1
Exhibit 1.2
UNITED COMMUNITY FINANCIAL CORP.
____________ TO ____________ SHARES
COMMON STOCK
(WITHOUT PAR VALUE)
$10.00 PER SHARE
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
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Dear Sirs:
United Community Financial Corp., an Ohio corporation (the "Holding
Company"), and The Home Savings and Loan Company of Youngstown, Ohio, an
Ohio-chartered and federally insured mutual savings and loan association (the
"Company"), hereby confirm, as of _____________, 1998, 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 Company intends to convert from an Ohio-chartered
mutual savings association to an Ohio-chartered stock savings association as a
wholly owned subsidiary of the Holding Company (together with the Offerings, as
defined below, the issuance of shares of common stock of the Company to the
Holding Company and the incorporation of the Holding Company, the "Conversion")
pursuant to a plan of conversion adopted on ____________ (the "Plan"). In
accordance with the Plan, the Holding Company is offering shares of its common
stock no par value 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 Company, the
Company's Employee Stock Ownership Plan (the "ESOP") and directors, officers and
employees of the Company. Shares of the Common Stock not sold in the
Subscription Offering may be offered to the general public in a community
offering (the "Community Offering", and together with the Subscription Offering
the "Offerings"), subject to the right of the Holding Company and the Company,
in their absolute discretion, to reject orders in the Community Offering in
whole or in part. It is anticipated that shares of the Common Stock not
otherwise subscribed for in the Subscription and Community Offerings may be
offered at the discretion of the Holding Company to certain members of the
general public as part of a community offering on a best efforts basis by
Trident or, if necessary, by a selling group of selected broker-dealers to be
managed by Trident (the "Syndicated Community Offering"). In the Offerings, the
Holding Company is offering between ___________ and ___________ shares,
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with the possibility of offering up to ___________ shares without a
resolicitation of subscribers. No Eligible Account Holder, Supplemental Account
Holder or Other Member may purchase in his capacity as such more than 30,000
shares of Common Stock in the Subscription Offering. No individual person or
other entity, together with associates of and persons acting in concert with
such person, may purchase in the Community Offering and the Syndicated Community
Offering more than 30,000 shares of Common Stock. No person, individually or
together with associates of and persons acting in concert with such person, may
purchase more than 30,000 shares of Common Stock in the Conversion.
The Holding Company and the Company have been advised by Trident that
it will utilize its best efforts in assisting the Holding Company and the
Company with the sale of the Shares in the Offerings and, if deemed necessary by
the Holding Company, in a Syndicated Community Offering. Prior to the execution
of this Agreement, the Holding Company has delivered to Trident the Prospectus
dated ____________, 1998 (as hereinafter defined) and all supplements thereto to
be used in the Offerings. Such Prospectus contains information with respect to
the Holding Company, the Company and the Shares.
2. Representations and Warranties.
-------------------------------
(a) The Holding Company and the Company jointly and severally
represent and warrant to Trident that:
(i) The Holding Company has filed with the Commission
a registration statement, including exhibits and an amendment
or amendments thereto, on Form S-1 (No. 333-_____), 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 Holding 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 Holding 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
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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 the Commission and shall
include any amendments or supplements thereto from and after
their dates of effectiveness or use, respectively. If any
Shares remain unsubscribed following completion of the
Subscription Offering and the Community Offering, the Holding
Company (i) will, if required by the SEC Regulations, promptly
file with the Commission a post-effective amendment to such
Registration Statement relating to the results of the
Subscription and the Community Offerings, any additional
information with respect to the proposed plan of distribution
and any revised pricing information or (ii) if no such
post-effective amendment is required, will file with, or mail
for filing to, the Commission a prospectus or prospectus
supplement containing information relating to the results of
the Subscription and Community Offerings and pricing
information pursuant to Rule 424(c) of the Regulations, in
either case in a form reasonably acceptable to the Holding
Company and Trident.
(ii) The Company has filed an Application for
Approval of Conversion including exhibits (as amended or
supplemented, the "Conversion Application" with the Office of
Thrift Supervision ("OTS") under the Home Owners' Loan Act
(the "HOLA") and the rules and regulations promulgated
thereunder, which has been approved by the OTS; 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
Conversion Application have been approved for use by the OTS.
No order has been issued by the OTS preventing or suspending
the use of the Prospectus or the Proxy Statement; and no
action by or before the OTS revoking such approvals is, to the
Company's best knowledge, pending or threatened.
(iii) The Holding Company has filed with the OTS a
holding company application on Form H-(e)1-S (the "H-(e)1-S")
under the HOLA and the regulations promulgated thereunder and
shall receive approval of its acquisition of the Company from
the OTS prior to closing.
(iv) The Company and Holding Company have filed
copies of the Conversion Application and a holding company
application (the "Holding Company Application") with the Ohio
Department of Commerce, Division of Savings and Loans (the
"Ohio Division") together with all amendments thereto. Such
applications have been approved by the Ohio Division,
including approval of the proposed stock articles of
incorporation, constitution, and bylaws.
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(v) 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, in light of the
circumstances under which they were made, not misleading,
(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, and (iv) the Conversion Application was complete
and did not contain an untrue statement 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. 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 Holding Company or the Company
relating to Trident by or on behalf of Trident expressly for
use in the Registration Statement or Prospectus.
