EXHIBIT (1).(b)
ANSON BANCORP, INC.
Up to 872,850 Shares
COMMON STOCK
(No Par Value Per Share)
Subscription Price $10.00 Per Share
SALES AGENCY AGREEMENT
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May __, 1998
Trident Securities, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Gentlemen:
Anson Bancorp, Inc., Wadesboro, North Carolina (the "Company"), a North
Carolina corporation, and Anson Savings Bank, SSB, Wadesboro, North Carolina
(the "Bank"), a North Carolina-chartered, federally-insured savings bank, hereby
confirm their respective agreements with Trident Securities, Inc., Raleigh,
North Carolina ("Trident") as follows:
1. Introduction. The Bank, in accordance with its plan of conversion
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(the "Plan"), pursuant to which the Bank intends to convert from a North
Carolina-chartered mutual savings bank to a North Carolina-chartered stock
savings bank (the "Conversion"), is offering to certain depositors and borrowers
and to directors, officers and employees of the Bank nontransferable rights to
subscribe for a minimum of 561,000 and a maximum of 759,000 shares, with the
possibility of increasing the number of such shares offered to 872,850 shares
without a resolicitation of subscribers, of the Company's common stock, no par
value per share (the "Shares" and the "Common Stock"), or such lesser amount of
Common Stock as the Administrator of the Savings Institutions Division of the
North Carolina Department of Commerce (the "Administrator") permits to be
offered, in a subscription offering (the "Subscription Offering"). Shares for
which subscriptions are not received in the Subscription Offering may be offered
to members of the general public in a community offering with priority being
given to natural persons or trusts of natural persons who are residents of Anson
County, North Carolina, subject to the priorities and limitations described in
the Plan (the "Community Offering") and Shares for which subscriptions are not
received in the Subscription Offering or purchased in the Community Offering may
be offered to the general public in a syndicated community offering (the
"Syndicated Community Offering"), subject to the priorities and limitations
described in the Plan. The Subscription Offering, the Community Offering, if
any, and the Syndicated Community Offering, if any, are referred to collectively
as the "Offerings."
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Page 2
The Company and the Bank have been advised by Trident that it desires to
utilize its best efforts in assisting the Company and the Bank with the sale of
the Common Stock in the Offerings. Prior to the execution of this Agreement, the
Company and the Bank have delivered to Trident the prospectus dated [_____],
1998 (the "Prospectus") and the proxy statement dated [_____], 1998 (the "Proxy
Statement"), and all supplements and amendments thereto, if any, to be used in
the Conversion and the Offerings. Such Prospectus and such Proxy Statement
contain information with respect to the Company, the Bank and the Common Stock.
2. Representations and Warranties. The Company and the Bank jointly and
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severally represent and warrant to Trident that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form SB-2 (No. [ ]), including
exhibits and all amendments and supplements thereto, including the Prospectus,
for the registration of the Offerings under the Securities Act of 1933, as
amended ("1933 Act"). Such registration statement has become effective under the
1933 Act and no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the best of its knowledge,
threatened by the Commission. Except as the context may otherwise require, such
registration statement, as amended or supplemented, if amended or supplemented,
on file with the Commission at the time the registration statement becomes
effective, including the Prospectus, financial statements, schedules, exhibits
and all other documents filed as part thereof, is herein called the
"Registration Statement," and the prospectus, as amended or supplemented, if
amended or supplemented, on file with the Commission at the time the
Registration Statement becomes 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
1933 Act ("1933 Act Regulations") differs from the form of prospectus on file at
the time the Registration Statement becomes 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 with the Commission and shall include any amendments
or supplements thereto from and after their dates of effectiveness or use,
respectively. If any Shares remain unsubscribed following completion of the
Subscription Offering, the Company, if required under the 1933 Act, (i) will
promptly file with the Commission a post-effective amendment to the Registration
Statement relating to the results of the Offerings, any additional information
with respect to the proposed plan of distribution and any revised pricing
information or (ii) will file with, or mail for filing to, the Commission a
prospectus or prospectus supplement containing information relating to the
results of the Offerings and pricing information pursuant to Rule 424(c) of the
1933 Act Regulations.
(b) The Bank has filed an Application to Convert a Mutual Savings
Bank to a Stock Owned Savings Bank, including exhibits (as amended or
supplemented, the "Conversion Application") with the Administrator, which has
been conditionally approved by the Administrator; and the Prospectus and the
Proxy Statement included as part of the Conversion
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Application has been conditionally approved for use by the Administrator. No
order has been issued by the Administrator preventing or suspending the use of
the Prospectus or the Proxy Statement; and no action by or before the
Administrator revoking such approvals is pending or, to the Bank's best
knowledge, threatened. The Bank also has filed a Notice of Intent to Convert to
Stock Form (as amended or supplemented, the "Notice") with the Federal Deposit
Insurance Corporation (the "FDIC"), and the FDIC has issued a conditional Notice
of Intent Not to Object to the Conversion. The Company has filed holding company
applications, including exhibits (as amended or supplemented, the "Holding
Company Applications"), with the Board of Governors of the Federal Reserve
System (the "Federal Reserve") and the Administrator, which have been approved
by them. No action by or before the Federal Reserve or the Administrator
revoking such approvals is pending or, to the Bank's best knowledge, threatened.
(c) As of the date of the Prospectus, and at all times subsequent
thereto through and including the "Closing Date" (as defined in Section 3
hereof), (i) the Registration Statement and Prospectus (as amended and
supplemented, if amended and supplemented) complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations, (ii) the Prospectus and the Proxy Statement (as amended and
supplemented, if amended and supplemented) complied and will comply in all
material respects with Chapter 54C-33 of the North Carolina General Statutes, as
amended, and the rules and regulations of the Administrator and other applicable
North Carolina law (collectively the "Administrator's Regulations") and with the
Federal Deposit Insurance Act, as amended, and the rules and regulations of the
FDIC and other applicable federal law (collectively the "FDIC's Regulations"),
(iii) the Registration Statement (as amended and supplemented, if amended and
supplemented) did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (iv) the Prospectus and the Proxy
Statement (each as amended or supplemented, if amended or supplemented) did not
and will not contain any untrue statement of a material fact or omit to state
any material fact 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, the Prospectus or the Proxy Statement.
(d) The Company is duly organized as a business corporation under the
laws of the State of North Carolina and the Bank is duly organized as a mutual
savings bank under the laws of the State of North Carolina, and each of them is
validly existing and has a corporate existence under all applicable laws with
full power and authority to own its property and conduct its business as
described in the Prospectus and the Proxy Statement; the Bank is a member in
good standing of the Federal Home Loan Bank of Atlanta ("FHLB-Atlanta"); and the
deposit accounts of the Bank are insured by the Savings Association Insurance
Fund ("SAIF") administered by the
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FDIC up to the applicable legal limits. Each of the Company and the Bank is
qualified to do business as a foreign corporation in any jurisdiction where non-
qualification has or would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets, earnings or properties
("Material Adverse Effect") of the Company and the Bank, taken as a whole. The
Bank does not own equity securities of or any equity interest in any other
business enterprise. Upon amendment of the Bank's charter and bylaws as provided
in the Administrator's Regulations and completion of the sale by the Company of
the Shares as contemplated by the Prospectus, (i) the Bank will be converted
pursuant to the Plan to a North Carolina-chartered capital stock savings bank
with full power and authority to own its properties and conduct its business as
described in the Prospectus and the Proxy Statement, (ii) all of the outstanding
shares of capital stock of the Bank will be owned of record and beneficially by
the Company, and (iii) the Company will have no direct subsidiaries other than
the Bank.
