Exhibit 1.2
BCSB BANKCORP, INC.
1,552,950 TO 2,101,050 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
$10.00 PER SHARE
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
Baltimore County Savings Bank, M.H.C., a federally chartered mutual holding
company (the "MHC"), BCSB Bankcorp, Inc., a federally chartered corporation (the
"Company"), and Baltimore County Savings Bank, F.S.B., a federally chartered and
insured mutual savings bank (the "Bank"), hereby confirm, as of September 10,
1997, their respective agreements with Trident Securities, Inc. ("Trident"), a
broker-dealer registered with the Securities and Exchange Commission
("Commission") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), as follows:
1. Introductory. The Bank intends to reorganize from a federally
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chartered mutual savings bank to the mutual holding company form of ownership,
whereby the Bank will convert to a federally chartered stock savings bank as a
wholly owned subsidiary of the Company, and the Company will become a majority-
owned subsidiary of the MHC (the "Reorganization"). The shares of Common Stock
are being offered hereby pursuant to the Company's Plan of Stock Issuance (the
"Plan of Stock Issuance"), which is an integral part of the Bank's Plan of
Reorganization from Mutual Savings Bank to Mutual Holding Company and Subsidiary
Holding Company Formation (the "Plan Reorganization") (collectively, the
"Plan"). In accordance with the Plan, the Company is offering shares of its
common stock, par value $0.01 per share (the "Shares" and the "Common Stock"),
pursuant to nontransferable subscription rights in a subscription offering (the
"Subscription Offering") to certain depositors and borrowers of the Bank and to
the Bank's tax-qualified employee benefit plans (i.e., the Bank's Employee Stock
Ownership Plan (the "ESOP")). The Company may offer shares of Common Stock not
subscribed for in the Subscription Offering to members of the general public in
a community offering, with preference being given to natural persons and trusts
of natural persons permanently residing in the Bank's Local Community (the
"Community Offering"), subject to the right of the Company, the Bank and the
MHC, in their absolute discretion, to reject orders in the Community Offering in
whole or in part. It is anticipated that shares of the Common Stock not
otherwise subscribed for in the Subscription and Community Offerings may be
offered at the discretion of the Company to certain members of the general
public as part of a community offering on a best efforts basis by a selling
group of selected broker-dealers to be managed by Trident Securities, Inc. (the
"Syndicated Community Offering"). The Subscription Offering and the Community
Offering and Syndicated Community Offering, if any, are collectively referred to
herein as the "Offering." In the Offering, the Company is offering
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between 1,552,950 and 2,101,050. No person, individually or together with
associates of and persons acting in concert with such person, may purchase more
than 1.0% of the Shares sold in the Offering.
It is anticipated that the Bank will make a contribution of $750,000 of the
Common Stock to the Baltimore County Savings Bank Foundation (the "Foundation"),
a Maryland chartered charitable foundation. The Board of Directors has
established a public offering range such that the public ownership of the
Company will constitute a 42.0% ownership interest prior to the issuance of
shares to the Foundation. Accordingly, the offering range to the public of the
minority stock will be $15,529,500 at the minimum, $18,270,000 at the midpoint
and $21,010,500 at the maximum. Based on the public offering range, exclusive
of the shares to be issued to the Foundation, the public ownership of the shares
will represent 41.3% of the shares of Common Stock to be outstanding following
consummation of the Reorganization and establishment of the Foundation.
The Company, the Bank and the MHC have been advised by Trident that it will
utilize its best efforts in assisting the Company, the Bank and the MHC with the
sale of the Shares in the Offering. Prior to the execution of this Agreement,
the Company has delivered to Trident the Prospectus dated _________ ___, 1998
(as hereinafter defined) and all supplements thereto to be used in the Offering.
Such Prospectus contains information with respect to the MHC, the Company, the
Bank and the Shares.
2. Representations and Warranties.
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(a) The Company, the Bank and the MHC jointly and severally represent
and warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto,
on Form SB-2 (No. 333-44831), including a Prospectus relating to the
Offering, for the registration of the Shares (including those shares
of Common Stock to be issued to the MHC) under the Securities Act of
1933, as amended (the "Act"); and such registration statement has
become effective under the Act and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or, to
the Company's best knowledge, threatened by the Commission. Except as
the context may otherwise require, such registration statement, as
amended or supplemented, on file with the Commission at the time the
registration statement became effective, including the Prospectus,
financial statements, schedules, exhibits and all other documents
filed as part thereof, as amended and supplemented, is herein called
the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration
Statement became effective is herein called the "Prospectus," except
that if the prospectus filed by the Company with the Commission
pursuant to Rule 424(b) of the general rules and regulations of the
Commission under the Act
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(together with the enforceable published policies and actions of the
Commission thereunder, the "SEC Regulations") differs from the form of
prospectus on file at the time the Registration Statement became
effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with or mailed for
filing to the Commission and shall include any amendments or
supplements thereto from and after their dates of effectiveness or
use, respectively. If any Shares remain unsubscribed following
completion of the Subscription Offering and the Community Offering,
the Company (i) will promptly file with the Commission a post-
effective amendment to such Registration Statement relating to the
results of the Subscription and the 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, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing
information relating to the results of the Subscription and the
Community Offering and pricing information pursuant to Rule 424(c) of
the Regulations, in either case in a form reasonably acceptable to the
Company and Trident.
(ii) The Bank has filed with the OTS a Notice of Mutual Holding
Company Reorganization on Form MHC-1 and an Application for Approval
of Minority Stock Issuance by a Savings Association Subsidiary of a
Mutual Holding Company on Form MHC-2, including exhibits (as amended
or supplemented, the "MHC Application" and together with the Form H-
(e)1-S referred to below, the "Conversion Application") with the
Office of Thrift Supervision (the "Office") under the Home Owners'
Loan Act, as amended (the "HOLA") and the enforceable rules and
regulations, including published policies and actions, of the Office
thereunder (the "OTS Regulations"), which has been approved by the
Office; and the Prospectus and the proxy statement for the
solicitation of proxies from members for the special meeting to
approve the Plan (the "Proxy Statement") included as part of the MHC
Application have been approved for use by the Office. No order has
been issued by the Office preventing or suspending the use of the
Prospectus or the Proxy Statement; and no action by or before the
Office revoking such approvals is pending or, to the Company's or the
Bank's best knowledge, threatened. The Company and the MHC have filed
with the Office the Company's and the MHC's application on Form H-
e(1)-S promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act and the regulations
promulgated thereunder ("HOLA") and has received approval of its
acquisition of the Bank from the Office.
(iii) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (i) the Registration
Statement and the Prospectus (as amended or supplemented, if amended
or supplemented) complied
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with the Act and the Regulations, (ii) the Registration Statement (as
amended or supplemented, if amended or supplemented) did not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) the Prospectus (as amended or
supplemented, if amended or supplemented) did not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Representations or warranties in this subsection shall
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company or the
Bank relating to Trident by or on behalf of Trident expressly for use
in the Registration Statement or Prospectus.