(vi) The Holding Company has been duly incorporated
as an Ohio corporation and the Company has been duly organized
as a mutual savings association under the laws of the State of
Ohio, and each of them is validly existing and in good
standing under the laws of the jurisdiction of its
organization with full power and authority to own its property
and conduct its business as described in the Registration
Statement and Prospectus; the Company is a member in good
standing of the Federal Home Loan Bank; and the deposit
accounts of the Company are insured by the Savings Association
Insurance Fund ("SAIF") administered by the Federal Deposit
Insurance Corporation ("FDIC") up to the applicable legal
limits. Neither the Holding Company nor the Company 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 operations of the
Holding Company and the Company, taken as a whole. The Company
does not own equity securities of or an equity interest in any
business enterprise other than the Holding Company and the
Company's wholly owned service corporation. Upon amendment of
the Company's charter, constitution and bylaws to read in the
form of a federal stock charter and constitution as provided
under Ohio law and the rules and regulations promulgated
thereunder and completion of the sale by the Holding Company
of the Shares as contemplated by the Prospectus, (i) the
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Company will be converted pursuant to the Plan to an
Ohio-chartered capital stock savings association with full
power and authority to own its property and conduct its
business as described in the Prospectus, (ii) all of the
authorized and outstanding capital stock of the Company will
be owned of record and beneficially by the Holding Company,
and (iii) the Holding Company will have no direct subsidiaries
other than the Company.
(vii) The Company 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 material liens, charges, encumbrances or restrictions,
except for liens for taxes not yet due, except as described in
the Prospectus and except as could not in the aggregate have a
material adverse effect upon the operations or financial
condition of the Holding Company and the Company taken as a
whole; and all of the leases and subleases material to the
operations or financial condition of the Company, under which
it holds properties, including those described in the
Prospectus, are in full force and effect as described therein.
(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 Holding Company and the Company,
and this Agreement is a valid and binding obligation with
valid execution and delivery by each of the Holding Company
and the Company, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar
laws relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of savings and
loan holding companies the accounts of whose subsidiaries are
insured by the FDIC or by general equity principles,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent that
the provisions of Sections 8 and 9 hereof may be unenforceable
as against public policy or pursuant to Section 23A of the
Federal Reserve Act, 12 U.S.C. Section 371c ("Section 23A")).
(ix) Except as described in the Prospectus, there is
no litigation or governmental proceeding pending or, to the
best knowledge of the Holding Company or the Company,
threatened against or involving the Holding Company, the
Company 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 Holding Company and the Company,
taken as a whole.
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(x) The Holding Company and the Company have received
the opinion of Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, LLP to the
effect that the Conversion will constitute a tax-free
reorganization under the Internal Revenue Code of 1986, as
amended, and that the Conversion will not be a taxable
transaction for the Holding Company or the Company under the
income tax laws of Ohio. The facts relied upon in such
opinions are accurate and complete.
(xi) Each of the Holding Company and the Company 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 OTS in
connection with its approval Conversion Application and the
H-(e)1-S application and the Ohio Division in connection with
its approval of the Conversion Application and Holding Company
Application, and except as may be required under the
securities, or "blue sky," laws of various jurisdictions, and
in the case of the Holding Company, as of the Closing Date,
will, to the best knowledge of the Company, have such
approvals and orders to issue and sell the Shares to be sold
by the Holding Company as provided herein, and in the case of
the Company, as of the Closing Date, will, to the knowledge of
the Holding Company, have such approvals and orders to issue
and sell the Shares of its Common Stock to be sold to the
Holding Company as provided in the Plan, subject to the
issuance of an amended charter in the form required for an
Ohio-chartered stock savings associations (the "Stock
Charter"), the form of which Stock Charter has been approved
by the Ohio Division.
(xii) Neither the Holding Company nor the Company is
in violation of any rule or regulation of the Ohio Division,
OTS or FDIC that could reasonably be expected to result in any
enforcement action against the Holding Company, the Company or
their respective officers or directors that could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), operations, businesses, assets or
properties of the Holding Company and the Company, taken as a
whole.
(xiii) The financial statements and any related notes
or schedules which are included in the Registration Statement
and the Prospectus fairly present the financial condition,
income, retained earnings and cash flows of the Company 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
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Regulations and the applicable accounting regulations of the
OTS. 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 Company with supervisory and regulatory authorities
except as such generally accepted accounting principles may
otherwise require. The tables in the Prospectus accurately
present the information purported to be shown thereby at the
respective dates thereof and for the respective periods
therein.
(xiv) There has been no material change in the
condition (financial or otherwise), results of operations or
business, including assets and properties, of the Holding
Company and the Company, 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
Holding Company and the Company conform in all material
respects to the descriptions thereof contained in the
Prospectus. Neither the Holding Company nor the Company has
any material liabilities of any kind, contingent or otherwise,
except as set forth in the Prospectus.
(xv) 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 Holding Company or the
Company pursuant to any of the terms, provisions or conditions
of, any agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Holding Company or the
Company 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 Holding
Company and the Company taken as a whole; all agreements which
are material to the condition (financial or otherwise),
results of operations or business of the Holding Company and
the Company 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 Holding Company and the Company, threatened
any action or proceeding wherein the Holding Company or the
Company would be alleged to be in default thereunder.
