FEDERAL TRUST CORPORATION
Up to 2,701,619 Common Stock
($0.01 Par Value Per Share)
Subscription Price $____ Per Share
AGENCY AGREEMENT
_____________, 1997
Keefe, Bruyette & Woods, Inc.
211 Bradenton Drive
Dublin, Ohio 43017-5034
Ladies and Gentlemen:
Federal Trust Corporation, a Florida corporation ("Company") and
Federal Trust Bank, a Federal Savings Bank, a federally chartered savings bank
(the "Bank") hereby confirm their agreement with Keefe, Bruyette & Woods, Inc.
(the "Agent") as follows:
Section 1. The Offering. Pursuant to a Registration Statement on Form
S-1, hereinafter described, the Company intends to distribute to the holders of
record (the "Current Shareholders") of the Company's common stock, $0.01 par
value per share (the "Common Stock"), as of March 26, 1997 (the "Record Date"),
subscription rights (the "Subscription Rights") to subscribe for and purchase up
to an aggregate of 2,701,619 Shares of Common Stock of the Company ("Shares") at
a subscription price of $___ per share ("Subscription Price"). Each Current
Shareholder will receive a non-transferable right to subscribe for and purchase
one additional share of Common Stock for each whole share of Common Stock owned
on the Record Date. Such offering of Subscription Rights to Current Shareholders
is referred to as the "Rights Offering" and shall be deemed to commence upon the
date of the first general mailing of the prospectus, as hereinafter defined
("Commencement Date").
Upon completion of the Rights Offering, the Company will offer shares
not subscribed for in the Rights Offering to members of the general public (the
"Community Offering") to whom a copy of the prospectus (as hereinafter defined)
is delivered and through participating registered broker-dealers in a concurrent
syndicated community offering (the "Syndicated Community Offering"). The Rights
Offering, the Community Offering and the Syndicated Community Offering,
together, are collectively referred to as the "Offering."
The Company has filed with the Securities and Exchange Commission
("Commission") a registration statement on Form S-1 (File No. 333-___________),
including exhibits ("Registration Statement"), containing a prospectus relating
Keefe, Bruyette & Woods, Inc.
Page 2
to the Offering, for the registration of the Shares under the Securities Act of
1933 ("1933 Act"), and has filed such amendments and supplements thereto, if
any, and such amended prospectuses and supplemented prospectuses as may have
been required to the date hereof. The prospectus, as amended, on file with the
Commission at the time the Registration Statement initially becomes effective is
hereinafter called the "Prospectus," except that if any prospectus is filed by
the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the
Commission under the 1933 Act ("1933 Act Regulations") differing from the
prospectus on file at the time the Registration Statement initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission.
Section 2. Retention of Agents; Compensation and Expenses; Sale and
Delivery of the Shares. Subject to the terms and conditions herein set forth,
the Company hereby appoints the Agent as its agent to utilize its best efforts
to solicit subscriptions and purchase orders for shares of Common Stock in the
Offering and to consult with and advise the Company in accordance with the terms
of this Agreement and the Prospectus.
On the basis of the representations and warranties and the agreements
herein, but subject to the terms and conditions herein, the Agent accepts such
appointment and agrees to consult with and advise the Company as to the matters
set forth in the letter agreement dated March 12, 1997 ("Letter Agreement"),
between the Company and the Agent. It is acknowledged by the Company that the
Agent shall not be required to purchase any Shares or take any action
inconsistent with all applicable laws, regulations, decisions or orders. If
requested by the Company, the Agent may engage additional broker-dealers that
are members of the National Association of Securities Dealers, Inc. ("NASD") to
participate in the solicitation of purchase orders for shares under a selected
dealers' agreement in the form attached hereto as Exhibit A.
The obligations of the Agent pursuant to this Agreement shall terminate
upon the completion, termination or abandonment of the Rights Offering by the
Company or upon termination of the Offering, but in no event later than
______________, 1997 ("End Date"). All unpaid fees and expenses due to the Agent
shall be payable in immediately available funds at the earlier of the Closing
Date (as hereinafter defined) or the End Date. In the event the Offering is
extended beyond the End Date, the Company, the Bank and the Agent may agree to
renew this Agreement under mutually acceptable terms.
Neither the Agent nor any NASD member shall hold any funds of
subscribers for any of the shares. All checks received from such subscribers
shall be made payable to "________, Subscription Agent for Federal Trust
Corporation" (the "Subscription Agent").
In the event the Company is unable to sell a minimum of 1,000,000
Shares within the period herein provided, this Agreement shall terminate and the
Company shall direct the Subscription Agent to refund to all persons who have
subscribed for any of the Shares the full amount which it may have received from
Keefe, Bruyette & Woods, Inc.
Page 3
them without interest as set forth in the Prospectus; and none of the parties to
this Agreement shall have any obligation to the other parties hereunder, except
as set forth in this Section 2 and in Sections 6, 7, and 8 hereof.
In the event the Offering is terminated or otherwise abandoned for any
reason not attributable to the action or inaction of the Agent, the Agent shall
have earned and be entitled to be paid the fees and expenses accruing to the
date of such termination pursuant to this Section 2.
If all conditions precedent to the consummation of the Offering,
including, without limitation, the receipt of subscriptions for the minimum
number of Shares permitted to be sold in the Offering and compliance by the
Company and the Bank of the conditions set forth in Section 5 hereof to the
reasonable satisfaction of the Agent and its counsel, are satisfied, the Company
agrees to issue, or have issued, the Shares sold in the Offering and to deliver
certificates for such Shares on the Closing Date (as hereinafter defined)
against payment to the Company. The release of Shares against payment therefor
shall be made at a time, date and place mutually acceptable to the Company and
the Agent. Certificates for Shares shall be delivered directly to the purchasers
in accordance with their directions. The date upon which the Company shall
release or deliver the Shares sold in the Offering, in accordance with the terms
herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) An advisory fee of $25,000, which the Agent acknowledges has
previously been paid. Such fee shall be applied against the
fees paid pursuant section (b) below.
(b) (i) A marketing fee of 2.0% of the aggregate purchase price of
the Shares sold in the Rights Offering, excluding Shares
purchased by the Bank's officers, directors or employees.
(ii) A marketing fee of 7.0% of the aggregate purchase price
of the Shares sold in the Community Offering and the
Syndicated Community Offering, excluding Shares purchased by
the Bank's officers, directors and employees. The Agent shall
pass on to such selected broker-dealers who participate in the
Syndicated Community Offering an amount competitive with gross
underwriting discounts charged at such time for comparable
amounts of stock sold at a comparable price per share in a
similar market environment. Fees with respect to purchases
affected with the assistance of broker-dealers other than the
Agent shall be transmitted by the Agent to such broker-dealer.
Whether or not the sale of the Shares by the Company is consummated,
the Company agrees to pay or reimburse the Agent, from time to time upon the
Agent's request, for all reasonable out-of-pocket expenses incurred by the Agent
Keefe, Bruyette & Woods, Inc.