(iv) The Company has been duly incorporated and is in good
standing under the laws of the United States; the Bank has been duly
organized and has a corporate existence as a mutual savings
association under the laws of the United States and the Bank's first-
or second-tier subsidiaries, Baltimore County Service Corporation,
Ebeneezer Road, Inc., and Route 543, Incorporated, (the
"Subsidiaries"), have been duly incorporated as Maryland corporations;
and each of them is validly existing and in good standing under the
laws of the jurisdiction of its organization with full power and
authority to own its property and conduct its business as described in
the Registration Statement and Prospectus; the Bank is a member in
good standing of the Federal Home Loan Bank of Atlanta; and the
deposit accounts of the Bank are insured by the Savings Association
Insurance Fund ("SAIF") administered by the Federal Deposit Insurance
Corporation ("FDIC") up to the applicable legal limits. Each of the
Company, the Bank and the Subsidiaries is not required to be qualified
to do business as a foreign corporation in any jurisdiction where non-
qualification would have a material adverse effect on the Company, the
Bank and the Subsidiaries, taken as a whole. The Bank does not own
equity securities of or an equity interest in any business enterprise
other than the Subsidiaries and except as described in the Prospectus.
Upon amendment of the Bank's charter and bylaws as provided in the
rules and regulations of the Office and completion of the sale by the
Company of the Shares as contemplated by the Prospectus, (i) the Bank
will be converted pursuant to the Plan to a federally chartered
capital stock savings bank with full power and authority to own its
property and conduct its business as described in the Prospectus, (ii)
all of the authorized and outstanding capital stock of the Bank will
be owned of record and beneficially by the Company, and (iii) the
Company will have no direct subsidiaries other than the Bank.
(v) The Foundation has been duly organized as a Maryland non-
stock corporation, and an is validly existing and in good standing
under the laws of the
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jurisdiction of its organization with full power and authority to own
its property and conduct its business as described in the Registration
Statement and Prospectus; the Foundation qualifies as an exempt
organization for the purposes of Section 501(c)(3) under the Internal
Revenue Code of 1986, as amended (the "Code");
(vi) The Company, the Bank and the Subsidiaries have good,
marketable and insurable title to all assets material to its business
and to those assets described in the Prospectus as owned by it, free
and clear of all material liens, charges, encumbrances or
restrictions, except for liens for taxes not yet due, except as
described in the Prospectus and except as could not in the aggregate
have a material adverse effect upon the operations or financial
condition of the Company, the Bank and the Subsidiaries, taken as a
whole; and all of the leases and subleases material to the operations
or financial condition of the Bank, under which it holds properties,
including those described in the Prospectus, are in full force and
effect as described therein.
(vii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary actions on the part of each of
the Company, the Bank and the MHC, and this Agreement is a valid and
binding obligation with valid execution and delivery of each of the
Company, the Bank and the MHC, enforceable in accordance with its
terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and loan holding
companies the accounts of whose subsidiaries are insured by the FDIC
or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and
except to the extent that the provisions of Sections 8 and 9 hereof
may be unenforceable as against public policy or pursuant to Section
23A of the Federal Reserve Act, 12 U.S.C. Section 371c ("Section
23A")).
(viii) There is no litigation or governmental proceeding pending
or, to the best knowledge of the Company or the Bank, threatened
against or involving the Company, the Bank, the Subsidiaries or any of
their respective assets which individually or in the aggregate would
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), results of operations and
business, including the assets and properties, of the Company, the
Bank and the Subsidiaries, taken as a whole.
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(ix) The Company, the Bank and the MHC have received the
opinions of Xxxxxxx Xxxxxxxx Kantarian & Xxxxxxxxx, P.C. with respect
to federal tax consequences of the Conversion, and of Xxxxxxxx
Associates, LLP with respect to Maryland tax consequences of the
Conversion, to the effect that the Conversion will constitute a tax-
free reorganization under the Internal Revenue Code of 1986, as
amended, and will not be a taxable transaction for the Bank, the
Company, or the MHC under the laws of Maryland, and the facts relied
upon in such opinions are accurate and complete.
(x) Each of the Company, the Bank and the MHC has all such
corporate power, authority, authorizations, approvals and orders as
may be required to enter into this Agreement and to carry out the
provisions and conditions hereof, subject to the limitations set forth
herein and subject to the satisfaction of certain conditions imposed
by the Office in connection with its approvals of the MHC Application
and the Application H-(e)1-S, and except as may be required under the
securities, or "blue sky," laws of various jurisdictions, and in the
case of the Company, as of the Closing Date, will have such approvals
and orders to issue and sell the Shares to be sold by the Company as
provided herein, and in the case of the Bank, as of the Closing Date,
will have such approvals and orders to issue and sell the Shares of
its Common Stock to be sold to the Company as provided in the Plan,
subject to the issuance of amended charter in the form required for
federally chartered stock savings banks (the "Stock Charter"), the
form of which Stock Charter has been approved by the Office.
(xi) Neither the Company, the Bank nor any Subsidiary is in
violation of any rule or regulation of the Office or the FDIC that
could reasonably be expected to result in any enforcement action
against the Company, the Bank, the Subsidiaries or their officers or
directors that might have a material adverse effect on the condition
(financial or otherwise), operations, businesses, assets or properties
of the Company, the Bank and the Subsidiaries, taken as a whole.
(xii) The consolidated financial statements and any related
notes or schedules which are included in the Registration Statement
and the Prospectus fairly present the consolidated financial
condition, income, retained earnings and cash flows of the Bank and
the Subsidiaries at the respective dates thereof and for the
respective periods covered thereby and comply as to form with the
applicable accounting requirements of the Regulations and the
applicable accounting regulations of the Office. Such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as set forth therein, and such financial statements
are consistent with financial statements and other reports filed by
the
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Bank with supervisory and regulatory authorities except as such
generally accepted accounting principles may otherwise require. The
tables in the Prospectus accurately present the information purported
to be shown thereby at the respective dates thereof and for the
respective periods therein.
(xiii) There has been no material change in the condition
(financial or otherwise), results of operations or business, including
assets and properties, of the Company, the Bank and the Subsidiaries,
taken as a whole, since the latest date as of which such condition is
set forth in the Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the
Company, the Bank and the Subsidiaries conform to the descriptions
thereof contained in the Prospectus. None of the Company, the Bank or
the Subsidiaries has any material liabilities of any kind, contingent
or otherwise, except as set forth in the Prospectus.
(xiv) There has been no breach or default (or the occurrence of
any event which, with notice or lapse of time or both, would
constitute a default) under, or creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the Company, the Bank or any Subsidiary pursuant to any of the terms,
provisions or conditions of, any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company, the
Bank or any Subsidiary is a party or by which any of them or any of
their respective assets or properties may be bound or is subject, or
violation of any governmental license or permit or any enforceable
published law, administrative regulation or order or court order,
writ, injunction or decree, which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the Company, the Bank and the Subsidiaries taken as a whole; all
agreements which are material to the condition (financial or
otherwise), results of operations or business of the Company, the Bank
and the Subsidiaries taken as a whole are in full force and effect,
and no party to any such agreement has instituted or, to the best
knowledge of the Company and the Bank, threatened any action or
proceeding wherein the Company, the Bank or a Subsidiary would be
alleged to be in default thereunder.