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(xvi) Neither the Holding Company nor the Company is
in violation of its respective Articles of Incorporation,
constitution, charter or bylaws. The execution and delivery
hereof and the consummation of the transactions contemplated
hereby by the Holding Company and the Company do not conflict
with or result in a breach of the Articles of Incorporation,
charter, constitution or bylaws of the Holding Company or the
Company (in either mutual or stock form) or constitute a
material breach of or default (or an event which, with notice
or lapse of time or both, would constitute a default) under,
give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or
imposition of any lien, charge or other encumbrance upon any
of the properties or assets of the Holding Company or the
Company pursuant to any of the terms, provisions or conditions
of, any material agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Holding
Company or the Company 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 Director of the OTS and Ohio
Division in connection with his approval of the Conversion
Application or the H-(e)1-S, which breach, default,
encumbrance or violation would have a material adverse effect
on the condition (financial or otherwise), operations or
business of the Holding Company and the Company taken as a
whole.
(xvii) 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 (including any judgment resulting from litigation
described in the Prospectus), neither the Holding Company nor
the Company has issued any equity 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
Holding Company and the Company, taken as a whole.
(xviii) Upon consummation of the Conversion, the
authorized, issued and outstanding equity capital of the
Holding Company shall be within the range as set forth in the
Prospectus under the caption "Capitalization," and no Common
Stock of the Holding Company shall be outstanding immediately
prior to the Closing Date; the issuance and the sale of the
Shares of the Holding Company have been duly authorized by all
necessary action of the Holding Company and
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approved by the OTS, 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; and purchasers of
the Shares from the Holding Company, upon issuance thereof
against payment therefor, will acquire such Shares free and
clear of all claims, encumbrances, security interests and
liens of the Holding 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 Company to the
Holding Company has been duly authorized by all necessary
action of the Company and the Holding Company and appropriate
regulatory authorities (subject to the satisfaction of various
conditions imposed by the OTS or the Ohio Division in
connection with its approval of the Conversion Application,
the Holding Company Application and the H-(e)1-S, 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.
(xix) 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 OTS, approval of the Holding Company's
application on H-(e)1-S by the OTS, and the approval of the
Conversion Application and Holding Company Application by the
Ohio Division and the issuance of the stock charter and
constitution by the Ohio Division and as may be required under
the securities laws of various jurisdictions.
(xx) All contracts and other documents required to be
filed as exhibits to the Registration Statement or the
Conversion Application, Holding Company Application and the
H-(e)1-S have been filed with the Commission, the Ohio
Division and the OTS, as the case may be.
(xxi) Deloitte & Touche, LLP which has audited the
financial statements of the Company at December 31, 1997 and
1998 and for the years ended December 31, 1997, 1996 and 1995
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 Accountant.
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(xxii) The Holding Company and the Company 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 Holding
Company and the Company have paid all taxes that have become
due and, to the best of their knowledge, have made adequate
reserves for similar future tax liabilities, except where any
failure to make such filings, payments and reserves, or the
assertion of such a deficiency, would not have a material
adverse effect on the condition of the Holding Company and the
Company, taken as a whole or in the case of taxes which the
Company is contesting in good faith.
(xxiii) All of the loans represented as assets of the
Company on the most recent financial statements of the Company
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 Holding Company and the Company, taken
as a whole.
(xxiv) The records of account holders, depositors,
borrowers and other members of the Company delivered to
Trident by the Company or its agent for use during the
Conversion have been prepared or reviewed by the Company and,
to the best knowledge of the Holding Company and the Company,
are reliable and accurate.
(xxv) None of the Holding Company, the Company or the
employees of the Holding Company or the Company, has made any
payment of funds to the Holding Company or the Company
prohibited by law, and no funds of the Holding Company or the
Company have been set aside to be used for any payment
prohibited by law.
(xxvi) There are no actions, suits, regulatory
investigations or other proceedings pending or, to the best
knowledge of the Holding Company or the Company, threatened
against the Holding Company or the Company relating to
environmental protection. To the best knowledge of the Holding
Company and the Company, 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 Holding Company or the Company or, to the best
knowledge of the Holding
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Sales Agency Agreement
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Company or the Company, has occurred on, in or at any of the
facilities or properties of the Holding Company or the
Company, except such disposal, release or discharge which
would not have a material adverse effect on the Holding
Company or the Company, taken as a whole.
(xxvii) At the Closing Date, the Holding Company and
the Company will have completed the conditions precedent to,
and shall have conducted the Conversion in all material
respects in accordance with, the Plan, the HOLA and
regulations promulgated thereunder, Ohio law and regulation
and all other applicable laws, regulations, published
decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion
imposed by the OTS and the Ohio Division.
(b) Trident represents and warrants to the Holding Company and
the Company 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, and is licensed to conduct business in the
State of Ohio with full corporate power and authority to
provide the services to be furnished to the Holding Company
and the Company 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, the 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,
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approvals and permits necessary to perform such services, and
Trident is a registered selling agent in the jurisdictions in
which the Common Stock is to be offered and sold and will
remain registered in such jurisdictions in which the Holding
Company is relying on such registration for the sale of the
Shares, until the Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by
Trident, the fulfillment of the terms set forth herein and the
consummation of the transactions contemplated hereby shall not
violate or conflict with the corporate charter or bylaws of
Trident or violate, conflict with or constitute a breach of,
or default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, any material
agreement, indenture or other instrument by which Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or
court decree, injunction or order.
