities
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
DutchFork Bancshares, Inc., a Delaware corporation (the "Company"), and
Xxxxxxxx Federal Savings Bank, a federally-chartered savings bank (the "Bank"),
hereby confirm as of the date above their respective agreements with Trident
Securities, a Division of McDonald Investments 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. Introduction. The Bank intends to convert from a federally chartered
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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, collectively the "Conversion") pursuant to a plan
of conversion adopted on January 18, 2000, (the "Plan"). In accordance with the
Plan, the Company is offering shares of its common stock, par value $0.01 per
share (the "Shares" or the "Common Stock"), pursuant to nontransferable
subscription rights in a subscription offering ("Subscription Offering") to
certain depositors and borrowers of the Bank and the Bank's Employee Stock
Ownership Plan (the "ESOP"). Shares of the Common Stock not sold in the
Subscription Offering are being offered to the general public in a direct
community offering, with preference being given to natural persons residing in
Xxxxxxxx and Lexington Counties, South Carolina (the "Community Offering") and,
if necessary, through a syndicate of registered broker-dealers managed by
Trident in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription Offering, the Community Offering and the
Syndicated Community Offering are collectively referred to as the "Offerings."
Purchases of Shares in the Offerings are subject to certain limitations and
restrictions as described in the Plan.
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The Company and the Bank have been advised by Trident that it will utilize
its best efforts to assist the Company and the Bank with the sale of the Shares
in the Offerings. Prior to the execution of the Agreement, the Company has
delivered to Trident a prospectus dated as of the date hereof and all
supplements thereto to be used in the Offerings. Such prospectus contains
information with respect to the Company, the Bank, the Shares and the
Conversion.
2. Representations and Warranties.
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(a) The Company and the Bank jointly and severally represent and warrant
to Trident that:
(i) The Company has filed with the Commission a registration
statement, including a prospectus relating to the Offerings and
exhibits, and an amendment or amendments thereto, on Form SB-2 (No.
333-31986) for the registration of the Shares under the Securities Act
of 1933, as amended ("Securities Act"); and such registration
statement has been declared effective under the Securities Act and no
stop order has been issued with respect thereto and no proceedings
therefor have been initiated or, to the best knowledge of the Company
and the Bank, 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 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 any prospectus filed by the Company
with the Commission pursuant to Rule 424(b) of the general rules and
regulations of the Commission under the Securities Act (together with
the enforceable published policies, releases and actions of the
Commission thereunder, hereinafter referred to as the "Securities Act
Regulations") differs from the form of prospectus on file at the time
the Registration Statement became effective, the term "Prospectus"
shall refer to the Rule 424(b) prospectus from and after the time it
is filed with or mailed for filing to the Commission and shall include
any amendments or supplements thereto from and after their dates of
effectiveness or use, respectively. The Registration Statement
complies in all material respects with the Securities Act and the
Securities Act Regulations.
(ii) The Bank has filed an Application for Approval of Conversion on
Form AC, including exhibits (as amended or supplemented, the
"Conversion Application") with the Office of Thrift Supervision (the
"Office") under the Home Owners' Loan Act,
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as amended ("HOLA"), and the rules and regulations of the Office
thereunder (the "Office Regulations"), which has been approved by the
Office; and the Prospectus and the proxy statement for the
solicitation of proxies from members of the Bank for the special
meeting to approve the Plan ("Proxy Statement") included as part of
the Conversion Application have been approved for use by the Office.
The Company has filed with the Office the Company's application to
acquire ownership of the Bank on Form H-(e)1-S ("Holding Company
Application") promulgated under the savings and loan holding company
provisions of the HOLA and the regulations promulgated thereunder and
has received approval of its acquisition of the Bank from the Office.
No order has been issued by the Office preventing or suspending the
use of the Prospectus or Proxy Statement, and no action by or before
the Office or any court or other tribunal challenging or seeking to
challenge the Office's approval of the use of the Prospectus or Proxy
Statement or its approval of the Conversion Application or Holding
Company application is pending, or to the best knowledge of the
Company and the Bank, threatened.
(iii) As of the date hereof (i) the Registration Statement and the
Prospectus complied with the Securities Act and the Securities Act
Regulations, (ii) the Registration Statement does 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, in light of the circumstances under which they were made, not
misleading, and (iii) the Prospectus does 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 relating to Trident furnished to
the Company or the Bank by or on behalf of Trident and expressly
provided for use in the Registration Statement or Prospectus.
(iv) The Company has been duly incorporated as a Delaware corporation
and the Bank has been duly organized as a mutual savings bank under
the laws of the United States, and each of them is validly existing
and in good standing under the laws of their jurisdiction of
organization with full power and authority to own its property and
conduct its business as described in the Registration Statement and
Prospectus; the Bank is a member in good standing of the Federal Home
Loan Bank of Atlanta; and the deposit accounts of the Bank are insured
by the Savings Association Insurance Fund ("SAIF") administered by the
Federal Deposit Insurance Corporation ("FDIC") up to the applicable
legal limits. The Company is qualified to transact business as a
foreign corporation in the State of South Carolina. Each of the
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Company and the Bank is qualified to transact business as a foreign
corporation in all jurisdictions except those where non-qualification
does not, and could not have a Material Adverse Effect on the
condition (financial or otherwise), operations, business, earnings or
properties of the Company, the Bank and the Subsidiary (defined below)
considered as one enterprise ("Material Adverse Effect").
(v) The Bank owns of record and beneficially all of the outstanding
shares of Inter-Community Service Corporation (the "Subsidiary"). The
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of [South Carolina] with
full power and authority to own its properties and conduct its
business as described in the Prospectus. The Subsidiary is qualified
to do business as a foreign corporation in all jurisdictions except
those where nonqualification would not have a Material Adverse Effect.
Neither the Company nor the Bank owns, directly or indirectly, the
outstanding capital stock or other equity interest of the subsidiary
(a "Subsidiary").
(vi) The Company, the Bank and the Subsidiary has good and marketable
title to all assets material to its business and to those assets
described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except for liens for ad
valorem taxes not yet due, except as described in the Prospectus and
except as do not, and could not, in the aggregate, have a Material
Adverse Effect; and all of the leases and subleases material to the
operations of the Company, Bank or the Subsidiary, under which it
holds properties, including those described in the Prospectus, are in
full force and effect as described therein.