(xv) None of the Company, the Bank or any Subsidiary is in
violation of its respective charter or bylaws. The execution and
delivery hereof and the consummation of the transactions contemplated
hereby by the MHC, the Company, and the Bank do not conflict with or
result in a breach of the charter or bylaws of the MHC, the Company,
the Bank (in either mutual or stock form), or any Subsidiary or
constitute a material breach of or default (or an event which, with
notice or lapse of time or both, would constitute a default) under,
give rise
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to any right of termination, cancellation or acceleration contained
in, or result in the creation or imposition of any lien, charge or
other encumbrance upon any of the properties or assets of the Company,
the Bank or any Subsidiary pursuant to any of the terms, provisions or
conditions of, any material agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company, the
Bank or any Subsidiary is a party or violate any governmental license
or permit or any enforceable published law, administrative regulation
or order or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Office in connection
with its approval of the Conversion Application), which breach,
default, encumbrance or violation would have a material adverse effect
on the condition (financial or otherwise), operations or business of
the Company, the Bank and the Subsidiaries taken as a whole.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus and
prior to the Closing Date (as hereinafter defined), except as
otherwise may be indicated or contemplated therein, none of the
Company, the Bank or the Subsidiaries has issued any securities which
will remain issued at the Closing Date or incurred any liability or
obligation, direct or contingent, or borrowed money, except borrowings
in the ordinary course of business, or entered into any other
transaction not in the ordinary course of business and consistent with
prior practices, which is material in light of the business of the
Company, the Bank and the Subsidiaries, taken as a whole.
(xvii) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range as set forth in the Prospectus under the caption
"Capitalization," and no Common Stock of the Company shall be
outstanding immediately prior to the Closing Date; the issuance and
the sale of the Shares of the Company have been duly authorized by all
necessary action of the Company and approved by the Office and, when
issued in accordance with the terms of the Plan and paid for, shall be
validly issued, fully paid and nonassessable and shall conform to the
description thereof contained in the Prospectus; the issuance of the
Shares is not subject to preemptive rights, except as set forth in the
Prospectus; and good title to the Shares will be transferred by the
Company upon issuance thereof against payment therefor, free and clear
of all claims, encumbrances, security interests and liens against the
Company whatsoever. The certificates representing the Shares will
conform in all material respects with the requirements of applicable
laws and regulations. The issuance and sale of the capital stock of
the Bank to the Company has been duly authorized by all necessary
action of the Bank and the Company and appropriate regulatory
authorities (subject to the satisfaction of various conditions imposed
by the Office in connection with its approval of the
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Conversion Application), and such capital stock, when issued in
accordance with the terms of the Plan, will be fully paid and
nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus.
(xviii) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except for
the declaration of effectiveness of any required post-effective
amendment by the Commission and approval thereof by the Office and
approval of the Company's application on Form H-(e)1-S by the Office,
the issuance of the Stock Charter by the Office and as may be required
under the securities laws of various jurisdictions.
(xix) All contracts and other documents required to be filed
as exhibits to the Registration Statement or the Conversion
Application have been filed with the Commission and/or the Office, as
the case may be.
(xx) Xxxxxxxx Associates, LLP, which has audited the
financial statements of the Bank at September 30, 1997 and 1996 and
for the two years ended September 30, 1997 and 1996 included in the
Prospectus, is an independent public accountant within the meaning of
the Code of Professional Ethics of the American Institute of Certified
Public Accountants and Title 12 of the Code of Federal Regulations,
Section 571.2(c)(3).
(xxi) For the past five years, the Company, the Bank and the
Subsidiaries have timely filed all required federal, state and local
franchise tax returns, and no deficiency has been asserted with
respect to such returns by any taxing authorities, and the Company,
the Bank and the Subsidiaries have paid all taxes that have become due
and, to the best of their knowledge, have made adequate reserves for
similar future tax liabilities, except where any failure to make such
filings, payments and reserves, or the assertion of such a deficiency,
would not have a material adverse effect on the condition of the
Company, the Bank and the Subsidiaries taken as a whole.
(xxii) All of the loans represented as assets of the Bank on
the most recent financial statements of the Bank included in the
Prospectus meet or are exempt from all requirements of federal, state
or local law pertaining to lending, including without limitation truth
in lending (including the requirements of Regulation Z and 12 C.F.R.
Part 226 and Section 563.99), real estate settlement procedures,
consumer credit protection, equal credit opportunity and all
disclosure laws applicable to such loans, except for violations which,
if asserted, would not have a material adverse effect on the Company,
the Bank and the Subsidiaries taken as a whole.
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(xxiii) The records of account holders, depositors, borrowers
and other members of the Bank delivered to Trident by the Bank or its
agent for use during the Reorganization have been prepared or reviewed
by the Bank and, to the best knowledge of the Company, the Bank and
the MHC, are reliable and accurate.
(xxiv) None of the Company, the Bank, the Subsidiaries or the
employees of the Company, the Bank or the Subsidiaries, has made any
payment of funds of the Company, the Bank or the Subsidiaries
prohibited by law, and no funds of the Company, the Bank or any
Subsidiary have been set aside to be used for any payment prohibited
by law.
(xxv) To the best knowledge of the Company, the Bank and the
MHC, the Company, the Bank and the Subsidiaries are in compliance with
all laws, rules and regulations relating to the discharge, storage,
handling and disposal of hazardous or toxic substances, pollutants or
contaminants and neither the Company nor the Bank believes that the
Company, the Bank or any Subsidiary is subject to liability under the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or any similar law, except for violations which,
if asserted, would not have a material adverse effect on the Company,
the Bank and the Subsidiaries, taken as a whole. There are no
actions, suits, regulatory investigations or other proceedings pending
or, to the best knowledge of the Company or the Bank, threatened
against the Company, the Bank or any Subsidiary relating to the
discharge, storage, handling and disposal of hazardous or toxic
substances, pollutants or contaminants. To the best knowledge of the
Company, the Bank and the MHC, no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants, including
petroleum and gas products, as any of such terms may be defined under
federal, state or local law, has been caused by the Company, the Bank
or any Subsidiary or, to the best knowledge of the Company or the
Bank, has occurred on, in or at any of the facilities or properties of
the Company, the Bank or any Subsidiary, except such disposal, release
or discharge which would not have a material adverse effect on the
Company, the Bank and the Subsidiaries, taken as a whole.
(xxvi) At the Closing Date, the Company, the Bank and the MHC
will have completed the conditions precedent to, and shall have
conducted the Conversion in all material respects in accordance with,
the Plan, the OTS Regulations and all other applicable laws,
regulations, published decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion
imposed by the Office.
(b) Trident represents and warrants to the Company, the Bank and the
MHC that:
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(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and the NASD.
(ii) Trident is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to provide the services to be
furnished to the Company, the Bank and the MHC hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of Trident,
and this Agreement is a legal, valid and binding obligation of
Trident, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts of whose may be
protected by the Securities Investor Protection Corporation or by
general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A).
(iv) Each of Trident and, to Trident's knowledge, its
employees, agents and representatives who shall perform any of the
services required hereunder to be performed by Trident shall be duly
authorized and shall have all licenses, approvals and permits
necessary to perform such services, and Trident is a registered
selling agent in the jurisdictions listed in Exhibit A hereto and will
remain registered in such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, until the
Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by Trident,
the fulfillment of the terms set forth herein and the consummation of
the transactions contemplated hereby shall not violate or conflict
with the corporate charter or bylaws of Trident or violate, conflict
with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both, would constitute a default) under,
any material agreement, indenture or other instrument by which Trident
is bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) Any funds received by Trident to purchase Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
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(vii) There is not now pending or, to Trident's knowledge,
threatened against Trident any action or proceeding before the
Commission, the NASD, any state securities commission or any state or
federal court concerning Trident's activities as a broker-dealer.
