CGB&L FINANCIAL GROUP, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇.▇.
93,500 to 145,475 Shares
Common Stock
(Par Value $0.01 Per Share)
$10.00 Per Share
SALES AGENCY AGREEMENT
Trident Securities, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
CGB&L Financial Group, Inc., a Delaware-chartered corporation (the
"Company"), and Cerro Gordo Building and Loan, s.b., an Illinois chartered and
insured mutual savings bank (the "Bank"), hereby confirm, as of ________ __,
1998, their respective agreements with Trident Securities, Inc. ("Trident"), a
broker-dealer registered with the Securities and Exchange Commission
("Commission") and a member of the National Association of Securities Dealers,
Inc. ("NASD"), as follows:
1. Introductory. The Bank intends to convert from an Illinois chartered
mutual savings Bank to an Illinois chartered stock savings bank as a wholly
owned subsidiary of the Company (together with the Offerings, as defined below,
the issuance of shares of common stock of the Bank to the Company and the
incorporation of the Company, the "Conversion") pursuant to a plan of conversion
adopted on March 11, 1998 (the "Plan"). In accordance with the Plan, the Company
is offering shares of its common stock, par value $0.01 per share (the "Shares"
and the "Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to certain depositors and
borrowers of the Bank, to directors, officers and employees of the Bank, and to
the Bank's tax-qualified employee benefit plans (i.e., the Bank's Employee Stock
Ownership Plan (the "ESOP")). Concurrently with, during or promptly after the
Subscription Offering, shares of the Common Stock not sold in the Subscription
Offering may be offered to the general public in a community offering, with
preference being given to natural persons residing in ▇▇▇▇▇ County, Illinois
(the "Community Offering") (the Subscription and Community Offerings are
sometimes referred to collectively as the "Offerings"), subject to the right of
the Company and the Bank, in their absolute discretion, to reject orders in the
Community Offering in whole or in part. In the Offerings, the Company is
offering between 93,500 and 126,500 Shares, with the possibility of offering up
to 145,475 Shares without a resolicitation of subscribers. Officers and
directors of the Bank and associates thereof may not purchase in the aggregate
more than 35% of the shares issued in the Conversion.
The Company and the Bank have been advised by Trident that it will
utilize its best efforts in assisting the Company and the Bank with the sale of
the Shares in the Offerings including a syndicated community offering if deemed
necessary by the Company. Prior to the execution of this
Trident Securities, Inc.
Sales Agency Agreement
Page 2
Agreement, the Company has delivered to Trident the Prospectus dated ________
__,1998 (as hereinafter defined) and all supplements thereto to be used in the
Offerings. Such Prospectus contains information with respect to the Company, the
Bank and the Shares.
2. Representations and Warranties.
(a) The Company and the Bank jointly and severally represent
and warrant to Trident that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement, including exhibits and an amendment or amendments
thereto, on Form SB-2 (No. 333-_____), including a Prospectus
relating to the Offerings, for the registration of the Shares
under the Securities Act of 1933, as amended (the "Act"); and
such registration statement has become effective under the Act
and no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the Company's
best knowledge, threatened by the Commission. Except as the
context may otherwise require, such registration statement, as
amended or supplemented, on file with the Commission at the
time the registration statement became effective, including
the Prospectus, financial statements, schedules, exhibits and
all other documents filed as part thereof, as amended and
supplemented, is herein called the "Registration Statement,"
and the Prospectus, as amended or supplemented, on file with
the Commission at the time the Registration Statement became
effective is herein called the "Prospectus," except that if
the Prospectus filed by the Company with the Commission
pursuant to Rule 424(b) of the general rules and regulations
of the Commission under the Act (together with the enforceable
published policies and actions of the Commission thereunder,
the "SEC Regulations") differs from the form of Prospectus on
file at the time the Registration Statement became effective,
the term "Prospectus" shall refer to the Rule 424(b)
Prospectus from and after the time it is filed with or mailed
for filing to the Commission and shall include any amendments
or supplements thereto from and after their dates of
effectiveness or use, respectively. If any Shares remain
unsubscribed following completion of the Subscription Offering
and the Community Offering, if any, the Company (i) will
promptly file with the Commission a post-effective amendment
to such Registration Statement relating to the results of the
Subscription Offering and, if any, the Community Offering, any
additional information with respect to the proposed plan of
distribution and any revised pricing information or (ii) if no
such post-effective amendment is required, will file with, or
mail for filing to, the Commission a Prospectus or Prospectus
supplement containing information relating to the results of
the Subscription and the Community Offerings and pricing
information pursuant to Rule 424(c) of the Regulations, in
either case in a form reasonably acceptable to the Company and
Trident.
Trident Securities, Inc.
Sales Agency Agreement
Page 3
(ii) The Bank has filed an application to convert
including exhibits (as amended or supplemented, the
"Conversion Application") with the Illinois Office of Banks
and Real Estate ("Commissioner") and a Notice of Intent to
Convert to Stock Form (the "Notice") with the Federal Deposit
Insurance Corporation ("FDIC") (the application to the
Commissioner and the Notice filed with the FDIC are
collectively referred to as the "Application"). (The
enforceable rules and regulations, including published
policies and actions, of the Commissioner are hereinafter
referred to as the "Commissioner Regulations"). The
Commissioner and the FDIC have approved the Bank's
Application. The Prospectus and the proxy statement for the
solicitation of proxies from members for the special meeting
to approve the Plan (the "Proxy Statement") included as part
of the Conversion Application have been approved for use by
the Commissioner and the FDIC. No order has been issued by the
Commissioner or the FDIC preventing or suspending the use of
the Prospectus or the Proxy Statement; and no action by or
before the Commissioner or the FDIC revoking such approvals is
pending or, to the Bank's best knowledge, threatened. The
Company has filed with the Commissioner and the Federal
Reserve Board ("FRB") the Company's application promulgated
under the Bank Holding Company Act of 1956, as amended
("BHCA") and has received approval of its acquisition of the
Bank from the Commissioner and the FRB.
(iii) At the date of the Prospectus and at all times
subsequent thereto through and including the Closing Date (i)
the Registration Statement and the Prospectus (as amended or
supplemented, if amended or supplemented) complied with the
Act and the SEC Regulations, (ii) the Registration Statement
(as amended or supplemented, if amended or supplemented) did
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(iii) the Prospectus (as amended or supplemented, if amended
or supplemented) did not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Representations or warranties in this subsection
shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to
the Company or the Bank relating to Trident by or on behalf of
Trident expressly for use in the Registration Statement or
Prospectus.