Page 4
including, but not limited to, travel, communication, lodging and postage, up to
a maximum of $10,000. In the event the Company terminates the Offering for any
reason, except based on the breach of the Agent's obligations hereunder, the
Company will reimburse the Agent for the fees and expenses of its counsel.
The Company shall bear the expenses of the Offering customarily borne
by issuers, including, without limitation, Commission, "Blue Sky," and NASD
filing and registration fees; the fees of the Company's accountants, attorneys,
appraiser, transfer agent and registrar, and other agent fees and expenses; any
stock issue or transfer taxes; printing, mailing and marketing and syndicate
expenses associated with the Offering.
Full payment of the Agent's fees and expenses, as described above,
shall be made by wire transfer in immediately available funds on the earlier of
the Closing Date or the End Date.
Section 3. Representations and Warranties of the Company. The Company
represents and warrant to the Agent as follows:
(a) The Registration Statement has been declared effective by the
Commission. At the time the Registration Statement, including the Prospectus
contained therein, became effective, the Registration Statement, including the
Prospectus contained therein, complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, and the Registration
Statement, including the Prospectus contained therein, and any information
regarding the Company or the Bank contained in Sales Information (as such term
is defined in Section 6 hereof) authorized by the Company for use in connection
with the Offering, 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, in light of the circumstances under which they were
made, not misleading; and at the time any Rule 424(b) or (c) Prospectus was
filed with the Commission and as of the date of this Agreement, the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), any information regarding the Company or the Bank
contained in Sales Information (as such term is defined in Section 6 hereof)
authorized by the Company for use in connection with the Offering did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 3(a) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly regarding the Agent
for use in the Prospectus under the captions "Market for Common Stock and
Dividends" and "The Offering--Marketing Arrangements." No documents are
incorporated by reference in the Prospectus.
(b) No order has been issued by the Commission or any other
governmental agency preventing or suspending the use of the Prospectus and no
Keefe, Bruyette & Woods, Inc.
Page 5
action by or before any governmental entity to revoke any approval,
authorization or order of effectiveness related to the Offering is pending or,
to the best knowledge of the Company, threatened.
(c) The Subscription Rights have been duly and validly authorized and,
at or prior to the Commencement Date, will have been granted and will constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms; except as enforcement may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws relating to creditors' rights generally, or
(b) general equitable principles (whether considered in an action at law or in
equity); and the Subscription Rights and the certificates related thereto have
the terms set forth in the Prospectus; the Subscription Agent Agreement dated as
of __________, 1997 (the "Subscription Agent Agreement"), between the Company
and the Subscription Agent will be in substantially the form filed as an exhibit
to the Registration Statement; and the Subscription Agent Agreement has been
duly authorized and validly executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company, enforceable
against it in accordance with its terms.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Florida, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; the Company is qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the financial condition, earnings, capital, assets, properties
or the business of the Company; the Company has obtained all licenses, permits
and other governmental authorizations currently required for the conduct of its
business except those that individually or in the aggregate would not materially
adversely affect the financial condition, earnings, capital, assets or
properties of the Company and the Bank taken as a whole; and all such licenses,
permits and governmental authorizations are in full force and effect, and the
Company is complying in all material respects therewith.
(e) The capitalization of the Company as of March 31, 1997 is as set
forth under the caption "Capitalization" in the Registration Statement. All the
authorized shares of Common Stock have been duly authorized, and all the issued
and outstanding shares of Common Stock are, and all the Shares, when issued,
delivered and paid for in the manner described in the Prospectus, will be,
validly issued and outstanding, fully paid and nonassessable. None of the Shares
to be sold by the Company when issued, delivered and paid for in accordance with
the Prospectus, will be subject to any lien, claim, encumbrance, preemptive
rights or any other claim against the Company by any third party; and the Shares
will conform in all material respects to the description thereof contained in
the Registration Statement under the caption "Description of Capital Stock".
Except as described in the Registration Statement and the Prospectus, there are
no outstanding securities or other obligations which are convertible into Common
Stock or into any other equity or debt security of the Company, and there are no
Keefe, Bruyette & Woods, Inc.
Page 6
outstanding options, warrants, rights, scrip, rights to subscribe to, calls or
other commitments of any nature which would entitle the holder, upon exercise
thereof, to be issued Common Stock or any other equity or debt security of the
Company.
(f) The Bank is organized and is validly existing as a federally
chartered savings bank in stock form of organization in good standing under the
laws of the United States, duly authorized to conduct its business and own its
property as described in the Registration Statement and the Prospectus; the Bank
has obtained all licenses, permits and other governmental authorizations
required for the conduct of its business except those that individually or in
the aggregate would not materially adversely affect the financial condition,
earnings, capital, assets or properties of the Company and the Bank taken as a
whole; all such licenses, permits and governmental authorizations are in full
force and effect and the Bank is complying therewith in all material respects;
the Bank is duly qualified as a foreign corporation to transact business in each
jurisdiction in which the failure to be so qualified in one or more of such
jurisdictions would have a material adverse effect on the financial condition,
earnings, capital, assets properties or business of the Bank. All of the
outstanding capital stock of the Bank is held beneficially and of record by the
Company, free and clear of any lien, claim, security interest, encumbrance,
charge, restriction or right of any third party of any kind whatsoever. There
are no outstanding securities or other obligations which are convertible into
the common stock of the Bank or into any other equity or debt security of the
Bank, and there are no outstanding options, warrants, rights, scrip, rights to
subscribe to, calls or other commitments of any nature which would entitle the
holder, upon exercise thereof, to be issued the common stock of the Bank or any
other equity or debt security of the Bank.
(g) The Company does not own any equity securities or any equity
interest in any business enterprise other than the Bank. The Bank does not own
any equity securities or any equity interest in any business enterprise except
as described in the Prospectus.
(h) The Bank is a member of the Federal Home Loan Bank of Atlanta
("FHLB- Atlanta"); the deposit accounts of the Bank are insured by the Federal
Deposit Insurance Corporation ("FDIC") under the Savings Association Insurance
Fund ("SAIF") up to applicable legal limits; and no proceedings for the
termination or revocation of such membership or insurance are pending or, to the
best knowledge of the Bank, threatened.
(i) The Company and the Bank have good and marketable title to all real
property and other assets material to the business of the Company and the Bank
and to those properties and assets described in the Registration Statement and
Prospectus as owned buy them, free and clear of all liens, charges, encumbrances
or restrictions, except as described therein or are not material to the business
of the Company and the Bank, taken as a whole; and all of the leases and
subleases material to the business of the Company and the Bank, including those
described in the Registration Statement and Prospectus, are in full force and
effect and the Company and the Bank are complying therewith in all material
respects.
Keefe, Bruyette & Woods, Inc.
