EXHIBIT 1.1
1,983,750 Shares
(subject to increase up to 2,281,312 shares
in the event of an oversubscription)
SOUTHBANC SHARES, INC.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
____________, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SouthBanc Shares, Inc., a Delaware corporation (the "Company"), SouthBanc
Shares, M.H.C., a federally chartered mutual holding company (the "MHC") and
Perpetual Bank, A Federal Savings Bank, a federally-chartered stock savings bank
(the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx & Partners,
L.P. ("Sandler X'Xxxxx" or the "Agent") with respect to the offer and sale by
the Company of 1,983,750 shares (subject to increase up to 2,281,312 shares in
the event of an oversubscription) of the Company's Common Stock, par value $.01
per share (the "Common Stock"). The shares of Common Stock to be sold by the
Company are hereinafter called the "Securities."
The Securities are being offered for sale in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank and the
MHC on September 22, 1997 and subsequently amended on December 22, 1997 pursuant
to which: (i) the MHC will convert to an interim federal stock savings bank
("Interim A") and simultaneously merge with and into the Bank, pursuant to which
the MHC will cease to exist and the outstanding shares of the Bank Common Stock
held by the MHC (800,000 shares, or 53.02% of the outstanding Bank Common Stock
as of the date of the Registration Statement) will be canceled, and (ii) an
interim federal stock savings bank ("Interim B") will be formed as a wholly-
owned subsidiary of the Company and will merge with and into the Bank, resulting
in the Bank becoming a wholly-owned subsidiary of the Company
and the outstanding Bank common stock (708,873 shares, or 46.98% of the
outstanding Bank Common Stock as of the date of the Registration Statement) will
be converted into the Exchange Shares pursuant to an Exchange Ratio. The
Exchange Ratio will result in the holders of the outstanding Public Bank common
stock owning in the aggregate approximately the same percentage of the Common
Stock to be outstanding upon the completion of the Conversion and Reorganization
(i.e., the Conversion Shares and the Exchange Shares) as the percentage of Bank
----
Common Stock owned by them in the aggregate immediately before the consummation
of the Conversion and Reorganization, before giving effect to any (i) payment of
cash in lieu of issuing fractional Exchange Shares and (ii) Conversion Shares
purchased by the Stockholders in the Conversion Offerings.
Pursuant to the Plan, the Company is offering to certain of the Bank' s
depositors rights to subscribe for the Securities in a subscription offering
(the "Subscription Offering"). To the extent Securities are not subscribed for
in the Subscription Offering, such Securities will be offered in a Direct
Community Offering to certain members of the general public, with first
preference given to Public Stockholders as of the close of business on the
Voting Record Date (who are not Eligible Account Holders, Supplemental Eligible
Account Holders or Other Members) and then to natural persons residing in the
counties in Xxxxxxxx and Oconee Counties, South Carolina (the "Community
Offering" and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription and Community Offering"). It is
currently anticipated by the Bank, the MHC and the Company that any Securities
not subscribed for in the Subscription and Community Offering will be offered,
subject to Section 2 hereof, on a best efforts basis by a selling group of
broker-dealers managed by Sandler X'Xxxxx in a syndicated community offering
(the "Syndicated Community Offering"). The Subscription and Community Offering
and the Syndicated Community Offering are hereinafter referred to collectively
as the "Offerings." The conversion of the MHC, the consolidation of the MHC with
and into the Bank, the acquisition of all of the Bank's capital stock by the
Company and the Offerings are hereinafter referred to collectively as the
"Conversion". It is acknowledged that the number of Securities to be sold in the
Offerings may be increased or decreased as described in the Prospectus (as
hereinafter defined). If the number of Securities is increased or decreased in
accordance with the Plan, the term "Securities" shall mean such greater or
lesser number, where applicable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-42517) including a
prospectus for the registration of the Securities under the Securities Act of
1933, as amended (the "Securities Act"), has filed such amendments thereto, if
any, and such amended prospectuses as may have been required to the date hereof
by the Commission in order to declare such registration statement effective, and
will file such additional amendments thereto and such amended prospectuses and
prospectus supplements as may hereafter be required. Such registration statement
(as amended to date, if applicable, and as from time to time amended or
supplemented hereafter) and the prospectuses constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
by reference therein and the information, if any, deemed to be part thereof
pursuant to the rules and regulations of the Commission under the Securities
Act, as from time to time amended or supplemental pursuant to the Securities Act
or otherwise (the "Securities Act Regulations")) are hereinafter referred to as
the
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"Registration Statement" and the "Prospectus", respectively, except that if
any revised prospectus shall be used by the Company in connection with the
Subscription and Community Offering or the Syndicated Community Offering which
differs from the Prospectus on file with the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the Securities
Act Regulations), the term "Prospectus" shall refer to such revised prospectus
from and after the time it is provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the MHC, the Company and the Common Stock.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company, the MHC and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the Company,
the MHC and the Bank, threatened by the Commission. At the time the Registration
Statement became effective and at the Closing Time referred to in Section 2
hereof, the Registration Statement complied and will comply in all material
respects with the requirements of the Securities Act and the Securities Act
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Prospectus, at the date
hereof does not and at the Closing Time referred to in Section 2 hereof will
not, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Prospectus made in reliance upon and in
conformity with information with respect to the Agent furnished to the Company
in writing by the Agent expressly for use in the Prospectus (the "Agent
Information," which the Company, the MHC and the Bank acknowledge appears only
in the sections captioned "Market for Common Stock" and the first two paragraphs
of the section captioned "The Conversion - Marketing Arrangements" of the
Prospectus).
(ii) The Company has filed with the Department of the Treasury, Office
of Thrift Supervision (the "OTS") the Company's application for approval of its
acquisition of the Bank (the "Holding Company Application") on Form H-(e)l-S
promulgated under the savings and loan holding company provisions of the Home
Owners' Loan Act, as amended, ("HOLA") and the regulations promulgated
thereunder. The Company has received written notice from the OTS of its approval
of the acquisition of the Bank, such approval remains in full force and effect
and no order has been issued by the OTS suspending or revoking such approval and
no proceedings therefor have been
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initiated or, to the knowledge of the Company, the MHC or the Bank, threatened
by the OTS. At the date of such approval and the Closing Time as referred to in
Section 2, the Holding Company Application complied and will comply in all
material respects with the applicable provisions of HOLA and the regulations
promulgated thereunder.
(iii) Pursuant to the Rules and Regulations of the Office of
Thrift Supervision ("OTS") governing the conversion of federally-chartered
mutual savings banks and mutual holding companies to stock form (the "Conversion
Regulations"), the Bank has filed with the OTS an application for conversion,
and has filed such amendments thereto and supplementary materials as may be
required to the date hereof (such application, as amended to date, if
applicable, and as from time to time amended or supplemented hereafter, is
hereinafter referred to as the "Conversion Application"), including copies of
the Bank's Proxy Statement, to be dated __________, 1998, relating to the
Conversion (the "Proxy Statement"), and the Prospectus. The OTS has, by letter
dated __________, 1998, approved the Conversion Application, such approval
remains in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company, the MHC or the Bank, threatened
by the OTS. At the date of such approval by the OTS and at the Closing Time
referred to in Section 2, the Conversion Application complied and will comply in
all material respects with the applicable provisions of the Conversion
Regulations.