(e) The Bank has good and marketable title to all assets material to
the business of the Bank and to those assets described in the Prospectus as
owned by the Bank, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not expected
to have a Material Adverse Effect on the Bank and the Company, taken as a whole;
and all of the leases and subleases material to the operations and financial
condition of the Bank under which the Bank holds properties, including those
described in the Prospectus, are in full force and effect as described therein.
(f) 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 each of the Company and the Bank, and this
Agreement is a valid and binding obligation of each of the Company and the Bank,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship or other laws affecting creditors' rights generally, except as
may be limited by the exercise of judicial discretion in applying principles of
equity and except to the extent that the provisions of Sections 8 and 9 hereof
may be unenforceable as against public policy or Section 23A of the Federal
Reserve Act, 12 U.S.C. (S) 371c ("Section 23A").
(g) There is no litigation or governmental proceeding pending or, to
the knowledge of the Company or the Bank, threatened against or involving the
Company, the Bank or any of their respective assets which individually or in the
aggregate reasonably would be expected to have a Material Adverse Effect on the
Company and the Bank, taken as a whole, except as referred to in the Prospectus
and the Proxy Statement.
(h) The Conversion of the Bank from mutual to stock form will
constitute a tax-free reorganization under the Internal Revenue Code of 1986, as
amended, and will not be a taxable transaction under the laws of the State of
North Carolina to the Company or the Bank; and the Bank has received the opinion
of Brooks, Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P.,
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Greensboro, North Carolina, with respect to North Carolina and federal income
tax consequences of the Conversion, which opinion is filed as an exhibit to the
Registration Statement and the Conversion Application, and the facts relied upon
in such opinion are true, accurate and complete.
(i) The Company and Bank each has all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof (subject to the
limitations set forth herein and subject to post-Conversion conditions imposed
by the Administrator, the FDIC and/or the Federal Reserve in connection with
their respective approvals, or nonobjection, as the case may be, of the
Conversion Application, the Notice, and the Holding Company Applications) and,
in the case of the Company, as of the Closing Date to issue and sell the Shares
to be sold by it as provided herein, and, in the case of the Bank, as of the
Closing Date to issue and sell the shares of its capital stock to be sold to the
Company as provided in the Plan (subject to the issuance of an amended charter
in the form required for a North Carolina-chartered stock savings bank (the
"Stock Charter"), the form of which Stock Charter has been filed as an exhibit
to the Conversion Application).
(j) The Bank is not in violation of any rule or regulation of the
Administrator or the FDIC that would result in any enforcement action against
the Bank or its officers or directors that has or may have a Material Adverse
Effect on the Company and the Bank, taken as a whole.
(k) The financial statements of the Bank and any related notes or
schedules which are included in the Registration Statement and the Conversion
Application and are part of the Prospectus fairly present the financial
condition, results of operations, retained earnings and cash flows of the Bank
at the respective dates thereof and for the respective periods covered thereby
and comply as to form in all material respects with the applicable accounting
requirements of both the 1993 Act Regulations and the Administrator's
Regulations. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as set forth therein. The tables and other financial,
statistical and pro forma information and related notes in the Prospectus
accurately present the information purported to be shown thereby at the
respective dates thereof and for the respective periods covered thereby.
(l) There has been no material adverse change in the condition
(financial or otherwise), results of operations, business, assets, properties or
earnings of the Company or the Bank since the latest date as of which such
condition is set forth in the Prospectus except as referred to therein; and the
capitalization, assets, properties and businesses of the Company and the Bank
conform to the descriptions thereof contained in the Prospectus as of the date
specified and, since such date, there has been no Material Adverse Effect on the
Company and the Bank, taken as a whole. Neither the Company nor the Bank have
any material liabilities, contingent or otherwise, of any kind, except as
specifically set forth in the Prospectus.
Trident Securities, Inc.
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(m) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default, on the
part of the Company, the Bank or, to the best knowledge of the Company and the
Bank, on the part of any other party in the due performance and observance of
any term, obligation, covenant or condition of any agreement, contract,
indenture, bond, debenture, note, instrument or any other evidence of
indebtedness which would result in a Material Adverse Effect on the Company and
the Bank, taken as a whole; said agreements are in full force and effect; and no
other party to any such agreement has instituted or, to the best knowledge of
the Company or the Bank, threatened any action or proceeding wherein the Company
or the Bank would or might be alleged to be in default thereunder.
(n) Neither the Company nor the Bank is in violation of their
respective charters, articles of incorporation or bylaws. The execution and
delivery of this Agreement, the fulfillment of the terms set forth herein and
the consummation of the transactions contemplated hereby shall not violate or
conflict with the respective charter, articles of incorporation or bylaws of the
Company or the Bank, or, in any material respect, violate, conflict with or
constitute a breach of, or default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, any agreement, indenture or
other instrument by which any of the Company or the Bank is bound and which is
material to the Company and the Bank, taken as a whole, or under any
governmental license or permit or any law, administrative regulation or
authorization, approval, court decree, injunction or order which is material to
the Company and the Bank, taken as whole, subject to the satisfaction of certain
conditions imposed by the Administrator, the FDIC and the Federal Reserve in
connection with their approvals of the Conversion Application, the Notice and
the Holding Company Applications, and except as may be required under the blue
sky laws and regulations (collectively the "Blue Sky Laws") of various
jurisdictions.
(o) Subsequent to the respective dates as of which information is
given in the Prospectus or the Proxy Statement and prior to the Closing Date,
except as otherwise may be indicated or contemplated therein, neither the
Company nor the Bank has issued any securities or incurred any liabilities or
obligations, direct or contingent, for borrowed money, except borrowings by the
Bank in the ordinary course of business, or entered into any transaction other
than in the ordinary course of business which is material in light of the
businesses and properties of the Company and the Bank.
(p) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be as set forth in the
Prospectus under the caption "Capitalization," and no equity or debt securities
of the Company have been or shall be issued and outstanding prior to the Closing
Date; the issuance and the sale of the Shares have been, or as of the Closing
Date will be, duly authorized by all necessary action of the Company and
approved by the Administrator and received the order of non-objection from the
FDIC (subject to the satisfaction of post-Conversion conditions imposed by the
Administrator and the FDIC) and, when
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issued in accordance with the terms of the Plan, shall be validly issued, fully
paid and nonassessable and shall conform to the description thereof contained in
the Prospectus; the issuance of the Shares is not subject to preemptive rights;
and good title to the Shares will be transferred to the purchasers thereof upon
issuance thereof against payment therefor, free and clear of all claims,
encumbrances, security interests and liens whatsoever, with respect to the
Company's interest in such shares. The certificates representing the Shares will
conform with the requirements of applicable laws and regulations. The issuance
and sale of the common stock of the Bank to the Company has been, or as of the
Closing Date will be, duly authorized by all necessary action of the Bank and
the Company and appropriate regulatory authorities (subject to the satisfaction
of post-Conversion conditions imposed by the Administrator, the FDIC and/or the
Federal Reserve) and such common 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.