Page 7
(j) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into and
perform this Agreement; the execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated have been
duly and validly authorized by all necessary corporate action on the part of the
Company and the Bank and this Agreement has been validly executed and delivered
by the Company and the Bank and is the valid, legal and binding Agreement of the
Company and the Bank enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement or creditors' rights generally or the rights of
creditors of insured financial institutions and their holding companies, the
accounts of whose subsidiaries are insured by the FDIC, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, or (iii) laws relating to the safety and
soundness of insured depository institutions and their affiliates as set forth
in 12 U.S.C. ss.1818(b), and except to the extent, if any, that the provisions
of Sections 6 and 7 hereof may be unenforceable as against public policy or
Section 23A of the Federal Reserve Act, as amended ("Section 23A").
(k) The execution, delivery and performance of this Agreement by the
Company and the Bank shall not conflict with, or result in a breach of, any of
the terms, provision or conditions of, or constitute a default (or event which
with notice or lapse of time or both would constitute a default) under, the
articles of incorporation or bylaws of the Company or the charter and bylaws of
the Bank.
(l) The Company and the Bank are not in violation of any directive from
the Office of Thrift Supervision ("OTS"), FDIC or any other governmental agency
to make any change in the method of conducting their businesses so as to comply
in all material respects with all applicable statutes and regulations and,
except as set forth in the Registration Statement and the Prospectus, there is
no suit, proceeding, charge or action before or by any court, regulatory
authority or governmental agency or body, pending or, to the best knowledge of
the Company and the Bank, threatened, which might materially and adversely
affect the Offering, the performance of this Agreement, the consummation of the
transactions contemplated hereby and as described in the Registration Statement
and the Prospectus or which might have a material adverse affect on the
financial condition, earnings, capital, properties, assets or business of the
Company or the Bank, taken as a whole.
(m) The consolidated financial statements (including the related notes)
of the Company which are included in the Registration Statement and the
Prospectus present fairly the financial condition, results of operations,
retained earnings and cash flows of the Company 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 Regulation S-X
of the Commission, and generally accepted accounting principles ("GAAP")
consistently applied through the periods involved (except as noted therein). The
Keefe, Bruyette & Woods, Inc.
Page 8
other financial, statistical and pro forma information and related notes
included in the Prospectus present fairly the information shown therein on a
basis consistent with the audited and unaudited financial statements of the
Company included in the Registration Statement and the Prospectus, and as to the
pro forma adjustments, the adjustments made therein have been properly applied
on the bases described therein.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be stated
therein: (i) there has not been any material adverse change in the financial
condition, earnings, capital, properties or business of the Company and the
Bank, considered as one enterprise, whether or not arising in the ordinary
course of business; (ii) there has not been any material increase in loans past
due 90 days or more or in real estate acquired by foreclosure, by deed-in-lieu
of foreclosure, or deemed in-substance foreclosure, (iii) there has not been any
material decrease in surplus and reserves or total assets of the Bank, (iv)
neither the Company nor the Bank has issued any securities or incurred any
liability or obligation for borrowing other than in the ordinary course of
business; (v) there have not been any transactions entered into by the Company
or the Bank, except with respect to those transactions entered into in the
ordinary course of business; (vi) the properties and business of the Company and
the Bank conform in all material respects to the descriptions thereof contained
in the Prospectus; and (vii) neither the Company nor the Bank has any material
contingent liabilities except as disclosed in the Prospectus.
(o) Neither the Company nor the Bank is in violation of its articles of
incorporation or bylaws or charter or bylaws, as applicable, or in default in
the performance or observance of any obligation, agreement, covenant, or
condition contained in any contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it or any of its property may be
bound, which would result in a material adverse effect on the financial
condition, earnings, capital, assets, properties or business of the Company and
the Bank, considered as one enterprise.
(p) No 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 or the Bank in the due performance and observance of any term, covenant
or condition of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other instrument or agreement to which the Company or
the Bank is a party or by which any of them or any of their property is bound or
affected, except such defaults which would not have a material adverse affect on
the financial condition, earnings, capital, assets, properties or business of
the Company and the Bank, considered as one enterprise; and such agreements are
in full force and effect and no other party to any such agreements has
instituted or, to the best knowledge of the Company and the Bank, threatened any
action or proceeding wherein the Company or the Bank might be alleged to be in
default thereunder under circumstances where such action or proceeding, if
determined adversely to the Company or the Bank, would have a material adverse
Keefe, Bruyette & Woods, Inc.
Page 9
effect on the financial condition, earnings, capital, assets, properties or
business of Company and the Bank, considered as one enterprise.
(q) There is no contract or other document which is required by the Act
or by the Rules and Regulations to be described in the Registration Statement,
or the Prospectus, to be filed as an exhibit to the Registration Statement which
has not been described or filed as required.
(r) Notwithstanding Subscription Rights granted to Current
Shareholders, no preemptive rights exist with respect to the Shares.
(s) There are no holders of securities of the Company who, by reason of
the filing of the Registration Statement under the Act or the execution by the
Company of this Agreement, have the right (other than a right which has been
waived or satisfied) to request or demand that the Company register under the
Act securities held by them except as set forth in the Registration Statement
and the Prospectus.
(t) The Company has not taken within the 90 day period preceding the
date of this Agreement, and agrees that it will not take, directly or
indirectly, any action which might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock of the Company.
(u) 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 approvals of the
Commission and any necessary qualification, notification, registration or
exemption under the Blue Sky Laws of the various jurisdictions in which the
Shares are to be offered.
(v) KPMG Peat Marwick LLP, whose report appears in the Prospectus, are,
with respect to the Company and the Bank, independent public accountants within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and the 1933 Act Regulations.
(w) The Company and the Bank have timely filed all required federal,
state and local tax returns; and the Company and the Bank have paid all taxes
due and payable in respect of such returns, and except where permitted to be
extended, and have made adequate reserves for similar future tax liabilities and
no deficiency has been asserted with respect thereto by any taxing authority.
(x) The Bank complies in all material respects with the applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the regulations and rules
thereunder.
Keefe, Bruyette & Woods, Inc.
Page 10
(y) Neither the Company nor the Bank has lent any funds for the
purchase of Shares or has made any other payment of funds prohibited by law, and
no funds have been set aside to be used for any payment prohibited by law.
(z) Neither the Company nor the Bank has: (i) issued any securities
within the last 18 months (except for notes to evidence other bank loans or
other liabilities in the ordinary course of business or as described in the
Prospectus and with respect to the Company); (ii) had any dealings within the
immediate prior 12 months with any NASD member, or any person related to or
associated with such member, other than discussions and meetings relating to the
Offering and purchases and sales of United States government and agency and
other securities in the ordinary course of business; (iii) entered into a
financial or management consulting agreement except as contemplated hereunder
and except for the Letter Agreement; and (iv) engaged any intermediary other
than the Agent in connection with the Offering, and no person is being
compensated in any manner for such service.
(aa) The Company and the Bank have not relied upon the Agent or the
Agent's counsel for any legal, tax or accounting advice in connection with the
Offering.
(bb) All documents delivered by the Bank or the Company or their
representatives in connection with the issuance and sale of the Common Stock and
the Agent's exercise of due diligence, were, on the dates on which they were
delivered, accurate and complete in all material respects or were amended in
writing to be accurate and complete in all material respects.