(vii) The Company, the Bank and the Subsidiary have obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of their respective businesses except where
the failure to obtain such licenses, permits and governmental
authorizations does not, and could not, have a Material Adverse
Effect; all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company, the Bank
and the Subsidiary are complying therewith in all material respects.
(viii) 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 of each of the Company and the Bank, enforceable in
accordance with its terms except as the enforceability thereof may be
limited by (a) bankruptcy, insolvency, moratorium, reorganization,
conservatorship, receivership or similar laws relating to or affecting
the enforcement of creditors'
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rights generally or the rights of creditors of insured financial
institutions and their holding companies, the accounts of whose
subsidiaries are insured by the FDIC; (b) general equity principles,
regardless of whether such principles are applied in a proceeding in
equity or at law; (c) laws relating to the safety and soundness of
insured depository institutions and their affiliates, and except to
the extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or by applicable law, including
without limitation, Section 23A of the Federal Reserve Act, 12 U.S.C.
Section 371c ("Section 23A").
(ix) Except as described in the Prospectus, there is no litigation or
governmental proceeding pending or, to the best knowledge of the
Company or the Bank, threatened against or involving the Company, the
Bank or the Subsidiary, or any of their respective assets which
individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect.
(x) The Company and the Bank each has all power, authority,
authorizations, approvals and orders as may be required to enter into
this Agreement, to carry out the provisions and conditions hereof and,
in the case of the Company, to issue and sell the Shares to be sold by
it as provided herein, and in the case of the Bank, to issue and sell
the shares of its capital 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 a federal stock savings bank ("Stock Charter"), the form
of which is filed as an exhibit to the Form AC).
(xi) The Company and the Bank have received the opinions of Xxxxxxx,
Xxxxxx & Xxxxxxxx LLP with respect to the federal income tax
consequences of the Conversion, and of Xxxxxxx X. Xxxxxxxx, CPA with
respect to the state income tax consequences of the Conversion, to the
effect that the Conversion will constitute a tax-free reorganization
under the Internal Revenue Code of 1986, as amended (the "Code"), or
under the laws of South Carolina, and will not be a taxable
transaction for the Bank or the Company under the Code or under the
laws of South Carolina; and the facts and representations provided by
the Company and the Bank and relied upon in the rendering of such
opinions are accurate and complete, and neither the Company nor the
Bank have taken any action inconsistent therewith.
(xii) Neither the Company, the Bank nor the Subsidiary is in violation
of any rule or regulation of the Office, the FDIC or any state
department or agency regulating the banking or other activities of the
Company, the Bank or the Subsidiary that has resulted or could result
in any enforcement action against the Company, the Bank or the
Subsidiary, or their officers or directors, that might have a Material
Adverse Effect.
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(xiii) Xxxxxx & Company, the firm that prepared the independent
appraisal included in the Conversion Application, is independent with
respect to the Company, the Bank and the Subsidiary within the meaning
of the Office Regulations. The Company and the Bank believe such firm
to be experienced and expert in providing appraisals of thrift
institutions, and nothing has come to the attention of the Company or
the Bank which has caused either of them to believe that the appraisal
included in the Conversion Application was not prepared in accordance
with the requirements of the Office Regulations.
(xiv) Xxxxxxx X. Xxxxxxxx, CPA, the firm that certified the financial
statements of the Bank filed as part of the Registration Statement and
the Conversion Application, is independent with respect to the
Company, the Bank and the Subsidiary as required by the Securities
Act, the Securities Act Regulations, the Code of Professional Ethics
of the American Institute of Certified Public Accountants, and Title
12 of the Code of Federal Regulations Parts 563c and 571, and nothing
has come to the attention of the Company or the Bank which has caused
either of them to believe that such firm is not independent within the
meaning of such provisions.
(xv) The financial statements and related notes which are included in
the Registration Statement and the Prospectus fairly present the
financial condition, results of operations, retained earnings and cash
flows of the Bank at the respective dates thereof and for the
respective periods covered thereby and comply as to form with the
applicable accounting requirements of the Securities Act Regulations
and the Office Regulations. Such financial statements have been
prepared in accordance with generally accepted accounting principles
("GAAP") 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 the
Office, except as GAAP may otherwise require. The financial tables in
the Prospectus accurately present the information purported to be
shown thereby at the respective dates thereof and for the respective
periods covered thereby.
(xvi) There has been no material change in the condition (financial or
otherwise), results of operations, business, assets or properties, 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 set forth therein; and the capitalization, assets,
properties and business of each of the Company, the Bank and the
Subsidiary conform in all material aspects to the descriptions thereof
contained in the
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Prospectus. None of the Company, the Bank and the Subsidiary, has any
material liabilities of any kind, contingent or otherwise, except as
set forth in the Prospectus.
(xvii) There has been no breach or default (or the occurrence of any
event which, with notice or lapse of time or both, would constitute a
default) under, or creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the Company, the
Bank or the Subsidiary pursuant to any of the terms, provisions or
conditions of any agreement, contract, indenture, lease, 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
any 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, lien, charge,
encumbrance or violation could have a Material Adverse Effect; all
agreements which are material to the financial condition, results of
operations, business, assets or properties 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.
(xviii) Neither the Company, the Bank nor the Subsidiary is in
violation of its respective charter, certificate or articles of
incorporation or bylaws. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by the
Company and the Bank do not conflict with or result in a breach of the
charter, certificate or articles of incorporation or bylaws of the
Company, the Bank (in either mutual or stock form) or the Subsidiary,
or violate, conflict with or constitute a material breach 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
agreement, contract, indenture, lease, bond, debenture, note,
instrument or obligation to which the Company, the Bank or the
Subsidiary is a party (other than the establishment of a liquidation
account pursuant to the Plan) or violate any governmental license or
permit or any 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 have a Material Adverse Effect.
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(xix) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as
otherwise may be indicated or contemplated therein, neither the
Company, the Bank nor Subsidiary has issued any securities which will
remain issued at the Closing Date (as defined below) or incurred any
liability or obligation, direct or contingent, or borrowed money,
except borrowings or liabilities incurred in the ordinary course of
business, or entered into any other transaction not in the ordinary
course of business and not consistent with prior practices, which is
material in light of the business of the Company, the Bank and
Subsidiary, taken as a whole.
