Exhibit 1
THE XXXXXXX GROUP, INC.
0000 Xxxxxxxx Xxx.
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Direct Line: (000)000-0000
Ph: (000)000-0000
Fax: (000)000-0000
___________, 2002
Xx. Xxxxx X. Xxxxxxx, Xx., President
Carolinas First Investments, Inc.
0000 Xxxx Xxxx, Xxxxx 000-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
This letter agreement (this "Agreement") sets forth and confirms the
terms and conditions of the engagement of Carolinas First Securities, Inc.
("Carolinas First") by The Xxxxxxx Group, Inc. (the "Company") as a
non-exclusive selling agent of the Company with respect to the Company's public
offering (the "Offering") of subordinated term notes due 1, 6, 12, 36 and 60
months and subordinated daily notes (collectively, the "Notes") registered under
the Securities Act of 1933, as amended (the "1933 Act"), pursuant to a
Registration Statement on Form S-1 (File No. 333-_____) (the "Registration
Statement"), and to be issued under an Indenture, dated February 17, 1998 (the
"Indenture"), between the Company and The Bank of New York (the "Trustee"). The
Notes will be offered pursuant to the prospectus included in the Registration
Statement, as it may be supplemented from time to time (the "Prospectus").
(a) REPRESENTATIONS OF THE COMPANY. The Company represents and warrants
to Carolinas First as follows:
(i) The Prospectus does not and will not contain any
untrue statements of material fact or omit to state any
material facts required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) During of the Offering, the Company will have
all requisite power and authority and all necessary
authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and
bodies to own its properties and carry on its businesses as
set forth in the Prospectus, to
complete the sale of the Notes, to enter into this Agreement
and to carry out the provisions and conditions hereof;
(iii) Neither the execution and delivery of this
Agreement, the consummation of the transactions herein
contemplated, nor compliance with the terms and provisions
hereof will conflict with or result in a breach of any of the
terms, provisions or conditions of the articles of
incorporation or bylaws of the Company, or any agreement or
instrument to which the Company is a party, or by which it or
any of its properties, is bound or affected, or violate any
franchise, license, permit, judgement, decree, order, statute,
rule or regulation applicable to the Company;
(iv) The Notes, when issued and delivered to
purchasers in exchange for payment to the Company of the
respective principal amounts thereof and authenticated by the
Trustee as provided in the Indenture, will be duly and validly
issued and fully paid;
(v) This Agreement has been duly and validly
authorized, executed and delivered by the Company and is a
valid and binding agreement and obligation of the Company
enforceable according to its terms except as such obligations
may be limited by bankruptcy or other laws relating to or
affecting creditors' rights generally; and
(vi) The Company is not subject to any material
contingent obligation nor are its properties or business
subject to any material risks, except those that have been
disclosed in the Prospectus.
(b) REPRESENTATIONS OF CAROLINAS FIRST. Carolinas First represents and
warrants to the Company that:
(i) Carolinas First has all appropriate licenses and
registrations with the Commission, the National Association of
Securities Dealers, Inc. ("NASD") and any applicable state
regulatory bodies to offer and sell the Notes on a "best
efforts" basis as a non-exclusive selling agent for the
Company;
(ii) Neither Carolinas First nor any person
associated with Carolinas First that participates in the
Offering will make any statements to potential purchasers of
the Notes respecting the Notes, the Company, its operations,
financial condition or prospects except such statements as are
contained in the Prospectus; and
(iii) In connection with the offer and sale of any
Notes by Carolinas First, Carolinas First will comply with all
rules and regulations of the NASD and all other pertinent
regulatory bodies applicable to the conduct of its business
including, without limitation, rules of the NASD applicable to
"fair dealing" with customers and the "suitability" of the
Notes for investment by non-institutional investors.
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(c) DUTIES OF CAROLINAS FIRST. On the basis of the representations and
warranties of the Company herein contained, and subject to the terms and
conditions herein set forth, Carolinas First agrees:
(i) to act as the Company's selling agent in
connection with the Offering on a non-exclusive basis and, as
such, to use its "best efforts" to offer and sell the Notes in
any and all states where the Company is required to distribute
its Notes through a licensed broker-dealer;
(ii) to manage, oversee and provide consulting advice
to the Company with respect to the Offering in all states,
irrespective of whether or not Carolinas First is acting as
the Company's selling agent in a particular state;
(iii) to assist the Company in identifying additional
states where the Company's Notes can be offered and sold in a
cost-effective manner;
(iv) to the extent the officers of the Company
approve the offering of the Notes in any additional state,
Carolinas First shall develop a marketing plan with respect to
such state and shall present such plan to the officers of the
Company for their approval;
(v) if such plan is approved by the officers of the
Company, Carolinas First shall oversee and manage the
implementation of such plan; and
(vi) if requested by the Company, Carolinas First
shall provide such other consulting advice to the Company on
any issue within its expertise relating to the Offering.