3. Employment of Trident; Sale and Delivery of the Shares. On the basis
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of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company, the Bank and the MHC hereby employ
Trident as their agent to utilize its best efforts in assisting the Company with
the Company's sale of the Shares in the Offering. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Subscription and
Community Offering closes, unless the Company, the Bank and the MHC, with the
approval of the Office, are permitted to extend such period of time, or (b) upon
consummation of the Conversion, whichever date shall first occur.
In the event the Company is unable to sell a minimum of 1,517,250 Shares
(or such lesser amount as the Office may permit) within the period herein
provided, this Agreement shall terminate, and the Company, the Bank and the MHC
shall refund promptly to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them, together with interest as
provided in the Prospectus, and no party to this Agreement shall have any
obligation to the other party hereunder, except as set forth in Sections 6, 8(a)
and 9 hereof. Appropriate arrangements for placing the funds received from
subscriptions for Shares in special interest-bearing accounts with the Bank
until all Shares are sold and paid for were made prior to the commencement of
the Subscription and Community Offering, with provision for prompt refund to the
purchasers as set forth above, or for delivery to the Company if all Shares are
sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company at 0000 X. Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx
00000 or at such other place as shall be agreed upon between the parties hereto.
The date upon which Trident is paid the compensation due hereunder is herein
called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the offering price of the Common Stock ordered on or
before twelve noon on the next business day following receipt or execution of an
order form by Trident to the Bank for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) Trident will subsequently
contact any potential subscriber indicating interest to confirm the interest and
give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgements of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident
Trident Securities, Inc.
Sales Agency Agreement
Page 13
will debit accounts of such subscribers on the fifth business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms together with such funds to the Bank on or before
twelve noon on the next business day following the debit date for deposit in a
segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder:
(a) (i) a commission equal to 1.5% of the aggregate dollar amount of
Common Stock sold in the Subscription Offering and the Community Offering
(excluding Shares sold to the Bank's directors and executive officers and
their "associates," as such term is defined in the Plan, and the ESOP), and
(ii) a commission [DETERMINED BY THE BANK AND TRIDENT] payable to Trident
for any Shares sold by other member firms of the NASD in the Syndicated
Community Offering said commission to be agreed upon by the Company, the
Bank and Trident, not to exceed 5.0%. All such fees are to be payable in
next-day funds to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses, including but
not limited to travel, communications, legal fees and postage, incurred by
it whether or not the Offering are successfully completed; provided,
however, that reimbursable legal fees will not exceed $27,500 (excluding
out of pocket expenses), that other reimbursable expenses will not exceed
$9,000 and that neither the Company nor the Bank shall pay or reimburse
Trident for any of the foregoing expenses accrued after Trident shall have
notified the Company or the Bank of its election to terminate this
Agreement pursuant to Section 11 hereof or after such time as the Company
or the Bank shall have given notice in accordance with Section 12 hereof
that Trident is in breach of this Agreement. Full payment to defray
Trident's reimbursable expenses shall be made in next-day funds on the
Closing Date or, if the Conversion is not completed and is terminated for
any reason, within ten (10) business days of receipt by the Company of a
written request from Trident for reimbursement of its expenses. Trident
acknowledges receipt of $9,000 advance payment from the Bank which shall be
credited against the total reimbursement due Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in the immediately preceding paragraph (b), in
the event that a resolicitation or other event causes the Offering to be
extended beyond their original expiration date, Trident shall be reimbursed
for its allocable expenses incurred during such extended period, provided
that the allowance for allocable expenses provided for in the immediately
preceding paragraph (b) above have been exhausted and subject to the
following. Such reimbursement shall be in amount equal to the product
obtained by
Trident Securities, Inc.
Sales Agency Agreement
Page 14
dividing $9,000 (original out-of-pocket expenses) by the total number of
days of the unextended Subscription Offering (calculated from the date of
the Prospectus to the intended close of the Subscription Offering as stated
in the Prospectus) and multiplying such product by the number of days of
the extension (that number of days from the date of the supplemental
prospectus used in the extended Subscription Offering to the closing of the
extension of the Subscription Offering described in such supplemental
prospectus).
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company, the Bank and the
MHC shall also pay all expenses of the Conversion incurred by them or on their
prior approval including but not limited to their attorneys' fees, NASD filing
fees, and attorneys' fees relating to any required state securities laws
research and filings, telephone charges, air freight, rental equipment,
supplies, transfer agent charges, fees relating to auditing and accounting and
costs of printing all documents necessary in connection with the Reorganization.
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
--------
assisting the Company on a best efforts basis in offering a minimum of 1,552,950
and a maximum of 2,101,050 Shares (except as the Office may permit to be
decreased or increased) in the Subscription and Community Offering. The Shares
are to be offered to the public at the price set forth on the cover page of the
Prospectus and the first page of this Agreement.
5. Further Agreements. The Company, the Bank and the MHC jointly and
------------------
severally covenant and agree that:
(a) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident immediately upon discovery, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective or any supplement to the
Prospectus has been filed, (ii) of the issuance by the Commission of any
stop order relating to the Registration Statement or of the initiation or
the threat of any proceedings for that purpose, (iii) of the receipt of any
notice with respect to the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, and (iv) of the receipt of any
comments from the staff of the Commission relating to the Registration
Statement. If the Commission enters a stop order relating to the
Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible moment.
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon
Trident Securities, Inc.
Sales Agency Agreement
Page 15
it by the Act, as now in effect and hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to permit
the continuance of offers and sales of or dealings in the Shares in
accordance with the provisions hereof and the Prospectus. If during the
period when the Prospectus is required to be delivered in connection with
the offer and sale of the Shares any event relating to or affecting the
Company, the Bank and the MHC, taken as a whole, shall occur as a result of
which it is necessary, in the opinion of counsel for Trident, with the
concurrence of counsel to the Company, to amend or supplement the
Prospectus in order to make the Prospectus not false or misleading in light
of the circumstances existing at the time it is delivered to a purchaser of
the Shares, the Company forthwith shall prepare and furnish to Trident a
reasonable number of copies of an amendment or amendments or of a
supplement or supplements to the Prospectus (in form and substance
satisfactory to counsel for Trident) which shall amend or supplement the
Prospectus so that, as amended or supplemented, the Prospectus shall not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser of the Shares, not misleading. The Company will not file or use
any amendment or supplement to the Registration Statement or the Prospectus
of which Trident has not first been furnished a copy or to which Trident
shall reasonably object after having been furnished such copy. For the
purposes of this subsection the Company, the Bank and the MHC shall furnish
such information with respect to themselves as Trident from time to time
may reasonably request.
(d) The Company and the Bank have taken or will take all reasonably
necessary action as may be required to qualify or register the Shares for
offer and sale by the Company under the securities or blue sky laws of such
jurisdictions as Trident and either the Company or its counsel may agree
upon; provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction. In each jurisdiction where such qualification or
registration shall be effected, the Company, unless Trident agrees that
such action is not necessary or advisable in connection with the
distribution of the Shares, shall file and make such statements or reports
as are, or reasonably may be, required by the laws of such jurisdiction.
(e) Appropriate entries will be made in the financial records of the
Bank sufficient to establish a liquidation account for the benefit of
eligible account holders as of September 30, 1996 and ____________ ___,
1998 in accordance with the requirements of the Office.