(xx) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be as set forth in the
Prospectus under the heading "Capitalization," and no equity
securities of the Company shall be outstanding immediately prior to
the Closing Date other than shares of capital stock issued in
connection with the formation of the Company, which shares shall be
canceled on the Closing Date. The issuance and the sale of the Shares
of the Company have been duly authorized by all necessary action of
the Company and approved by the Office and, when issued in accordance
with the terms of the Plan and paid for as set forth in the
Prospectus, shall be validly issued, fully paid and nonassessable and
shall conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Shares is not subject
to preemptive rights, except as set forth in the Prospectus; and good
title to the Shares will be transferred by the Company upon issuance
thereof against payment therefor, free and clear of all claims,
encumbrances, security interests and liens against the Company
whatsoever. The certificates representing the Shares will conform 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 all
appropriate regulatory authorities (subject to the satisfaction of
various conditions imposed by the Office in connection with its
approvals of the Conversion Application and the Holding Company
Application), and such capital stock, when issued in accordance with
the terms of the Plan, will be validly issued, fully paid and
nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus.
(xxi) 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 such approvals as
have been obtained, except for the declaration of effectiveness by the
Commission of any required post-effective amendment of the
Registration Statement not yet filed, except as may be required by
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the "blue sky" or securities laws of various jurisdictions, and except
as may be required by the conditions of the approval of the Conversion
Application by the Office.
(xxii) All contracts and other documents required to be filed as
exhibits to the Registration Statement, the Conversion Application or
the Holding Company Application have been filed with the Commission or
the Office or both, as the case may be.
(xxiii) 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 knowledge of
the Company and the Bank, have made adequate reserves for future tax
liabilities, except where any failure to make such filings, payments
and reserves, or the assertion of such a deficiency, could not have a
Material Adverse Effect.
(xxiv) All of the loans represented as assets of the Bank as of the
most recent date for which financial condition data is 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), real estate settlement procedures, consumer credit
protection, equal credit opportunity and all disclosure laws
applicable to such loans, except for violations which, if asserted,
could not have a Material Adverse Effect.
(xxv) The records of depositors, account holders, borrowers and other
members of the Bank delivered to Trident by the Bank or its agent for
use during the Conversion have been reviewed by the Bank and are
believed to be accurate, reliable and complete.
(xxvi) Neither the Company, the Bank nor the Subsidiary or, to the
best knowledge of the Company and the Bank, the employees of the
Company, the Bank or the Subsidiary, has made any payment of funds of
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.
(xxvii) 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, the Bank nor the Subsidiary is subject to
liability under the Comprehensive Environmental Response,
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Compensation and Liability Act of 1980, as amended, or any similar
law, except for violations which, if asserted, could not have a
Material Adverse Effect. 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 and the Bank, except as disclosed in the
Prospectus, has occurred on, in or at any of the facilities or
properties owned or leased by the Company, the Bank or the Subsidiary
or on any properties pledged to the Bank or the Subsidiary as security
for any indebtedness, except such disposal, release or discharge as
could not have a Material Adverse Effect.
(xxviii) All documents delivered by the Company, the Bank or the
Subsidiary or their representatives in connection with the issuance
and sale of the Common Stock, except for those documents that were
prepared by parties other than the Company, the Bank, the Subsidiary
or their representatives, were, on the dates on which they were
delivered, true, complete and correct in all material respects.
(xxix) At the Closing Date, the Company and the Bank will have
completed the conditions precedent to, and will have conducted the
Conversion in all material respects in accordance with, the Plan, the
HOLA, the Office 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 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
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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 whose accounts may be protected
by the Securities Investor Protection Corporation or by general equity
principles, regardless of whether such principles are applied 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 by applicable law, including, without limitation,
Section 23A).
(iv) Trident and, to Trident's best knowledge, its employees, agents
and representatives who shall perform any of the services required
hereunder to be performed by Trident, shall be duly authorized and
shall have all licenses, approvals and permits necessary to perform
such services, and Trident is a registered selling agent in the
jurisdictions in which the Company is relying on such registration for
the sale of the Shares, and will remain so registered until the
Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by Trident, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with
the 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
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 which breach, default or violation could have a
material adverse effect on the condition (financial or otherwise),
operations, business, assets or properties of Trident or its ability
to perform its obligations under this Agreement.
(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 ("Exchange Act").
(vii) No action or proceeding against Trident before the Commission,
the NASD, any state securities commission, or any state or federal
court is pending or, to Trident's best knowledge, threatened
concerning Trident's activities as a broker-dealer which could have a
material adverse effect on the condition (financial or otherwise),
operations, business, assets or properties of Trident or its ability
to perform its obligations under this Agreement.
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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 to assist the Company with the
Company's sale of the Shares in the Offerings, and Trident hereby accepts such
employment. The employment of Trident hereunder shall terminate (a) forty-five
(45) days after the Subscription Offering closes, unless the Company and the
Bank, with the approval of the Office, if required, 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 1,003,000 Shares
(or such lesser amount as the Office may permit) within the period of Trident's
employment, 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 they 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 3(c)
and 3(d) below and Sections 6, 8, 9 and 10 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
will be made prior to the commencement of the Subscription 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 for such Shares on or as soon as possible following
the Closing Date against payment to the Company by any means authorized pursuant
to the Prospectus, at the principal executive office of the Bank or at such
other place as shall be agreed upon between the parties hereto. The date upon
which the Company shall release or deliver the Shares sold in the Offerings, in
accordance with the terms hereof, is herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward to the Bank 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 of an order form by Trident or (b) to solicit
indications of interest in which event (i) Trident will subsequently contact any
potential subscriber indicating interest to confirm the interest and give
instructions to execute and return an order form or to receive authorization to
execute the order form on the subscriber's behalf, (ii) Trident will mail
acknowledgments of receipt of orders to each subscriber confirming interest on
the business day following such confirmation, (iii) Trident will debit accounts
of such subscribers on the third business day ("Debit Date") following receipt
of the confirmation referred to in (i), and (iv) Trident will forward completed
order forms together with such funds to the Bank on or before twelve noon on the
next business day following the Debit Date for deposit in a segregated account.
Trident acknowledges that if the procedure in (b) is adopted, subscribers' funds
are not required to be in their accounts until the Debit Date.