(q) No further 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 or non-objection thereof or thereto by the Administrator and the FDIC,
the issuance of the Stock Charter by the Administrator, the form of which has
been approved by the Administrator and except as may be required under the Blue
Sky Laws.
(r) All contracts and other documents required to be filed as
exhibits to the Registration Statement, the Conversion Application, the Notice
or the Holding Company Applications have been filed with the Administrator, the
FDIC, the Commission or the Federal Reserve, as the case may be.
(s) Xxxxxxxx & Xxxxxxxx, P.A. ("Xxxxxxxx"), which audited the
financial statements of the Bank at June 30, 1997 and for the fiscal years ended
June 30, 1996 and 1997 included in the Prospectus are, and were during the
periods covered in its report in the Prospectus, independent public accountants
within the meaning of the 1933 Act, the 1933 Act Regulations, and the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(t) Xxxxxxxx & Company, which has prepared the Conversion appraisal
dated as of February 27, 1998, described in the Prospectus is independent of the
Company and the Bank within the meaning of the Administrator's Regulations and
the FDIC's Regulations, is believed by the Company and the Bank to be
experienced and expert in rendering corporate appraisals of thrift institutions,
and the Company and the Bank have no reason to believe that Xxxxxxxx & Company
has not prepared the pricing information set forth in the Prospectus in
accordance with the requirements of the Administrator's Regulations and the
FDIC's Regulations.
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(u) The Company and the Bank have timely filed all required federal
and state tax returns and no deficiency has been asserted with respect to such
returns by any taxing authorities, 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 Company and the Bank, taken as a whole.
(v) 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 Conversion are reliable, accurate and complete, and Trident shall have no
liability to any person relating to the reliability, accuracy or completeness of
such records or for any denial or allocation of a subscription to purchase
Shares to any person based upon such records.
(w) To the best knowledge of the Company and the Bank, all the loans
represented as assets on the most recent financial statements of the Bank
included in the Prospectus meet or are exempt from all requirements of any
federal, state or local law pertaining to lending including, without limitation,
truth-in-lending (including the requirements of Regulation Z, 12 C.F.R. Part
226, and 12 C.F.R. (S) 563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and disclosure laws applicable to
such loans, except for violations which, if asserted, would not have a Material
Adverse Effect on the Bank and the Company, taken as a whole.
(x) To the best knowledge of the Company and the Bank, none of the
Company, the Bank nor employees of the Company or the Bank have made any payment
of funds of the Company or the Bank prohibited by law, and no funds of the
Company or the Bank have been set aside to be used for any payment prohibited by
law.
(y) To the best knowledge of the Company and the Bank, the Company
and the Bank are in compliance in all material respects with all Environmental
Law (as hereinafter defined), and neither the Company nor the Bank has been
notified or is otherwise aware that either of them is potentially liable, or is
considered potentially liable, under any Environmental Law, including the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S) 9601 et seq. or any similar state or local law. 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 or the Bank relating
to Environmental Law matters, nor does the Company or the Bank have any reason
to believe any such proceedings may be brought against either of them. To the
best knowledge of the Company and the Bank, no disposal, release or discharge of
hazardous waste, hazardous substances, toxic substances, pollutants, irritants
or contaminants, including petroleum and gas products, as any of such terms may
be defined under any Environmental Law, has occurred on, in, at or about any of
the facilities or properties of the Company or the Bank in violation of
Environmental Law, or, to the best knowledge of the
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Company or the Bank, has occurred on, in, at or about any of the facilities or
properties pledged to the Bank as collateral for any loan or extension of credit
by the Bank, except such disposal, release or discharge as reasonably could not
be deemed to have a Material Adverse Effect on the Company and the Bank, taken
as a whole.
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
agency (i.e., any federal, state or local agency responsible for regulating or
enforcing the matters identified herein) relating to (i) the protection,
preservation or restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
soil, subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the usage, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of any substance presently listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by
type or by quantity, including any material containing any such substance as a
component.
(z) At the Closing Date, the Company and the Bank will have completed
the conditions precedent to, and prior to the Closing Date, shall have conducted
the Conversion in all material respects in accordance with the Plan, the
Administrator's Regulations, the FDIC's Regulations and all other applicable
laws, regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon it by the
Administrator, the FDIC and the Federal Reserve.
(aa) Neither the Company nor the Bank is in violation of any directive
from the Administrator, the FDIC, the Federal Reserve, or any other agency to
make any material change in the method of conducting its business so as to
comply in all material respects with all applicable statutes and regulations
(including, without limitation, regulations, decisions, directives and orders of
the Administrator, the FDIC or the Federal Reserve), and except as set forth in
the Prospectus there is no suit, proceeding, charge, investigation or action
before or by any court, regulatory authority or governmental agency or body
pending or, to the best knowledge of the Company or the Bank, threatened, which
might materially and adversely affect the Conversion, the performance of this
Agreement or the consummation of the transactions contemplated in the Plan and
as described in the Prospectus, which might have a Material Adverse Effect on
the Company and the Bank, taken as a whole.
(bb) Prior to the Conversion, the Bank was not authorized to issue
shares of capital stock; the Company and the Bank have not: (i) placed any
securities within the last eighteen (18) months; (ii) had any material dealings
within the twelve (12) months prior to the date hereof with any member of the
National Association of Securities Dealers, Inc. ("NASD"), or any person related
to or associated with such member, other than discussions and meetings
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relating to the Offerings and routine purchases and sales of U.S. government
securities; (iii) entered into a financial or management consulting agreement
except as contemplated hereunder; or (iv) engaged any intermediary between
Trident and the Company and the Bank in connection with the offering of the
Common Stock, and no person is being compensated in any manner for such service.
(cc) All documents delivered by the Bank or the Company or their
representatives in connection with the issuance and sale of the Common Stock,
including records of account holders, depositors, borrowers and other members of
the Bank, or in connection with Trident's exercise of due diligence, except for
those documents which were prepared by parties other than the Bank, the Company
or their representatives were on the dates on which they were delivered, true,
complete and correct.
2A. Representations and Warranties of Trident. Trident represents and
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warrants to the Company and the Bank that:
(a) Trident is registered as a broker-dealer with the Commission and
is in good standing with the NASD.
(b) Trident is validly existing as a corporation under the laws of
its jurisdiction of incorporation, with full corporate power and authority to
provide the services to be furnished to the Company and the Bank hereunder.
(c) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of Trident, and this Agreement is a legal,
valid and binding obligation of Trident, enforceable in accordance with its
terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of creditors of
registered broker-dealers the accounts of whom may be insured 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 Section 23A).
(d) 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 such jurisdictions in which the Company is
relying on such registration for the sale of the Shares, and will remain
registered in such jurisdictions until the Conversion is consummated or
terminated.
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(e) 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 conflict with the corporate charter
or bylaws of Trident 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 in injunction by which Trident
is bound.
(f) 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 ("1934 Act").
(g) There is not now pending or, to Trident's knowledge, threatened
against Trident any action or proceeding before the SEC, NASD, any state
securities commission or any state or federal court concerning Trident's
activities as a broker-dealer.