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act, prior to completion of the
stock offering pursuant to the Plan and shall request that such
registration statement be effective upon completion of the Conversion. The
Company shall maintain the effectiveness of such
Trident Securities, Inc.
Sales Agency Agreement
Page 16
registration for a minimum period of three years or for such shorter period
as may be required by applicable law.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the regulations promulgated under the Act)
covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the effective date (as defined
in said Rule 158) of the Registration Statement.
(h) For a period of three (3) years from the date of this Agreement
(unless the Common Stock shall have been deregistered under the Exchange
Act), the Company will furnish to Trident, as soon as publicly available
after the end of each fiscal year, a copy of its annual report to
shareholders and Annual Report on Form 10-KSB for such year; and the
Company will furnish to Trident (i) as soon as publicly available, a copy
of each report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act and mailed to shareholders, all Quarterly
Reports on Form 10-QSB and all Current Reports on Form 8-K, and (ii) from
time to time, such other public information concerning the Company as
Trident may reasonably request.
(i) The Company shall use the net proceeds from the sale of the Shares
consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived by Trident.
(k) The Company and the Bank or its agent (_____________________)
shall be responsible for the allocation of shares, based on deposits in the
case of account holders, and votes in the case of Other Members, in the
event of an oversubscription and shall determine final instructions as to
the allocation of the shares ("Allocation Instructions") in such event.
Trident shall have no liability in respect to the Allocation Instructions
or process, and no liability for or related to any denial or grant of a
subscription in whole in in part.
(l) The Company, the Bank and the MHC will take such actions and
furnish such information as are reasonably requested by Trident in order
for Trident to ensure compliance with the NASD's "Interpretation Relating
to Free-Riding and Withholding."
6. Payment of Expenses. Whether or not the Reorganization is
-------------------
consummated, the Company, the Bank and the MHC shall pay or reimburse Trident
for (a) all filing fees paid or incurred by Trident in connection with all
filings with the NASD with respect to the Offering
Trident Securities, Inc.
Sales Agency Agreement
Page 17
and, (b) in addition, if the Company is unable to sell a minimum of 1,517,250
Shares or such lesser amount as the Office may permit or the Reorganization is
otherwise terminated, the Company, the Bank and the MHC shall reimburse Trident
for allocable expenses incurred by Trident relating to the offering of the
Shares as provided in Section 3 hereof; provided, however, that neither the
Company nor the Bank shall pay or reimburse Trident for any of the foregoing
expenses accrued after Trident shall have notified the Company or the Bank of
its election to terminate this Agreement pursuant to Section 11 hereof or after
such time as the Company or the Bank shall have given notice in accordance with
Section 12 hereof that Trident is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
-----------------------------------
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the
Company, the Bank and the MHC of their obligations hereunder and to the
following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinions
of Housley Kantarian & Xxxxxxxxx, P.C., special counsel for the Company,
the Bank and the MHC, or [local counsel] counsel to the Bank, dated the
Closing Date, addressed to Trident, substantially as set forth in Exhibit B
and C, respectively, hereto.
In rendering such opinions, such counsel may rely as to matters of
fact on certificates of officers and directors of the Company, the Bank and
the Subsidiaries and certificates of public officials delivered pursuant
hereto. Such counsel may assume that any agreement is the valid and
binding obligation of any parties to such agreement other than the MHC, the
Company, and the Bank. Such opinions may be governed by, and interpreted
in accordance with, the Legal Opinion Accord (the "Accord") of the ABA
Section of Business Law (1991), and, as a consequence, references in such
opinions to such counsel's "knowledge" may be limited to "actual knowledge"
as defined in the Accord (or knowledge based on certificates). Such
opinions may be limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist; in rendering such
opinions, such counsel need assume no obligation to revise or supplement
them should the present laws be changed by legislative or regulatory
action, judicial decision or otherwise; and such counsel need express no
view, opinion or belief with respect to whether any proposed or pending
legislation, if enacted, or any regulations or any policy statements issued
by any regulatory agency, whether or not promulgated pursuant to any such
legislation, would affect the validity of the execution and delivery by the
MHC, the Company, and the Bank of this Agreement or the issuance of the
Shares.
Trident Securities, Inc.
Sales Agency Agreement
Page 18
(b) At the Closing Date, Trident shall receive the letters of Housley
Kantarian & Xxxxxxxxx, P.C., special counsel for the Company, the Bank and
the MHC, dated the Closing Date, addressed to Trident, substantially as set
forth in Exhibit D, hereto.
(c) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or
pass upon the matters required by Trident, and for the purpose of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained, including but
not limited to, resolutions of the Board of Directors of the Company, the
Bank and the MHC regarding the authorization of this Agreement and the
transactions contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material change in the condition,
financial or otherwise, business or results of operations of the MHC, the
Company, the Bank and the Subsidiaries, taken as a whole, since the latest
date as of which such condition is set forth in the Prospectus, except as
referred to therein; (ii) there shall have been no transaction entered into
by the Company, the Bank or any Subsidiary after the latest date as of
which the financial condition of the Company, the Bank or the Subsidiaries
is set forth in the Prospectus other than transactions referred to or
contemplated therein, transactions in the ordinary course of business, and
transactions which are not material to the Company, the Bank and the
Subsidiaries, taken as a whole; (iii) none of the Company, the Bank or any
Subsidiary shall have received from the Office or Commission any direction
(oral or written) to make any change in the method of conducting their
respective businesses which is material to the business of the Company, the
Bank and the Subsidiaries, taken as a whole, with which they have not
complied; (iv) no action, suit or proceeding, at law or in equity or before
or by any federal or state commission, board or other administrative
agency, shall be pending or threatened against the Company, the Bank or any
Subsidiary or affecting any of their respective assets, wherein an
unfavorable decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or income of the
Company, the Bank and the Subsidiaries, taken as a whole; and (v) the
Shares shall have been qualified or registered for offering and sale by the
Company under the securities or blue sky laws of such jurisdictions as
Trident and the Company shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company, the Bank and the MHC, dated the Closing Date, to the effect
that: (i) they have examined the Prospectus and, at the time the Prospectus
became authorized by the Company for use, the Prospectus did not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading with respect to
the Company
Trident Securities, Inc.
Sales Agency Agreement
Page 19
or the Bank; (ii) since the date the Prospectus became authorized by the
Company for use, no event has occurred which should have been set forth in
an amendment or supplement to the Prospectus which has not been so set
forth, including specifically, but without limitation, any material change
in the business, condition (financial or otherwise) or results of
operations of the Company or the Bank and, the conditions set forth in
clauses (ii) through (iv) inclusive of subsection (d) of this Section 7
have been satisfied; (iii) to the best knowledge of such officers, no order
has been issued by the Commission or the Office to suspend the Subscription
Offering or the Community Offering or the effectiveness of the Prospectus,
and no action for such purposes has been instituted or threatened by the
Commission or the Office; (iv) to the best knowledge of such officers, no
person has sought to obtain review of the final actions of the Office and
division approving the Plan; and (v) all of the representations and
warranties contained in Section 2 of this Agreement are true and correct,
with the same force and effect as though expressly made on the Closing
Date.
(f) At the Closing Date, Trident shall receive, among other documents,
(i) copies of the letters from the Office authorizing the use of the
Prospectus and the Proxy Statement, (ii) a copy of the order of the
Commission declaring the Registration Statement effective; (iii) copies of
the letters from the Office evidencing the corporate existence of the Bank,
the Company, and the MHC; and (iv) if available, a copy of the letter(s)
from the Office approving the Bank's Stock Charter, the Company's Stock
Charter and the MHC's Mutual Charter.