(iv) The Company has been duly incorporated and is in
good standing as a Delaware corporation, and the Bank has
been duly organized and has a corporate existence as a
mutual savings bank under the laws of Illinois, and each of
them is validly existing under the laws of the jurisdiction
of its organization with full power and authority to own its
property and conduct its business as described in the
Registration Statement and Prospectus; the Bank is a member
in good standing of the Federal Home Loan Bank of Chicago;
and the deposit accounts of the Bank are
Trident Securities, Inc.
Sales Agency Agreement
Page 4
insured by the Savings Association Insurance Fund ("SAIF")
administered by the FDIC up to the applicable legal limits.
Each of the Company and the Bank is not required to be
qualified to do business as a foreign corporation in any
jurisdiction where non-qualification would have a material
adverse effect on the Company and the Bank, taken as a
whole. The Bank does not own equity securities of or an
equity interest in any business enterprise except as
described in the Prospectus. Upon amendment of the Bank's
charter and bylaws as provided in the rules and regulations
of the Commissioner 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 an
Illinois chartered capital stock savings bank with full
power and authority to own its property and conduct its
business as described in the Prospectus, (ii) all of the
authorized and outstanding capital stock of the Bank will be
owned of record and beneficially by the Company, and (iii)
the Company will have no direct subsidiaries other than the
Bank.
(v) The Bank does not own equity securities of or an
equity interest in any business enterprise except as
described in the Prospectus.
(vi) The Bank has good, marketable and insurable
title to all assets material to its business and to those
assets described in the Prospectus as owned by it, free and
clear of all material liens, charges, encumbrances or
restrictions, except for liens for taxes not yet due, except
as described in the Prospectus and except as could not in
the aggregate have a material adverse effect upon the
operations or financial condition of the Bank; and all of
the leases and subleases material to the operations or
financial condition of the Bank, under which it holds
properties, including those described in the Prospectus, are
in full force and effect as described therein.
(vii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary actions
on the part of each of the Company and the Bank, and this
Agreement is a valid and binding obligation with valid
execution and delivery of each of the Company and the Bank,
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and loan
holding companies the accounts of whose subsidiaries are
insured by the FDIC or by general equity principles,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent that
the provisions of Sections 8 and 9 hereof may be unenforceable
as against public policy or pursuant to Sections 23A or 23B of
the Federal Reserve Act, 12 U.S. C. Sections 371c ("Section
23A" or "Section 23B").
Trident Securities, Inc.
Sales Agency Agreement
Page 5
(viii) There is no litigation or governmental
proceeding pending or, to the best knowledge of the Company or
the Bank, threatened against or involving the Company, the
Bank, or any of their respective assets which individually or
in the aggregate would reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), results of operations and business, including the
assets and properties, of the Company and the Bank, taken as a
whole.
(ix) The Company and the Bank have received the
opinion of Geo. S. Olive & Co. LLC with respect to federal and
Illinois state tax consequences of the Conversion, to the
effect that the Conversion will constitute a tax-free
reorganization under the Internal Revenue Code of 1986, as
amended, and will not be a taxable transaction for the Bank or
the Company under the laws of Illinois or the United States,
and the facts relied upon in such opinions are accurate and
complete.
(x) Each of the Company and the Bank has all such
corporate power, authority, authorizations, approvals and
orders as may be required to enter into this Agreement and to
carry out the provisions and conditions hereof, subject to the
limitations set forth herein and subject to the satisfaction
of certain conditions imposed by the Commissioner, the FDIC,
and the FRB in connection with its approvals of the
Applications, and except as may be required under the
securities, or "blue sky," laws of various jurisdictions, and
in the case of the Company, as of the Closing Date, will have
such approvals and orders to issue and sell the Shares to be
sold by the Company as provided herein, and in the case of the
Bank, as of the Closing Date, will have such approvals and
orders to issue and sell the Shares of its Common Stock to be
sold to the Company as provided in the Plan, subject to the
issuance of an amended charter in the form required for
Illinois chartered stock savings banks (the "Stock Charter"),
the form of which Stock Charter has been approved by the
Commissioner.
(xi) To the best of its knowledge, neither the
Company nor the Bank is in violation of any rule or regulation
of the Commissioner or the FDIC that could reasonably be
expected to result in any enforcement action against the
Company, the Bank, or their officers or directors that might
have a material adverse effect on the financial condition,
operations, businesses, assets or properties of the Company
and the Bank, taken as a whole.
(xii) The consolidated financial statements and any
related notes or schedules which are included in the
Registration Statement and the Prospectus fairly present the
consolidated financial condition, income, retained earnings
and cash flows of the Bank at the respective dates thereof and
for the respective periods covered thereby and comply as to
form with the applicable accounting requirements of the
Regulations and the applicable accounting regulations of the
Commissioner. Such financial statements have been prepared in
accordance with generally accepted
Trident Securities, Inc.
Sales Agency Agreement
Page 6
accounting principles consistently applied throughout the
periods involved, except as set forth therein, and such
financial statements are consistent with financial statements
and other reports filed by the Bank with supervisory and
regulatory authorities except as such generally accepted
accounting principles may otherwise require. The tables in the
Prospectus accurately present the information purported to be
shown thereby at the respective dates thereof and for the
respective periods therein.
(xiii) There has been no material change in the
financial condition, results of operations or business,
including assets and properties, of the Company and the Bank,
taken as a whole, since the latest date as of which such
condition is set forth in the Prospectus, except as set forth
therein; and the capitalization, assets, properties and
business of each of the Company and the Bank conform to the
descriptions thereof contained in the Prospectus. Neither the
Company or the Bank has any material liabilities of any kind,
contingent or otherwise, except as set forth in the
Prospectus.
(xiv) There has been no breach or default (or the
occurrence of any event which, with notice or lapse of time or
both, would constitute a default) under, or creation or
imposition of any lien, charge or other encumbrance upon any
of the properties or assets of the Company and the Bank
pursuant to any of the terms, provisions or conditions of, 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 any of their respective
assets or properties may be bound or is subject, or violation
of any governmental license or permit or any enforceable
published law, administrative regulation or order or court
order, writ, injunction or decree, which breach, default,
encumbrance or violation would have a material adverse effect
on the financial condition, operations, business, assets or
properties of the Company and the Bank taken as a whole; all
agreements which are material to the financial condition,
results of operations or business of the Company and the Bank
taken as a whole are in full force and effect, and no party to
any such agreement has instituted or, to the best knowledge of
the Company and the Bank, threatened any action or proceeding
wherein the Company or the Bank would be alleged to be in
default thereunder.