(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 Holding Company and the Company hereby
employ Trident as their agent to utilize its best efforts in assisting the
Holding Company with the Holding Company's sale of the Shares in the
Subscription Offering and Community Offering. Trident will assist the Holding
Company and the Company in: (i) training and educating their employees regarding
the mechanics and regulatory requirements of the Conversion; (ii) keeping
records of all stock subscriptions and allocating Shares in the event of an
oversubscription; (iii) obtaining proxies from members of the Company with
respect to the Special Meeting at which the Plan is submitted to a vote; and
(iv) assisting with the Community Offering. The employment of Trident hereunder
shall terminate (a) forty-five (45) days after the Offerings close, unless the
Holding Company and the Company, with the approval of the OTS, are permitted to
extend such period of time, or (b) upon consummation of the Conversion,
whichever date shall first occur.
In the event the Holding Company is unable to sell a minimum of
__________ Shares (or such lesser amount as the OTS may permit) within the
period herein provided, this Agreement
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Sales Agency Agreement
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shall terminate, and the Holding Company and the Company shall refund promptly
to any persons who have subscribed for any of the Shares, the full amount which
it may have received from them, together with interest as provided in the
Prospectus, and no party to this Agreement shall have any obligation to the
other party hereunder, except as set forth in Sections 6, 8(a) and 9 hereof.
Appropriate arrangements for placing the funds received from subscriptions for
Shares in special interest-bearing accounts with the Company until all Shares
are sold and paid for were 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 Holding 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
Holding Company agrees to issue or have issued such Shares and to release for
delivery certificates to subscribers thereof for such Shares on the Closing Date
against payment to the Holding Company by any means authorized pursuant to the
Prospectus, at the principal office of the Holding Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ 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 Company 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 Company 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) Except for shares purchased by the Company's executive
officers and directors, and their associates, and by any employee
benefit plan for which no
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United Community Financial Corp.
Sales Agency Agreement
Page 14
commission shall be paid: (i) a commission equal to 0.95% of the
aggregate dollar amount of stock sold to eligible account holders,
supplemental eligible account holders and other members and persons in
the Community Offering; excluding any shares sold to the Company's
directors, executive officers and employee benefit plans, and
associates of the Company's directors and executive officers and (ii) a
commission to be agreed upon by Trident and the Holding Company for
Shares sold by other member firms of the NASD through a selected
dealers arrangement in the Syndicated Community Offering. All such fees
are to be payable in next-day funds to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses,
including but not limited to travel, communications, legal fees and
postage, incurred by it whether or not the Offerings are successfully
completed; provided, however, that reimbursable out of pocket expenses
shall not exceed $10,000 and legal fees exclusive of disbursements will
not exceed $50,000 without the prior permission from the Company
(excluding legal fees and expenses to comply with "blue sky"
requirements), and that neither the Holding Company or the Company
shall pay or reimburse Trident for any of the foregoing expenses
accrued after Trident shall have notified the Holding Company or the
Company of its election to terminate this Agreement pursuant to Section
11 hereof or after such time as the Holding Company or the Company
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 Holding
Company of a written request from Trident for reimbursement of its
expenses. Trident acknowledges receipt of $5,000 advance payment from
the Company which shall be credited against the total reimbursement due
Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of
Trident for allocable expenses provided in the immediately preceding
paragraph (b), in the event that a resolicitation or other event causes
the Offerings to be extended beyond their original expiration date,
Trident shall be reimbursed for its reasonable allocable expenses
incurred during such extended period.
The Holding Company shall pay any stock issue and transfer taxes which
may be payable with respect to the sale of the Shares. The Holding Company and
the Company shall also pay all reasonable expenses of the Conversion incurred by
them or on their prior approval including but not limited to their attorneys'
fees, NASD filing fees, and attorneys' fees relating to any required state
securities laws research and filings, telephone charges, air freight, rental
equipment, supplies, transfer agent charges, fees relating to auditing and
accounting and costs of printing all documents necessary in connection with the
Conversion.
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United Community Financial Corp.
Sales Agency Agreement
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4. OFFERING. Subject to the provisions of Section 7 hereof, Trident is
assisting the Holding Company on a best efforts basis in offering a minimum of
____________ and a maximum of _____________ Shares, with the possibility of
offering up to ___________ shares (except as the OTS may permit to be decreased
or increased) in the Subscription and Community Offerings. The Shares are to be
offered to the public at the price set forth on the cover page of the Prospectus
and the first page of this Agreement.
5. FURTHER AGREEMENTS. The Holding Company and the Company jointly and
severally covenant and agree that:
(a) The Holding Company shall deliver to Trident, from time to
time, such number of copies of the Prospectus as Trident reasonably may
request. The Holding Company authorizes Trident to use the Prospectus
in any lawful manner in connection with the offer and sale of the
Shares.