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The Company and the Bank agree to pay Trident the following
compensation and expense reimbursement for its services hereunder.
Such fees shall be paid in next-day funds on the Closing Date.
(a) A management fee in the amount of $10,000.
(b) A commission equal to two percent (2.0%) of the aggregate dollar
amount of the Shares sold in the Subscription Offering and Community
Offering (excluding Shares sold to the Bank's directors and executive
officers, and their "Associates," as defined in the Plan, and shares
sold to the ESOP). For stock sold by other NASD member firms under
selected dealers agreements, the commission shall not exceed a fee to
be agreed upon jointly by Trident and the Bank to reflect market
requirements at the time of the stock allocation in a Syndicated
Community Offering. All such fees shall be paid in next-day funds on
the Closing Date.
(c) Reimbursement for all allocable out-of-pocket expenses, including
but not limited to travel, food, lodging and legal fees, incurred by
Trident whether or not the Conversion is consummated; provided,
however, that reimbursable legal fees will not exceed $30,000
(excluding out-of-pocket expenses), that other reimbursable expenses
will not exceed $12,500 and that neither the Company nor the Bank
shall 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 reimbursement of Trident 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 detailing its
allocable expenses. Trident acknowledges receipt of a $10,000 advance
payment from the Bank, which shall be credited against the total
reimbursement due Trident hereunder.
(d) Reimbursement for any expenses of the Company and the Bank set
forth in Section 6 hereof to the extent paid by Trident on behalf of
the Company or the Bank. Full reimbursement 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 and the Bank of a written request from Trident
detailing such expenses.
Trident Securities
Page 14
Notwithstanding the limitations on reimbursement of Trident for its
allocable expenses provided in subsection (c) above and notwithstanding any
reimbursement of Trident pursuant to subsection (d) above, in the event that a
resolicitation or other event causes the Offerings to be extended beyond the
original expiration date of the Subscription Offering, as set forth in the
Prospectus, Trident shall be reimbursed for its allocable expenses incurred
during such extended period, provided that the allowance for allocable expenses
provided for in subsection (c) above has been exhausted and subject to the
following: such reimbursement shall not exceed an amount equal to the product
obtained by dividing $42,500 (the reimbursable expenses and legal fees
limitation set forth in Section (c) above) 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 (the number of
days from the date of the intended close of the Subscription Offering to the
closing of the extension of the Subscription Offering).
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
--------
assisting the Company and the Bank on a best efforts basis in offering a minimum
of 1,003,000 and a maximum of 1,357,000 Shares, subject to adjustment up to
1,560,550 Shares, in the Offerings, subject to such other adjustments as may
be permitted by the Office. The Shares are to be offered to the public at the
price set forth on the cover page of the Prospectus and the first page of this
Agreement.
5. Further Agreements. The Company and the Bank jointly and severally
------------------
covenant and agree that:
(a) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus and through and including the
Closing Date, except as otherwise may be indicated or contemplated therein,
neither the Company, the Bank nor the Subsidiary will issue any securities
which will remain issued at the Closing Date or incur any liability or
obligation, direct or contingent, or borrow money, except borrowings or
liabilities in the ordinary course of business, or enter into any other
transaction not in the ordinary course of business and consistent with
prior practices, which is material in light of the financial condition or
operations of the Company, the Bank and the Subsidiary, taken as a whole.
(b) If any Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offerings, the Company (i) will, if
required by the Securities Act Regulations, promptly file with the
Commission a post-effective amendment to such Registration Statement
relating to the results of the Subscription and the Community Offerings,
any additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no such post-
effective amendment is required, will, if required by the Securities Act
Regulations, file with the Commission a prospectus or
Trident Securities
Page 15
prospectus supplement containing information relating to the results of the
Subscription and Community Offerings and pricing information pursuant to
Rule 424(c) of the Securities Act Regulations, in either case in a form
reasonably acceptable to the Company and Trident.
(c) 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 (other than shares of Common Stock issued in connection with the
initial capitalization of the Company, which shares will be canceled upon
consummation of the Conversion), and the certificates representing the
Shares will conform in all material respects with the requirements of
applicable laws and regulations.
(d) Upon amendment of the Bank's charter and bylaws as provided in the
Office Regulations 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.
(e) 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.
(f) The Company will notify Trident immediately, 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, (iv) of the receipt of any comments from the
staff of the Commission relating to the Registration Statement and (v) of
the issuance by the Office of any stop order relating to the Conversion or
the use of the Prospectus or Proxy Statement or the initiation or threat of
any proceedings for that purpose. 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.
(g) During the time when a prospectus is required to be delivered under the
Securities Act, the Company will comply with all requirements imposed upon
it by the Securities Act and by the Securities Act Regulations to permit
the continuance of offers and sales of or
Trident Securities
Page 16
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 or the Subsidiary, shall
occur as a result of which it is necessary, in the reasonable opinion of
counsel for Trident after consultation with counsel for the Company and the
Bank, to amend or supplement the Prospectus in order to make the Prospectus
not false or misleading in light of the circumstances existing at the time
it is delivered to a purchaser of the Shares, the Company shall prepare and
furnish to Trident a reasonable number of copies of an amendment or
amendments or of a supplement or supplements to the Prospectus (in form and
substance reasonably 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 unless Trident has been first furnished a copy or to
which Trident shall reasonably object after having been furnished such
copy. For the purposes of this subsection the Company and the Bank shall
furnish such information with respect to themselves as Trident from time to
time may reasonably request.
(h) The Company and the Bank will take all necessary action and furnish to
appropriate counsel such information as may be required to qualify or
register the Shares for offer and sale by the Company under the securities
or blue sky laws of such jurisdictions as Trident and the Company or its
counsel may agree upon; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws
of any such jurisdiction. In each jurisdiction where such qualification or
registration shall be effected, the Company, unless Trident agrees that
such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or reports
as are, or reasonably may be, required by the laws of such jurisdiction.
(i) Appropriate entries will be made in the financial records of the Bank
to establish a liquidation account in accordance with the Office
Regulations.
(j) The Company will file a registration statement for the Common Stock
under Section 12(b) or Section 12(g) of the Exchange Act, as applicable,
prior to completion of the Offerings 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 (3) years or for such shorter
period as may be required by applicable law.