(iv) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will comply in all material respects with the applicable
provisions of the Conversion Regulations and will 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 the light of the circumstances under which
they were made, not misleading. The Company and the Bank will promptly file the
Prospectus and any supplemental sales literature with the Commission and the
OTS. The Prospectus and all supplemental sales literature, as of the date the
Registration Statement became effective and at the Closing Time referred to in
Section 2, complied and will comply in all material respects with the applicable
requirements of the Conversion Regulations and, at or prior to the time of their
first use, will have received all required authorizations of the OTS for use in
final form.
(v) None of the Commission nor OTS has, by order or otherwise,
prevented or suspended the use of the Prospectus or any supplemental sales
literature authorized by the Company or the Bank for use in connection with the
Offerings.
(vi) At the Closing Time referred to in Section 2, the Company and the
Bank will have completed the conditions precedent to the Conversion and the
establishment of the Foundation in accordance with the Plan, the applicable
Conversion Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company or the Bank by the OTS, the
OTS, or any other regulatory authority, other than those which the regulatory
authority permits to be completed after the Conversion.
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(vii) RP Financial, Inc., which prepared the valuation of the
Company and the Bank as part of the Conversion, has advised the Company, the MHC
and the Bank in writing that it satisfies all requirements for an appraiser set
forth in the Conversion Regulations and any interpretations or guidelines issued
by the OTS with respect thereto.
(viii) The accountants who certified the consolidated financial
statements and supporting schedules of the Bank included in the Registration
Statement have advised the Company, the MHC and the Bank in writing that they
are independent public accountants within the meaning of the Code of Ethics of
the American Institute of Certified Public Accountants, and that such
accountants are, with respect to the Company, the MHC and the Bank, independent
certified public accountants as required by the Securities Act and the
Securities Act Regulations.
(ix) The only direct subsidiary of the MHC is the Bank. The only
subsidiaries (the "Subsidiaries") of the Bank are _____________________ and
________________.
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present fairly
the consolidated financial position of the MHC, the Bank and the Subsidiaries at
the dates indicated and the results of operations, retained earnings and cash
flows for the periods specified, and comply as to form in all material respects
with the applicable accounting requirements of the Securities Act Regulations
and the Conversion Regulations; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement present
fairly the information required to he stated therein.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein (A) there has been no material adverse change in the financial
condition, results of operations or business affairs of the Company, the MHC,
the Bank and the Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, and (B) except for transactions specifically
referred to or contemplated in the Prospectus, there have been no transactions
entered into by the Company, the MHC, the Bank or the Subsidiaries other than
those in the ordinary course of business, which are material with respect to the
Company, the MHC, the Bank and the Subsidiaries taken as a whole.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in the State of South Carolina and in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the Bank, and the Subsidiaries,
taken as a whole.
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The MHC has been duly chartered and is validly existing as a mutual
holding company under the laws of the United States with corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under this Agreement; the MHC is qualified to do business in any jurisdiction in
which the failure to so qualify would have a material adverse effect on the
financial condition, results of operations or business of the Company, the MHC,
the Bank and the Subsidiaries, taken as a whole; upon consummation of the
Conversion, the MHC will merge with and into the Bank, with the Bank being the
surviving institution.
(xiii) Upon consummation of the Conversion as described in the
Prospectus, the authorized, issued and outstanding capital stock of the Company
will be as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus); no shares of Common Stock have
been or will be issued and outstanding prior to the Closing Time referred to in
Section 2; at the time of Conversion, the Securities will have been duly
authorized for issuance and, when issued and delivered by the Company pursuant
to the Plan against payment of the consideration calculated as set forth in the
Plan and stated on the cover page of the Prospectus, will be duly and validly
issued and fully paid and non-assessable; the terms and provisions of the Common
Stock and the capital stock of the Company conform to all statements relating
thereto contained in the Prospectus; the certificates representing the shares of
Common Stock conform to the requirements of applicable law and regulations; and
the issuance of the Securities is not subject to preemptive or other similar
rights.
(xiv) The Bank, as of the date hereof, is a federally-chartered
savings bank in mutual form and upon consummation of the Conversion will be a
federally-chartered savings bank in stock form, in both instances with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; the Company, the MHC, the
Bank and the Subsidiaries have obtained all licenses, permits and other
governmental authorizations currently required for the conduct of their
respective businesses or required for the conduct of their respective businesses
as contemplated by the Holding Company Application and the Conversion
Application, except where the failure to obtain such licenses, permits or other
governmental authorizations would not have a material adverse effect on the
financial condition, results of operations or business affairs of the Company,
the MHC, the Bank and the Subsidiaries taken as a whole; all such licenses,
permits and other governmental authorizations are in full force and effect and
the Company, the MHC, the Bank and the Subsidiaries are in all material respects
in compliance therewith; neither the Company, the MHC, the Bank nor any of the
Subsidiaries has received notice of any proceeding or action relating to the
revocation or modification of any such license, permit or other governmental
authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse effect on
the financial condition, results of operations or business affairs of the
Company, the MHC, the Bank and the Subsidiaries, taken as a whole, and the Bank
is in good standing under the laws of the United States and is qualified as a
foreign corporation in any jurisdiction in which the failure to so qualify would
not have a material adverse effect on the financial condition, results of
operations or business affairs of the Company, the MHC, the Bank and the
Subsidiaries, taken as a whole.
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(xv) The deposit accounts of the Bank are insured by the FDIC up to
the applicable limits and upon consummation of the Conversion, the liquidation
account for the benefit of eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations. The Bank is a
"qualified thrift lender" within the meaning of 12 U.S.C. Section 1467a(m).
(xvi) Upon consummation of the Conversion, the authorized capital
stock of the Bank will be _______ shares of commons stock, par value $_____ per
share (the "Bank Common Stock") and __________ shares of serial preferred stock,
par value $_____ per share (the "Bank Preferred stock"), and the issued and
outstanding capital stock of the Bank will be ______ shares of Bank Common
stock; shares of Bank Common Stock and no shares of Bank Preferred Stock are
issued and outstanding as of the date hereof. No additional shares of Bank
Common Stock and no shares of Bank Preferred Stock will be issued prior to the
Closing Time referred to in Section 2; the issued and outstanding shares of Bank
Common stock have been duly authorized and validly issued, are fully paid and
nonassessable, and have been issued in compliance with all federal and state
securities laws and are owned by the MHC beneficially and of record free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. The shares of Bank Common Stock to be issued to the Company will have
been duly authorized for issuance and, when issued and delivered by the Bank
pursuant to the Plan against payment of the consideration calculated as set
forth in the Plan and as described in the Prospectus, will be duly and validly
issued and fully paid and nonassessable, and all such Bank Common Stock will be
owned beneficially and of record by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; the
terms and provisions of the Bank Common Stock and the Bank Preferred Stock
conform to all statements relating thereto contained in the Prospectus, and the
certificates representing the shares of the Bank Common Stock will conform with
the requirements of applicable laws and regulations; and the issuance of the
Bank Common stock is not subject to preemptive or similar rights.