(xv) None of the Company or the Bank is in violation
of its respective charter or bylaws. The execution and
delivery hereof and the consummation of the transactions
contemplated hereby by the Company and the Bank do not
conflict with or result in a breach of the charter or bylaws
of the Company or the Bank (in either mutual or stock form) or
constitute a material breach of or default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, give rise to any right of termination,
cancellation or acceleration contained in, or result in the
creation or imposition of any lien, charge or other
encumbrance upon any of the
Trident Securities, Inc.
Sales Agency Agreement
Page 7
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 violate any governmental license or permit or any
enforceable published law, administrative regulation or order
or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Commissioner
in connection with its approval of the Conversion
Application), which breach, default, encumbrance or violation
would have a material adverse effect on the financial
condition, operations or business of the Company and the Bank
taken as a whole.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus and prior to the Closing Date (as hereinafter
defined), except as otherwise may be indicated or contemplated
therein, none of the Company or the Bank has issued any
securities which will remain issued at the Closing Date or
incurred any liability or obligation, direct or contingent, or
borrowed money, except borrowings in the ordinary course of
business, or entered into any other transaction not in the
ordinary course of business and consistent with prior
practices, which is material in light of the business of the
Company and the Bank, taken as a whole.
(xvii) Upon consummation of the Conversion, the
authorized, issued and outstanding equity capital of the
Company shall be within the range as set forth in the
Prospectus under the caption "Capitalization," and no Common
Stock of the Company shall be outstanding immediately prior to
the Closing Date; the issuance and the sale of the Shares of
the Company have been duly authorized by all necessary action
of the Company and approved by the Commissioner and, when
issued in accordance with the terms of the Plan and paid for,
shall be validly issued, fully paid and nonassessable and
shall conform to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to
preemptive rights, except as set forth in the Prospectus; and
good title to the Shares will be transferred by the Company
upon issuance thereof against payment therefor, free and clear
of all claims, encumbrances, security interests and liens
against the Company whatsoever. The certificates representing
the Shares will conform in all material respects with the
requirements of applicable laws and regulations. The issuance
and sale of the capital stock of the Bank to the Company has
been duly authorized by all necessary action of the Bank and
the Company and appropriate regulatory authorities (subject to
the satisfaction of various conditions imposed by the
Commissioner and the FDIC in connection with its approval of
the Conversion Application), and such capital stock, when
issued in accordance with the terms of the Plan, will be fully
paid and nonassessable and will conform in all material
respects to the description thereof contained in the
Prospectus.
Trident Securities, Inc.
Sales Agency Agreement
Page 8
(xviii) No approval of any regulatory or supervisory
or other public authority is required in connection with the
execution and delivery of this Agreement or the issuance of
the Shares, except for the declaration of effectiveness of any
required post-effective amendment by the Commission and final
approvals of the Conversion by the Commissioner and the FDIC,
approval of the Company's application by the FRB, and the
issuance of the Stock Charter by the Commissioner and as may
be required under the securities laws of various
jurisdictions.
(xix) All material contracts and other documents
required to be filed as exhibits to the Registration Statement
or the Conversion Application have been filed with the
Commission and/or the Commissioner or the FRB, as the case may
be.
(xx) Geo. S. Olive & Co. LLC, which has audited the
consolidated financial statements of the Bank at March 31,
1998 and for the eleven months ended March 31, 1997, is an
independent public accountant within the meaning of the Code
of Professional Ethics of the American Institute of Certified
Public Accountants and Title 12 of the Code of Federal
Regulations, Section 303.15.
(xxi) For the past five years, the Company and the
Bank have timely filed all required federal, state and local
franchise tax returns, and no deficiency has been asserted
with respect to such returns by any taxing authorities, and
the Company and the Bank have paid all taxes that have become
due and, to the best of their knowledge, have made adequate
reserves for similar future tax liabilities, except where any
failure to make such filings, payments and reserves, or the
assertion of such a deficiency, would not have a material
adverse effect on the condition of the Company and the Bank
taken as a whole.
(xxii) All of the loans represented as assets of the
Bank on the most recent financial statements of the Bank
included in the Prospectus meet or are exempt from all
requirements of federal, state or local law pertaining to
lending, including without limitation truth in lending
(including the requirements of Regulation Z and 12 C.F.R. Part
226 and Section 563.99), real estate settlement procedures,
consumer credit protection, equal credit opportunity and all
disclosure laws applicable to such loans, except for
violations which, if asserted, would not have a material
adverse effect on the Company and the Bank taken as a whole.
(xxiii) The records of account holders, depositors,
borrowers and other members of the Bank delivered to Trident
by the Bank or its agent for use during the Conversion have
been prepared or reviewed by the Bank and, to the best
knowledge of the Company and the Bank, are reliable and
accurate.
(xxiv) To the knowledge of the Company and the Bank,
none of the Company, the Bank nor directors or employees of
the Company or the Bank have
Trident Securities, Inc.
Sales Agency Agreement
Page 9
made any payment of funds of the Company or the Bank as a loan
to any person other than the Employee Stock Ownership Plan
Trust for the purchase of the Shares.
(xxv) To the best knowledge of the Company and the
Bank, the Company and the Bank are in compliance with all
laws, rules and regulations relating to the discharge,
storage, handling and disposal of hazardous or toxic
substances, pollutants or contaminants and neither the Company
nor the Bank believes that the Company or the Bank is subject
to liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any
similar law, except for violations which, if asserted, would
not have a material adverse effect on the Company and the
Bank, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending or, to
the best knowledge of the Company or the Bank, threatened
against the Company or the Bank relating to the discharge,
storage, handling and disposal of hazardous or toxic
substances, pollutants or contaminants. To the best knowledge
of the Company and the Bank, no disposal, release or discharge
of hazardous or toxic substances, pollutants or contaminants,
including petroleum and gas products, as any of such terms may
be defined under federal, state or local law, has been caused
by the Company or the Bank or, to the best knowledge of the
Company or the Bank, has occurred on, in or at any of the
facilities or properties of the Company or the Bank, except
such disposal, release or discharge which would not have a
material adverse effect on the Company and the Bank, taken as
a whole.