Trident Securities
Page 17
(k) 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 Securities Act Regulations) 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.
(l) For a period of three (3) years from the date of this Agreement, 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.
(m) The Company will use the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus.
(n) The Company will not deliver the Shares until each and every condition
set forth in Section 7 hereof has been satisfied, unless such condition is
waived in writing by Trident.
(o) The Company and the Bank will advise Trident as to the allocation of
the deposits of the Bank's depositors and as to the allocation of votes of
its voting members, and in the event of an oversubscription for Shares in
the Offerings, will determine and provide Trident with final instructions
as to the allocation of the Shares and such information shall be accurate,
reliable and complete. Trident shall be entitled to rely upon such
information and instructions and shall have no liability related to its
reliance thereon, including, without limitation, any liability for or
related to any denial or satisfaction of any subscription in whole or in
part.
(p) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Trident in order for Trident to
comply with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
(q) At the Closing Date, the Company and the Bank will have completed all
conditions precedent to, and shall have conducted the Conversion in all
material respects in accordance with, the Plan, Office 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.
Trident Securities
Page 18
(r) The Company will use its best efforts to obtain approval for and
maintain quotation of its shares of common stock on The Nasdaq National
Market effective on or prior to the Closing Date.
(s) The Company will not sell or issue, contract to sell or otherwise
dispose of, for a period of 90 days after the Closing Date, without
Trident's prior written consent, any shares of common stock other than as
described in the Prospectus.
(t) The Company and the Bank will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or
orders to purchase Common Stock in the Subscription and Community Offerings
on an interest bearing basis at the rate described in the Prospectus until
the Closing Date and satisfaction of all conditions precedent to the
delivery of certificates for the Shares to subscribers or until refunds of
such funds have been made to the persons entitled thereto in accordance
with the Plan and as described in the Prospectus.
(u) The Company and Bank will conduct the Conversion in accordance with the
Plan, the Office Regulations and all other applicable laws, regulations,
decisions, approvals and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion.
6. Payment of Expenses. Whether or not the Conversion is consummated,
-------------------
the Company and the Bank shall pay all expenses of the Conversion, including,
but not limited to, the following expenses: (a) all regulatory filing fees,
including but not limited to those payable to the Commission, the Office, state
blue sky authorities and the NASD (including fees payable to the NASD for
Trident's filing pursuant to the NASD Corporate Finance Rule), (b) all stock
issue and transfer taxes which may be payable with respect to the sale of the
Shares, (c) attorneys' fees of the Company and the Bank, (d) attorneys' fees
relating to any required state blue sky laws research and filings, (e) telephone
charges, (f) air freight, (g) rental equipment, (h) supplies, (i) transfer agent
and registrar fees and expenses, (j) auditing and accounting fees and expenses,
(k) fees for appraisals and business plans, (l) conversion agent charges, (m)
costs of printing and mailing all documents necessary in connection with the
Conversion, and (n) slide production expenses in connection with any community
investor meetings to be held in connection with the Conversion.
7. Conditions of Trident's Obligations. Except as may be waived in
-----------------------------------
writing 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:
Trident Securities
Page 19
(a) On the Closing Date, Trident shall receive the favorable opinion of
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, special counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and substance
satisfactory to counsel for Trident and stating that:
(i) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware; the Bank has been duly organized and is validly existing as
a mutual savings bank under the laws of the United States; the
Subsidiary has been duly organized and is validly existing as a
corporation in good standing under the laws of the state in which it
is incorporated; and the Company, the Bank and the Subsidiary have
full power and authority to own their properties and conduct their
businesses as described in the Prospectus;
(ii) the Bank is a member of the Federal Home Loan Bank of Atlanta,
and the deposit accounts of the Bank are insured by the SAIF up to the
applicable legal limits, and to such counsel's Actual Knowledge, no
actions or proceedings are pending or threatened to revoke such
membership or insurance coverage;
(iii) to such counsel's Actual Knowledge, the Bank has no direct or
indirect subsidiary corporations, except as set forth in the
Prospectus;
(iv) Neither the Company nor the Bank is required to be registered as
an investment company under the Investment Company Act of 1940;
(v) the Company, the Bank and the Subsidiary are each duly qualified
to do business and are in good standing as a foreign corporation in
each jurisdiction where the ownership or leasing of its properties or
the conduct of its business of which such counsel has Actual Knowledge
requires such qualification, unless the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect;
(vi) to such counsel's Actual Knowledge, the Company, the Bank and the
Subsidiary has obtained all licenses, permits and other governmental
authorizations required for the conduct of its business as described
in the Prospectus, except where the failure to obtain such licenses,
permits or governmental authorizations would not reasonably be
expected to have a Material Adverse Effect; to such counsel's Actual
Knowledge, all of the leases and subleases material to the business of
the Company, the Bank or the Subsidiary under which the Company, the
Bank or the Subsidiary holds properties are in full force and effect;
to such counsel's Actual Knowledge, neither the Company, the Bank, nor
the Subsidiary is in violation of its charter or bylaws;
Trident Securities
Page 20
(vii) the Plan has been duly adopted and approved by the Boards of
Directors of the Bank and the Company and the members of the Bank; the
Plan complies with, and to such counsel's Actual Knowledge, the
Conversion has been effected in all material respects in accordance
with, the HOLA and the Office Regulations and applicable Office
approvals issued thereunder; to such counsel's Actual Knowledge, all
of the terms, conditions, requirements and provisions with respect to
the filing or submission of certain required reports or other
materials by the Company or the Bank, have been complied with by the
Company and the Bank in all material respects except for reports and
items required to be filed or submitted after the Closing Date; and,
to such counsel's Actual Knowledge, no person has sought to obtain
regulatory or judicial review of the final action of the Office in
approving the Plan;
(viii) the Company has authorized Common Stock as set forth in the
Registration Statement and the Prospectus, and the description thereof
in the Registration Statement and the Prospectus is accurate and
complete in all material respects;
(ix) upon the effectiveness of the Bank's Stock Charter and Bylaws in
accordance with the Office Regulations and the completion of the sale
by the Company of the Shares as contemplated by the Prospectus and
Plan, (a) the Bank will be converted pursuant to the Plan to a federal
capital stock savings bank, with full power and authority to own its