(xvii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has full corporate power and authority to own, lease and
operate its properties and to conduct its business as descried in the
Registration Statement and Prospectus, is duly qualified to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of operations or
business of the Company, the MHC, the Bank and the Subsidiaries, taken as a
whole; the activities of the Subsidiaries are permitted to subsidiaries of a
federally-chartered savings bank by the rules, regulations, resolutions and
practices of the OTS and the FDIC; all of the issued and outstanding capital
stock of the Subsidiaries has ben duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Bank directly, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or legal or equitable
claim.
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(xviii) This Agreement has been duly executed and delivered by, and
is the valid and binding agreement of, the Company, the MHC and the Bank,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of the rights
of creditors generally and judicial limitations on the right of specific
performance and except as the enforceability of indemnification and contribution
provisions may be limited by applicable securities laws.
(xix) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated therein, none
of the Company, the MHC, the Bank nor the Subsidiaries will have (A) issued any
securities or incurred any liability or obligation, direct or contingent, or
borrowed money, except borrowings in the ordinary course of business from the
same or similar sources and in similar amounts as indicated in the Prospectus,
or (B) entered into any transaction or series of transactions which is material
in light of the business of the Company and the Bank, taken as a whole,
excluding the origination, purchase and sale of loans or the purchase or sale of
investment securities or mortgage-backed securities in the ordinary course of
business.
(xx) No approval of any regulatory or supervisory authority or any
other public authority is required in connection with the execution and delivery
of this Agreement or the issuance of the Securities and the Foundation Shares
that has not been obtained and a copy of which has been delivered to the Agent,
except as may be required under the securities laws of various jurisdictions.
(xxi) None of the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter as the case may be, or bylaws;
and neither the Company, the MHC, the Bank nor any of the Subsidiaries is in
default (nor has any event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company, the MHC,
the Bank, or any of the Subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company, the MHC,
the Bank or any of the Subsidiaries is subject, except for such defaults that
would not individually or in the aggregate, have a material adverse effect on
the financial condition, results of operations or business of the Company, the
MHC, the Bank and the Subsidiaries, taken as a whole; and there are no contracts
or documents of the Company, the MHC, the Bank or any of the Subsidiaries which
are required to be filed as exhibits to the Registration Statement or the
Conversion Application which have not been so filed.
(xxii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action and do not and will not conflict
with or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company, the MHC, the Bank or any of the Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company, the MHC, the
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Bank or any of the Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company, the MHC, the
Bank or any of the Subsidiaries is subject, except for such defaults that would
not, individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business of the Company, the MHC,
the Bank and the Subsidiaries taken as a whole; nor will such action result in
any violation of the provisions of the certificate of incorporation,
organization certificate, articles of incorporation or charter, as the case may
be, or the by-laws of the Company, the MHC, the Bank or any of the subsidiaries,
or any applicable law, administrative regulation or administrative or court
decree to which the Company, the MHC, the Bank or any of the Subsidiaries is
subject or by which any of their property or assets may be bound.
(xxiii) No labor dispute with the employees of the Company, the MHC,
the Bank or any of the Subsidiaries exists or, to the knowledge of the Company,
the MHC or the Bank, is threatened; and the Company, the MHC and the Bank are
not aware of any existing or threatened labor disturbance by the employees of
any of its principal suppliers or contractors which might be expected to result
in any material adverse change in the financial condition, results of operations
or business of the Company, the MHC and the Bank, taken as a whole.
(xxiv) Each of the Company, the MHC, the Bank and the Subsidiaries
has good and marketable title to all properties and assets for which ownership
is material to the business of the Company, the MHC, the Bank or the
Subsidiaries and to those properties and assets described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
in relation to the business of the Company, the MHC, the Bank and the
Subsidiaries taken as a whole; and all of the leases and subleases material to
the business of the Company, the MHC the Bank and the Subsidiaries, under which
the Company, the MHC, the Bank and any of the Subsidiaries hold properties,
including those described in the Prospectus, are valid and binding agreements of
the Company, the MHC, the Bank and any of the Subsidiaries enforceable in
accordance with their terms.
(xxv) None of the Company, the MHC, the Bank nor any of the
Subsidiaries is in violation of any directive from the OTS to make any material
change in the method of conducting their respective businesses; the Bank and the
Subsidiaries have conducted and are conducting their businesses so as to comply
with all applicable statutes, regulations and administrative and court decrees
(including, without limitation, all regulations, decisions, directives and
orders of the OTS).
(xxvi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, the MHC or the Bank, threatened, against or
affecting the Company, the MHC, the Bank or any of the Subsidiaries which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in any material adverse change in the financial
condition, results of operations or business affairs of the Company, the MHC,
the Bank and the Subsidiaries, taken as a whole, or which might materially and
adversely affect the properties or assets thereof or which might materially and
adversely affect the consummation of the Conversion; all pending legal or
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governmental proceedings to which the Company, the MHC, the Bank or any of its
Subsidiaries is a party or of which any of their respective property or assets
is the subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to their business, are considered in the
aggregate not material; and there are no contracts or documents of the Company,
the MHC, the Bank or any of the Subsidiaries which are required to be filed as
exhibits to the Registration Statement or the Conversion Application which have
not been so filed.
(xxvii) The Bank has obtained an opinion of its counsel, Breyer &
Aggugia with respect to the legality of the Securities to be issued and the
federal income tax consequences of the Conversion, copies of which are filed as
exhibits to the Registration Statement; the Bank has obtained the opinion of
Evans, Carter, Xxxxx & Xxxxxxx, P.A., Charleston, South Carolina with respect to
the state and local income tax consequences of the Conversion (including
franchise tax, sales or use tax, license fee on foreign corporations, stock
transfer tax, real property transfer gain tax and real estate transfer tax),
copies of which are filed as exhibits to the Registration Statement; all
material aspects of the aforesaid opinions are accurately summarized in the
Prospectus; the facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects; and neither the Bank,
the MHC nor the Company has taken or will take any action inconsistent
therewith.
(xxviii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxix) All of the loans represented as assets on the most recent
consolidated financial statements or consolidated selected financial information
of the Bank included in the Prospectus meet or are exempt from all requirements
of federal, state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of Regulation Z and 12
C.F.R. Part 226 and Section 563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure laws applicable
to such loans, except for violations which, if asserted, would not result in a
material adverse effect on the financial condition, results of operations or
business of the Company, the MHC, the Bank and the Subsidiaries taken as a
whole.
(xxx) The Company, the MHC, the Bank and the Subsidiaries are in
compliance in all material respects with the applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transaction Reporting Act
of 1970. as amended. and the rules and regulations thereunder.