(xxvi) At the Closing Date, the Company and the Bank
will have completed the conditions precedent to, and shall
have conducted the Conversion in all material respects in
accordance with, the Plan, the Commissioner Regulations, FDIC
Regulations and all other applicable laws, regulations,
published decisions and orders, including all terms,
conditions, requirements and provisions precedent to the
Conversion imposed by the Commissioner, the FDIC and the FRB.
(b) Trident represents and warrants to the Company and the
Bank that:
(i) Trident is registered as a broker-dealer with the
Commission, and is in good standing with the Commission and
the NASD.
(ii) Trident is validly existing as a corporation in
good standing under the laws of North Carolina, with full
corporate power and authority to provide the services to be
furnished to the Company and the Bank hereunder.
(iii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action
on the part of Trident, and this Agreement is a legal, valid
and binding obligation of Trident, enforceable in accordance
with its terms (except as the
Trident Securities, Inc.
Sales Agency Agreement
Page 10
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of registered
broker-dealers accounts of whose may be protected by the
Securities Investor Protection Corporation or by general
equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except
to the extent that the provisions of Sections 8 and 9 hereof
may be unenforceable as against public policy or pursuant to
Section 23A or Section 23B).
(iv) Trident and, to Trident's knowledge, its
employees, agents and representatives who shall perform any of
the services required hereunder to be performed by Trident
shall be duly authorized and shall have all licenses,
approvals and permits necessary to perform such services, and
Trident is a registered selling agent in the jurisdictions
listed in Exhibit A hereto and will remain registered in such
jurisdictions in which the Company is relying on such
registration for the sale of the Shares, until the Conversion
is consummated or terminated.
(v) The execution and delivery of this Agreement by
Trident, the fulfillment of the terms set forth herein and the
consummation of the transactions contemplated hereby shall not
violate or conflict with the corporate charter or bylaws of
Trident or violate, conflict with or constitute a breach of,
or default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, any material
agreement, indenture or other instrument by which Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or
court decree, injunction or order.
(vi) Any funds received by Trident to purchase Common
Stock will be handled in accordance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(vii) There is not now pending or, to Trident's
knowledge, threatened against Trident any action or proceeding
before the Commission, the NASD, any state securities
commission or any state or federal court concerning Trident's
activities as a broker-dealer.
3. Employment of Trident: Sale and Delivery of the Shares. On the basis
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the 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 Subscription Offering and Community
Offering. If the Conversion is not consummated for any reason, or if the
Conversion is consummated without using the services of Trident, Trident shall
be entitled to retain the fees received up to the time that the Conversion is
terminated or Trident's services no longer are utilized. Under the agreement
with Trident, the Savings Bank is also obligated to indemnify Trident against
Trident Securities, Inc.
Sales Agency Agreement
Page 11
certain liabilities and expenses, including legal fees, to which Trident may
become subject in connection with its engagement.
In the event the Company is unable to sell a minimum of 93,500 Shares
(or such lesser amount as the Commissioner with 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 from them, together with
interest as provided in the Prospectus, and no party to this Agreement shall
have any obligation to the other party hereunder, except as set forth in
Sections 6, 8 and 9 hereof. Appropriate arrangements for placing the funds
received from subscriptions for Shares in interest-bearing accounts with the
Bank until all Shares are sold and paid for were made prior to the commencement
of the Subscription and Community Offerings, with provision for prompt refund to
the purchasers as set forth above, or for delivery to the Company if all Shares
are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on or promptly after the
Closing Date against payment to the Company by any means authorized pursuant to
the Prospectus, at the principal office of the Company at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be agreed upon
between the parties hereto. The date upon which Trident is paid the compensation
due hereunder is herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the offering price of the Common Stock ordered on or
before twelve noon on the next business day following receipt or execution of an
order form by Trident to the Bank for deposit in a segregated account or (b) to
solicit indications of interest in which event (i) Trident will subsequently
contact any potential subscriber indicating interest to confirm the interest and
give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscribers behalf, (ii) Trident
will mail acknowledgments of receipt of orders to each subscriber confirming
interest on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the third business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms together with such funds to the Bank on or before
twelve noon on the next business day following the debit date for deposit in a
segregated account. Trident acknowledges that if the procedure in (b) is
adopted, subscribers' funds are not required to be in their accounts until the
debit date.
In addition to the expenses specified in Section 6 hereof, Trident
shall receive the following compensation for its services hereunder upon
completion and closing of the Conversion and Offerings:
(a) A management fee in the amount of $53,500. All such fees are to be
payable in next-day funds to Trident on the Closing Date.
Trident Securities, Inc.
Sales Agency Agreement
Page 12
(b) For stock sold by other NASD member firms under selected dealer's
agreements, the commission shall not exceed a fee to be agreed upon jointly by
Trident and the Bank to reflect market requirements at the time of the stock
allocation in a Syndicated Community Offering.
(c) Trident shall be reimbursed for allowable expenses, incurred by it
whether or not the Offerings are successfully completed; provided, however, that
reimbursable legal fees will not exceed $25,000, that other reimbursable
expenses will not exceed $10,000 and that neither the Company nor the Bank shall
pay or reimburse Trident for any of the foregoing expenses accrued after Trident
shall have notified the Company or the Bank of its election to terminate this
Agreement pursuant to Section 11 hereof or after such time as the Company or the
Bank shall have given notice in accordance with Section 12 hereof that Trident
is in breach of this Agreement. Full payment to defray Trident's reimbursable
expenses shall be made in next-day funds on the Closing Date or, if the
Conversion is not completed and is terminated for any reason, within ten (10)
business days of receipt by the Company of a written request from Trident for
reimbursement of its expenses. Trident acknowledges receipt of $10,000 advance
payment from the Bank which shall be credited against the total reimbursement
due Trident hereunder.
(d) Notwithstanding the limitations on reimbursement of Trident for
allocable expenses provided in the immediately preceding paragraph (c), in the
event that a resolicitation or other event causes the Offerings to be extended
beyond their original expiration date, Trident shall be reimbursed for its
allocable expenses incurred during such extended period, provided that the
allowance for allowable expenses provided for in the immediately preceding
paragraph (c) above shall have been exhausted and subject to the following. Such
reimbursement shall be in an amount equal to the product obtained by dividing
$10,000 (original out-of-pocket expenses) by the total number of days of the
unextended Subscription Offering (calculated from the date of the Prospectus to
the intended close of the Subscription Offering as stated in the Prospectus) and
multiplying such product by the number of days of the extension (that number of
days from the date of the supplemental Prospectus used in the extended
Subscription Offering to the closing of the extension of the Subscription
Offering described in such supplemental Prospectus).