(g) As soon as available after the Closing Date, Trident shall receive
a certified copy of the Bank's and the Company's Stock Charter and the
MHC's Mutual Charter executed by the Office.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Xxxxxxxx Associates, LLP, independent
certified public accountants, addressed to Trident and the Company, in
substance and form satisfactory to counsel for Trident, with respect to the
financial statements and certain financial information contained in the
Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Xxxxxxxx Associates,
LLP, independent certified public accountants, dated the Closing Date and
addressed to Trident and the Company, confirming the statements made by
them in the letter delivered by them pursuant to the preceding subsection
as of a specified date not more than five (5) days prior to the Closing
Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel,
Trident Securities, Inc.
Sales Agency Agreement
Page 20
satisfactory to Trident and its counsel. Any certificates signed by an officer
or director of the Company, the Bank or any Subsidiary prepared for Trident's
reliance and delivered to Trident or to counsel for Trident shall be deemed a
representation and warranty by the Company, the Bank and the Subsidiary to
Trident as to the statements made therein. If any condition to Trident's
obligations hereunder to be fulfilled prior to or at the Closing Date is not so
fulfilled, Trident may terminate this Agreement or, if Trident so elects, may
waive any such conditions which have not been fulfilled, or may extend the time
of their fulfillment. If Trident terminates this Agreement as aforesaid, the
Company, the Bank and the MHC shall reimburse Trident for its expenses as
provided in Section 3(b) hereof.
8. Indemnification.
---------------
(a) The Company, the Bank and the MHC jointly and severally agree to
indemnify and hold harmless Trident, its officers, directors and employees
and each person, if any, who controls Trident within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and all
loss, liability, claim, damage and expense whatsoever and shall further
promptly reimburse such persons for any legal or other expenses reasonably
incurred by each or any of them in investigating, preparing to defend or
defending against any such action, proceeding or claim (whether commenced
or threatened) arising out of or based upon (A) any misrepresentation by
the MHC, the Company or the Bank in this Agreement or any breach of
warranty by the MHC, the Company or the Bank with respect to this Agreement
or arising out of or based upon any untrue or alleged untrue statement of a
material fact or the omission or alleged omission of a material fact
required to be stated or necessary to make not misleading any statements
contained in (i) the Registration Statement or the Prospectus or (ii) any
application (including the MHC Application and the Form H-(e)1-S) or other
document or communication (in this Section 8 collectively called
"Application") prepared or executed by or on behalf of the Company, the
Bank or the Subsidiaries or based upon written information furnished by or
on behalf of the Company, the Bank or the Subsidiaries, whether or not
filed in any jurisdiction, to effect the Conversion or qualify the Shares
under the securities laws thereof or filed with the Office or Commission,
unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company, the Bank or
the Subsidiary with respect to Trident by or on behalf of Trident expressly
for use in the Prospectus or any amendment or supplement thereof or in any
Application, as the case may be, or (B) the participation by Trident in the
Conversion. This indemnity shall be in addition to any liability the
Company, the Bank and the MHC may have to Trident otherwise.
(b) The Company shall indemnify and hold Trident harmless for any
liability whatsoever arising out of (i) the Allocation Instructions or (ii)
any records of account holders, depositors, borrowers, and other members of
the Bank delivered to Trident by the Bank, the Company or its agents for
use during the Conversion.
Trident Securities, Inc.
Sales Agency Agreement
Page 21
(c) Trident agrees to indemnify and hold harmless the MHC, the
Company, the Bank and the Subsidiaries, their officers, directors and
employees and each person, if any, who controls the MHC, the Company, the
Bank and the Subsidiaries within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the MHC, the Company, and the Bank to Trident, but only with
respect to (A) statements or omissions, if any, made in the Prospectus or
any amendment or supplement thereof, in any Application or to a purchaser
of the Shares in reliance upon, and in conformity with, written information
furnished to the Company, the Bank or the Subsidiaries with respect to
Trident by or on behalf of Trident expressly for use in the Prospectus or
in any Application; (B) any misrepresentation by Trident in Section 2(b) of
this Agreement; or (C) any liability of the Company or the Bank which is
found in a final judgment by a court of competent jurisdiction (not subject
to further appeal) to have principally and directly resulted from gross
negligence or willful misconduct of Trident.
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with the
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than the reasonable cost of investigation except as
otherwise provided herein. In the event the indemnifying party elects to
assume the defense of any such action and retain counsel acceptable to the
indemnified party, the indemnified party may retain additional counsel, but
shall bear the fees and expenses of such counsel unless (i) the
indemnifying party shall have specifically authorized the indemnified party
to retain such counsel or (ii) the parties to such suit include such
indemnifying party and the indemnified party, and such indemnified party
shall have been advised by counsel that one or more material legal defenses
may be available to the indemnified party which may not be available to the
indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying party's
consent.
Trident Securities, Inc.
Sales Agency Agreement
Page 22
To the extent required by law, this Section 8 is subject to and limited by
the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the MHC, the Company
and/or the Bank other than in accordance with its terms, the MHC, the Company or
the Bank and Trident shall contribute to the aggregate losses, liabilities,
claims, damages, and expenses of the nature contemplated by said indemnity
agreement incurred by the MHC, the Company or the Bank and Trident (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Bank and the MHC on the one hand and Trident on the other from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above, but also the
relative fault of the MHC, the Company or the Bank on the one hand and Trident
on the other hand in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Bank and the MHC on the one hand and Trident on the other shall be
deemed to be in the same proportions as the total net proceeds from the
Conversion received by the Company, the Bank and the MHC bear to the total fees
received by Trident under this Agreement. The relative fault of the Company or
the Bank on the one hand and Trident on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the MHC, the Company or the Bank or by
Trident and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Bank and the MHC and Trident agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
the indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, Trident
shall not be required to contribute any amount in excess of the amount by which
fees owed Trident pursuant to this Agreement exceeds the amount of any damages
which Trident has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. To the extent required by law, this Section 8 is
subject to and limited by the provisions of Section 23A.
Trident Securities, Inc.
Sales Agency Agreement
Page 23
10. Survival of Agreements, Representations and Indemnities. The
--------------------------------------------------------
respective indemnities of the Company, the Bank and the MHC and Trident and the
representation and warranties of the Company, the Bank and the MHC and of
Trident set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of Trident or the Company or
the Bank or any controlling person or indemnified party referred to in Section 8
hereof, and shall survive any termination or consummation of this Agreement
and/or the issuance of the Shares, and any legal representative of Trident, the
MHC, the Company, the Bank and any such controlling persons shall be entitled to
the benefit of the respective agreements, indemnities, warranties and
representations.
11. Termination. Trident may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in Trident's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become involved in a war
or major hostilities; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the Bank or
the Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have
been a material change in the capitalization, condition or business of the
Company, or if the Bank shall have sustained a material or substantial loss
by fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act, whether or not said loss shall have been
insured; or if there shall have been a material change in the condition or
prospects of the Company, the Bank or the Subsidiaries.
(b) If Trident elects to terminate this Agreement as provided in this
Section, the Company, the Bank and the MHC shall be notified promptly by
Trident by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, and to fulfill its obligations, if any,
pursuant to Sections 3, 6, 8(a) and 9 of this Agreement and upon demand,
the Company, the Bank and the MHC shall pay Trident the full amount so
owing thereunder.