(b) The Holding 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 Holding 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 Holding Company will comply so far as it
is able with all requirements imposed upon it by the Act, as now in
effect and hereafter amended, and by the SEC Regulations, as from time
to time in force, so far as necessary to permit the continuance of
offers and sales of or dealings in the Shares in accordance with the
provisions hereof and the Prospectus. If during the period when the
Prospectus is required to be delivered in connection with the offer and
sale of the Shares any event relating to or affecting the Holding
Company and the Company, 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 Holding 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 Holding Company forthwith shall prepare
and
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United Community Financial Corp.
Sales Agency Agreement
Page 16
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 Holding Company will not file or use any amendment or supplement to
the Registration Statement or the Prospectus of which Trident has not
first been furnished a copy or to which Trident shall reasonably object
after having been furnished such copy. For the purposes of this
subsection the Holding Company and the Company shall furnish such
information with respect to themselves as Trident from time to time may
reasonably request.
(d) The Holding Company and the Company have taken or will
take all reasonable necessary action as may be required to qualify or
register the Shares for offer and sale by the Holding Company under the
securities or blue sky laws of such jurisdictions as Trident and the
Holding Company may agree upon; provided, however, that the Holding
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 Holding 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 Company 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 OTS.
(f) The Holding Company will file a registration statement for
the Common Stock under Section 12(g) of the Exchange Act, prior to
completion of the stock offering pursuant to the Plan and shall request
that such registration statement be effective upon completion of the
Conversion. The Holding Company shall maintain the effectiveness of
such registration for a minimum period of three years or for such
shorter period as may be required by applicable law.
(g) The Holding 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
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United Community Financial Corp.
Sales Agency Agreement
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beginning not later than the first day of the Holding 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 Holding 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 Holding Company
will furnish to Trident (i) as soon as publicly available, a copy of
each report or definitive proxy statement of the Holding 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 Holding Company as Trident may reasonably request.
(i) The Holding Company shall use the net proceeds from the
sale of the Shares consistently with the manner set forth in the
Prospectus.
(j) The Holding 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 Holding Company shall advise Trident, if necessary, as
to the allocation of deposits, in the case of eligible account holders
and votes, in the case of other members, and of the Shares in the event
of an oversubscription and shall provide Trident final instructions as
to the allocation of the Shares ("Allocation Instructions") in such
event and such information shall be accurate and reliable. Trident
shall be entitled to rely on such instructions and shall have no
liability in respect of its reliance thereon, including without
limitation, no liability for or related to any denial or grant of a
subscription in whole or in part.
(l) The Holding Company and the Company 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 Holding Company and the Company 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
Holding Company is unable to sell a minimum of ___________ Shares or such lesser
amount as the OTS may permit or the Conversion is otherwise terminated, the
Holding Company and the Company shall reimburse Trident for allocable expenses
incurred by Trident relating to the offering of the Shares as provided in
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United Community Financial Corp.
Sales Agency Agreement
Page 18
Section 3 hereof; provided, however, that neither the Holding Company nor the
Company shall pay or reimburse Trident for any of the foregoing expenses accrued
after Trident shall have notified the Holding Company or the Company of its
election to terminate this Agreement pursuant to Section 11 hereof or after such
time as the Holding Company or the Company 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 Holding
Company and the Company of their obligations hereunder and to the following
conditions:
(a) At the Closing Date, Trident shall receive the favorable
opinion of Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, special counsel for
the Holding Company and the Company, dated the Closing Date, addressed
to Trident, in form and substance reasonably satisfactory to counsel
for Trident and to the effect that:
(i) the Holding Company has been duly incorporated
and is validly existing as a corporation under the laws of the
State of Ohio, and the Company is validly existing as a
savings association in mutual form under the laws of the State
of Ohio, each with full corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) the Company is a member of the Federal Home Loan
Bank, and the deposit accounts of the Company are insured by
the SAIF up to the applicable legal limits;
(iii) to the Actual Knowledge of such counsel, the
activities of the Company as such activities are described in
the Prospectus are permitted under federal and Ohio law to
subsidiaries of an Ohio business corporation and the
activities of the Company's wholly-owned service corporation
as described in the Prospectus are permitted for a service
corporation of an Ohio chartered savings association under
Ohio law and to the extent applicable under the HOLA;
(iv) the Plan complies with, and to such counsel's
Actual Knowledge, the Conversion has been effected in all
material respects in accordance with, Ohio law, the HOLA and
the regulations promulgated thereunder (except with respect to
the securities or "blue sky" laws of various states and except
for compliance with post-Closing conditions in the Ohio
Division and OTS approvals as to which
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United Community Financial Corp.