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their attorneys' fees, NASD filing fees,
and attorneys' fees relating to any required state securities laws research and
filings, telephone charges, air freight, rental equipment, supplies, transfer
agent charges, fees relating to auditing and accounting and costs of printing
all documents necessary in connection with the Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
assisting the Company on a best efforts basis in offering a minimum of 93,500
and a maximum of 126,500 Shares, with the possibility of offering up to 145,475
Shares (except as the Commissioner and FDIC may permit to be decreased or
increased) in the Subscription and Community Offerings. The Shares
Trident Securities, Inc.
Sales Agency Agreement
Page 13
are to be offered to the public at the price set forth on the cover page of the
Prospectus and the first page of this Agreement.
5. Further Agreements. The Company 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 any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident immediately upon discovery, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective or any supplement to the Prospectus has
been filed, (ii) of the issuance by the Commission of any stop order relating to
the Registration Statement or of the initiation or the threat of any proceedings
for that purpose, (iii) of the receipt of any notice with respect to the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, and (iv) of the receipt of any comments from the staff of the
Commission relating to the Registration Statement. If the Commission enters a
stop order relating to the Registration Statement at any time, the Company will
make every reasonable effort to obtain the lifting of such order at the earliest
possible moment.
(c) During the time when a Prospectus is required to be delivered under
the Act, the Company will comply so far as it is able with all requirements
imposed upon it by the Act, as now in effect and hereafter amended, and by the
SEC Regulations, as from time to time in force, so far as necessary to permit
the continuance of offers and sales of or dealings in the Shares in accordance
with the provisions hereof and the Prospectus. If during the period when the
Prospectus is required to be delivered in connection with the offer and sale of
the Shares any event relating to or affecting the Company and the Bank, taken as
a whole, shall occur as a result of which it is necessary, in the opinion of
counsel for Trident, with the concurrence of counsel to the Company, to amend or
supplement the Prospectus in order to make the Prospectus not false or
misleading in light of the circumstances existing at the time it is delivered to
a purchaser of the Shares, the Company forthwith shall prepare and furnish to
Trident a reasonable number of copies of an amendment or amendments or of a
supplement or supplements to the Prospectus (in form and substance satisfactory
to counsel for Trident) which shall amend or supplement the Prospectus so that,
as amended or supplemented, the Prospectus shall not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser of the Shares, not misleading. The
Company will not file or use any amendment or supplement to the Registration
Statement or the Prospectus of which Trident has not first been furnished a copy
or to which Trident shall reasonably object after having been furnished such
copy. For the purposes of this subsection the Company and the Bank shall furnish
such information with respect to themselves as Trident from time to time may
reasonably request.
Trident Securities, Inc.
Sales Agency Agreement
Page 14
(d) The Company and the Bank have taken or will take all reasonably
necessary action as may be required to qualify or register the Shares for offer
and sale by the Company under the securities or blue sky laws of such
jurisdictions as Trident and either the Company or its counsel may agree upon;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation to do business under the laws of any such jurisdiction. In
each jurisdiction where such qualification or registration shall be effected,
the Company, unless Trident agrees that such action is not necessary or
advisable in connection with the distribution of the Shares, shall file and make
such statements or reports as are, or reasonably may be, required by the laws of
such jurisdiction.
(e) Appropriate entries will be made in the financial records of the
Bank sufficient to establish a liquidation account for the benefit of eligible
account holders as of December 31, 1996 and supplemental eligible account
holders as of June 30, 1998 in accordance with the requirements of the
Commissioner and the FDIC.
(f) The Company will file a registration statement for the Common Stock
under Section 12(g) of the Exchange Act, prior to completion of the stock
offering pursuant to the Plan and shall request that such registration statement
be effective upon completion of the Conversion. The Company shall maintain the
effectiveness of such registration for a minimum period of three years or for
such shorter period as may be required by applicable law.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the regulations promulgated under the Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date (as defined in said Rule 158) of the
Registration Statement.
(h) For a period of three years from the date of this Agreement (unless
the Common Stock shall have been deregistered under the Exchange Act), the
Company will furnish to Trident, as soon as publicly available after the end of
each fiscal year, a copy of its annual report to shareholders for such year; and
the Company will furnish to Trident (i) as soon as publicly available, a copy of
each report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, and (ii) from time
to time, such other public information concerning the Company as Trident may
reasonably request.
(i) The Company shall use the net proceeds from the sale of the Shares
consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived by Trident.
(k) The Company shall advise Trident, if necessary, as to the
allocation of deposits, in the case of eligible account holders and supplemental
eligible account holders and votes, in the case
Trident Securities, Inc.
Sales Agency Agreement
Page 15
of other members, and of the Shares in the event of an oversubscription and
shall provide Trident final instructions as to the allocation of the Shares
("Allocation Instructions") in such event and such information shall be accurate
and reliable. Trident shall be entitled to rely on such instructions and shall
have no liability in respect of its reasonable reliance thereon, including
without limitation, no liability for or related to any denial or grant of a
subscription in whole or in part.
(1) 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."
6. Payment of Expenses. Whether or not the Conversion is consummated,
the Company and 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 with
respect to the Subscription and Community Offerings and, (b) in addition, if the
Company is unable to sell a minimum of 93,500 Shares or such lesser amount as
the Commissioner and the FDIC may permit or the Conversion is otherwise
terminated, the Company and the Bank shall reimburse Trident for allowable
expenses incurred by Trident relating to the offering of the Shares as provided
in Section 3 hereof; provided, however, that neither the Company nor the Bank
shall pay or reimburse Trident for any of the foregoing expenses accrued after
Trident shall have notified the Company or the Bank of its election to terminate
this Agreement pursuant to Section 11 hereof or after such time as the Company
or the Bank shall have given notice in accordance with Section 12 hereof that
Trident is in breach of this Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C., counsel to the Bank, dated the Closing Date,
addressed to Trident, in form and substance reasonably satisfactory to counsel
for Trident substantially as set forth in Exhibit B hereto:
In rendering such opinions, such counsel may rely as to matters of fact
on certificates of officers and directors of the Company and the Bank and
certificates of public officials delivered pursuant hereto. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company and the Bank. Such opinions may be
governed by, and interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991), and, as a consequence,
references in such opinions to such counsel's "knowledge" may be limited to
"actual knowledge" as defined in the Accord (or knowledge based on
certificates). Such opinions may be limited to present statutes, regulations and
judicial interpretations and to facts as they presently exist; in rendering such
opinions, such counsel need assume no obligation to revise or supplement them
should the present laws be changed by legislative or regulatory action, judicial
decision or otherwise; and such counsel need express no view, opinion
Trident Securities, Inc.