(xxxi) None of the Company, the MHC, the Bank nor any of the
Subsidiaries nor any properties owned or operated by the Company, the MHC, the
Bank or any of the Subsidiaries is in violation of or liable under any
Environmental Law (as defined below), except for such violations or liabilities
that, individually or in the aggregate, would not have a material adverse effect
on the financial condition, results of operations or business of the Company,
the MHC, the Bank and the Subsidiaries, taken as a whole. There are no actions,
suits or proceedings, or demands, claims, notices or investigations (including,
without limitation, notices, demand letters or requests for
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information from any environmental agency) instituted or pending, or to the
knowledge of the Company, the MHC or the Bank threatened, relating to the
liability of any property owned or operated by the Company, the MHC, the Bank or
any Subsidiary thereof, under any Environmental Law. For purposes of this
subsection, the term "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any regulatory authority relating to (i) the protection,
preservation or restoration of the environment (including, without limitation,
air, water, vapor, surface water, groundwater, drinking water supply, surface
soil, subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production. release or disposal of any substance
presently listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by type or by
quantity, including any material containing any such substance as a component.
(xxxii) The Company, the MHC, the Bank and the Subsidiaries have
filed all federal income and state and local franchise tax returns required to
be filed and have made timely payments of all taxes shown as due and payable in
respect of such returns, and no deficiency has been asserted with respect
thereto by any taxing authority.
(xxxiii) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Securities quoted
on the Nasdaq Stock Market (the "Nasdaq National Market") effective at the
Closing Time referred to in Section 2 hereof.
(xxxiv) The Company has filed a registration statement for the
Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act Registration Statement") and has requested that such
registration statement be effective concurrent with the effectiveness of the
Registration Statement.
(b) Any certificate signed by any officer of the Company, the MHC or
the Bank and delivered to either of the Agent or counsel for the Agent shall be
deemed a representation and warranty by the Company, the MHC or the Bank to each
of the matters covered thereby.
SECTION 2. APPOINTMENT OF SANDLER X'XXXXX; SALE AND DELIVERY OF THE
SECURITIES; CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler O"Neill as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
The Subscription and Community Offering and the Syndicated Community Offering.
On the basis of the representations and warranties herein contained, and subject
to the terms and conditions herein set forth, Sandler X'Xxxxx accepts such
appointment and agrees to use its best efforts to assist the Company with its
solicitation of subscriptions and purchase orders for Securities in accordance
with this Agreement; provided, however, that the Agent shall not be obligated to
take any action that is
11
inconsistent with any applicable laws, regulations, decisions or orders. The
services to be rendered by Sandler X'Xxxxx pursuant to this appointment include
the following: (i) consulting as to the securities marketing implications of any
aspect of the Plan or related corporate documents; (ii) reviewing with the
Bank's Board of Directors the independent appraiser's appraisal of the aggregate
pro forma market value of the MHC and Bank, as converted; (iii) reviewing all
offering documents, including the Prospectus, stock order forms and related
offering materials (it being understood that the preparation and filing of such
documents is the sole responsibility of the MHC, the Company and the Bank and
their counsel); (iv) assisting in the design and implementation of a marketing
strategy for the Offerings; (v) assisting in obtaining all requisite regulatory
approvals; (vi) assisting Bank management in preparing for meetings with
potential investors and broker-dealers; and (vii) providing such other general
advice and assistance as may be requested to promote the successful completion
of the Conversion offerings.
The appointment of the Agent hereunder shall terminate upon the earlier to
occur of (a) forty five (45) days after the last day of the Subscription and
Community Offering, unless the Company and the Agent agree in writing to extend
such period and the OTS agrees to extend the period of time in which the Shares
may be sold, (b) the receipt and acceptance of subscriptions and purchase orders
for all of the Securities, or (c) the completion of the Syndicated Community
Offering.
If any of the Securities remain available after the expiration of the
Subscription Offering and Community Offering, at the request of the Company and
the Bank, Sandler X'Xxxxx will seek to form a syndicate of registered brokers or
dealers ("Selected Dealers") to assist in the solicitation of purchase orders of
such Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed 1.75% of the aggregate Purchase
Price of the Securities sold by such Selected Dealers. Xxxxxx X'Xxxxx will
endeavor to distribute the Securities among the Selected Dealers in a fashion
which best meets the distribution objective of the Company and the requirements
of the Plan, which may result in limiting the allocation of stock to certain
Selected Dealers. It is understood that in no event shall Sandler X'Xxxxx be
obligated to act as a Selected Dealer or to take or purchase any Securities.
In the event the Company is unable to sell at least the total minimum of
the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities 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 others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the
funds received from subscriptions for Securities or other offers to purchase
Securities
12
in special interest-bearing accounts with the Bank until all Securities are sold
and paid for were made prior to the commencement of the Subscription Offering,
with provision for refund to the purchasers as set forth above, or for delivery
to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover page
of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
office of Breyer & Aguggia at ____ ____, local time, or at such other place and
time as shall be agreed upon by the parties hereto, on a business day to be
agreed upon by the parties hereto. The Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. Certificates for Securities shall be delivered directly to the
purchasers thereof in accordance with their directions. Notwithstanding the
foregoing, certificates for Securities purchased through Selected Dealers shall
be made available to the Agent for inspection at least 48 hours prior to the
Closing Time at such office as the Agent shall designate. The hour and date upon
which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4 hereof,
the Agent will receive the following compensation for its services hereunder:
(a) One and one-half percent (1.50%) of the aggregate Purchase Price (as
defined in the Prospectus) of the Securities sold in the Subscription and
Community Offering, excluding in each case shares purchased by any director,
officer or employee of the Company or the Bank or members of their immediate
families (which term shall mean parents, grandparents, spouse, siblings,
children and grandchildren); and
(b) with respect to any Securities sold by an NASD member firm (other than
Sandler X'Xxxxx) under any Selected Dealers' Agreement in the Syndicated
Community Offering, (i) the sales commission payable to Selected Dealers under
any Selected Dealers Agreement, (ii) any sponsoring dealer's fees and (iii) a
management fee to Sandler X'Xxxxx of one and three-quarters percent (1.75%) of
the aggregate Purchase Price of such Securities sold under any such agreement.
Any fees payable to Sandler X'Xxxxx for Securities under such agreement shall be
limited to an aggregate of seven percent (7.0%) of the aggregate Purchase Price
of such Securities. Sandler X'Xxxxx will also be reimbursed for out-of-pocket
expenses, including legal fees, in an amount not to exceed $75,000.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the Company
or the Bank, no fee shall be payable by the Company or the Bank to Sandler
X'Xxxxx; however, the Company shall reimburse the Agent for all of its
reasonable out-of-pocket expenses incurred prior to termination, including the
reasonable fees
13
and disbursements of counsel for the Agent in accordance with
the provisions of Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in immediately
available funds at Closing Time, or upon the termination of this Agreement, as
the case may be. In recognition of the long lead times involved in the
conversion process, the Bank agrees to make advance payments to the Agent in the
aggregate amount of $25,000 which shall be credited against any fees or
reimbursement of expenses payable hereunder.
SECTION 3. COVENANTS OF THE COMPANY, THE MHC AND THE BANK.