(cc) To the best knowledge of the Company, the Company and the Bank
comply with all laws, rules and regulations relating to environmental
protection, 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 the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any other Federal, state or local
environmental laws and regulations; no action, suit, regulatory investigation or
other proceeding is pending, or to the best knowledge of the Company and the
Bank, threatened against the Company or the Bank relating to environmental
protection, nor does the Company or the Bank have any reason to believe any such
proceedings may be brought against either of them; and 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 occurred on, in, at or about any facilities or properties owned or leased by
the Company or the Bank or in which the Bank has a security interest.
Any certificate signed by an officer of the Company or the Bank
pursuant to the conditions of this Agreement and delivered to the Agent or its
counsel that refers to this Agreement shall be deemed to be a representation and
Keefe, Bruyette & Woods, Inc.
Page 11
warranty by the Company or the Bank to the Agent as to the matters covered
thereby with the same effect as if such representation and warranty were set
forth herein.
Section 4. Covenants of the Company. The Company hereby covenants with
the Agent as follows:
(a) From the time the Registration Statement, including the Prospectus
contained therein (including any amendment or supplement thereto), became
effective and up to the Closing Date, the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
and any information regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 6 hereof) authorized by the
Company for use in connection with the Offering, 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 under which they
were made, not misleading; provided, however, that the covenant in this Section
4(a) shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company or the Bank by the
Agent expressly regarding the Agent for use in the Prospectus under the captions
"Market for Common Stock and Dividends" and "The Offering -- Marketing
Arrangements."
(b) At any time after the date the Registration Statement is declared
effective, the Company shall not file any amendment or supplement to the
Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or supplement, and shall not file any
amendment or supplement to which the Agent or its counsel shall reasonably
object.
(c) The Company shall notify the Agent in writing of any violation of
the articles of incorporation and bylaws of the Company and the charter and
bylaws of the Bank at any time after the date hereof and prior to the Closing
Date. Unless waived in writing by the Agent, which waiver shall not be
unreasonably withheld, the Company shall not be in violation of its articles of
incorporation or bylaws, and the Bank shall not be in violation of its charter
or bylaws, at any time after the date hereof and prior to the Closing Date.
(d) The Company and the Bank shall use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared effective
by the Commission and shall immediately notify the Agent upon receipt of any
information concerning any of the following events: (i) when any post-effective
amendment to the Registration Statement has become effective; (ii) when any
comments from the Commission or any other governmental entity are issued with
respect to the Registration Statement or the transactions contemplated by this
Agreement; (v) when any request is made by the Commission or any other
governmental entity for any amendment or supplement to the Registration
Statement or for any other additional information; (vi) when the Commission or
any other governmental entity issues any order or takes or threatens any action
Keefe, Bruyette & Woods, Inc.
Page 12
to suspend the Offering, the effectiveness of the Registration Statement, or the
use of the Prospectus; (vii) the issuance by the Commission or any other
governmental authority of any stop order suspending the effectiveness of the
Registration Statement, or of the initiation or threat of initiation of any
proceedings for any such purpose; or (viii) the occurrence of any event
mentioned in paragraph (h) below; and the Company and the Bank shall take every
reasonable effort to prevent the issuance by the Commission, the OTS or any
state authority of any order referred to in (vi) and (vii) above, and if any
such order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(e) The Company shall deliver to the Agent and to its counsel two
conformed copies of the Registration Statement as originally filed and of each
amendment or supplement thereto. The Company shall also deliver such additional
copies of the foregoing documents to counsel to the Agent as may be required for
any NASD filings.
(f) The Company shall furnish to the Agent, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the Securities Exchange Act of 1934 ("1934 Act"), such number of copies of such
Prospectus as the Agent may reasonably request for the purposes contemplated by
the 1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act ("1934 Act Regulations"); and the
Company authorizes the Agent to use the Prospectus in any lawful manner in
connection with the sale of the Shares.
(g) The Company and the Bank shall comply with any and all terms,
conditions, requirements and provisions with respect to the transactions
contemplated hereby imposed by the Commission to be complied with subsequent to
the Closing Date; and when the Prospectus is required to be delivered, the
Company and the Bank shall comply, at their own expense, with all requirements
imposed upon them by the Commission, including, without limitation, Rule 10b- 5
under the 1934 Act, in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus.
(h) If, at any time during the period when the Prospectus is required
to be delivered, any event relating to or affecting the Company or the Bank
shall occur, as a result of which it is necessary or appropriate, in the opinion
of counsel for the Company and the Bank or in the opinion of the Agent's
counsel, to amend or supplement the Registration Statement or Prospectus in
order to make the Registration Statement or Prospectus not misleading in light
of the circumstances existing at the time the Prospectus is delivered, the
Company shall, at its own expense, prepare and file with the Commission and the
OTS and furnish to the Agent a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the Registration Statement or
Prospectus (in form and substance satisfactory to the Agent and its counsel
after a reasonable time for review) which shall amend or supplement the
Registration Statement or Prospectus, so that as amended or supplemented the
Registration Statement and the Prospectus shall not contain an untrue statement
Keefe, Bruyette & Woods, Inc.
Page 13
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, not misleading.
(i) The Company shall each timely furnish to the Agent such information
with respect to the Company and the Bank as the Agent may from time to time
reasonably request.
(j) The Company shall take all necessary action required to register
the Shares for offering and sale by the Company or to exempt such Shares from
registration and to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the Blue Sky Laws of
such jurisdictions as the Agent may reasonably request; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to quality to do business in any jurisdiction in which it is not so
qualified; and in each jurisdiction where any of the Shares shall have been
qualified or registered the Company shall prepare and file, at its own expense,
such statements and reports as may be required by the laws of such jurisdiction.
(k) The Company shall not sell or issue, contract to sell or otherwise
dispose of, for a period of 180 days after the Closing Date, without the prior
written consent of the Agent, any shares of Common Stock other than in
connection with any plan or arrangement described in the Prospectus.
(l) The Company shall cause each officer of the Company specified by
the Agent and each director of the Company to furnish to the Agent, on or prior
to the date of this Agreement, an agreement pursuant to which each such person
shall agree not to sell or otherwise dispose of, or offer or contract to sell
any shares of Common Stock or any securities convertible with respect to the
Common Stock for 180 days after the Closing Date, except with the Agent's prior
written consent (which consent shall not be unreasonably withheld);
(m) The Common Stock shall be the subject of an effective registration
statement under Section 12(g) of the 1934 Act as of the Closing Date and the
Company shall maintain the effectiveness of such registration for not less than
three years.
(n) During the period during which the Common Stock is registered under
the 1934 Act or for three years from the Closing Date, whichever period is
greater, the Company shall furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report in accordance with Rule
14a-3(b) of the 1934 Act Regulations.
(o) During the period of three years from the Closing Date, the Company
shall furnish to the Agent: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted
Keefe, Bruyette & Woods, Inc.