3. Employment of Trident; Sale and Delivery of the Shares. On the basis
------------------------------------------------------
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank 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 Offerings. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Subscription
Offering closes, unless the Company and the Bank, with the approval of the
Administrator, 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 561,000 Shares (or
such lesser amount as the Administrator and the FDIC may permit) within the
period herein provided, this Agreement shall terminate, and the Company and the
Bank shall refund promptly to any persons who have subscribed for any of the
Shares, the full amount which it may have received with interest from such
persons; and neither party to this Agreement shall have any obligation to the
other parties hereunder, except as set forth in Sections 6, 8 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
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 Shares are sold and all other conditions precedent to consummation
of the Conversion are satisfied, the Company agrees to issue or have issued such
Shares and to release for delivery certificates to subscribers thereof for such
Shares as soon as practicable after the Closing Date. Such release for delivery
shall be against payment to the Company by any means authorized pursuant to the
Prospectus, at the office of the Company at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Trident Securities, Inc.
Page 12
North Carolina 28170, or at such other place as shall be agreed upon among the
parties hereto. The date upon which Trident is paid the compensation due to it
hereunder is herein called the "Closing Date".
Trident shall receive the following compensation for its services
hereunder:
(a) A commission equal to two and one half percent (2.50%) of the
aggregate dollar amount of any Shares sold in the Subscription Offering and the
Community Offering, excluding any shares sold to the Bank's executive officers,
directors and their "Associates" (as such term is defined in the Plan) and
excluding shares sold by other NASD member firms under Selected Dealer (as such
term is defined in the Prospectus) arrangements. For stock sold by other NASD
member firms under Selected Dealer Agreements, the commission payable shall be
as agreed upon by the Company and Trident to reflect market requirements at the
time of the stock allocation in the Syndicated Community Offering. All such
fees payable to Trident are to be payable in next day funds to Trident in
Raleigh, North Carolina, on the Closing Date.
(b) Trident shall be reimbursed for all allocable expenses, including
legal fees, incurred by it whether or not the Offerings are successfully
completed; provided, however, that Trident's legal fees shall not exceed $27,500
-------- -------
and its other allocable expenses shall not exceed $10,000. Full payment of
Trident's allocable expenses, including legal fees, 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) calendar days of receipt by the
Company of the detailed listing from Trident of its allocable expenses. Trident
acknowledges receipt of a $10,000 advance payment from the Bank which shall be
credited against the total reimbursement due Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided above, in the event that a resolicitation or other
event causes the Offerings to be extended beyond their original expiration
dates, Trident shall be reimbursed for its allocable expenses (including legal
expenses) incurred during such extended period provided that the applicable
allowance for allocable expenses provided above have been exhausted. Such
reimbursement shall be in an amount equal to the product obtained by dividing
$[7,500] (in the case of the reimbursement for legal fees) or $[2,500] (in the
case of the reimbursement of other allocable 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 then multiplying such product by the number of days of the
extension (that number of days from the date of the supplement to the Prospectus
to the closing of the extension of the Subscription Offering); provided,
--------
however, that the aggregate additional reimbursement for allocable expenses
-------
(including legal fees) shall not exceed $[10,000].
(d) The Company shall pay any stock issue and transfer taxes which
may be payable with respect to the sale of the Shares. The Company and the Bank
also shall pay all
Trident Securities, Inc.
Page 13
expenses of the Conversion including, but not limited to, their attorneys' fees,
NASD filing fees, filing and registration fees, and attorneys' fees relating to
any required state securities laws research and filings, transfer agent charges,
fees relating to auditing and accounting, telephone charges, air freight
expenses, courier service costs, rental equipment costs, costs of supplies and
costs of printing all necessary documents in connection with the Conversion.
4. Offerings. Subject to the provisions of Section 7 hereof, Trident is
---------
offering on behalf of the Company and on a best efforts basis a minimum of
561,000 Shares and a maximum of 759,000 Shares with the possibility of
increasing the number of Shares to 872,850, or such lesser amount of Common
Stock as the Administrator and the FDIC permit to be offered, in a Subscription
Offering and, if necessary, any Shares which remain unsubscribed at the
conclusion of the Subscription Offering, in a Community Offering and a
Syndicated Community Offering. The Shares are to be initially offered to the
public at the price set forth on the cover page of the Prospectus and the first
page of this Agreement.
(a) Subscriptions shall be offered in the Subscription Offering only
during the subscription period by means of Order Forms as described in the
Prospectus and may be offered in the Syndicated Community Offering by means of
solicitations of indications of interest from customers of Trident or Selected
Dealers (as defined in the Prospectus) residing in those states in which the
Shares may be qualified for offer and sale. The Bank and the Company shall
notify Trident promptly after the expiration of the Subscription Offering of the
number of Shares sold in the Subscription Offering and the aggregate number of
Shares remaining available to be sold in the Syndicated Community Offering. The
Bank and the Company shall provide Trident with any information (which shall be
accurate and reliable) necessary to assist Trident in allocating the Shares in
the event of an oversubscription. The Bank and the Company, jointly and
severally, shall indemnify and hold harmless each of Trident and the Selected
Dealers against any losses, claims, damages or liabilities resulting from
reliance under any records of depositors, borrowers and other members of the
Bank delivered to Trident by the Bank or its agents for use during the
Conversion.
(b) Trident agrees that any Selected Dealer Agreements between
Trident and Selected Dealers will provide that Selected Dealers will solicit
indications of interest from their customers to place orders for the purchase of
Shares as of a certain date (the "Order Date") and, upon request by Trident, (i)
submit orders to purchase Shares, for which they have previously received
indication1s of interest from their customers, (ii) mail confirmations of orders
to each subscriber on the business day following the Order Date, (iii) debit
accounts of such subscribers on the third business day from the Order Date
("Debit Date"), and (iv) forward completed Order Forms together with such funds
to the Company on the next business day following the Debit Date for deposit in
an account established by the Company for each Selected Dealer.
Trident Securities, Inc.
Page 14
5. Further Agreements. The Company and the Bank 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 connection with the offer
and sale of the Shares.
(b) The Company shall notify Trident immediately upon discovery, and
confirm the notice in writing, if requested, (i) when any post-effective
amendment to the Registration Statement becomes effective or any supplement to
the Prospectus or the Proxy Statement has been filed, (ii) of the issuance by
the Commission, the Administrator, the FDIC or the Federal Reserve of any stop
order relating to the Registration Statement, the Conversion Application, the
Notice, the Holding Company Applications, the Prospectus or the Proxy 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 Commission, the Administrator, the FDIC or the Federal
Reserve relating to the Registration Statement, the Conversion Application, the
Notice, the Holding Company Applications, the Prospectus or the Proxy Statement.
If the Commission, the Administrator, the FDIC or the Federal Reserve enters a
stop order relating to the Registration Statement, the Conversion Application,
the Notice, the Holding Company Applications, the Prospectus or the Proxy
Statement at any time, the Company and the Bank will make any reasonable effort
to obtain the lifting of such order as soon as possible.