The Company, the MHC and the Bank covenant with the Agent as follows:
(a) The Company, the MHC and the Bank will prepare and file such amendments
or supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may hereafter be
requested by the Agent. Following completion of the Subscription and Community
Offering, in the event of a Syndicated Community Offering, the Company and the
Bank will (i) promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement relating to the results of the
Subscription and Community Offering, 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, 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 Offering and pricing
information pursuant to Rule 424l(c) of the Securities Act Regulations, in
either case in a form acceptable to the Agent. The Company, the MHC and the Bank
will notify the Agent immediately, and confirm the notice in writing, (i) of the
effectiveness of any post-effective amendment of the Registration Statement, the
filing of any supplement to the Prospectus and the filing of any amendment to
the Conversion Application, (ii) of the receipt of any comments from the OTS or
the Commission with respect to the transactions contemplated by this Agreement
or the Plan, (iii) of any request by the Commission or the OTS for any amendment
to the Registration Statement or the Conversion Application or any amendment or
supplement to the Prospectus or for additional information, (iv) of the issuance
by the OTS of any order suspending the Offerings or the use of the Prospectus or
the initiation of any proceedings for that purpose, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, and (vi) of the
receipt of any notice with respect to the suspension of any qualification of the
Securities for offering or sale in any jurisdiction. The Company, the MHC and
the Bank will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company, the MHC and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application or
Registration Statement (including any post-effective amendment) or any amendment
or supplement to the Prospectus (including any
14
revised prospectus which the Company proposes for use in connection with the
Syndicated Community Offering of the Securities which differs from the
prospectus on file at the Commission at the time the Registration Statement
becomes effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the Securities Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or use any such prospectus to which the Agent
or counsel for the Agent may object.
(c) The Company, the MHC and the Bank will deliver to the Agent as many
signed copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Agent may reasonably request, and from time to time such number of copies of the
Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered, the
Company. the MHC and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in farce, and by the Securities Act, the
Securities Act Regulations, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission promulgated
thereunder, including, without limitation, Regulation 1 Ob-6 under the Exchange
Act, so far as necessary to permit the continuance of sales or dealing in shares
of Common Stock during such period in accordance with the provisions hereof and
the Prospectus.
(e) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company,
the MHC and the Bank will forthwith amend or supplement the Prospectus (in form
and substance satisfactory to counsel for the Agent) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company, the MHC and the Bank will
furnish to the Agent a reasonable number of copies of such amendment or
supplement. For the purpose of this subsection, the Company, the MHC and the
Bank will each furnish such information with respect to itself as the Agent may
from time to time reasonably request.
(f) The Company, the MHC and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States and
other jurisdictions as the Conversion Regulations may require and as the Agent
and the Company have agreed; provided, however, that the Company, the MHC and
the Bank shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company, and the Bank will file such statements and
15
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company will file with the Commission such reports on Form SR as
may be required pursuant to Rule 463 of the Securities Act Regulations, if such
report or substantially similar report is required by the SEC.
(h) The Company will maintain the effectiveness of the Exchange Act
Registration Statement for not less than three years. The Company will file with
the Nasdaq Stock Market all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities that are listed on the Nasdaq
Stock Market.
(i) During the period beginning on the date hereof and ending on the later
of the third anniversary of the Closing Time or the date on which the Agent
receives full payment in satisfaction of any claim for indemnification or
contribution to which it may be entitled pursuant to Sections 6 or 7
respectively, neither the Company nor the Bank shall, without the prior written
consent of the Agent, which consent shall not be unreasonably withheld, take or
permit to be taken any action that could result in the Bank Common Stock or Bank
Preferred Stock becoming subject to any security interest, mortgage, pledge,
lien or encumbrance; provided, however, that this covenant shall be null and
void if the Board of Governors of the Federal Reserve System, by regulation,
policy statement or interpretive release, or letter, permits indemnification of
the Agent by the Bank as contemplated by Section 6(a) hereof.
(j) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent to
ensure compliance with the National Association of Securities Dealers, Inc.'s
"Interpretation Relating to Free-Riding and Withholding."
(k) Other than in connection with any employee benefit plan or arrangement
described in the Prospectus, the Company will not, without the prior written
consent of the Agent, sell or issue, contract to sell or otherwise dispose of,
any shares of Common Stock other than the Securities for a period of 180 days
following the Closing Time.
(l) The Company and the Bank will comply with the conditions imposed by or
agreed to with the OTS in connection with its approval of the Holding Company
Application and with the OTS or the FDIC in connection with their approval of,
or non-objection to, the Conversion Application including those conditions
relating to the establishment and the operation of the Foundation; the Company
and the Bank shall use their best efforts to ensure that the Foundation submits
within the time frames required by applicable law a request to the Internal
Revenue Service to be recognized as a tax-exempt organization under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"); the
Company and the Bank will take no action which will result in the possible loss
of the Foundation's tax-exempt status; and neither the Company nor the Bank will
contribute any additional assets to the Foundation until such time that such
additional contributions will be deductible for federal and state income tax
purposes.
16
(m) During the period ending on the first anniversary of the Closing Time.
the Bank will comply with all applicable law and regulation necessary for the
Bank to continue to be a "qualified thrift lender" within the meaning of 12
U.S.C. 1467a(m).
(n) The Company shall not deliver the Securities until the Company and the
Bank have certified each condition set forth in Section 5 hereof, unless such
condition is waived by the Agent,.
(o) The Company or the Bank will furnish to Sandler X'Xxxxx as early as
practicable prior to the Closing Date, but no later than two (2) full business
days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Bank and the Subsidiaries which have
been read by ___________________, as stated in their letters to be furnished
pursuant to subsections (e) and (f) of Section 5 hereof.
SECTION 4. PAYMENT OF EXPENSES.
The Company and the Bank jointly and severally agree to pay all expenses
incident to the performance of their obligations under this Agreement, including
but not limited to (i) the cost of obtaining all securities and bank regulatory
approvals, (ii) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the purchasers in the
Offerings, (iv) the fees and disbursements of the Company's, the MHC's and the
Bank's counsel, accountants, conversion agent, appraiser and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent
of copies of the Registration Statement as originally filed and of each
amendment thereto and the printing and delivery of the Prospectus and any
amendments or supplements thereto to the purchasers in the Offerings and the
Agent, (vii) the printing and delivery to the Agent of copies of a Blue Sky
Survey, (viii) the fees and expenses incurred in connection with the listing of
the Securities on the Nasdaq Stock Market, and (viii) the cost of printing and
distributing the offering materials. In the event the Agent incurs any such fees
and expenses on behalf of the Bank, the MHC or the Company, the Bank will
reimburse the Agent for such fees and expenses whether or not the Conversion is
consummated; provided, however, that the Agent shall not incur any substantial
expenses on behalf of the Bank, the MHC or the Company pursuant to this Section
without the prior approval of the Bank or the Company.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, regardless of whether the Conversion is consummated, including (i)
the filing fees paid or incurred by the Agent in connection with all filings
with the National Association of Securities Dealers, Inc., and (ii) all
reasonable out of pocket expenses incurred by the Agent relating to the
Offerings, including, without limitation, advertising, promotional, syndication
and travel expenses and fees and expenses of the Agent's counsel. All fees and
expenses to which the Agent is entitled to reimbursement under this paragraph
17
of this Section 4 shall be due and payable upon receipt by the Company or the
Bank of a written accounting therefor setting forth in reasonable detail the
expenses incurred by the Agent.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS.