property and conduct its business as described in the Prospectus, and
(b) all of the outstanding capital stock of the Bank will be owned of
record and, to such counsel's Actual Knowledge, beneficially by the
Company free and clear of all liens, charges, encumbrances and
restrictions;
(x) the issuance and sale of the Shares have been duly authorized by
all necessary corporate action on the part of the Company; the Shares,
upon receipt of consideration and issuance in accordance with the
terms of the Plan and this Agreement, will be validly issued, fully
paid, nonassessable and, except as disclosed in the Prospectus, free
of preemptive rights, and purchasers of such 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;
(xi) the certificates for the Shares comply in all material respects
with the applicable law of the jurisdiction in which the Company is
incorporated;
Trident Securities
Page 21
(xii) 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, except as disclosed in the Prospectus,
free of preemptive rights; the Company upon issuance thereof against
payment to the Bank of a portion of the net proceeds from the sale of
the Shares, will acquire such shares which, to such counsel's Actual
Knowledge, are free and clear of all claims, encumbrances, security
interests and liens whatsoever;
(xiii) subject to the satisfaction of the conditions to the Office
approval of the Conversion Application and the Holding Company
Application, no further approval, authorization, consent or other
order of any regulatory agency is required in connection with the
execution and delivery of this Agreement, the issuance and sale of the
Shares and the consummation of the Conversion, except with respect to
the issuance of the Bank's Stock Charter by the Office, and except as
may be required under the blue sky securities laws of various
jurisdictions and the regulations of the NASD (as to which no opinion
need be rendered in such letter);
(xiv) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly authorized by all
necessary corporate action on the part of each of the Company and the
Bank, and this 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 (i)
bankruptcy, insolvency, moratorium, reorganization, receivership,
conservatorship or other similar laws relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors
of depository Banks whose accounts are insured by the FDIC or savings
and loan holding companies the accounts of whose subsidiaries are
insured by the FDIC; (ii) general equity principles, regardless of
whether such enforceability is considered in a proceeding in equity or
at law, or (iii) laws relating to the safety and soundness of insured
depository Banks and their affiliates, and except to the extent that
the provisions of Sections 8 and 9 hereof may be unenforceable as
against public policy or applicable law, including but not limited to,
Section 23A;
(xv) except as set forth in the Prospectus, to such counsel's Actual
Knowledge, the Bank is not in violation of any directive from the
Office to make any change in the method of conducting its business and
there are no legal or governmental proceedings pending or threatened
against or involving the assets of the Company or the Bank, which
violation or proceedings would reasonably be expected to have a
Material Adverse Effect (provided that for this purpose such counsel
need not
Trident Securities
Page 22
regard any litigation or governmental proceeding to be
"threatened" unless the potential litigant or government authority has
manifested to the management of the Company or the Bank, or to such
counsel, a present intention to initiate such litigation or
proceeding);
(xvi) the statements in the Prospectus under the captions "Regulation
and Supervision," "Federal and State Taxation on Income," "DutchFork
Bancshares' Dividend Policy," "Restrictions on Acquisition of
DutchFork Bancshares and Xxxxxxxx Federal" "Regulatory Capital
Compliance" and "Description of DutchFork Bancshares Stock," insofar
as they are, or refer to, statements of federal law or legal
conclusions (excluding financial or statistical data or stock
valuation information included therein, as to which an opinion need
not be expressed), have been prepared or reviewed by such counsel and
are accurate in all material respects;
(xvii) the Conversion Application and the Holding Company Application
have 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 have been declared
effective by the Commission; and no proceedings are pending by or
before the Commission or the Office seeking to revoke or rescind the
orders declaring the Registration Statement or any post-effective
amendment thereto effective or approving the Conversion Application or
the Holding Company Application and, to such counsel's Actual
Knowledge, no such proceedings are contemplated or threatened
(provided that for this purpose such counsel need not regard any
litigation or governmental proceeding to be "threatened" unless the
potential litigant or government authority has manifested to the
management of the Company or the Bank, or to such counsel, a present
intention to initiate such litigation or proceeding);
(xviii) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the Bank do not (i)
violate or conflict with the charter, certificate of incorporation or
bylaws of the Company, the Bank (in either mutual or stock form) or
the Subsidiary, (ii) to such counsel's Actual Knowledge, constitute a
breach of or default (or an event which, with notice or lapse of time
or both, would constitute a default) under, give rise to any right of
termination, cancellation or acceleration contained in, or result in
the creation or imposition of any lien, charge or other encumbrance
upon any of the properties or assets of the Company, the Bank or the
Subsidiary pursuant to any of the terms, provisions or conditions of,
any agreement, contract, indenture, bond, lease, debenture, note,
instrument or obligation to which the Company, the Bank or the
Subsidiary is a party (other than the required establishment of the
liquidation account pursuant to the Plan)
Trident Securities
Page 23
which in any such event would reasonably be expected to result in a
Material Adverse Effect or (iii) violate the HOLA or the Office
Regulations or, to such counsel's Actual Knowledge, any law,
administrative regulation, court order, writ, injunction or decree
(subject to the satisfaction of certain post-closing conditions
imposed by the Office in connection with its approval of the
Conversion Application and the Holding Company Application);
(xix) to such counsel's Actual Knowledge, there has been no violation
of any provision of the Company's, the Bank's or the Subsidiary's
charter, certificate of incorporation, articles of incorporation 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) by
the Company, the Bank or the Subsidiary under any agreement, contract,
indenture, lease, 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 violation of any license, permit, law, administrative
regulation or order, court order, injunction or decree which
violation, breach or default would reasonably be expected to have a
Material Adverse Effect;
(xx) The Conversion Application, the Holding Company Application, the
Registration Statement, the Prospectus and the Proxy Statement, in
each case, as amended and supplemented, comply as to form in all
material respects with the requirements of the Securities Act, the
HOLA, the Securities Act Regulations and the Office Regulations, as
the case may be (except as to information provided in writing by
Trident with respect to Trident included therein and financial
statements, notes to financial statements, financial tables and other
financial and statistical data and appraisal information included
therein, as to which no opinion need be rendered); to such counsel's
Actual Knowledge, all documents and exhibits required to be filed with
the Conversion Application and the Registration Statement have been so
filed; and the descriptions in the Conversion Application and the
Registration Statement of such documents and exhibits are accurate and
complete in all material respects.