Page 14
(including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all
proxy statements and annual reports to stockholders), (ii) if requested, a copy
of each other non-confidential report of the Company mailed to its stockholders
or filed with the Commission, the OTS or any other supervisory or regulatory
authority or any national securities exchange or system on which any class of
securities of the Company is listed or quoted, each press release and material
news items and additional documents and information with respect to the Company
or the Bank as the Agent may reasonably request; and (iii) from time to time,
such other nonconfidential information concerning the Company or the Bank as the
Agent may reasonably request.
(p) The Company and the Bank 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."
(q) The Company shall not distribute any prospectus (as defined in
Section 2(10) of the 1933 Act) other than the Prospectus and the Sales
Information (as defined in Section 6 hereof) in connection with the offer and
sale of the Shares without first notifying the Agent.
(r) The Company shall use its best efforts to (i) encourage and assist
two market makers to establish and maintain a market for the Shares and (ii)
list the Shares on a national securities exchange or on The Nasdaq Stock Market
effective on or prior to the Closing Date.
(s) As described in the Prospectus, the Company shall deposit all funds
received from subscribers with the Subscription Agent until the Closing Date and
the satisfaction of all conditions precedent to the release of the Shares, or
until refunds of such funds have been made to the persons entitled thereto.
(t) The Company shall take such actions and furnish such information as
are reasonably requested by the Agent in order for the Agent to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(u) From the date of this Agreement up to the Closing Date, the records
of stockholders shall be accurate, reliable and complete in all material
respects; and the Agent, who shall assist the Company in its allocation of the
Shares in the event of an oversubscription in the Subscription Offering, shall
have no liability to any person for the accuracy, reliability and completeness
of such records or for any denial or reduction of a subscription or order to
purchase Common Stock, whether as a result of a properly calculated allocation
pursuant to the instructions of the Company otherwise, based upon such records.
(v) The Company shall comply with the provisions of Rule 158 of the
1933 Act Regulations.
Keefe, Bruyette & Woods, Inc.
Page 15
(w) The Company shall file with the Commission, within the required
time period, a Report of Sales of Securities and Use of Proceeds Therefrom on
Form SR pursuant to Rule 463 of the 1933 Act Regulations.
(x) The Company shall use all reasonable efforts to comply with, or
cause to be complied with, the conditions precedent to the several obligations
of the Agent specified in Section 5 hereof.
(y) The Company shall, and shall cause the Bank to, conduct its
businesses in material compliance with all applicable federal and state laws,
rules, regulations, decisions, directives and orders, including all decisions,
directives and orders of the Commission, the OTS and the FDIC.
Section 5. Conditions to the Agent's Obligations. The Agent's
obligations hereunder are subject, to the extent not waived in writing by the
Agent, to the condition that all representations and warranties of the Company
herein are, at and as of the commencement of the Offering and at and as of the
Closing Date, true and correct in all material respects, the condition that the
Company shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the following further conditions:
(a) The Registration Statement shall have been declared effective by
the Commission not later than 5:30 p.m. on the date of this Agreement, or with
the Agent's consent at a later time and date; and at the Closing Date, no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefore initiated or threatened by
the Commission, or any state authority and no order or other action suspending
the authorization of the Prospectus shall have been issued or proceedings
therefore initiated or, to the best of the Company's knowledge, threatened by
the Commission, or any other federal or state authority.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent for their benefit, of Igler & Dougherty,
Tallahassee, Florida, counsel for the Company and the Bank, in form and
substance to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Florida and has corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus;
and the Company is qualified to do business as a foreign
corporation in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure
to so qualify would not have a material adverse effect on the
financial condition, results of operations, or business of the
Company.
Keefe, Bruyette & Woods, Inc.
Page 16
(ii) The Bank has been chartered and is validly
existing as a federally-chartered savings bank in stock form
of organization under the laws of the United States of America
with full corporate power and authority to conduct its
business and own its property as described in the Registration
Statement and Prospectus; the Bank is qualified to do business
as a foreign corporation in each jurisdiction in which the
conduct of its business requires such qualification, except
where the failure to so qualify would have a material adverse
effect on the financial condition, results of operations or
the business of the Bank; all of the issued and outstanding
capital stock of the Bank is duly authorized and validly
issued, fully paid and non-assessable, and all such capital
stock is owned of record and beneficially by the Company, free
and clear of any liens, encumbrances or claims.
(iii) The Bank is a member of the FHLB-Atlanta; the
deposit accounts of the Bank are insured by the FDIC under the
SAIF up to the maximum amount allowed under law; and, to such
counsel's knowledge, no proceedings for the termination or
revocation of such membership or insurance are pending or
threatened.
(iv) The execution and delivery of this Agreement and
the consummation of the transactions contemplated thereby have
been duly and validly authorized by all necessary action on
the part of the Company and the Bank; and this Agreement is a
valid and binding obligation of the Company and the Bank,
enforceable in accordance with its terms, except as rights to
indemnity and contribution thereunder may be limited under
applicable law and except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization,
conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of
savings institutions and their holding companies or by general
equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at
law, and Section 23A.
(v) Upon consummation of the Offering, the
authorized, issued and outstanding capital stock of the
Company shall be within the range set forth in the Prospectus
under the caption "Capitalization," upon consummation of the
Offering, the Shares subscribed for pursuant to the Offering
shall have been duly and validly authorized for issuance, and
when issued and delivered by the Company against payment of
the consideration calculated as set forth in the Prospectus,
shall be duly and validly issued, fully paid and
non-assessable; except for the Subscription Rights, the
issuance of the Shares is not subject to preemptive rights;
Keefe, Bruyette & Woods, Inc.
Page 17
the terms and provisions of the Shares conform to the
description thereof contained in the Prospectus; and the form
of certificate used to evidence the Common Stock is in due and
proper form.
(vi) The execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
(A) result in any violation of the provisions of the articles
of incorporation, charter or bylaws of the Company or the
Bank, (B) constitute a breach of, or default (or an event
which, with notice or lapse of time or both, would constitute
a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or the Bank pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or the Bank is a party or by which any of
them may be bound, or to which any of the property or assets
of the Company or the Bank is subject that individually or in
the aggregate, would have a material adverse effect on the
financial condition, results of operations or business of the
Company and the Bank considered as one enterprise, or (C)
violate Florida or federal law or regulations or any existing
obligation of the Company or the Bank under any court or
regulatory order, writ, injunction or decree that specifically
names the Company or the Bank and that is specifically
directed to any of them or their property.
(vii) No further approval, registration,
authorization, consent or other order of or notice to any
governmental agency is required in connection with the
execution and delivery of this Agreement and the issuance of
the Shares.
(viii) The Registration Statement has been declared
effective under the 1933 Act and no stop order suspending the
effectiveness has been issued or proceedings therefor
initiated or, to such counsel's knowledge, threatened by the
Commission or any other governmental agency.