The Company, the MHC, the Bank and the Agent agree that the issuance and
the sale of Securities and all obligations of the Agent hereunder are subject to
the accuracy of the representations and warranties of the Company, the MHC and
the Bank herein contained as of the date hereof and the Closing Time, to the
accuracy of the statements of officers and directors of the Company, the MHC and
the Bank made pursuant to the provisions hereof, to the performance by the
Company the MHC and the Bank of their obligations hereunder, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission. no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS and no order
suspending the sale of the Securities in any jurisdiction shall have been
issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Breyer &
Aguggia, counsel for the MHC, the Company and the Bank, in form and substance
satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of South Carolina, and in
each other jurisdiction in which such qualification is required whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to be so qualified would not have a material adverse
effect upon the financial condition, results of operation or business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(iv) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Company will be within the range set forth in
the Prospectus under "Capitalization" and no shares of Common Stock have been or
will be issued and remain outstanding prior to the Closing Time.
18
(v) The Securities have been duly and validly authorized for issuance
and sale and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan will be
duly and validly issued, fully paid and non-assessable.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights arising by operation of law or, to the best of such
counsel's knowledge. otherwise.
(vii) The MHC is validly existing and is in good standing under
the laws of the United States as a mutual holding company, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus and is duly
qualified as a foreign corporation in each jurisdiction in which such
qualification is required, except where the failure to so qualify would not have
a material adverse effect upon the financial condition, results of operations or
business of the MHC.
(viii) The Bank has been at all times since the date hereof and
prior to the Closing Time duly organized, and is validly existing in good
standing under the laws of the United States as a federally-chartered savings
bank of stock form, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Bank is duly qualified as a
foreign corporation in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business except where the failure to so qualify would not have a
material adverse effect upon the financial condition or results of operations or
business of the Bank.
(ix) The deposit accounts of the Bank are insured by the FDIC up to
the applicable limits.
(x) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect upon the financial condition, results
of operation or business of the Company, the Bank and the Subsidiaries, taken as
a whole, the activities of the Subsidiaries as described in the Prospectus are
permitted to subsidiaries of a savings association holding company and of a
federally-chartered savings bank by the rules, regulations, resolutions and
practices of the OTS; all of the issued and outstanding capital stock of each of
the Subsidiaries has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Bank free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim.
19
(xi) Upon consummation of the Conversion, all of the issued and
outstanding capital stock of the Bank when issued and delivered pursuant to the
Plan against payment of consideration calculated as set forth in the Plan will
be duly authorized and validly issued and fully paid and nonassessable, and all
such capital stock will be owned beneficially and of record by the Company free
and clear of any security interest, mortgage, pledge, lien, encumbrance. claim
or equity.
(xii) The OTS has approved the Holding Company Application and
the Conversion Application and no action is pending, or to the best of such
counsel's knowledge, threatened respecting the Holding Company Application or
the Conversion Application or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding Company Application
complies as to form in all material respects with the applicable requirements of
the OTS, and the Conversion Application complies as to form in all material
respects with the applicable requirements of the OTS and include all documents
required to be filed as exhibits thereto, excluding the Prospectus and any
related marketing materials filed as a part of the Holding Company Application
or the Conversion Application as to which no opinion need be given; the Company
is duly authorized to become a savings and loan holding company and is duly
authorized to own all of the issued and outstanding capital stock of the Bank to
be issued pursuant to the Plan.
(xiii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (A) have been duly and
validly authorized by all necessary action on the part of each of the Company,
the MHC and the Bank, and this Agreement constitutes the legal, valid and
binding agreement of each of the Company, the MHC and the Bank, enforceable in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited under applicable law (it being understood that such
counsel may avail itself of customary exceptions concerning the effect of
bankruptcy, insolvency, and the availability of equitable remedies), (B) will
not result in any violation of the provisions of the certificate of
incorporation, organization certificate, articles of incorporation or charter,
as the case may be, or by-laws of the Company, the MHC, the Bank or any of its
Subsidiaries; and, (C) will not conflict with or constitute a breach of, or
default under, and no event has occurred which, with notice or lapse of time or
both, would constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company,
the MHC, the Bank or the Subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company,
the MHC, the Bank or any of the Subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company, the MHC,
the Bank or the Subsidiaries is subject, that, individually or in the aggregate,
would have a material adverse effect on the financial condition, results of
operations or business of the Company, the MHC, the Bank and the Subsidiaries,
taken as a whole.
(xiv) The Prospectus has been duly authorized by the OTS for
final use pursuant to the Conversion Regulations and no action is pending, or to
the best of such counsel's knowledge, is threatened, by the OTS to revoke such
authorization.
20
(xv) The Registration Statement is effective under the Securities Act
and no stop order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act or, to the best of such counsel's
knowledge, have proceedings therefor been initiated or threatened by the
Commission.
(xvi) No further approval, authorization, consent or other order
of any public board or body is required in connection with the execution and
delivery of this Agreement, the issuance of the Securities and the consummation
of the Conversion, except as may be required under the securities or Blue Sky
laws of various jurisdictions as to which no opinion need be rendered.
(xvii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements the notes
thereto, related schedules and other financial, appraisal and statistical data
included therein, as to which no opinion need be rendered) complied as to form
in all material respects with the requirements of the Securities Act and the
Securities Act Regulations and the Conversion Regulations.
(xviii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
statutory requirements.
(xix) There are no legal or governmental proceedings pending or
threatened against or affecting the Company, the MHC, the Bank any of the
Subsidiaries, which are required, individually or in the aggregate, to be
disclosed in the Registration Statement and Prospectus, other than those
disclosed therein.
(xx) All pending legal or governmental proceedings to which the
Company, the MHC, the Bank or any of the Subsidiaries is a party or to which any
of their property is subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the business,
are, considered in the aggregate, not material.
(xxi) The information in the Prospectus under "-Certain Anti-
Takeover Provisions," and "- Possible Adverse Income Tax Consequences of the
Distribution of Subscription Rights," "Dividend Policy," "Business of the Bank -
Legal Proceedings," "Federal and State Taxation," "Regulation," "- Effects of
Conversion," "-Liquidation Rights" and "-Tax Aspects," "Restrictions on
Acquisition of the Company and the Bank," "Description of Capital Stock of the
Company" and "Description of Capital Stock of the Bank" to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by them and is complete and
accurate in all material respects.
(xxii) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, and the descriptions thereof
or references thereto are correct.