In rendering such opinions, such counsel may rely as to certain matters of
fact on certificates of executive officers and directors of the Company and the
Bank and certificates of public officials delivered pursuant hereto. Such
counsel may assume that any agreement is the valid and binding obligation of any
parties to such agreement other than the Company and the Bank. As used in such
counsel's opinion, the phrase "Actual Knowledge" shall mean the conscious
awareness of facts or other information by
________________________________________________________________________
________________________________ who are all the lawyers employed by such
counsel
Trident Securities
Page 24
who have had active involvement in representing the Company or the Bank,
and except to the extent stated in such opinion, such counsel will not be deemed
to have undertaken any independent investigation or inquiry to determine the
existence or absence of any facts. For purposes of such opinion, no proceeding
shall be deemed to be pending, no order or stop order shall be deemed to be
issued, and no action shall be deemed to be instituted unless, in each case, a
director or executive officer of the Company or the Bank, or its counsel, shall
have received a copy of such proceeding, order, stop order or action. Such
opinion may be limited to statutes, regulations and judicial interpretations and
to facts as they exist as of the date of such opinion. In rendering such
opinion, such counsel need assume no obligation to revise or supplement it
should such statutes, regulations and judicial interpretations be changed
thereafter by legislative or regulatory action, judicial decision or otherwise.
(b) At the Closing Date, Trident shall receive the letter of Xxxxxxx, Xxxxxx &
Xxxxxxxx LLP, special counsel for the Company and the Bank, dated the Closing
Date, addressed to Trident, in form and substance reasonably satisfactory to
counsel for Trident and to the effect that: (i) nothing has come to such
counsel's attention that would lead it to believe that the Registration
Statement, as amended or supplemented (except as to information in respect of
Trident contained therein and except as to the financial statements, notes to
financial statements, financial tables and other financial and statistical data
and appraisal information contained therein, as to which such counsel need
express no view), at the time it became effective and at the time any post-
effective amendment thereto 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, in light of the
circumstances under which they were made, not misleading, or that the
Prospectus, as amended or supplemented (except as to information in respect of
Trident contained therein and except as to financial statements, notes to
financial statements, financial tables and other financial and statistical data
and appraisal information contained therein as to which such counsel need
express no view), as of its date, at the time the Prospectus was filed with the
Commission under Rule 424(b) of the Securities Act regulations and at the
Closing Date, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (in issuing such
letter, such counsel may indicate that it has not confirmed the accuracy or
completeness of or otherwise verified the factual information contained in the
Registration Statement or the Prospectus and that it does not assume any
responsibility for the accuracy or completeness thereof.)
(c) Counsel for Trident shall have been furnished such documents as they
reasonably may require for the purpose of enabling them to review or pass upon
the matters required by Trident, and for the purpose of evidencing the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained, including but not limited
Trident Securities
Page 25
to, resolutions of the Board of Directors of the Company and the Bank
regarding the authorization of this Agreement and the transactions
contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion of Trident,
(i) there shall have been no material adverse change in the financial
condition, results of operations, business or prospects 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
or contemplated 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 or the Bank is set forth in
the Prospectus other than transactions referred to or contemplated therein,
transactions in the ordinary course of business, and transactions which are
not material to the Company, the Bank and the Subsidiary, taken as a whole;
(iii) none of the Company, the Bank nor the Subsidiary shall have received
from the Office or Commission any directive (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 could have a Material Adverse Effect; and (v) the Shares shall have
been qualified or registered for offering and sale by the Company under the
securities or blue sky laws of such jurisdictions as Trident and the
Company shall have agreed upon.
(e) On 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 the Prospectus does not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading with respect to
the Company, the Bank or the Subsidiary; (ii) since the date the Prospectus
became authorized for final 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 adverse change in the business, financial condition, or results of
operations of the Company, the Bank or the Subsidiary, and the conditions
set forth in clauses (i) through (v) inclusive of subsection (d) 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 Offerings 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 action of the Office approving the
Plan; and
Trident Securities
Page 26
(v) all of the representations and warranties contained in
Section 2 of this Agreement are true and correct, with the same force and
effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident shall receive, among other documents, (i)
copies of the letters from the Office authorizing the use of the Prospectus
and the Proxy Statement, (ii) a copy of the order of the Commission
declaring the Registration Statement effective; (iii) a copy of the
certificate from the Office evidencing the corporate existence of the Bank;
(iv) a copy of the certificate from the FDIC evidencing the insured status
of the Bank, (v) a copy of the letter from the appropriate state authority
evidencing the incorporation (and, if generally available from such
authority, good standing) of the Company and the Subsidiary (vi) a copy of
the charter, certificate of incorporation or articles of incorporation of
the Company and Subsidiary each certified by the appropriate state
governmental authority; and (vii) if available, a copy of the letter from
the Office approving the Bank's Stock Charter.
(g) As soon as available after the Closing Date, Trident shall receive a
certified copy of the Bank's Stock Charter as executed by the appropriate
governmental authority.
(h) Concurrently with the execution of this Agreement, Trident acknowledges
receipt of a letter from Xxxxxxx X. Xxxxxxxx, independent certified public
accountant, addressed to Trident and the Company, in substance and form
reasonably satisfactory to counsel for Trident, with respect to the
financial statements of the Bank and certain financial information
contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter from Xxxxxxx X.
Xxxxxxxx, independent certified public accountant, dated the Closing Date
and addressed to Trident and the Company, in form and substance reasonably
satisfactory to counsel for Trident, confirming the statements made by such
accountants in the letter delivered by them pursuant to the preceding
subsection and dated 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 or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and the
Bank to Trident as to the statements made therein. If any condition to
Trident's obligations hereunder to be fulfilled prior to or at the Closing Date
is not so fulfilled, Trident may terminate this Agreement or, if Trident so
elects, may waive in writing 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 hereof.