(ix) At the time that the Registration Statement
became effective, the Registration Statement, including the
Prospectus (except as to financial statements, the notes
thereto, and financial tables included therein, as to which no
opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(x) To such counsel's knowledge, there are no
material legal or governmental proceedings pending or
threatened against the Company or the Bank or principals of
the Company or the Bank that are required to be disclosed in
the Registration Statement and the Prospectus other than those
disclosed therein (provided that for this purpose such counsel
need not regard any litigation or governmental proceeding to
Keefe, Bruyette & Woods, Inc.
Page 18
be "threatened" unless the potential litigant or governmental
authority has manifested to the management of the Company or
the Bank or to such counsel, a present intention to initiate
such litigation or proceeding).
(xi) To such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or the Prospectus or
required to be filed as exhibits to the Registration Statement
or other than those described or referred to therein or filed
as exhibits thereto.
(xii) Neither the Company nor the Bank is in
violation of its articles of incorporation and bylaws, or
charter and bylaws, respectively.
(xiii) Neither the Company nor the Bank is in
violation of any directive from the OTS or the FDIC to make
any material change in the method of conducting its respective
business.
(xiv) The information in the Prospectus under the
captions "Regulation," "Certain Restriction on Acquisition of
the Company," "Taxation," and "Description of Capital Stock,"
to the extent that such information constitutes matters of
law, summaries of legal matters, documents or proceedings, or
legal conclusions, has been reviewed by such counsel and is
accurate and complete in all material respects.
(xv) To such counsel's knowledge, the Company and the
Bank have obtained all licenses, permits and other
governmental authorizations currently required for the conduct
of their respective businesses as described in the
Registration Statement and Prospectus, except for licenses,
approvals or authorizations the failure of which to have would
not result in a material adverse change in the financial
condition, results of operation or the business of the Company
and the Bank, taken as a whole, and, to such counsel's
knowledge, all such licenses, permits and other governmental
authorizations are in full force and effect, and, to such
counsel's knowledge, the Company and the Bank are in all
materials respects complying therewith.
(xvi) To such counsel's knowledge, neither the
Company nor the Bank is in default or violation in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or the Bank is a party or by which the
Company or the Bank or any of their property may be bound in
any respect that would have a material adverse effect on the
Keefe, Bruyette & Woods, Inc.
Page 19
financial condition or results of operations of the Company
and the Bank, taken as a whole.
In giving such opinion, such counsel may rely as to all matters of fact
on certificates of officers or directors of the Company and the Bank and
certificates of public officials. All references "to such counsel's knowledge"
in such opinion shall have the meaning of "actual knowledge" as set forth in the
American Bar Association Legal Opinion Accord (1991) ("Accord"). For purposes of
such opinion, no proceedings shall be deemed to be pending, no order or stop
order shall be deemed to be issued, and no action shall be deemed to be
instituted unless, in each case, a director or executive officer of the Company
or the Bank, or their counsel, shall have received a copy of such proceedings,
order, stop order or action. Such counsel may assume that any agreement is the
valid and binding obligation of any parties to such agreement other than the
Company or the Bank.
In addition, such counsel shall provide a letter stating that during
the preparation of the Registration Statement and the Prospectus, such counsel
participated in conferences with certain officers and other representatives of
the Bank and the Company, representatives of the Agent, counsel to the Agent,
and representatives of the independent public accountants for the Company at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although they are not passing upon and do not assume
the responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus, on the basis of the
foregoing (relying as to factual matters on certificates of officers and other
factual representations by the Bank and the Company), nothing has come to such
counsel's attention that caused such counsel to believe that the Registration
Statement at the time it was declared effective by the SEC or the Prospectus as
of its date and as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel shall express no comment or opinion with
respect to the financial statements, schedules and other financial information
and statistical data included in the Registration Statement and Prospectus).
(2) The favorable opinion, dated as of the Closing Date, of
Breyer & Aguggia, Washington, D.C., counsel to the Agent, with respect
to such matters as the Agent may reasonably require. Such opinion may
rely, as to matters of fact, upon certificates of officers and
directors of the Company and the Bank delivered pursuant hereto or as
such counsel shall reasonably request.
(c) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company dated as
of the Closing Date, that states: (i) they have reviewed the Prospectus and, at
the time the Registration Statement was declared effective by the Commission,
Keefe, Bruyette & Woods, Inc.
Page 20
the Prospectus did not contain any 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; (ii)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus and as of the Closing Date, no material adverse
change in the financial condition or in the earnings, capital, properties or
business of the Company and the Bank, considered as one enterprise, has occurred
and no other event has occurred, which should have been set forth in an
amendment or supplement to the Prospectus which has not been so set forth, and
the conditions set forth in this Section 5 have been satisfied; (iii) the
representations and warranties in Section 3 are true and correct with the same
force and effect a though expressly made at and as of the Closing Date; (iv) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Date and shall
comply in all material respects with all obligations to be satisfied by it after
the Closing Date; (v) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of the
Company, threatened by the Commission or any state authority; (vi) no order
suspending the Offering or the effectiveness of the Prospectus has been issued
or are pending or, to the best knowledge of the Company, threatened by the OTS,
the Commission, or any other authority.
(d) Prior to and at the Closing Date: (i) in the reasonable opinion of
the Agent, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Company and the Bank,
considered as one enterprise, from that as of the latest dates as of which such
condition is set forth in the Prospectus other than transactions referred to or
contemplated therein; (ii) the Company or the Bank shall not have received any
directive from the OTS or the FDIC to make any material change in the method of
conducting their business with which it has not complied (which directive, if
any, shall have been disclosed to the Agent) or which materially and adversely
would affect the business, operations or financial condition or income of the
Company and the Bank, considered as one enterprise; (iii) the Company and the
Bank shall not have been in default (nor shall an event have occurred which,
with notice or lapse of time or both, would constitute a default) under any
provision of any agreement or instrument relating to any outstanding
indebtedness; (iv) no action, suit or proceedings, at law or in equity or before
or by any federal or state commission, board or other administrative agency,
shall be pending or, to the best knowledge of the Company, threatened against
the Company or the Bank or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business operations, financial condition or income of the Company and the
Bank, considered as one enterprise; and (v) the Shares have been qualified or
registered for offering and sale under the Blue Sky Laws of the jurisdictions in
which the Shares have been offered for sale.
(e) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from KPMG Peat Marwick LLP dated the date hereof and addressed
to the Agent: (i) confirming that KPMG Peat Marwick LLP are independent public
accountants within the meaning of the 1933 Act, the 1933 Act Regulations, 12 CFR
Section 571.2(c)(3) and the Code of Professional Ethics of the American
Keefe, Bruyette & Woods, Inc.