Sales Agency Agreement
Page 16
or belief with respect to whether any proposed or pending legislation, if
enacted, or any regulations or any policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation, would
affect the validity of the execution and delivery by the Company and the Bank of
this Agreement or the issuance of the Shares.
(b) At the Closing Date, Trident shall receive the letter of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ Attorneys, P.C., counsel for the Company and the Bank, dated the Closing
Date, addressed to Trident, in form and substance reasonably satisfactory to
counsel for Trident substantially as set forth in Exhibit C, hereto:
(c) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or pass
upon the matters required by Trident, and for the purpose of evidencing the
accuracy, completeness or satisfaction of any of the representations, warranties
or conditions herein contained, including but not limited to, resolutions of the
Board of Directors of the Company 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 change in the financial
condition, business or results of operations of the Company and the Bank, taken
as a whole, since the latest date as of which such condition is set forth in the
Prospectus, except as referred to therein; (ii) there shall have been no
transaction entered into by the Company and the Bank after the latest date as of
which the financial condition of the Company or the Bank is set forth in the
Prospectus other than transactions referred to or contemplated therein,
transactions in the ordinary course of business, and transactions which are not
material to the Company and the Bank, taken as a whole; (iii) none of the
Company or the Bank shall have received from the Commissioner, FDIC, FRB or
Commission any direction (oral or written) to make any change in the method of
conducting their respective businesses which is material to the business of the
Company and the Bank, taken as a whole, with which they have not complied; (iv)
no action, suit or proceeding, at law or in equity or before or by any federal
or state commission, board or other administrative agency, shall be pending or
threatened against the Company or the Bank or affecting any of their respective
assets, wherein an unfavorable decision, ruling or finding would have a material
adverse effect on the business, operations, financial condition or income of the
Company 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
securities or blue sky laws of such jurisdictions as Trident and the Company
shall have agreed upon.
(e) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of the
Company and the Bank, dated the Closing Date, to the effect that: (i) they have
examined the Prospectus and, at the time the Prospectus became authorized by the
Company for use, the Prospectus did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading with respect to the Company or the Bank; (ii) since the date the
Prospectus became authorized by the Company for use, no event has
Trident Securities, Inc.
Sales Agency Agreement
Page 17
occurred which should have been set forth in an amendment or supplement to the
Prospectus which has not been so set forth, including specifically, but without
limitation, any material change in the business, financial condition or results
of operations of the Company or the Bank and, the conditions set forth in
clauses (ii) through (iv) inclusive of subsection (d) of this Section 7 have
been satisfied; (iii) to the best knowledge of such officer, no order has been
issued by the Commission, FRB, FDIC or the Commissioner to suspend the
Subscription Offering or the Community Offering or the effectiveness of the
Prospectus, and no action for such purposes has been instituted or threatened by
the Commission or the Commissioner; (iv) to the best knowledge of such officer,
no person has sought to obtain review of the final actions of the FDIC,
Commissioner and FRB approving the Plan; and (v) all of the representations and
warranties contained in Section 2 of this Agreement are true and correct, with
the same force and effect as though expressly made on the Closing Date.
(f) At the Closing Date, Trident shall receive, among other documents,
(i) copies of the letters from the FDIC and the Commissioner authorizing the use
of the Prospectus and the Proxy Statement, (ii) a copy of the order of the
Commission declaring the Registration Statement effective; (iii) copies of the
letters from the Commissioner evidencing the corporate existence of the Bank;
(iv) a copy of the letter from the appropriate Delaware authority evidencing the
incorporation (and, if generally available from such authority, good standing)
of the Company; (v) a copy of the Company's corporate charter certified by the
appropriate Delaware governmental authority; and, (vi) if available, a copy of
the letter from the Commissioner approving the Bank's Stock Charter.
(g) As soon as available after the Closing Date, Trident shall receive
a copy of the Bank's certified Restated Organization Certificate executed by the
appropriate state governmental authority.
(h) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Geo. S. Olive & Co. LLC, independent
certified public accountants, addressed to Trident and the Company, in substance
and form satisfactory to counsel for Trident, with respect to the financial
statements and certain financial information contained in the Prospectus.
(i) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Geo. S. Olive & Co. LLC,
independent certified public accountants, dated the Closing Date and addressed
to Trident and the Company, confirming the statements made by them in the letter
delivered by them pursuant to the preceding subsection as of a specified date
not more than five days prior to the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident shall be deemed a representation and warranty by the Company and 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.
Trident Securities, Inc.
Sales Agency Agreement
Page 18
If Trident terminates this Agreement as aforesaid, the Company and the Bank
shall reimburse Trident for its expenses as provided in Section 3(b) 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 Act or Section 20(a) of the Exchange Act,
against any and all loss, liability, claim, damage and expense
whatsoever and shall further promptly reimburse such persons for any
legal or other expenses reasonably incurred by each or any of them in
investigating, preparing to defend or defending against any such
action, proceeding or claim (whether commenced or threatened) arising
out of or based upon (A) any misrepresentation by the 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 or the Prospectus or (ii) any application
(including the Applications) or other document or communication (in
this Section 8 collectively called "Application") prepared or 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,
whether or not filed in any jurisdiction, to effect the Conversion or
qualify the Shares under the securities laws thereof or filed with the
Commissioner, FRB or 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 or any amendment
or supplement thereof or in any Application, as the case may be, or (B)
the participation by Trident in the Conversion. This indemnity shall be
in addition to any liability the Company and the Bank may have to
Trident otherwise.
(b) The Company shall indemnify and hold Trident harmless for
any liability whatsoever arising out of (i) the Allocation Instructions
or (ii) any records of account holders, depositors, borrowers and other
members of the Bank delivered to Trident by the Bank or its agents for
use during the Conversion.
(c) Trident agrees to indemnify and hold harmless the Company
and the Bank, their officers, directors and employees and each person,
if any, who controls the Company and the Bank within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Bank to
Trident, but only with respect to (A) statements or omissions, if any,
made in the Prospectus or any amendment or supplement thereof, in any
Application or to a purchaser of the Shares in reliance upon, and in
conformity with, written information furnished to the Company or the
Bank with respect to Trident by or on behalf of Trident expressly for
use in the Prospectus or in any Application, provided that it is agreed
and understood that the only
Trident Securities, Inc.