Sales Agency Agreement
Page 19
no opinion need be rendered); to such counsel's Actual
Knowledge, all of the terms, conditions, requirements and
provisions with respect to the Plan and the Conversion imposed
by the Ohio Division and OTS, except with respect to the
Conversion Application, the Prospectus and the Proxy Statement
(which are covered by clause (xix) below) and the filing or
submission of certain required post-Conversion reports or
other materials by the Holding Company or the Company, have
been complied with by the Holding Company and the Company in
all material respects; and, to the Actual Knowledge of such
counsel, no person has sought to obtain regulatory or judicial
review of the final action of the Ohio Division and OTS in
approving the Plan;
(v) the Holding 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 Holding Company; the Shares, upon receipt
of payment and issuance in accordance with the terms of the
Plan and this Agreement, will be validly issued, fully paid,
nonassessable and free of preemptive rights, and purchasers of
the Shares from the Holding 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 Holding Company;
(vii) the form of certificate used to evidence the
Shares is in proper form and complies in all material respects
with applicable Ohio law;
(viii) the issuance and sale of the capital stock of
the Company to the Holding Company have been duly authorized
by all necessary corporate action of the Company and the
Holding Company and have received the approval of the Ohio
Division and OTS, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of the Plan,
will be validly issued, fully paid and nonassessable and owned
of record and, to the Actual Knowledge of such counsel,
beneficially by the Holding Company;
(ix) subject to the satisfaction of the conditions to
the Ohio Division of the Conversion Application and Holding
Company Application and the OTS's approval of the Conversion
Application and H-(e)1-S, no further approval, authorization,
consent or other order of any federal or state regulatory
agency, the
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United Community Financial Corp.
Sales Agency Agreement
Page 20
Ohio Division or the OTS is required in connection with the
execution and delivery of this Agreement and the consummation
of the Conversion, except with respect to the issuance to the
Company of the Stock Charter and constitution by the Ohio
Division, except as may be required under the "blue sky" laws
of various jurisdictions and except as may be required under
the rules and regulations of the NASD;
(x) to the Actual Knowledge of such counsel, the
Company has obtained all licenses, permits and other
governmental authorizations currently required for the conduct
of its business by federal laws and regulations as such
business is described in the Prospectus, all such licenses,
permits and other governmental authorizations are in full
force and effect and the Company is in all material respects
complying therewith, except where the failure to hold such
licenses, permits or governmental authorizations or the
failure to so comply would not have a material adverse effect
on the Holding Company and the Company, taken as a whole;
(xi) to the Actual Knowledge of such counsel, there
are no material legal or governmental proceedings pending or
threatened against or involving the assets of the Holding
Company or the Company (provided that for this purpose such
counsel need not regard any litigation or governmental
procedure to be "threatened" unless the potential litigant or
government authority has manifested to the management of the
Holding Company or the Company, or to such counsel, a present
intention to initiate such litigation or proceeding);
(xii) to the Actual Knowledge of such counsel, the
execution and delivery of this Agreement and the consummation
of the Conversion by the Holding Company and the Company 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, nor 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
Holding Company or the Company pursuant to any of the terms,
provisions or conditions of, any material agreement, contract,
indenture, bond, debenture, note, instrument or obligation to
which the Holding Company or the Company is a party or violate
any federal governmental license or permit or any federal law,
administrative regulation or order or court order, writ,
injunction or decree (subject to the satisfaction of certain
conditions imposed by the OTS or the Ohio Division), which
breach, default, encumbrance or violation would have a
material adverse
21
United Community Financial Corp.
Sales Agency Agreement
Page 21
effect on the condition (financial or otherwise), operations,
business, assets or properties of the Holding Company and the
Company, taken as a whole; and
(xiii) to the Actual Knowledge of such counsel, there
has been no material breach of any provision of the Holding
Company's or the Company's Articles of Incorporation,
constitution, 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 Holding Company or the Company is a
party or by which any of them or any of their respective
assets or properties may be bound, or a violation of any court
order, writ, injunction or decree which breach, default, or
violation would have a material adverse effect on the
condition (financial or otherwise), operations, business,
assets or properties of the Holding Company and the Company,
taken as a whole;
(xiv) the execution and delivery of this Agreement
and the consummation of the Conversion have been duly and
validly authorized by all necessary corporate action on the
part of each of the Holding Company and the Company;
(xv) this Agreement is a legal, valid and binding
obligation of each of the Holding Company and the Company,
enforceable in accordance with its terms except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, receivership,
conservatorship or other 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 savings and loan holding companies the
accounts of whose subsidiaries are insured by the FDIC, (ii)
by 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 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
applicable law, including but not limited to Section 23A (as
to which no opinion need be rendered);
(xvi) the statements in the Prospectus and
incorporated by reference in the Proxy Statement under the
captions "Regulation," "Dividends," "Restrictions on
Acquisitions of the Holding Company" and "Description of
Capital Stock," insofar as they are, or refer to, statements
of law or legal conclusions (excluding financial data included
therein, as to which an opinion need not be expressed), have
been prepared or reviewed by counsel and are correct in all
material respects;
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United Community Financial Corp.
Sales Agency Agreement
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(xvii) the Conversion Application has been approved
by the OTS and Ohio Division, and the Prospectus and the Proxy
Statement have been authorized for use by the OTS; the
Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission, and to
the Actual Knowledge of such counsel, no proceedings are
pending by or before the Commission, the Ohio Division or the
OTS seeking to revoke or rescind the orders declaring the
Registration Statement effective or approving the Conversion
Application, or, to the Actual Knowledge of such counsel, are
contemplated or threatened;
(xviii) the execution and delivery of this Agreement
and the consummation of the Conversion by the Holding Company
and the Company do not conflict with or result in a breach of
the Articles of Incorporation, constitution, charter or bylaws
of the Holding Company or the Company (in either mutual or
stock form); and
(xix) at the time the Conversion Application, the
Registration Statement, the Prospectus and the Proxy
Statement, in each case as amended, were approved or declared
effective, such documents complied as to form in all material
respects with the requirements of the Act, the HOLA and the
SEC Regulations and rules and regulations of the OTS and the
Ohio Division, 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, and stock valuation
information, included therein, as to which an opinion need not
be expressed); to such counsel's Actual Knowledge, all
documents and exhibits required to be filed with the
Conversion Application and the Registration Statement have
been so filed and the descriptions in the Conversion
Application and the Registration Statement of such documents
and exhibits are accurate in all material respects.