(d) The Bank may terminate the Reorganization in accordance with the
terms of the Plan. Such termination shall be without liability to any
party, except that the Company, the Bank and the MHC shall be required to
fulfill their obligations pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of
this Agreement.
Trident Securities, Inc.
Sales Agency Agreement
Page 24
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., 0000
Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Mr. R. Xxx
Xxxxxxx, Xx. (with a copy to Xxxxxxx, Spidi, Sloane & Xxxxx, P.C., 0000 X
Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X.
Xxxxxx, Esquire) and if sent the MHC, to the Company, the Bank or any
Subsidiary, shall be mailed, delivered or telegraphed and confirmed to BCSB
Bankcorp, Inc., Baltimore County Savings Bank, F.S.B., 0000 X. Xxxxx Xxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxx, President
(with a copy to Housley Kantarian & Xxxxxxxxx, P.C., 0000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxx, Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the MHC, the Company, the Bank and the
controlling and other persons referred to in Section 8 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained.
14. Construction. Unless governed by preemptive federal law, this
------------
Agreement shall be governed by and construed in accordance with the substantive
laws of Maryland.
15. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 25
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
BCSB Bankcorp, INC. Baltimore County Savings Bank, F.S.B.
By: ___________________ By: ___________________________
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
President and Chief President and Chief
Executive Officer Executive Officer
Date: Date:
Baltimore County Savings Bank, MHC
By: ___________________________
Xxxxxxx X. Xxxxx
President and Chief
Executive Officer
Date:
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By: ____________________________
Date:
Exhibit A
---------
Jurisdictions where Trident is a Registered Selling Agent
Trident Securities, Inc. is a registered selling agent in the jurisdictions
--
listed below:
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no
agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
---
listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
A-1
Exhibit B
---------
(i) The Company and the MHC have been duly incorporated, and
each of the MHC, the Company and the Subsidiaries is validly existing
as a corporation in good standing under the laws of its jurisdiction
of incorporation, and the Bank is validly existing as a mutual savings
bank in good standing under the laws of the United States, each with
full power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) the Bank is a member of the Federal Home Loan Bank of
Cincinnati, and the deposit accounts of the Bank are insured by the
SAIF up to the applicable legal limits;
(iii) to the knowledge of such counsel, the activities of each
of the Bank and the Subsidiaries as such activities are described in
the Prospectus are permitted under federal and Maryland law to
subsidiaries of a Maryland business corporation and the Bank does not
have any subsidiaries other than the Subsidiaries;
(iv) The Foundation has been duly organized as a Maryland non-
stock corporation, and an is validly existing and in good standing
under the laws of the jurisdiction of its organization with full power
and authority to own its property and conduct its business as
described in the Registration Statement and Prospectus; the Foundation
qualifies as an exempt organization for the purposes of Section
501(c)(3) under the Internal Revenue Code of 1986, as amended (the
"Code");
(v) the Plan complies with, and, to the knowledge of such
counsel, the reorganization of the Bank from a federally chartered
mutual savings bank to the mutual holding company form of
organization, including the conversion of the Bank to a federally
chartered stock savings bank and the creation of the Company and the
MHC as stock and mutual holding companies for the Bank, respectively,
have been effected in all material respects in accordance with, the
HOLA and the OTS Regulations; to such counsel's knowledge, all of the
terms, conditions, requirements and provisions with respect to the
Plan and the Reorganization imposed by the Office, except with respect
to the filing or submission of certain required post-Reorganization
reports or other materials by the MHC, the Company or the Bank, have
been complied with by the MHC, the Company and the Bank; and, to the
knowledge of such counsel, no person has sought to obtain regulatory
or judicial review of the final action of the Office in approving the
Plan;
(vi) the Company and Bank have authorized Common Stock as set
forth in the Registration Statement and the Prospectus, and the
description of such
B-1
Common Stock in the Registration Statement and the Prospectus is
accurate in all material respects;
(vii) the issuance and sale of the Shares have been duly and
validly authorized by all necessary corporate action on the part of
the Company; the Shares, upon receipt of payment and issuance in
accordance with the terms of the Plan and this Agreement, will be
validly issued, fully paid, nonassessable and, except as disclosed in
the Prospectus, free of preemptive rights, and good title thereto
shall be transferred by the Company free and clear of all claims,
encumbrances, security interests and liens created by the Company;
(viii) the certificates for the Shares are in proper form and
comply in all material respects with applicable [Federal] law;
(ix) the issuance and sale of the capital stock of the Bank to
the Company have been duly authorized by all necessary corporate
action of the Bank and the Company and have received the approval of
the Office, and such capital stock, upon receipt of payment and
issuance in accordance with the terms of the Plan, will be validly
issued, fully paid and nonassessable and owned of record and, to the
knowledge of such counsel, beneficially by the Company;
(x) subject to the satisfaction of the conditions to the
Office's approval of the Conversion Application, no further approval,
authorization, consent or other order of any public board or body is
required in connection with the execution and delivery of this
Agreement, the issuance of the Shares and the consummation of the
Reorganization, except with respect to the issuance to the Bank of the
Stock Charter by the Office and as may be required under the "blue
sky" laws of various jurisdictions;
(xi) the execution and delivery of this Agreement and the
consummation of the Reorganization have been duly and validly
authorized by all necessary corporate action on the part of each of
the Company, the Bank and the MHC; and this Agreement is a legal,
valid and binding obligation of each of the Company, the Bank and the
MHC, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization, receivership, conservatorship or similar
laws relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of depository institutions whose
accounts are insured by the FDIC or savings and loan holding companies
the accounts of whose subsidiaries are insured by the FDIC or by
general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A, as
to which no opinion need be rendered);
B-2
(xii) there are no material legal or governmental proceedings
pending or, to the knowledge of such counsel, threatened against or
involving the assets of the MHC, the Company, the Bank or any
Subsidiary (provided that for this purpose such counsel need not
regard any litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has manifested
to the management of the MHC, the Company or the Bank, or to such
counsel, a present intention to initiate such litigation or
proceeding);
(xiii) the statements in the Prospectus and incorporated by
reference in the Proxy Statement under the captions "Business of the
Bank--Lending Activities," "Regulation," "Taxation," "Dividends,"
"Certain Restrictions on Acquisition of the Company and the Bank" and
"Description of Capital Stock," insofar as they are, or refer to,
statements of law or legal conclusions (excluding financial data
included therein, as to which an opinion need not be expressed), have
been prepared or reviewed by such counsel and are correct in all
material respects;
(xiv) the Conversion Application has been approved by the
Office, and the Prospectus and the Proxy Statement have been
authorized for use by the Office; the Registration Statement and any
post-effective amendment thereto has been declared effective by the
Commission; except as to any necessary qualifications or registration
under the securities laws of the jurisdictions in which the Shares
were offered, no further approval of any governmental authority is
required for the issuance and sale of the Shares (subject to the
satisfaction of various conditions subsequent imposed by the Office in
connection with its approval of the Conversion Application), and no
proceedings are pending by or before the Commission or the Office
seeking to revoke or rescind the orders declaring the Registration
Statement effective or approving the Conversion Application or, to the
knowledge of such counsel, are contemplated or threatened (provided
that for this purpose such counsel need not regard any litigation or
governmental procedure to be "threatened" unless the potential
litigant or government authority has manifested to the management of