21
(xxiii) The Plan has been duly authorized by the Board of Directors
of the MHC and the Board of Directors of the Company and the Board of Directors
of the Bank and the OTS' approvals of the Plan remain in full force and effect;
the Bank's organization certificate has been amended and restated, effective
upon consummation of the Conversion and the filing of such amended and restated
organization certificate with the OTS, to authorize the issuance of permanent
capital stock; to the best of such counsel's knowledge, the Company, the MHC and
the Bank have conducted the Conversion in all material respects in accordance
with applicable requirements of the Conversion Regulations, the Plan and all
other applicable regulations. decisions and orders thereunder, including all
material applicable terms, conditions, requirements and conditions precedent to
the Conversion imposed upon the Company or the Bank by the OTS and, no order has
been issued by the OTS to suspend the Conversion or the Offerings and no action
for such purpose has been instituted or threatened by the OTS; and, to the best
of such counsel's knowledge, no person has sought to obtain review of the final
action of the OTS in approving the Conversion Application or of the OTS in
approving the Holding Company Application.
(xxiv) To the best of such counsel's knowledge, the Company, the
MHC, the Bank and the Subsidiaries have obtained all material licenses, permits
and other governmental authorizations currently required for the conduct of
their respective businesses as described in the Registration Statement and
Prospectus, and all such licenses, permits and other governmental authorizations
are in full force and effect, and the Company, the MHC, the Bank and the
Subsidiaries are in all material respects complying therewith.
(xxv) None of the MHC, the Company, the Bank nor any of the
Subsidiaries is in violation of its certificate of incorporation, organization
certificate, articles of incorporation or charter, as the case may be, or bylaws
(and the Bank will not be in violation of its organization certificate and
bylaws in stock form upon consummation of the Conversion) or, to the best of
such counsel's knowledge, in default (nor has any event occurred which, with
notice or lapse of time or both, would constitute a default) in the performance
or observance of any obligation, agreement, covenant or condition contained in
any material contract indenture, mortgage, loan agreement. note, lease or other
instrument to which the Company, the MHC, the Bank or any of the Subsidiaries is
a party or by which the Company, the MHC, the Bank or any of the Subsidiaries or
any of their property may be bound.
(xxvi) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxxx,
Xxxxxx & Xxxxxxxx, counsel for the Agent, with respect to the matters set forth
in Section 5(b)(1)(i). (iv), (v), (vi) (solely as to preemptive rights arising
by operation of law), (xviii) and (xixi) and such other matters as the Agent may
reasonably require.
22
(3) In giving their opinions required by subsections (b)(l) and
(b)(2), respectively. of this Section, Breyer & Aguggia and Xxxxxxx, Xxxxxx &
Xxxxxxxx shall each additionally state that nothing has come to their attention
that would lead them to believe that the Registration Statement (except for the
appraisal, financial statements, notes thereto, related schedules and other
financial, statistical or appraisal data included therein, as to which counsel
need make no statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for the appraisal, financial statements and
schedules and other financial, statistical or appraisal data included therein,
as to which counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In giving their opinions Breyer & Aguggia and Xxxxxxx,
Xxxxxx & Xxxxxxxx may state that they have not independently verified the
information with respect to the Company and the Bank contained in the
Registration Statement, Conversion Application and the Prospectus. In giving
their opinions, Breyer & Aguggia and Xxxxxxx, Xxxxxx & Xxxxxxxx may rely as to
matters of fact on certificates of officers and directors of the Company, the
MHC and the Bank and certificates of public officials and as to certain matters
of South Carolina law upon the opinion of ______________ and as to certain
matters of Delaware law upon the opinion of __________, which opinions shall be
in form and substance satisfactory to the Agent, and Xxxxxxx, Xxxxxx & Xxxxxxxx
may also rely on the opinion of Breyer & Aguggia.
(c) At the Closing time referred to in Section 2, the Company, the MHC and
the Bank will have completed in all material respects the conditions precedent
to the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS or any other
regulatory authority other than those which the OTS permit to be completed after
the Conversion.
(d) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition, results of operations or business of the Company, the MHC, the Bank
and the Subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, and the Agent shall have received a certificate of the Chief
Executive Officer of the Company, of the MHC and of the Bank, and the chief
financial or chief accounting officer of the Company, of the MHC and of the
Bank, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) there shall have been no material transaction
entered into by the Company, the MHC or the Bank from the latest date as of
which the financial condition of the Company, the MHC or the Bank is set forth
in the Registration Statement and the Prospectus other than transactions
referred to or contemplated therein and transactions in the ordinary cause of
business, (iii) neither the Company, the MHC nor the Bank has received from the
OTS, the FDIC or the OTS any direction (oral or written) to make any material
change in the method of conducting its business with which it has not complied
(which direction, if any, shall have been
23
disclosed to the Agent) or which materially and adversely would affect the
business, financial condition or results of operations of the Company, the MHC,
the Bank and the Subsidiaries, taker. as a whole, (iv) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (v) the Company,
the MHC and the Bank have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to Closing
Time, (vi) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission and (vii) no order suspending the
Offerings or the authorization for final use of the Prospectus has been issued
and no proceedings for that purpose have been initiated or threatened by the OTS
or the FDIC and no person has sought to obtain regulatory or judicial review of
the action of the OTS or the FDIC in approving the Plan in accordance with the
Conversion Regulations nor has any person sought to obtain regulatory or
judicial review of the action of the OTS in approving the Holding Company
Application.
(e) At the time of the execution of this Agreement, the Agent shall have
received from KPMG Peat Marwick LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are independent
public accountants with respect to the Company, the MHC, the Bank and the
Subsidiaries within the meaning of the Code of Ethics of the American Institute
of Certified Public Accountants, the Securities Act and the Securities Act
Regulations and the Conversion Regulations; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included in the
Registration Statement and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations and the Conversion
Regulations; (iii) based upon limited procedures as agreed upon by the Agent and
KPMG Peat Marwick LLP set forth in detail in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Bank and the Subsidiaries included in
the Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, the
Securities Act Regulations. and the Conversion Regulations or are not presented
in conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus, (B) the unaudited amounts set
forth under "Selected Consolidated Financial Information and Other Data" and
"Recent Developments" in the Registration Statement and Prospectus do not agree
with the amounts set forth in unaudited consolidated financial statements as of
and for the dates and periods presented under such captions or such amounts were
not determined on a basis substantially consistent with that used in determining
the corresponding amounts in the audited financial statements included in the
Registration Statement, (C) at a specified date not more than five days prior to
the date of this Agreement, there has been any increase in the consolidated long
term or short term debt of the Bank and the Subsidiaries or any decrease in
consolidated total assets, the allowance for loan losses, total deposits or
retained earnings of the Bank. and the Subsidiaries, in each case as compared
with the amounts shown in the September 30 1997 balance sheet included in the
Registration Statement or, (D) during the period from September 30, 1997 to a
specified date not more than five days prior to the date of this Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in total interest
24
income, net interest income, net interest income after provision for loan
losses. income before income tax expense or net income of the Bank and the
Subsidiaries, except in all instances for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Registration Statement and Prospectus and which are specified by the Agent, and
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company, the MHC, the Bank and the Subsidiaries identified in such letter.