In rendering such opinions, such counsel may rely as to
matters of fact on certificates of officers and directors of the
Holding Company and the Company 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 Holding Company and the Company. Such opinion may be
governed by, and interpreted in accordance with, the Legal Opinion
Accord (the "Accord") of the ABA Section of Business Law (1991), and,
as a consequence, such opinion is subject to the qualifications,
exceptions, definitions, limitations on coverage and other limitations,
all as more particularly described in the Accord, and it should be read
in conjunction therewith.
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United Community Financial Corp.
Sales Agency Agreement
Page 23
In addition, the General Qualifications set forth in the Accord apply
to the opinions set forth in such opinion, and the term "Actual
Knowledge" as used therein shall have the meaning set forth in the
Accord. Such opinion may be limited to present statutes, regulations
and judicial interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no obligation to
revise or supplement it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise which
occur subsequent to the date of the opinion; and such counsel need
express no view, opinion or belief with respect to whether any proposed
or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated
pursuant to any such legislation, would affect the validity of the
execution and delivery by the Holding Company and the Company of this
Agreement or the issuance of the Shares. Further, in rendering such
opinions, Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, LLP will opine solely as to
matters of Federal Securities and Banking law and Ohio law.
(c) At the Closing Date, Trident shall receive the letter of
Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, special counsel for the Holding
Company and the Company, dated the Closing Date, addressed to Trident,
in form and substance reasonably satisfactory to counsel for Trident
and to the effect that: based on such counsel's participation in
conferences with representatives of the Holding Company, the Company,
its counsel, the independent appraiser, the independent certified
public accountants, Trident and its counsel, review of documents and
understanding of applicable law (including the requirements of Form S-1
and the character of the Registration Statement contemplated thereby)
and the experience such counsel has gained in its practice under the
Act, nothing has come to such counsel's attention that would lead it to
believe that the Registration Statement, as amended or supplemented
(except as to information in respect of Trident contained therein and
except as to the financial statements, notes to financial statements,
financial tables and other financial and statistical data and stock
valuation information contained therein, as to which counsel need
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, 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 stock valuation
information contained therein as to which such counsel need express no
view), as of its date and at the Closing Date, contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (in making this statement
such counsel may state that it has not undertaken to verify
independently the information
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United Community Financial Corp.
Sales Agency Agreement
Page 24
in the Registration Statement or Prospectus and, therefore, does not
assume any responsibility for the accuracy of completeness or fairness
thereof).
(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 Holding Company and the Company 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 Holding Company and the Company, 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 Holding Company or the Company after
the latest date as of which the financial condition of the Holding
Company and the Company 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 Holding Company and the Company, taken as a whole; (iii)
none of the Holding Company or the Company shall have received from the
OTS or Commission any direction (oral or written) to make any change in
the method of conducting their respective businesses which is material
and adverse to the business of the Holding Company and the Company,
taken as a whole, with which they have not complied; (iv) except as
noted in the Prospectus, 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
Holding Company or the Company 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 Holding Company and the Company, taken as a
whole; and (v) the Shares shall have been qualified or registered for
offering and sale by the Holding Company under the securities or blue
sky laws of such jurisdictions as Trident and the Holding 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 Holding Company and the Company, dated the Closing Date,
to the effect that: (i) they have examined the Prospectus and, at the
time the Prospectus became authorized by the Holding Company for use,
the Prospectus did not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the
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United Community Financial Corp.
Sales Agency Agreement
Page 25
circumstances under which they were made, not misleading with respect
to the Holding Company or the Company; (ii) since the date the
Prospectus became authorized by the Holding 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 Holding Company or the Company 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 OTS 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 OTS; (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 OTS authorizing the use
of the Prospectus and the Proxy Statement; (ii) if available, a copy of
the order of the Commission declaring the Registration Statement
effective; (iii) copies of the letters from the OTS evidencing the
corporate existence of the Company; (iv) a copy of the letter from the
appropriate Ohio authority evidencing the incorporation (and, if
generally available from such authority, valid existence) of the
Holding Company; (v) a copy of the Holding Company's Articles of
Incorporation certified by the appropriate Ohio governmental authority;
(vi) a copy of the OTS order approving the Conversion; (vii) a copy of
the OTS letter authorizing the acquisition of the Company by the
Holding Company; (viii) a copy of the letter from the OTS approving the
use of the prospectus, proxy statement and offering materials; and (ix)
such other documents as Trident may reasonably request and which are
normal and customary documents to be provided at the Closing Date.
(h) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Company's Stock Charter executed by the
OTS.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Deloitte & Touche, LLP,
independent certified public accountants, addressed to Trident and the
Holding Company, in substance and form satisfactory to counsel for
Trident, with respect to the financial statements and certain financial
information contained in the Prospectus.