the MHC, the Company or the Bank, or to such counsel, a present
intention to initiate such litigation or proceeding);
(xv) the execution and delivery of this Agreement and the
consummation of the Reorganization by the Company, the Bank and the
MHC do not conflict with or result in a breach of the charter or
bylaws of the MHC, the Company, the Bank (in either mutual or stock
form) or the Subsidiaries, or, to the best knowledge of such counsel,
constitute a material breach of or default (or an event which, with
notice or lapse of time or both, would constitute a default) under,
give rise to any right of termination, cancellation or acceleration
contained in, or result in the creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the MHC, the Company, the Bank or any Subsidiary pursuant to any of
the terms, provisions or conditions of, any material
B-3
agreement, contract, indenture, bond, debenture, note, instrument or
obligation to which the MHC, the Company, the Bank or any Subsidiary
is a party or violate any governmental license or permit or any
enforceable published law, administrative regulation or order or court
order, writ, injunction or decree (subject to the satisfaction of
certain conditions imposed by the Office in connection with its
approval of the Conversion Application), which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), operations, business, assets or
properties of the Company, the Bank and the Subsidiaries taken as a
whole;
(xvi) to the knowledge of such counsel, there has been no
material breach of any provision of the MHC's the Company's, the
Bank's or any Subsidiary's charter or bylaws or breach or default (or
the occurrence of any event which, with notice or lapse of time or
both, would constitute a default) under any agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which
the MHC, the Company, the Bank or any Subsidiary is a party or by
which any of them or any of their respective assets or properties may
be bound, or any governmental license or permit, or a violation of any
enforceable published law, administrative regulation or order, or
court order, writ, injunction or decree which breach, default,
encumbrance or violation would have a material adverse effect on the
condition (financial or otherwise), operations, business, assets or
properties of the MHC, the Company, the Bank and the Subsidiaries
taken as a whole; and,
(xvii) the Conversion Application, the Registration Statement,
the Prospectus and the Proxy Statement, in each case as amended,
comply as to form in all material respects with the requirements of
the Act, the HOLA, the SEC Regulations and the OTS Regulations, as the
case may be (except as to information with respect to Trident included
therein and financial statements, notes to financial statements,
financial tables and other financial and statistical data, including
the appraisal, included therein, as to which an opinion need not be
expressed); to such counsel's knowledge, all documents and exhibits
required to be filed with the Conversion Application and the
Registration Statement have been so filed and the descriptions in the
Conversion Application and the Registration Statement of such
documents and exhibits are accurate in all material respects.
B-4
Exhibit C
---------
(i) each of the MHC, the Company, the Bank and the
Subsidiaries has been qualified to do business and, to such counsel's
knowledge, is in good standing as a foreign corporation in each
jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification or, if not so
qualified and in good standing, failure to so qualify would not have
any material adverse effect on the Company, the Bank and the
Subsidiaries, taken as a whole;
(ii) to the knowledge of such counsel, the MHC, the Company,
the Bank and the Subsidiaries have obtained all licenses, permits and
other governmental authorizations currently required for the conduct
of its business as such business is described in the Prospectus, all
such licenses, permits and other governmental authorizations are in
full force and effect and the MHC, the Company, the Bank and the
Subsidiaries are in all material respects complying therewith, except
where the failure to hold such licenses, permits or governmental
authorizations or the failure to so comply would not have a material
adverse effect on the Company, the Bank and the Subsidiaries, taken as
a whole;
(iii) there are no material legal or governmental proceedings
pending or, to the knowledge of such counsel, threatened against or
involving the assets of the MHC, the Company, the Bank or any
Subsidiary (provided that for this purpose such counsel need not
regard any litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has manifested
to the management of the MHC, the Company or the Bank, or to such
counsel, a present intention to initiate such litigation or
proceeding);
(iv) the execution and delivery of this Agreement and the
consummation of the Reorganization by the Company, the Bank and the
MHC do not conflict with or result in a breach of the charter or
bylaws of the MHC, the Company, the Bank (in either mutual or stock
form) or the Subsidiaries, or, to the best knowledge of such counsel,
constitute a material breach of or default (or an event which, with
notice or lapse of time or both, would constitute a default) under,
give rise to any right of termination, cancellation or acceleration
contained in, or result in the creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the MHC, the Company, the Bank or any Subsidiary pursuant to any of
the terms, provisions or conditions of, any material agreement,
contract, indenture, bond, debenture, note, instrument or obligation
to which the MHC, the Company, the Bank or any Subsidiary is a party
or violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court order,
writ, injunction or decree (subject to the satisfaction of certain
conditions imposed by the Office in
C-1
connection with its approval of the Conversion Application), which
breach, default, encumbrance or violation would have a material
adverse effect on the condition (financial or otherwise), operations,
business, assets or properties of the Company, the Bank and the
Subsidiaries taken as a whole;
(v) to the knowledge of such counsel, there has been no material
breach of any provision of the MHC's the Company's, the Bank's or any
Subsidiary's charter or bylaws or breach or default (or the occurrence
of any event which, with notice or lapse of time or both, would
constitute a default) under any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the MHC, the
Company, the Bank or any Subsidiary is a party or by which any of them
or any of their respective assets or properties may be bound, or any
governmental license or permit, or a violation of any enforceable
published law, administrative regulation or order, or court order,
writ, injunction or decree which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the MHC, the Company, the Bank and the Subsidiaries taken as a
whole; and,
C-2
Exhibit D
---------
(i) based on such counsel's participation in conferences with
representatives of the MHC, the Company, the Bank, its counsel, the
independent appraiser, the independent certified public accountants,
Trident and its counsel, review of documents and understanding of
applicable law (including the requirements of Form S-1 and the character of
the Registration Statement contemplated thereby) and the experience such
counsel has gained in its practice under the Act, nothing has come to such
counsel's attention that would lead it to believe that the Registration
Statement, as amended (except as to information in respect of Trident
contained therein and except as to the financial statements, notes to
financial statements, financial tables and other financial and statistical
data contained therein, as to which such counsel need express no comment),
at the time it became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, or that the
Prospectus, as amended (except as to information in respect of Trident
contained therein and except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data
contained therein as to which such counsel need express no comment), at the
time the Prospectus was filed with the Commission under Rule 424(b) and at
the Closing Date, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(in making this statement such counsel may state that it has not undertaken
to verify independently the information in the Registration Statement or
Prospectus and, therefore, does not assume any responsibility for the
accuracy or completeness thereof), and
(ii) based on such counsel's participation in conferences with
representatives of the Company, the Bank and the MHC concerning the Bank,
the Company, the Subsidiaries and their counsel, [local counsel], P.C.
("[Local]"), nothing has come to such counsel's attention that would lead
it to believe that Trident should not rely on the legal opinion of [Local]
delivered under Section 7(a) hereof (in making this statement, Xxxxxxx
Xxxxxxxx Kantarian & Xxxxxxxxx may state that its members are not licensed
to practice law in Maryland, it has not undertaken to research legal
matters or issues involved in [Local]'s opinion and it has not undertaken
to verify independently factual information relied upon in [Local]'s
opinion and, therefore, it does not render any opinion with respect to
[Local's] opinion and it does not assume responsibility for the accuracy or
completeness of [Local's] opinion).
D-1