(f) At Closing Time, the Agent shall have received from ___________________
a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing on
the Nasdaq Stock Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from RP
Financial, Inc., dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities and the Foundation Shares
as herein contemplated and related proceedings. or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities and Foundation Shares as
herein contemplated shall be satisfactory in form and substance to the Agent and
counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which, in the judgment of the Agent, are so material and
adverse as to make it impracticable to market the Securities or to enforce
contracts, including subscriptions or orders, for the sale of the Securities,
and (ii) trading generally on the American Stock Exchange, the New York Stock
Exchange or Nasdaq shall not have been suspended, and minimum or maximum prices
for trading shall not have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of the
Commission or any other governmental authority, and a banking moratorium shall
not have been red by either Federal or South Carolina authorities.
25
SECTION 6. INDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to indemnify and
hold harmless the Agent, each person, if any, who controls the Agent, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and its respective partners, directors, officers, employees and agents as
follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the Conversion
(including establishment of the Foundation and the contribution of the
Foundation Shares thereto by the Company) or any action taken by the Agent where
acting as agent of the Company or the Bank or otherwise as described in Section
2 hereof;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the Proxy
Statement or Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to make the
statements therein. in the light of the circumstances under which they were
made, not misleading;
(iii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
described in clauses (i) or (ii) above. if such settlement is effected with the
written consent of the Company or the Bank. which consent shall not be
unreasonably withheld; and
(iv) from and against any and all expense whatsoever. as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating, preparing
for or defending against any litigation, or any investigation, proceeding or
inquiry by any governmental agency or body, commenced or threatened, or any
claim pending or threatened whatsoever described in clauses (i) or (ii) above,
to the extent that any such expense is not paid under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading which was made in reliance upon and in conformity with
the Agent Information.
26
(b) The Agent agrees to indemnify and hold harmless the Company, the Bank,
their directors and trustees, each of their officers who signed the Registration
Statement, and each person, if any. who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with the Agent Information.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Bank, the Company, its security holders or the Bank's or the Company's creditors
relating to or arising out of the engagement of the Agent pursuant to, or the
performance by the Agent of the services contemplated by. this Agreement, except
to the extent that any loss, claim, damage or liability is found in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or any of its partners, directors, officers, employees or
agents is requested or required to appear as a witness or otherwise gives
testimony in any action, proceeding, investigation or inquiry brought by or on
behalf of or against the Company, the MHC, the Bank, the Agent or any of its
respective affiliates or any participant in the transactions contemplated hereby
in which the Agent or such person or agent is not named as a defendant or
subject of an investigation or inquiry, the Company and the Bank jointly and
severally agree to reimburse the Agent for all reasonable and necessary out-of-
pocket expenses incurred by it in connection with preparing or appearing as a
witness or otherwise giving testimony and to compensate the Agent in an amount
to be mutually agreed upon.
27
SECTION 7. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Section 6 hereof is for any reason
held to be unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company, the Bank and the Agent shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company or the Bank and
the Agent, as incurred, in such proportions (i) that the Agent is responsible
for that portion represented by the percentage that the maximum aggregate
marketing fees appearing on the cover page of the Prospectus bears to the
maximum aggregate gross proceeds appearing thereon and the Company, the MHC and
the Bank are jointly and severally responsible for the balance or (ii) if, but
only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the Company and the Bank on the one hand and the Agent on
the other, as reflected in clause (i), but also the relative fault of the
Company and the Bank on the one hand and the Agent on the other, as well as any
other relevant equitable considerations; provided, however, that 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 was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any. who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Agent, and each director of the Company, each trustee of
the Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company and the Bank. Notwithstanding
anything to the contrary set forth herein, to the extent permitted by applicable
law, in no event shall the Agent be required to contribute an aggregate amount
in excess of the aggregate marketing fees to which the Agent is entitled and
actually paid pursuant to this Agreement.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement.
or contained in certificates of officers of the Company, the MHC or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective date s as of which information is given
in the Registration Statement, any material adverse change in the financial
condition, results of operations or business of the Company, the MHC or the
Bank, or the Company the MHC, the Bank and the Subsidiaries taken as a whole,
whether or not arising
28
in the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which, in the judgment of the Agent, are so material and adverse as to
make it impracticable to market the Securities or to enforce contracts,
including subscriptions or orders, for the sale of the Securities, (iii) if
trading generally on the Nasdaq Stock Market, the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by such market or either of said Exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal or State authorities, (iv) if any condition
specified in Section 5 shall not have been fulfilled when and as required to be
fulfilled; (v) if there shall have been such material adverse change in the
condition or prospects of the Company or the Bank or the prospective market for
the Company's securities as in the Agent's good faith opinion would make it
inadvisable to proceed with the offering, sale or delivery of the Securities;
(vi) if, in the Agent's good faith opinion, the price for the Securities
established by RP Financial, Inc. is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Conversion is not consummated on
or prior to ____________, 1998.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Agent shall be directed to the Agent
at Two World Trade Center, 104th Floor. New York, New York 10048, attention of
Xxxxxxxxx X. Xxxxxx, Principal, with a copy to Xxxx X. Xxxxxxxxx, Esq., Xxxxxxx,
Xxxxxx & Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000; notices
to the Company and the Bank shall be directed to either of them at Perpetual
Bank, A Federal Savings Bank, 000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx,
00000 attention of Xxxxxx X. Xxx, President, with a copy to Breyer & Aguggia,
0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000.
SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Agent,
the Company, the MHC and the Bank and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Agent, the Company, the
MHC. and the Bank and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions
29
hereof and thereof are intended to be for the sole and exclusive benefit of the
Agent, the Company, the MHC and the Bank and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement represents the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and supersedes any and
all other oral or written agreements heretofore made, except for engagement
letter dated ____________, 1997, by and between the Agent and the Company and
the Bank, relating to the Agent's providing conversion agent services to the
Company and the Bank in connection with the Conversion. No waiver, amendment or
other modification of this Agreement shall be effective unless in writing and
signed by the parties hereto.
SECTION 13. GOVERNING LAW AND TIME.
This Agreement shall be governed by and construed in accordance with the
laws of the State of South Carolina applicable to agreements made and to be
performed in said State without regard to the conflicts of laws provisions
thereof. Specified times of day refer to Eastern time.
SECTION 14. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
SECTION 15. HEADINGS.
Sections headings are not to be considered part of this Agreement, are for
convenience and reference only and are not to be deemed to be full or accurate
descriptions of the contents of any paragraph or subparagraph.
30
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Agent, the Company, the MHC and the Bank in accordance with its terms.
Very truly yours,
SOUTHBANC SHARES, INC.
___________________________________
By: ________________________________
Title: ______________________________
SOUTHBANC SHARES, M.H.C.
(Mutual Holding Company)
___________________________________
By: ________________________________
Title: ______________________________
CONFIRMED AND ACCEPTED, PERPETUAL BANK, A FEDERAL
as of the date first above written: SAVINGS BANK
Sandler X'Xxxxx & Partners, L.P.
By: Sandler X'Xxxxx & Partners Corp. _________________________________
The sole general partner By: ______________________________
Title: ____________________________
___________________________
By: Xxxxxxxxx X. Xxxxxx
Vice President
31