(c) During the time when a prospectus is required to be delivered
under the 1933 Act, the Administrator's Regulations and the FDIC's Regulations,
the Company will comply with all requirements imposed upon it by the 1933 Act,
the 1933 Act Regulations, the Administrator's Regulations and the FDIC's
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 used in connection with the offer and sale of the Shares any event
relating to or affecting the Company or the Bank shall occur as a result of
which it is necessary, in the opinion of counsel for Trident, 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 f act 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
Trident Securities, Inc
Page 15
to which Trident reasonably shall object after having been furnished such copy.
For the purposes of this subsection the Company and the Bank shall furnish such
information with respect to themselves as Trident, from time to time, reasonably
may request.
(d) The Company shall take all reasonably necessary action and
furnish to whomever Trident may direct, such information as may be required to
qualify or register the Shares for offer and sale by the Company under the Blue
Sky Laws of such jurisdictions as Trident and the Company or its counsel may
reasonably 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 to establish a liquidation account for the benefit of account holders
according to the Administrator's Regulations.
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), prior to completion of the Offerings pursuant to the Plan and
shall request that such registration statement be effective upon or prior to
completion of the Conversion. The Company shall maintain the effectiveness of
such registration for not less than three (3) years following completion of the
Conversion.
(g) For a period of three (3) years from the date of this Agreement,
the Company will furnish to Trident, as soon as publicly available after the end
of each fiscal year, a copy of its annual report to shareholders for such year;
and the Company will furnish to Trident (i) as soon as publicly available, a
copy of each report or definitive proxy statement of the Company filed with the
Commission under the 1934 Act or mailed to shareholders, and (ii) from time to
time, such other public information concerning the Company as Trident may
reasonably request.
(h) The Company shall use the net proceeds from the sale of the
Shares in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(i) The Company shall not deliver the Shares until it has satisfied
or caused to be satisfied each and every condition set forth in Section 7
hereof, unless such condition is waived in writing by Trident.
Trident Securities, Inc.
Page 16
(j) The Company and the Bank shall advise Trident, if necessary, as
to the allocation of the Shares in the event of an oversubscription and shall
provide Trident final instructions as to the allocations of the Shares in such
event and such instructions shall be accurate, reliable and complete. Trident
shall be entitled to rely completely and without independent investigation on
such instructions and shall have no liability to any person in respect of its
reliance thereon, including without limitation, no liability to any person for
or related to any denial or grant of a subscription for Shares. The Company
shall indemnify and hold Trident harmless for any liability arising out of such
instructions or any records of account holders, depositors, borrowers and other
members of the Bank delivered to Trident by the Company, the Bank or their
agents for use during the Offerings and the Conversion.
(k) The Company and the Bank 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."
(l) The Company will not sell or issue, contract to sell or otherwise
dispose of, for a period of ninety (90) days after the Closing Date, without
Trident's prior written consent, any shares of the Company's common stock other
than the Common Stock.
(m) Upon consummation of the Conversion, the Company will list the
Common Stock over-the-counter through the OTC "Electronic Bulletin Board."
(n) The Company will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or orders to purchase
Common Stock in the Offerings on an interest-bearing basis at the rate described
in the Prospectus until the Closing Date and satisfaction of all conditions
precedent to the release of the Company's obligation to refund payments received
from persons subscribing for or ordering Common Stock in the Offerings in
accordance with the Plan as described in the Prospectus or until refunds of such
funds have been made to the persons entitled thereto in accordance with the Plan
and as described in the Prospectus.
6. Payment of Expenses. Whether or not the Conversion is completed or
-------------------
the sale of the Shares by the Company is consummated, the Company or the Bank
shall pay or reimburse Trident for (a) all filing fees paid or incurred by
Trident in connection with all filings with the NASD; and, (b) in addition, if
the Agreement does not become effective, the Company is unable to sell a minimum
of 561,000 Shares (or such lesser number as may be permitted by the
Administrator and FDIC), or the Offerings or Conversion are otherwise
terminated, the Company or the Bank shall reimburse Trident for all allocable
expenses incurred by Trident relating to the offering of the Shares, subject to
Section 3 hereof; provided, however, that the Company and the Bank shall not pay
-------- -------
or reimburse Trident for any of the foregoing expenses accrued after Trident
shall have notified the Company and the Bank of its election to terminate this
Agreement pursuant
Trident Securities, Inc.
Page 17
to Section 11 hereof or after such time as the Company and the Bank shall have
given notice in accordance with Sections 11 and 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 accuracy of the statements
of officers and directors of the Company and the Bank made pursuant to the
provisions hereof, to the performance by the Company and the Bank of their
obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinion
of Brooks, Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P., special counsel for the
Company and the Bank, dated the Closing Date, addressed to Trident, in form and
substance satisfactory to counsel for Trident and to the effect that:
(i) the Company is incorporated and is validly existing as
a corporation under the laws of the State of North Carolina, and the
Bank is duly organized and validly existing as a mutual savings bank
with a corporate existence under the laws of the State of North
Carolina, each with full power and authority to own its property and
conduct its business as described in the Prospectus;
(ii) the Company and the Bank are each duly qualified to do
business and each are in good standing as a foreign corporation in
each jurisdiction where the ownership or leasing of its properties of
which such counsel has Actual Knowledge or the conduct of its business
of which such counsel has Actual Knowledge requires such qualification
unless the failure to be so qualified would not have a Material
Adverse Effect on the Company and the Bank, taken as a whole;
(iii) the Bank is a member of the FHLB-Atlanta and the
deposit accounts of the Bank are insured by the SAIF of the FDIC up to
the applicable limits;
(iv) to the Actual Knowledge of such counsel, (a) the Bank
has obtained all licenses, permits and other governmental
authorizations currently required for the conduct of its business
except where the failure to obtain such licenses, permits and
governmental authorizations would not have a Material Adverse Effect
on the Bank and the Company, taken as a whole, (b) all such licenses,
permits and other governmental authorizations are in full force and
effect and (c) the Bank is in all material respects complying
therewith;
Trident Securities, Inc.
Page 18
(v) the Plan complies with, and, to the Actual Knowledge
of such counsel, the Conversion of the Bank from a North Carolina-
chartered mutual savings bank to a North Carolina-chartered stock
savings bank and the creation of the Company as the holding company of
the Bank have been effected in all material respects in accordance
with all applicable laws, rules, regulations, decisions and orders
(with such modifications as were disclosed to and approved by the
Administrator and FDIC, as evidenced by their approval and conditional
notice of intent not to object and were in such counsel's opinion
appropriate for the transactions described in the Conversion
Application); to such counsel's Actual Knowledge, all of the terms,
conditions, requirements and provisions with respect to the Plan and
the Conversion imposed by the Administrator, the FDIC and the Federal
Reserve, except with respect to filing certain post-Conversion
reports, have been complied with in all material respects by the
Company and the Bank or appropriate waivers have been obtained; and to
the Actual Knowledge of such counsel, no person has sought to obtain
regulatory or judicial review of the final action of the Administrator
in approving the Plan or the FDIC order of non-objection to the Plan;
(vi) As of the Closing Date, the Company has authorized
Common Stock as set forth in the Registration Statement and the
Prospectus; the Bank has authorized capital stock as set forth in the
Conversion Application and the Prospectus and the description of such
capital stock in the Registration Statement, the Conversion
Application and the Prospectus is accurate and complete 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 and have received requisite regulatory approvals or
non-objection; 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 the purchasers of the
Shares from the Company, upon issuance thereof against payment
therefor, will acquire such Shares free and clear of all claims,
encumbrances, security interests and liens whatsoever created or
suffered to be created by the Company;
(viii) the certificates for the Common Stock are in due and
proper form and comply with applicable requirements of federal and
North Carolina law and the rules and regulations of the Administrator;
(ix) 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 has received the approval of the
Administrator, and such capital
Trident Securities, Inc.