Page 21
Institute of Certified Public Accountants, and stating in effect that in their
opinion the financial statements of the Company as of December 6, 1996 and 1995
and for the years ended December 31, 1996, 1995, and 1994 included in the
Registration Statement and the Prospectus and covered by their opinion included
therein, comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1933 Act Regulations and GAAP
applied consistently; (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 Company prepared by the
Company, a reading of the minutes of the meetings of the Boards of Directors of
the Bank and the Company and the stockholders of the Company, and consultations
with officers of the Bank responsible for financial and accounting matters,
nothing came to its attention which caused it to believe that: (A) the unaudited
financial statements of the Company included in the Prospectus are not in
conformity with GAAP applied on a basis substantially consistent with that of
the audited financial statements included in the Prospectus; and (B) during the
period from that date of the latest audited financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date hereof, there was any increase in borrowings or in non-performing assets by
the Company or the Bank; and (C) except as otherwise discussed in the
Prospectus, there was any decrease in retained earnings of the Company at the
date of such letter as compared with amounts shown in the latest audited
statement of condition included in the Prospectus or 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 audited income
statement included in the Prospectus and ended on the latest month end prior to
the date of the Prospectus or in such letter as compared to the corresponding
period in the preceding year (included in the Recent Developments Section of the
Prospectus); and (iii) stating that, in addition to the audit referred to in its
opinion included in the Prospectus and the performance of the procedures
referred to in clause (ii) of this subsection (f), it has compared with the
general accounting records of the Company, which are subject to the internal
controls of the Company's accounting system and other data prepared by the
Company directly from such accounting records, to the extent specified in such
letter, such amounts and/or percentages set forth in the Prospectus as the Agent
may reasonably request, and they have found such amounts and percentages to be
in agreement therewith.
(f) At the Closing Date, the Agent shall receive a letter from KPMG
Peat Marwick LLP dated the Closing Date, addressed to the Agent, confirming the
statements made by them in the letter delivered by them pursuant to subsection
(e) of this Section 5, the "specified date" referred to in clause (ii) of
subsection (e) thereof to be a date specified in such letter, which shall not be
more than three business days prior to the Closing Date.
(g) The Company and the Bank shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus.
Keefe, Bruyette & Woods, Inc.
Page 22
(h) At or prior to the Closing Date, the Agent shall receive: (i) a
copy of the order from the Commission declaring the Registration Statement
effective; (ii) a certificate from the OTS evidencing the existence of the Bank;
(iv) a certificate of good standing from the State of Florida evidencing the
good standing of the Company; (v) a certificate from the FDIC evidencing the
Bank's insurance of accounts; (vi) a certificate of the FHLB-Atlanta evidencing
the Bank's membership therein, and (vii) any other documents that the Agent
shall reasonably request.
(i) At or prior to the Closing Date, there shall not have occurred any
of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or in the over-the-counter market, or
quotations halted generally on The Nasdaq Stock Market, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required by either of such exchanges or The Nasdaq Stock Market or by
order of the Commission or any other governmental authority; (ii) a general
moratorium on the operations of commercial banks, Florida or federal savings and
loan associations or a general moratorium on the withdrawal of deposits from
commercial banks, Florida or federal savings and loan associations declared by
federal or state authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the date hereof,
of a national emergency or war; or (iv) a material decline in the price of
equity or debt securities in the effect of any of the above in the Agent's
reasonable judgment, makes it impracticable or inadvisable to proceed with the
Offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and Prospectus.
Section 6. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless the Agent, its officers, directors, agents, servants and
employees and each person, if any, who controls the Agent 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 or expense whatsoever (including but not limited
to settlement expenses), joint or several, that the Agent or any of them may
suffer or to which the Agent and any such persons may become subject under all
applicable federal or state laws or otherwise, and to promptly reimburse the
Agent and any such persons upon written demand for any expenses (including
reasonable fees and disbursements of counsel) incurred by the Agent or any of
them in connection with investigating, preparing to defend or defending any
actions, proceedings or claims (whether commenced or threatened) to the extent
such losses, claims, damages, liabilities or actions: (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or supplement
thereto), Prospectus (or any amendment or supplement thereto), or any blue sky
application or other instrument or document executed by the Company or based
upon written information supplied by the Company filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom, or provided to any state or jurisdiction to exempt the
Keefe, Bruyette & Woods, Inc.
Page 23
Company as a broker-dealer or its officers, directors and employees as
broker-dealers or agents, under the securities laws thereof (collectively, the
"Blue Sky Application"), or any application or other document, advertisement,
oral statement or communication ("Sales Information") prepared, made or executed
by or on behalf of the Company based upon written or oral information furnished
by or on behalf of the Company, whether or not filed in any jurisdiction, in
order to qualify or register the Shares or to claim an exemption therefrom under
the securities laws thereof; (ii) arise out of or based upon the omission or
alleged omission to state in any of the foregoing documents or information, a
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; or (iii) arise from any theory of liability whatsoever relating to
or arising from or based upon the Registration Statement (or any amendment or
supplement thereto), Prospectus (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information or other documentation distributed in
connection with the Offering; provided, however, that no indemnification is
required under this paragraph (a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue material
statement or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto), Prospectus (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Company by the Agent
regarding the Agent; and provided further, however, that the Company and the
Bank shall not be liable under the foregoing indemnification provision to the
extent that any loss, claim, damage, liability or action is found in a final
judgment by a court of competent jurisdiction to have resulted from the Agent's
bad faith or gross negligence.
(b) The Agent agree to indemnify and hold harmless the Company their
directors and officers and each person, if any, who controls the Company 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 or expense whatsoever
(including but not limited to settlement expenses), joint or several, which
they, or any of them, may suffer or to which they, or any of them may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Company and any such persons upon written demand for any
expenses (including reasonable fees and disbursements of counsel) incurred by
them, or any of them, in connection with investigating, preparing to defend or
defending any actions, proceedings or claims (whether commenced or threatened)
to the extent such losses, claims, damages, liabilities or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or supplement
thereto), or the Prospectus (or any amendment or supplement thereto), or are
based upon the omission or alleged omission to state in any of the foregoing
documents a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Agent's obligations under this
Section 8(b) shall exist only if and only to the extent (i) that such untrue
statement or alleged untrue statement was made in, or such material fact or
alleged material fact was omitted from, the Registration Statement (or any
Keefe, Bruyette & Woods, Inc.
Page 24
amendment or supplement thereto), the Prospectus (or any amendment or supplement
thereto) or and Blue Sky Application or Sales Information in reliance upon and
in conformity with information furnished in writing to the Company by the Agent
regarding the Agent.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 11 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one action, proceeding
or claim or separate but similar or related actions, proceedings or claims in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements in this Section 6 and in Section 7 hereof and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect regardless of: (i) any
investigation made by or on behalf of the Agent or their officers, directors or
controlling persons, agents or employees or by or on behalf of the Company or
any officers, directors or controlling persons, agents or employees of the
Company; (ii) delivery of and payment hereunder for the Shares; or (iii) any
termination of this Agreement. To the extent applicable, the Company's, the
Bank's and the Agent's obligations under this Section 6 are subject to and
limited by public policy and the provisions of applicable law, including Section
23A.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, as the case may
be, the Company, the Bank and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding of any claims asserted, but after deducting
any contribution received by the Company, the Bank or the Agent from persons
Keefe, Bruyette & Woods, Inc.