Sales Agency Agreement
Page 19
information so furnished is set forth in the Prospectus under the
caption "The Conversion Subscription and Community Offering Marketing
and Other Fees"; (B) any misrepresentation by Trident in Section 2(b)
of this Agreement; or (C) any liability of the Company or the Bank
which is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have principally and directly
resulted from gross negligence or willful misconduct of Trident. It is
expressly agreed, however, that Trident shall not be liable for any
loss, liability, claim, damage or expense which in the aggregate
exceeds the amount paid (excluding reimbursable expenses) to Trident
under this Agreement.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with the other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable cost of
investigation except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified
party may retain additional counsel, but shall bear the fees and
expenses of such counsel unless (i) the indemnifying party shall have
specifically authorized the indemnified party to retain such counsel or
(ii) the parties to such suit include such indemnifying party and the
indemnified party, and such indemnified party shall have been advised
by counsel that one or more material legal defenses may be available to
the indemnified party which may not be available to the indemnifying
party, in which case the indemnifying party shall not be entitled to
assume the defense of such suit notwithstanding the indemnifying
party's obligation to bear the fees and expenses of such counsel. An
indemnifying party against whom indemnity may be sought shall not be
liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying
party's consent. Notwithstanding the provisions of this Section 8, the
Bank shall not provide indemnification to the Company or Trident solely
to the extent that such indemnification would cause the Bank to violate
Section 23A or Section 23B.
9. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company and the Bank and Trident and the
representation and warranties of the Company and the Bank and of Trident set
forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
Trident Securities, Inc.
Sales Agency Agreement
Page 20
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
10. Termination. Trident may terminate this Agreement by giving the
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or
occurrence has materially disrupted the United States securities
markets such as to make it, in Trident's reasonable opinion,
impracticable to proceed with the offering of the Shares; or if trading
on the New York Stock Exchange shall have suspended; or if the United
States shall have become involved in a war or major hostilities; or if
a general banking moratorium has been declared by a state or federal
authority which has material effect on the Bank or the Conversion; or
if a moratorium in foreign exchange trading by major international
Banks or persons has been declared; or if there shall have been a
material change in the capitalization, condition or business of the
Company, or if the Bank shall have sustained a material or substantial
loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act, whether or not said loss shall have
been insured; or if there shall have been a material change in the
condition or prospects of the Company or the Bank.
(b) If Trident elects to terminate this Agreement as provided
in this Section, the Company and the Bank shall be notified promptly by
Trident by telephone or telegram and confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the
reasons set forth in subsection (a) above, and to fulfill its
obligations, if any, pursuant to Sections 3(c), 6, 8(a) and 9 of this
Agreement and upon demand, the Company and the Bank shall pay Trident
the full amount so owing thereunder.
(d) 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 and the Bank shall be required to
fulfill their obligations, to the extent applicable, pursuant to
Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement.
11. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. R. ▇▇▇
▇▇▇▇▇▇▇ (with a copy to Silver, ▇▇▇▇▇▇▇▇ & Taff, L.L.P., ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, P.C., ) and
if sent to the Company or the Bank it shall be mailed, delivered or telegraphed
and confirmed to Cerro Gordo Building and Loan, s.b., ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Trident Securities, Inc.
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Page 21
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer (with a copy to ▇▇▇▇▇▇ &
▇▇▇▇▇▇ Attorneys, P.C., Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
12. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, Trident, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
13. Construction Unless governed by preemptive federal law, this
Agreement shall be governed by and construed in accordance with the substantive
laws of North Carolina.
14. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
Trident Securities, Inc.
Sales Agency Agreement
Page 22
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
CGB&L FINANCIAL GROUP, INC. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇.▇.
By: By:
-------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer Chief Executive Officer
Date: Date:
------------------------------ -----------------------------
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
--------------------------------
Date:
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Exhibit A
Jurisdictions where Trident is a Registered Selling Agent
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below:
Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware New York
District of Columbia North Carolina
Florida North Dakota (Trident Securities, Inc. only, no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Trident Securities, Inc. is not a registered selling agent in the
jurisdictions listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
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Exhibit B
[▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C. to insert introduction]
(i) the Company has been duly incorporated, and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and the Bank is validly existing as a
mutual savings Bank under the laws of Illinois, each with full power
and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) the Bank is a member of the Federal Home Loan Bank of
Chicago, and the deposit accounts of the Bank are insured by the SAIF
up to the applicable legal limits;
(iii) to the best of our knowledge, the activities of the Bank
as such activities are described in the Prospectus are permitted under
the laws of the state of Illinois to subsidiaries of a Delaware
business corporation and the Bank does not have any subsidiaries;
(iv) The Plan complies with, and, to the best of our
knowledge, the Conversion of the Bank from an Illinois chartered mutual
savings Bank to an Illinois chartered stock savings Bank and the
creation of the Company as a holding company for the Bank have been
effected in all material respects in accordance with, the Bank Holding
Company Act of 1956, as amended ("BHCA") and the regulations of the
Commissioner and the FDIC; to the best of our knowledge, all of the
terms, conditions, requirements and provisions with respect to the Plan
and the Conversion imposed by the Commissioner and the FDIC, except
with respect to the filing or submission of certain required
post-Conversion reports or other materials by the Company or the Bank,
have been complied with by the Company and the Bank; and, to the best
of our knowledge, no person has sought to obtain regulatory or judicial
review of the final action of the Commissioner and the FDIC in
approving the Plan;
(v) the Company has authorized Common Stock as set forth in
the Registration Statement and the Prospectus, and the description of
such Common Stock in the Registration Statement and the Prospectus is
accurate in all material respects;
(vi) the issuance and sale of the Shares have been duly and
validly authorized by all necessary corporate action on the part of the
Company; the Shares, upon receipt of payment and issuance in accordance
with the terms of the Plan and this Agreement, will be validly issued,
fully paid, nonassessable and, except as disclosed in the Prospectus,
free of preemptive rights, and good title thereto shall be transferred
by the Company free and clear of all claims, encumbrances, security
interests and liens created by the Company;
(vii) the form of certificate used to evidence the Shares is
in proper form and complies in all material respects with applicable
Delaware law;
(viii) the issuance and sale of the capital stock of the Bank
to the Company have been duly authorized by all necessary corporate
action of the Bank and the Company and have received the approval of
the FDIC and the Commissioner, and such capital stock, upon
B-1