Page 19
stock, when paid for and issued in accordance with the terms of the
Plan, will be validly issued, fully paid and nonassessable and owned
of record and beneficially by the Company;
(x) subject to the satisfaction of the post-Conversion
conditions in the approvals of the Conversion Application, the Holding
Company Applications and the Notice, 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 consummation of the
Conversion except as may be required under the Blue Sky Laws (as to
which no opinion need be given);
(xi) 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, corporate or
otherwise, on the part of each of the Company and the Bank; and this
Agreement is a legal, valid and binding obligation of each of the
Company and the Bank, enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship or other laws affecting
creditors' rights generally and as may be limited by the exercise of
judicial discretion in applying principles of equity and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or Section 23A;
(xii) to the Actual Knowledge of such counsel, except as
set forth in the Prospectus, there are no legal or governmental
proceedings pending or threatened against or involving the assets of
the Company or the Bank required to be disclosed in the Prospectus
(provided, however, that no litigation or governmental proceeding is
-------- -------
considered to be threatened unless the potential litigant or
governmental authority has manifested to the management of the Bank,
or to such counsel, a present intention to initiate such litigation or
proceeding), nor are there any statutes or regulations, and, to the
Actual Knowledge of such counsel, any contracts or other documents
required to be described or disclosed in the Prospectus which are not
so described or disclosed; and the description in the Prospectus of
such statutes, regulations, contracts and other documents therein
described are in all material respects accurate summaries and in all
material respects fairly present the information required to be shown;
(xiii) the statements in the Prospectus under the captions
"Taxation," "Supervision and Regulation," "Dividend Policy," "Anti-
Takeover Provisions Affecting the Company and the Bank" and
"Description of Capital Stock," insofar as they are, or refer to,
statements of law or legal conclusions
Trident Securities, Inc.
Page 20
thereon (excluding financial data included therein, as to which an
opinion need not be expressed), have been prepared or reviewed by them
and are correct in all material respects;
(xiv) the Conversion Application has been approved by the
Administrator, the FDIC has given its non-objection to the Conversion
Application, and the Prospectus and Proxy Statement have been approved
and authorized for distribution to members of the Bank and others
pursuant to the Plan by the Administrator; the Stock Charter when
issued to the Bank by the Administrator and filed with the North
Carolina Secretary of State's office will be in full force and effect;
the Registration Statement and any post-effective amendment thereto
have been declared effective by the Commission; the Administrator and
the Federal Reserve have issued their orders of approval for the
Company to acquire the Bank; and to such counsel's Actual Knowledge no
proceedings are pending, contemplated or threatened by or before the
Commission, the Administrator or the FDIC seeking to revoke or rescind
the orders declaring the Registration Statement, the Prospectus or the
Proxy Statement effective or, authorizing their use; provided,
--------
however, that no such action or proceeding is considered to be
-------
"threatened" unless the applicable governmental authority has
manifested to the management of the Company or the Bank, or to such
counsel, a present intention to initiate such proceeding;
(xv) the execution and delivery of this Agreement, the
incurring of the obligations herein set forth and the consummation of
the transactions contemplated hereby shall not conflict with nor
result in a material breach of the articles of incorporation, charter
or bylaws of the Company or the Bank (in either mutual or stock form),
nor to the Actual 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 material default) under, or give rise to
any right of termination, cancellation or acceleration contained in,
or result in the creation or imposition of any lien, charge or other
encumbrance upon any of the properties or assets of the Company or the
Bank 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 or the Bank is a party
or by which it or its assets or properties may be bound or is subject,
or any governmental license or permit (subject to the satisfaction of
any post-Conversion conditions imposed by the Administrator, the FDIC
and/or the Federal Reserve), which in any such event would have a
Material Adverse Effect on the Company and the Bank, taken as a whole;
nor will any such actions violate any material law, administrative
regulation or order, court order, writ, injunction or decree, which
breach, default,
Trident Securities, Inc.
Page 21
encumbrance or violation would have a Material Adverse Effect on the
Company and the Bank, taken as a whole;
(xvi) to the Actual Knowledge of such counsel, there has
been no material breach of the Company's or the Bank's articles of
incorporation or charter or bylaws or a breach or default (or the
occurrence of any event which, with the lapse of time or action, or
both, by a third party, would result in a breach or default) under any
agreement, contract, indenture, bond, debenture, note, instrument or
obligation to which the Company or the Bank is a party or by which any
of them or their respective assets or properties may be bound, or any
governmental license or permit, or a violation of any law,
administrative regulation or order, court order, writ, injunction or
decree which breach or default would have a Material Adverse Effect on
the Company and the Bank, taken as a whole;
(xvii) the Conversion Application, the Notice, the Holding
Company Applications, the Registration Statement, the Prospectus and
the Proxy Statement (in each case, as amended or supplemented, if so
amended or supplemented) comply as to form in all material respects
with the requirements of all applicable laws (including the 0000 Xxx)
and the rules, regulations, and all written and published decisions
and orders of the Administrator, the FDIC, the Federal Reserve or the
Commission, as the case may be (except as to financial statements,
notes to financial statements, financial tables and other financial
and statistical data, including the appraisal included therein, as to
which no opinion need be expressed); to the Actual Knowledge of such
counsel, all documents and exhibits required to be filed with the
Conversion Application and the Registration Statement (in each case,
as amended or supplemented, if so amended or supplemented) have been
so filed; the description in the Conversion Application, the Holding
Company Applications and the Registration Statement of such documents
and exhibits is in all material respects accurate and complete and
presents fairly the information required to be shown; to the Actual
Knowledge of such counsel, there are no contracts or other documents
of a character required to be described which are not described, and
there are no statutes or regulations applicable to, certificates,
permits or other authorizations from governmental regulatory officials
or bodies required to be obtained or maintained by, or legal or
governmental proceedings, past, pending or threatened, (provided,
--------
however, that no litigation or governmental proceeding is considered
-------
to be threatened unless the potential litigant or governmental
authority has manifested to the management of the Bank, or to such
counsel, a present intention to initiate such litigation or
proceeding), against the Company or the Bank of a character required
to be disclosed in the Conversion Application, the Holding Company
Applications, the
Trident Securities, Inc.
Page 22
Registration Statement or the Prospectus which have not
been so disclosed and properly described therein;
(xviii) to the Actual Knowledge of such counsel, neither the
Company nor the Bank is in violation of any directive from the
Administrator, the FDIC or the Federal Reserve to make any change in
the method of conducting their respective businesses; and,
(xix) the Company is not required to be registered as an
investment company under the Investment Company Act of 1940 and will
not be required to be so registered as a result of the consummation of
the Conversion and the receipt and use of the proceeds from the sale
of the Shares, as such use of proceeds is described in the Prospectus
under the caption "Use of Proceeds."