(d) COMPENSATION OF CAROLINAS FIRST. The Company shall pay to Carolinas
First the following compensation:
(i) commencing on the fifth day of each calendar
month following the effective date of the Registration
Statement during the term of this Agreement, a monthly
management fee in the amount of $6,250.00; and
(ii) commencing on the effective date of the
Registration Statement, a monthly sales commission in an
amount equal to the product obtained by multiplying 0.25% by
the aggregate principal amount of all Notes issued by the
Company during the preceding calendar month (including any
renewals of any such Notes) with respect to which Carolinas
First acted as selling agent.
(e) REIMBURSEMENT OF CERTAIN EXPENSES.
(i) The Company shall reimburse Carolinas First for
the reasonable and necessary travel expenses incurred by
Carolinas First employees in carrying on the
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obligations of Carolinas First hereunder; provided, however
that such expenses are approved by the Company prior to the
time they are incurred.
(ii) If, at the Company's request, Carolinas First
elects to apply for a license or otherwise qualify to operate
as a broker-dealer in any state other than Ohio, North
Carolina, Mississippi and South Carolina in order to provide
services to the Company pursuant to this Agreement in such
states, the Company shall reimburse Carolinas First for the
licensing and/or qualification fees associated with such
application.
(iii) Carolinas First may, at the Company's request,
incur expenses other than those described in subparagraphs
(e)(i) and (e)(ii) above in connection with the performance of
its obligations hereunder. Carolinas First shall notify the
Company in writing of any such expense prior to the time it is
incurred and, if agreed to and approved by the Company,
Carolinas First shall be entitled to the reimbursement of such
expense by the Company. Any reimbursement of expenses pursuant
to this subparagraph (e)(iii) shall be made by the Company to
Carolinas First on or before the fifth day of the calendar
month following the calendar month in which the Company is
provided a receipt or other evidence by Carolinas First
satisfactory to the Company documenting the payment by
Carolinas First of such expense.
(f) TERM. Until terminated as provided in the following sentence, the
initial term of this Agreement shall commence on the effective date of the
Registration Statement and shall automatically be renewed and extended for
successive terms of one calendar month each until so terminated. Either party
may terminate this Agreement by giving the other party thirty days notice. This
Agreement shall terminate on the thirtieth (30th) day (the "Termination Date")
following the giving of such notice. Upon the termination of this Agreement, the
rights and duties of each party arising hereunder shall terminate; provided,
however, that Carolinas First shall be entitled to (A) any unpaid compensation
earned pursuant to subparagraphs (d)(i) and (d)(ii) of this Agreement and (B)
all unpaid reimbursements of actual accountable out-of-pocket expenses payable
pursuant to subparagraphs (e)(i), (e)(ii) and (e)(iii) of this Agreement. Any
such amounts shall be paid in a manner consistent with the terms of this
Agreement.
(g) INDEMNIFICATION. To the extent permitted by law, the Company will
indemnify Carolinas First against all claims, losses, damages or liabilities (or
actions in respect thereof), whether arising in connection with judicial action,
regulatory action or arbitration to the extent such claims, losses, damages or
liabilities arise out of or are based upon any untrue statement (or alleged
untrue statement) of a material fact contained in the Prospectus or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, and
the Company will reimburse Carolinas First for any legal and other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such claims, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by or on behalf
of and relating to Carolinas First specifically for use in the Prospectus.
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(h) REPRESENTATIONS AND AGREEMENT TO SURVIVE TERMINATION. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement (including the indemnification provisions of Section
(g)) shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any party hereto and shall survive
termination of this Agreement and the occurrence of the Termination Date.
(i) INDEPENDENT CONTRACTORS. The Company and Carolinas First are
independent contractors and nothing herein shall be deemed or construed to
create any relationship between the parties other than that of independent
contractors.
(j) INTEGRATION CLAUSE. This Agreement contains all of the
understandings between the parties hereto with reference to the Offering and
cannot be modified or changed except by a written instrument signed by the
parties hereto.
(k) PARTIES. This Agreement shall inure solely to the benefit of and
shall be binding upon each of the parties hereto and their respective
successors, and assigns and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained.
(l) ARBITRATION. Any controversy, dispute or question arising out of or
in connection with or in relation to this Agreement or its interpretation
performance or non-performance or any breach thereof shall be determined by
arbitration conducted in Charlotte, North Carolina in accordance with then
existing rules of the American Arbitration Association. The Company shall select
one arbitrator, Carolinas First shall select one arbitrator and the two
arbitrators shall select a third with substantially similar qualifications. Any
decision rendered shall be binding upon the parties thereto and may be enforced
in any jurisdiction. However, the arbitrators have no authority to grant any
relief that is inconsistent with this Agreement. The expense of arbitration
shall be borne equally by the Company and Carolinas First.
(m) APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of North Carolina.
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If the foregoing sets forth your understanding with respect to
Carolinas First's proposed participation in the Offering, please so confirm same
by signing and returning one copy of this Agreement.
THE XXXXXXX GROUP, INC.
By: ___________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED BY:
CAROLINAS FIRST INVESTMENTS, INC.
By: ________________________________
Xxxxx X. Xxxxxxx, Xx., President
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