receipt of payment and issuance in accordance with the terms of the
Plan, will be validly issued, fully paid and nonassessable and owned of
record and, to our actual knowledge, beneficially by the Company;
(ix) subject to the satisfaction of the conditions imposed by
the FDIC, FRB and the Commissioner, no further approval, authorization,
consent or other order of any federal government board or body is
required in connection with the execution and delivery of this
Agreement, and the consummation of the Conversion, except with respect
to the issuance to the Bank of the Stock Charter by the Commissioner
and as may be required under the "blue sky" laws of various
jurisdictions;
(x) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly and validly authorized by
all necessary corporate action on the part of each of the Company and
the Bank;
(xi) the statements in the Prospectus and incorporated by
reference in the Proxy Statement under the captions "Supervision and
Regulation," "Dividend Policy," "Restrictions on Acquisition of the
Holding Company" and "Description of Capital Stock," insofar as they
are, or refer to, statements of law or legal conclusions (excluding
financial data included therein, as to which no opinion is expressed),
have been prepared or reviewed by us and are correct in all material
respects;
(xii) the Applications have been approved by the FDIC and the
Commissioner, and the Prospectus and the Proxy Statement have been
authorized for use by the Commissioner; the Registration Statement and
any post-effective amendment thereto has been declared effective by the
Commission; except as to any necessary qualifications or registration
under the securities laws of the jurisdictions in which the Shares were
offered, no further approval of any governmental authority is required
for the issuance and sale of the Shares (subject to the satisfaction of
various conditions subsequent imposed by the FDIC and the Commissioner
in connection with its approval of the Conversion Application), and, to
the best of our knowledge, no proceedings are pending by or before the
Commission or the Commissioner seeking to revoke or rescind the orders
declaring the Registration Statement effective or approving the
Conversion Application or, to the best of our knowledge, are
contemplated or threatened (provided that for this purpose we do not
regard any litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has manifested to
the management of the Company or the Bank, or to us, a present
intention to initiate such litigation or proceeding);
(xiii) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the Bank do not
conflict with or result in a breach of the charter or bylaws of the
Company or the Bank (in either mutual or stock form)
(xiv) the Conversion Application, the Registration Statement,
the Prospectus and the Proxy Statement, in each case as amended, comply
as to form in all material respects with the requirements of the Act,
the BHCA, the SEC Regulations the FDIC Regulations and
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the Commissioner Regulations, as the case may be (except as to
information with respect to Trident included therein and financial
statements, notes to financial statements, financial tables and other
financial and statistical data, including the appraisal, included
therein, as to which no opinion is expressed); to the best of our
knowledge, all material documents and exhibits required to be filed
with the Conversion Application and the Registration Statement have
been so filed and the descriptions in the Conversion Application and
the Registration Statement of such documents and exhibits are accurate
in all material respects.
(xv) to our actual knowledge, the Bank has obtained all
licenses, permits and other governmental authorizations currently
required for the conduct of its business as such business is described
in the Prospectus, all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in all
material respects complying therewith, except where the failure to hold
such licenses, permits or governmental authorizations or the failure to
so comply would not have a material adverse effect on the Company and
the Bank, taken as a whole;
(xvi) there are no material legal or governmental proceedings
pending or, to our actual knowledge, threatened against or involving
the assets of the Company or the Bank (provided that for this purpose
we do not regard any litigation or governmental procedure to be
"threatened" unless the potential litigant or government authority has
manifested to the management of the Company or the Bank, or to us, a
present intention to initiate such litigation or proceeding);
(xvii) to our actual knowledge, the execution and delivery of
the Agreement and the consummation of the Conversion by the Company and
the Bank do not constitute a material breach of or default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, 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 violate any governmental license or
permit or any enforceable published law, administrative regulation or
order or court order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the Commissioner in
connection with the Commissioner's approval of the Conversion
Application), which breach, default, encumbrance or violation would
have a material adverse effect on the financial condition, operations,
business, assets or properties of the Company and the Bank taken as a
whole;
(xviii) to our actual knowledge, there has been no material
breach of any provision of the Company's or the Bank's charter or
bylaws or breach or default (or the occurrence of any event which, with
notice or lapse of time or both, would constitute a default) under any
agreement, contract, indenture, bond, debenture, note, instrument or
obligation to which the Company or the Bank is a party or by which any
of them or any of their respective assets or properties may be bound,
or any governmental license or permit, or a violation of any
enforceable published law, administrative regulation or order, or court
order, writ, injunction
B-3
or decree which breach, default, encumbrance or violation would have a
material adverse effect on the financial condition, operations,
business, assets or properties of the Company and the Bank taken as a
whole; and,
(xviv) the Agreement is a legal, valid and binding obligation
of each of the Company and the Bank, enforceable in accordance with its
terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization, receivership,
conservatorship or similar laws relating to or affecting the
enforcement of creditors' rights generally or the rights of creditors
of depository institutions whose accounts are insured by the FDIC or
savings and loan holding companies the accounts of whose subsidiaries
are insured by the FDIC or by general equity principles, regardless of
whether such enforceability is considered in a proceeding in equity or
at law, and except to the extent that the provisions of Sections 8 and
9 hereof may be unenforceable as against public policy or pursuant to
Section 23A or Section 23B, as to which we render no opinion);
[▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C. to insert conclusion]
▇-▇
▇▇▇▇▇▇▇ ▇
[▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. to insert introduction]
Based on such counsel's participation in conferences with
representatives of the Company, the Bank, its counsel, the independent
appraiser, the independent certified public accountants, Trident and its
counsel, review of documents and understanding of applicable law (including the
requirements of Form SB-2 and the character of the Registration Statement
contemplated thereby) and the experience such counsel has gained in its practice
under the Act, nothing has come to such counsel's attention that would lead it
to believe that the Registration Statement, as amended (except as to information
in respect of Trident contained therein and except as to the financial
statements, notes to financial statements, financial tables and other financial
and statistical data contained therein, as to which such counsel expresses no
opinion), at the time it became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, or that the Prospectus, as amended
(except as to information in respect of Trident contained therein and except as
to financial statements, notes to financial statements, financial tables and
other financial and statistical data contained therein as to which such counsel
expresses no opinion), as of the date of the Prospectus and at the Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (in making this statement such
counsel may state that it has not undertaken to verify independently the
information in the Registration Statement or Prospectus and, therefore, does not
assume any responsibility for the accuracy or completeness thereof).
[▇▇▇▇▇▇ & ▇▇▇▇▇▇ Attorneys, P.C. to insert conclusion]
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