In giving such opinion, such counsel may rely as to all matters of
fact on certificates of officers and directors of the Company and the Bank and
certificates of public officials delivered pursuant hereto.
As used in such counsel's opinion, the phrase "Actual Knowledge" shall mean
the conscious awareness of facts or other information by Xxxxxx X. Xxxxxxx III,
Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, Xxxx X.
Xxxxx, Xx., and Xxxxxx X. Xxxxxxx, who are the lawyers employed by such counsel
who have had active involvement with the Conversion, and except to the extent
stated in such opinion, such counsel will not be deemed to have undertaken any
independent investigation or inquiry to determine the existence or absence of
any facts.
(b) At the Closing Date, Trident shall receive the letter of Brooks,
Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P., special counsel for the Company
and the Bank, addressed to Trident, dated the Closing Date and in form and
substance satisfactory to special counsel for Trident to the effect that, in
connection with the preparation of the Registration Statement, the Prospectus
and the Proxy Statement, such counsel participated in conferences with
directors, officers, employees and other representatives of the Company and the
Bank, representatives of the independent public accountants for the Company and
the Bank and with representatives of Trident and Trident's special counsel as
well as reviewed various documents and other information deemed relevant and,
based on such conferences and reviews, nothing has come to such counsel's
attention that would lead it to believe that, the Registration Statement, as
amended or supplemented, if amended or supplemented (except as to financial
statements, notes to financial statements, financial tables and other financial
and statistical data, including the appraisal contained therein, with respect to
which such counsel need make no statement), at the time it became effective and
at the time any post-effective amendment thereto became effective, or that the
Prospectus, as amended or supplemented, if amended or supplemented (except as to
Trident Securities, Inc.
Page 23
financial statements, notes to financial statements, financial tables and other
financial and statistical data, including the appraisal contained therein, with
respect to which such counsel need make no statement), at the time it was
approved for final use by the Administrator and the FDIC, as of the date of such
document set forth thereon and as of the Closing Date, 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 (in making this
statement counsel may state that it has not undertaken to verify independently
the information set forth in the Registration Statement or Prospectus, and,
therefore, does not assume any responsibility for the accuracy or completeness
thereof).
(c) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or pass
upon the matters required by Trident, and for the purpose of evidencing the
accuracy, completeness or satisfaction of any of the representations, warranties
or conditions herein contained, including, but not limited to, resolutions of
the Boards of Directors of the Company and the Bank regarding the authorization
of this Agreement and the transactions contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material adverse change in the condition
or affairs, financial or otherwise, of the Company or the Bank from that as of
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 material transactions
entered into by the Company or the Bank from the latest date as of which the
financial condition of the Company and the Bank is set forth in the Prospectus
other than transactions referred to or contemplated therein and transactions in
the ordinary course of business; (iii) neither the Company nor the Bank shall
have received from the Administrator, the FDIC or the Federal Reserve any
direction (oral or written) to make any material change in the method of
conducting their respective businesses 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 or the Bank or affecting any of their respective
assets wherein an unfavorable decision, ruling or finding would result in a
Material Adverse Effect on the Company and the Bank, taken as a whole; and (v)
the Shares shall have been qualified or registered for offering and sale by the
Company under the Blue Sky Laws of such jurisdictions as Trident and the Company
shall have agreed upon.
Trident Securities, Inc.
Page 24
(e) At the Closing Date, Trident shall receive a certificate of the
President and of the principal financial officer of each of the Company and the
Bank, dated the Closing Date, to the effect that: (i) each has carefully
examined the Prospectus and the Proxy Statement and in their opinion, at the
time the Prospectus and the Proxy Statement became authorized for final use,
neither the Prospectus nor the Proxy Statement contained an untrue statement of
a material fact or omitted 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; (ii) since the date the Prospectus or the Proxy Statement
became authorized for final use, no event has occurred which should have been
set forth in an amendment or supplement to the Prospectus or the Proxy Statement
which has not been so set forth, including specifically, but without limitation,
any event or change that has or may have a Material Adverse Effect on 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) no
order has been issued by the Administrator, the FDIC or the Commission to
suspend the Offerings or the effectiveness or the authorization for final use of
the Prospectus and the Proxy Statement and, to the best knowledge of such
officers, no action for such purposes has been instituted or threatened by the
Administrator, the FDIC or the Commission; (iv) to the best knowledge of such
officers, no person has sought to obtain review of the final action of the
Administrator or the FDIC 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) a copy of the letter from the Administrator authorizing the use
of the Prospectus, the Proxy Statement and related materials, (ii) a copy of the
order of the Commission declaring the Registration Statement effective; (iii) a
copy of a letter from the Administrator evidencing the corporate existence of
the Bank; (iv) a copy of a letter from the North Carolina Secretary of State
evidencing the corporate existence of the Company; (v) a copy of the Company's
articles of incorporation certified by the North Carolina Secretary of State's
office; (vi) a copy of the letter from the Administrator approving the Bank's
Stock Charter; (vii) a copy of the order of the Federal Reserve approving the
Holding Company Application; and (viii) a copy of the order of the FDIC granting
its non-objection to the Conversion.
(g) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Bank's Stock Charter executed by the
Administrator.
(h) Concurrently with the execution of this Agreement, Trident shall
have received a letter from Xxxxxxxx, independent certified public accountants,
dated the date hereof and addressed to Trident: (i) confirming that Xxxxxxxx is
a firm of independent public accountants within the meaning of the 1933 Act and
the 1933 Act Regulations and stating in effect that in Xxxxxxxx'x opinion the
financial statements of the Bank as are included in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
1933 Act
Trident Securities, Inc.
Page 25
Regulations and generally accepted accounting principles; (ii) stating in effect
that, on the basis of certain agreed upon procedures (but not an audit
examination in accordance with generally accepted auditing standards) consisting
of a reading of the latest available unaudited interim financial statements of
the Bank prepared by the Bank, a reading of the minutes of the meetings of the
Board of Directors of the Bank, meetings of members of the Bank and
consultations with officers of the Bank responsible for financial and accounting
matters, nothing came to their attention which caused them to believe that,
except as set forth in such letter: (A) such unaudited financial statements are
not in conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial statements
included in the Prospectus; or (B) during the period from the date of the latest
unaudited financial statements included in the Prospectus to a specified date
not more than three (3) business days prior to the date hereof, there was any
material increase in borrowings, defined as advances from the FHLB-Atlanta,
securities sold under agreements to repurchase and any other form of debt other
than deposits of the Bank (increases in borrowings will not be deemed to be
material if such increase in total borrowings outstanding does not exceed
$1,000,000); (C) there was any decrease in retained earnings of the Bank at the
date of such letter as compared with amounts shown in the latest unaudited
statement of condition included in the Prospectus; or (D) there was any decrease
in net income or net interest income of the Bank for the number of full months
commencing immediately after the period covered by the latest unaudited income
statement included in the Prospectus, and ended on the latest month end prior to
the date of the Prospectus or of such letter as compared to the corresponding
period in the preceding year; and (iii) stating that, in addition to the audit
examination of the Bank referred to in its opinion included in the Prospectus
and the performance of the procedures referred to in clause (ii) of this
subsection (h), they have compared with the general accounting records of the
Bank, which are subject to the internal controls of the Bank, accounting system
and other data prepared by the Bank, directly from such accounting records, to
the extent specified in such letter, such amounts and/or percentages set forth
in the Prospectus as Trident reasonably may request; and they have found such
amounts and percentages to be in agreement therewith (subject to rounding).