Trident Securities
Page 27
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 Securities 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 action, proceeding or claim (whether commenced or
threatened) arising out of or based upon (A) 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 the statements, in
light of the circumstances under which they were made, not misleading
contained in (i) the Registration Statement or the Prospectus or (ii) any
application (including the Conversion Application) or other document or
communication (in this Section 8 collectively called "Application")
prepared or executed by or on behalf of the Company or the Bank or based
upon written information furnished by or on behalf of the Company or the
Bank, filed in any jurisdiction to register or qualify the Shares under the
securities laws thereof or filed with the Office or Commission with respect
to the offering of the Shares, unless such statement or omission was made
in reliance upon and in conformity with information furnished in writing to
the Company or the Bank with respect to Trident by or on behalf of Trident
expressly for use in the Registration Statement or Prospectus or any
amendment or supplement thereto or in any Application, as the case may be,
(B) any written or unwritten statement made to a purchaser of the Shares by
any director, officer or employee of the Company or the Bank, or (C) the
inaccuracy of any representation or warranty set forth in Section 2(a)
above or the breach of any covenant or agreement of the Company or the Bank
set forth herein or (D) the participation by Trident in the Conversion and
the Offering.
(b) The Company shall indemnify and hold Trident harmless for any liability
whatsoever arising out of (i) any instructions given to Trident as set
forth in Section 5(o) above or (ii) any records of account holders,
depositors, borrowers, and other members of the Bank delivered to Trident
by the Bank or its agents for use during the Conversion.
(c) Trident agrees to indemnify and hold harmless the Company and the Bank,
their officers, directors and employees and each person, if any, who
controls the Company and the Bank within the meaning of Section 15 of the
Securities 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,
information furnished in writing to
Trident Securities
Page 28
the Company or the Bank with respect to Trident by or on behalf of Trident
expressly for use in the Prospectus or any amendment or supplement thereof
or in any Application or (B) the inaccuracy of any representation or
warranty set forth in Section 2(b) above or the breach of any covenant or
agreement of Trident set forth herein.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of any action, proceeding or claim (whether commenced or threatened)
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 such action, proceeding or claim; 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 any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
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 reasonably
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 there are
substantive or procedural issues which raise conflicts of interest between
the indemnified party and indemnifying party, in which case the
indemnifying party shall not be entitled to assume the defense of such suit
notwithstanding the indemnifying party's obligation to bear the fees and
expenses of such counsel. An indemnifying party against whom indemnity may
be sought shall not be liable to indemnify an indemnified party under this
Section 8 if any settlement of any such action is effected without such
indemnifying party's consent.
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 and the Bank or
Trident shall contribute to the aggregate losses, liabilities, claims, damages,
and expenses of the nature contemplated by said indemnity agreement incurred by
the Company and the Bank or 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
Trident Securities
Page 29
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, acts 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 proportion 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 any 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 exceed the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement, act, omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
10. Survival of Agreements, Representations and Indemnities. The
--------------------------------------------------------
respective indemnities of the Company and the Bank and Trident and the
representations and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
Trident Securities
Page 30
11. Termination. The parties may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) Trident may terminate this Agreement if any domestic or international
event or act or occurrence has materially disrupted the United States
securities markets such as to make it, in Trident's reasonable opinion,
impracticable to proceed with the offering of the Shares; or if trading on
the New York Stock Exchange shall have suspended; or if the United States
shall have become involved in a war or major hostilities; or if a general
banking moratorium has been declared by a state or federal authority which
has material effect on the Bank or the Conversion; or if a moratorium in
foreign exchange trading by major international banks or persons has been
declared; or if there shall have been a material change in the
capitalization, financial condition or business of the Company, the Bank
and the Subsidiary, taken as a whole, or if the Company, the Bank and the
Subsidiary, taken as a whole, shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall
have been insured.
(b) Trident may terminate this Agreement in the event of a material breach
of this Agreement by the Company or the Bank at any time after this
Agreement becomes effective if such breach is not cured within five (5)
days after Trident delivers written notice thereof to the Company and the
Bank, and the Company and the Bank may terminate this Agreement in the
event of a material breach of this Agreement by Trident at any time after
this Agreement becomes effective if such breach is not cured within five
(5) days after the Company or the Bank delivers written notice thereof to
Trident.
(c) The Bank may terminate the Conversion in accordance with the terms of
the Plan. Such termination shall be without liability to any party, except
that the Company and the Bank shall be required to fulfill their
obligations pursuant to Sections 3, 6, 8, and 9 of this Agreement.
(d) If this Agreement is terminated by Trident for any of the reasons set
forth in subsections (a) or (b) above, and to fulfill their obligations, if
any, pursuant to Sections 3, 6, 8 and 9 of this Agreement and upon demand,
the Company and the Bank shall pay Trident the full amount so owing
thereunder.
(e) If this Agreement is terminated as provided in this Section 11, the
party terminating this Agreement shall notify any non-terminating party
promptly by telephone or telegram, confirmed by letter.
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
Trident Securities
Page 31
confirmed to Trident Securities, a Division of McDonald Investments Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxxxx
X. Xxxxxxx (with a copy to Elias, Matz, Xxxxxxx & Xxxxxxx LLP, 000 00/xx/ Xxxxxx
XX, Xxxxxxxxxx, XX 00000, Attention: Xxxxx Xxxxxxxx, Esquire) and if sent to the
Company or the Bank, shall be mailed, delivered or telegraphed and confirmed to
DutchFork Bancshares, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx,
Attention: J. Xxxxxx Xxxxxxx, President (with a copy to Xxxxxxx, Xxxxxx &
Xxxxxxxx, LLP, 0000 Xxxxxxxxx Xxxxxx XX, Xxxxxxxxxx, XX 00000, Attention Xx.
Xxxxxx X. Xxxxxxxxx, Esquire).
13. Parties. The Company and the Bank shall be entitled to act and rely
-------
on any request, notice, consent, waiver or agreement purportedly given on behalf
of Trident when the same shall have been given by the undersigned or any other
officer of Trident. Trident shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the Company
or the Bank, when the same shall have been given by the undersigned or any other
officer of the Company or the Bank. 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 preempted by federal law, this Agreement shall
------------
be governed by and construed in accordance with the substantive laws of North
Carolina.
15. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Trident Securities
Page 32
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
DUTCHFORK BANCSHARES, INC.
By: ____________________________
Name
Title
NEWBERRY FEDERAL SAVINGS BANK
By: ____________________________
Name
Title
Agreed to and accepted as of
the date first written above:
TRIDENT SECURITIES, a Division of McDonald Investments Inc.
By: ______________________________
Name
Title