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(j) At the Closing Date, Trident shall receive a letter in
form and substance satisfactory to counsel for Trident from Deloitte &
Touche, LLP, independent certified public accountants, dated the
Closing Date and addressed to Trident and the Holding Company,
confirming the statements made by them in the letter delivered by them
pursuant to the preceding subsection as of a specified date not more
than three (3) business days prior to the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Holding Company or the
Company prepared for Trident's reliance and delivered to Trident or to counsel
for Trident shall be deemed a representation and warranty by the Holding Company
or the Company 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 Holding Company and the Company shall reimburse Trident for its
expenses as provided in Section 3(b) hereof.
8. Indemnification.
----------------
(a) The Holding Company and the Company 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 upon
written demand 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 (A) any misrepresentation by
the Holding Company or the Company in this Agreement or any breach of
warranty by the Holding Company or the Company 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 or other document or communication
(in this Section 8 collectively called "Application") prepared or
executed by or on behalf of the Holding Company or the Company or based
upon (B) written information furnished by or on behalf of the Holding
Company or the Company, whether or not filed in any jurisdiction, to
effect the Conversion or qualify the Shares under the securities laws
thereof or filed with the OTS or Commission, unless such statement or
omission was
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United Community Financial Corp.
Sales Agency Agreement
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made in reliance upon and in conformity with written information
furnished to the Holding Company or the Company 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 Holding Company shall indemnify and hold Trident
harmless for any liability whatsoever arising out of any records of
account holders, depositors, and other members of the Company delivered
to Trident by the Company or its agents for use during the Conversion.
(c) Trident agrees to indemnify and hold harmless the Holding
Company and the Company, their officers, directors and employees and
each person, if any, who controls the Holding Company and the Company
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
Holding Company and the Company 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 Holding Company or the Company 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 Holding Company or the Company 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
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
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elects to assume the defense of any such action and retain counsel
acceptable to the indemnified party, the indemnified party may retain
additional counsel, but shall bear the fees and expenses of such
counsel unless (i) the indemnifying party shall have specifically
authorized the indemnified party to retain such counsel or (ii) the
parties to such suit include such indemnifying party and the
indemnified party, and such indemnified party shall have been advised
by counsel that one or more material legal defenses may be available to
the indemnified party which may not be available to the indemnifying
party, in which case the indemnifying party shall not be entitled to
assume the defense of such suit notwithstanding the indemnifying
party's obligation to bear the fees and expenses of such counsel. An
indemnifying party against whom indemnity may be sought shall not be
liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying
party's consent. To the extent required by law, this Section 8 is
subject to and limited by the provisions of Section 23A.
9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to Trident, the Holding
Company and/or the Company other than in accordance with its terms, the Holding
Company or the Company and Trident shall contribute to the aggregate losses,
liabilities, claims, damages, and expenses of the nature contemplated by said
indemnity agreement incurred by the Holding Company or the Company and Trident
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Holding Company and the Company 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 Holding Company or the Company 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 Holding Company and the Company 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 Holding Company and the Company
bear to the total fees received by Trident under this Agreement. The relative
fault of the Holding Company or the Company 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 Holding
Company or the Company or by Trident and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Holding Company and the Company 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
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United Community Financial Corp.
Sales Agency Agreement
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any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. To the extent required by law, this Section 9 is subject to
and limited by the provisions of Section 23A.
10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Holding Company and the Company and Trident and
the representation and warranties of the Holding Company and the Company 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 Holding
Company or the Company 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 Holding Company, the Company 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 ("NYSE") shall have suspended (except
that this shall not apply to the imposition of NYSE trading collars
imposed on program trading); 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 Company 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 adverse change in
the capitalization, condition or business of the Holding Company, or if
the Company shall have sustained a material or substantial loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act,
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United Community Financial Corp.
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whether or not said loss shall have been insured; or if there shall
have been a material adverse change in the condition or prospects of
the Holding Company or the Company.
(b) If Trident elects to terminate this Agreement as provided
in this Section, the Holding Company and the Company 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, the Holding Company and the
Company shall upon demand pay Trident the full amount so owing pursuant
to Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement.
(d) The Company may terminate the Conversion in accordance
with the terms of the Plan. Such termination shall be without liability
to any party, except that the Holding Company and the Company shall be
required to fulfill their obligations pursuant to Sections 3(b), 3(c),
6, 8(a) and 9 of this Agreement and Trident shall be required to
fulfill its obligations, if any, pursuant to Section 9 of this
Agreement.
12. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ (with a copy to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. Suite 400,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇,
Esquire). and if sent to the Holding Company or the Company, shall be mailed,
delivered or telegraphed and confirmed to The Home Savings and Loan Company of
Youngstown, Ohio, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President (with a copy to Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and
▇▇▇▇▇, LLP, Cincinnati, Ohio, Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esquire).
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Trident, the Holding Company, the Company 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 Ohio.
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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.
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Please acknowledge your agreement to the foregoing by signing below and
returning to the Holding Company one copy of this letter.
UNITED COMMUNITY FINANCIAL CORP. THE HOME SAVINGS AND LOAN
ASSOCIATION OF YOUNGSTOWN, OHIO
By: By:
------------------------------------ -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer President and Chief Executive Officer
Date: _________, 1998 Date: __________, 1998
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
---------------
Date: __________, 1998