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Xxxxxxxx, independent
certified public accountants, dated the Closing Date and addressed to Trident,
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)
business days prior to the Closing Date.
Trident Securities, Inc.
Page 26
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Bank and
delivered to Trident or to counsel for Trident shall be deemed a representation
and warranty by the Company or the Bank to Trident as to the statements made
therein. If any condition to Trident's obligations hereunder to be fulfilled
prior to or at the Closing Date is not so fulfilled, Trident may terminate this
Agreement or, if Trident so elects, may waive 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 or the Bank shall reimburse
Trident for its allocable expenses as provided in Section 3 hereof.
8. Indemnification.
---------------
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Trident, its officers, directors and employees and each
person, if any, who controls Trident within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage and expense whatsoever that such indemnified person(s) shall
suffer 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 any misrepresentation by the Company or
the Bank in this Agreement or any breach of warranty by 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, the Prospectus or the
Proxy Statement (as from time to time amended and supplemented) or (ii) any
application (including the Conversion Application and the Holding Company
Applications) or other document or communication (in this Section 8 collectively
called "Application") executed by or on behalf of the Company or the Bank or
based upon written information furnished by or on behalf of the Company or the
Bank to effect the Conversion or qualify the Shares under the Blue Sky Laws
thereof or filed with the Administrator, the FDIC, the Federal Reserve or the
Commission unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company or the Bank with
respect to Trident by or on behalf of Trident expressly for use in the
Prospectus, the Proxy Statement or any amendment or supplement thereof or in any
Application, or (iii) any unwritten statement made with the Company's consent to
a purchaser of the Shares by any director or officer or any person employed by
or associated with the Company or the Bank other than Trident, its officers,
directors, employees or agents. This indemnity shall be in addition to any
liability the Company or the Bank may have to Trident otherwise.
(b) The Company and the Bank shall indemnify and hold Trident
harmless from any liability whatsoever arising out of the Company's or the
Bank's instructions with respect to
Trident Securities, Inc.
Page 27
allocation of Shares in the event of an oversubscription as described in Section
5 hereof or any records of account holders, depositors, borrowers and other
members of the Bank delivered to Trident by the Bank or its agents for use in
the Conversion.
(c) Trident agrees to indemnify and hold harmless the Company and the
Bank and each person, if any, who control the Company and the Bank within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, to the
same extent as the foregoing indemnity from the Company and the Bank to Trident,
but only with respect to statements or omissions, if any, made in the
Prospectus, the Proxy Statement or any amendment or supplement thereof or in any
Application in reliance upon, and in conformity with, written information
furnished to the Company or the Bank with respect to Trident by or on behalf of
Trident expressly for use in the Prospectus, the Proxy Statement or any
amendment or supplement thereof or in any Application.
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party shall, 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 shall 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 shall be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party or parties to such indemnified party of
its election so to assume the defense thereof, such indemnifying party or
parties shall 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 effective without such
indemnifying party's consent.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason
Trident Securities, Inc.
Page 28
held to be unavailable to the Company, the Bank or Trident other than in
accordance with its terms, 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 Company or the
Bank and Trident (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Bank, on the one hand, and
Trident, on the other hand, 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 Company and
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 and the Bank, on
the one hand, and Trident, on the other hand, shall be deemed to be in the same
proportions as the total proceeds from the Conversion (before deducting
expenses) received by the Company and the Bank bear to the total fees received
by Trident under this Agreement. The relative fault of the Company and the Bank,
on the one hand, and Trident, on the other hand, 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 Company and 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 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 such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceed the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission for which Trident would be provided
indemnification under the Section 8 hereof. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.
10. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company, the Bank and Trident and the
representations and warranties of the Company, the Bank and 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 and the Bank or any
controlling
Trident Securities, Inc.
Page 29
person referred to in Section 8 hereof, and shall survive any termination or
consummation of this Agreement and/or the issuance of the Shares, and any legal
representative of Trident, the Company, the Bank and any such controlling
persons shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
11. Termination. The Company, the Bank or Trident may terminate this
-----------
Agreement by giving the notice indicated below in this Section 11 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 opinion, impracticable to proceed with the Offerings; or if trading on
the New York Stock Exchange shall have been 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; or if a
moratorium in foreign exchange trading by major international banks or persons
has been declared; or if there shall have been a material adverse change in the
capitalization, condition or business of the Company or the Bank; or if the Bank
shall have sustained a material or, in the reasonable opinion of Trident,
significant loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall have
been insured.
(b) The Company and the Bank may terminate this Agreement with
respect to Trident upon a material breach of this Agreement by Trident.
(c) Trident may terminate this Agreement with respect to the Company
and the Bank upon a material breach of this Agreement by the Company or the
Bank.
(d) If any party elects to terminate this Agreement as provided in
this Section 11, such party shall notify the other parties hereto promptly by
telephone, telegram or telecopy, confirmed by letter sent as provided in Section
12.
(e) If this Agreement is terminated for any of the reasons set forth
in subsection (a) above, to fulfill its obligations pursuant to Sections 3(b),
3(c), 3(d), 6, 8(a) and 9 of this Agreement and upon demand, the Company or the
Bank shall pay Trident the full amount owed to Trident under such Sections.
(f) The Bank may terminate the Conversion in accordance with the
terms of the Plan. Such termination shall be without liability to any party,
except that the Company or the Bank shall be required to fulfill its obligations
pursuant to Sections 3(b), 3(c), 3(d), 6, 8(a) and 9 of this Agreement.
Trident Securities, Inc.
Page 30
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: Xx. Xxxxxx
Xxxxx, XX (with a copy to Xxxxxxx Xxxxxxxx & Xxxx, 0000 X Xxxxxx, X.X., Xxxxx
000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq.), or, if sent
to the Company or the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company or the Bank, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Xx. Xxxxxx X. Xxxx, President (with a copy to Brooks,
Pierce, XxXxxxxx, Xxxxxxxx & Xxxxxxx, L.L.P., 000 Xxxxx Xxx Xxxxxx, 0000
Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxx Xxx 00000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxx X. Xxxxxx, Esq.).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company and 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. Severability. Any provision of this Agreement found to be invalid,
------------
unenforceable, or otherwise limited by law or regulation shall not effect the
validity or enforceability of the remaining terms of this Agreement.
15. Construction. Unless governed by preemptive federal law, this
------------
Agreement shall be governed by and construed in accordance with the substantive
laws of North Carolina.
16. 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.
Page 31
If the foregoing correctly sets forth the understanding between you and the
Company and the Bank, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Yours very truly,
ANSON BANCORP, INC.
By: _____________________________
Xxxxxx X. Xxxx
President
ANSON SAVINGS BANK, SSB
By: ______________________________
Xxxxxx X. Xxxx
President
Trident Securities, Inc.
Page 32
Agreed to and accepted this _____ day
of ___________, 1998.
TRIDENT SECURITIES, INC.
By: ______________________________________
Xxxxxx Xxxxx, XX
Senior Vice President