Page 25
other than the other party thereto, who may also be liable for contribution) in
such proportion so that the Agent is responsible for that portion represented by
the percentage that the fees and expenses paid to the Agent pursuant to Section
2 of this Agreement bears to the gross proceeds received by the Company from the
sale of the Shares in the Offering, and the Company and the Bank shall be
responsible for the balance. If, however, the allocation provided above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 6 above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of the
Company and the Bank, on the one hand, and the Agent, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the Company and the Bank,
on the one hand, and the Agent, on the other, from the Offering (before
deducting expenses). The relative benefits received by the Company and the Bank,
on the one hand, and the Agent, on the other, shall be deemed to be in the same
proportion as the gross proceeds from the Offering received by the Company bear
to the total fees and expenses received by the Agent. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission alleged omission to state a
material fact relates to information supplied by the Company or the Bank, on the
one hand, or the Agent, on the other, and the parties' relative intent, good
faith, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Bank and the Agent agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro-rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this Section 7. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions, proceedings or claims
in respect thereof) referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, proceeding
or claim. It is expressly agreed that the Agent shall not be required to
contribute any amount which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to the Agent under this Agreement. It is understood that
the above stated limitation on the Agent's liability is essential to the Agent
and that the Agent would not have entered into this Agreement if such limitation
had not been agreed to by the parties to this Agreement. No person found guilty
of any fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The obligations of the Company and
the Bank under this Section 7 and under Section 6 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 7, each of the Agent's, the Company's or the Bank's officers and
directors and each person, if any, who controls the Agent or the Company or the
Bank within the meaning of the 1933 Act and the 1934 Act shall have the same
rights to contribution as the Agent, the Company or the Bank. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 7, shall
Keefe, Bruyette & Woods, Inc.
Page 26
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any other obligation it may have hereunder or otherwise than under
this Section 7. To the extent applicable, the Company's, the Bank's and the
Agent's obligations under this Section 7 are subject to and limited by public
policy and the provisions of applicable law.
Section 8. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the Bank and the Agent, and the
representations and warranties and other statements of the Company 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 the Agent, the Company, the Bank or any
controlling person referred to in Section 6 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of the
Agent, the Company, the Bank, and any such controlling person shall be entitled
to the benefit of the respective agreements, indemnities, warranties and
representations.
Section 9. Termination. (a) The Agent may terminate its obligations
under this Agreement by giving the notice indicated below in subsection (b) at
any time after this Agreement becomes effective as follows:
(i) In the event the Company fails to sell the minimum number
of Shares by the End Date, this Agreement shall terminate upon refund
by the Bank to each person who has subscribed for or ordered any of the
Shares the full amount which it may have received from such person, and
no party to this Agreement shall have any obligation to the other
hereunder, except for payment by the Company or the Bank as set forth
in Sections 2, 6, 7 and 8 hereof.
(ii) If any of the conditions specified in Section 5 shall not
have been fulfilled when and as required by this Agreement unless
waived in writing, or by the Closing Date, this Agreement and all of
the Agent's obligations hereunder may be canceled by the Agent by
notifying the Company and the Bank of such cancellation as provided in
Section 10 hereof in writing or at any time at or prior to the Closing
Date, and any such cancellation shall be without liability of any party
to any other party except as otherwise provided in Sections 2, 6, 7 and
8 hereof.
(iii) In the event either the Company is in material breach of
the representation and warranties or covenants contained in Sections 3
and 4 and such breach has not been cured after the Company has provided
such Agent with notice of such breach.
(b) If the Agent elects to terminate this Agreement with respect to it
as provided in this Section 9, the Company shall be notified promptly by
telephone, confirmed by letter.
Keefe, Bruyette & Woods, Inc.
Page 27
(c) This Agreement may also be terminated by mutual written consent of
the parties hereto.
Section 10. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed or delivered and confirmed to Charles Webb & Company, 211
Bradenton, Dublin, Ohio 43017- 5034, Attention: Patricia A. McJoynt; (with a
copy to Breyer & Aguggia, 1300 I Street, N.W., Suite 470 East, Washington, D.C.
20005, Attention: Paul M. Aguggia, Esquire), if sent to the Company and the
Bank, shall be mailed or delivered and confirmed to the Company and the Bank at
1211 Orange Avenue, Winter Park, Florida 32789, Attention: James V. Suskiewich,
President and Chief Executive Officer (with a copy to Igler & Dougherty, 1501
Park Avenue East, Tallahassee, Florida 32301, Attention: A. George Igler,
Esquire).
Section 11. Parties. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement given on behalf of
the Agent when the same shall have been given by the undersigned. The Agent
shall be entitled to act and rely on any request, notice, consent, waiver or
agreement purportedly given on behalf of the Company, when the same shall have
been given by the undersigned or any other officer of the Company. This
Agreement shall inure solely to the benefit of, and shall be binding upon, the
Agent, the Company, the Bank, 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.
Section 12. Entire Agreement. It is understood and agreed that this
Agreement is the exclusive agreement among the paries hereto, and supersedes any
prior agreement among the parties (except for specific references herein to the
Letter Agreement) and may not be varied except in writing signed by all the
parties.
Section 13. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 14. Construction. This Agreement shall be construed in
accordance with the laws of the State of Ohio, except to the extent that federal
law shall apply.
Section 15. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
Keefe, Bruyette & Woods, Inc.
Page 28
If the foregoing correctly sets forth the arrangement among the
Company, the Bank, and the Agent, please indicate acceptance thereof in the
space provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Very truly yours,
FEDERAL TRUST CORPORATION
By:
Mr. James V. Suskiewich
Chief Executive Officer
FEDERAL TRUST BANK
By:
Mr. James V. Suskiewich
Chief Executive Officer
Accepted as of the date first above written
KEEFE, BRUYETTE & WOODS, INC.
By:
Patricia A. McJoynt
Executive Vice President
EXHIBIT A
FEDERAL TRUST CORPORATION
Up to 2,701,672 Shares
(Par Value $0.01 Per Share)
Selected Dealers' Agreement
___________________, 1997
Gentlemen:
We have agreed to assist Federal Trust Corporation, a Florida
corporation (the "Company") in connection with the offer and sale of up to
2,701,672 shares of common stock, par value $0.01 per share ("Common Stock").
The offering will not be consummated and all funds received with subscriptions
will be returned without interest if a minimum of 1,000,000 shares of Common
Stock are not sold. The price per share has been fixed at $_____. The Common
Stock, the number of shares to be issued, and certain of the terms on which they
are being offered, are more fully described in the enclosed Prospectus dated
_________ __, 1997 ("Prospectus"). The Company, on a best efforts basis, is
offering for sale such shares of Common Stock ("Shares"), in a Rights Offering
(as defined in the Prospectus). Any Shares not sold in the Rights Offering shall
be offered to the general public in the Community Offering (as defined in the
Prospectus).
The Common Stock is also being offered by broker-dealers licensed by
the National Association of Securities Dealers, Inc. ("NASD") which have been
approved by the Company ("Approved Brokers").
We are offering the Approved Brokers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we shall pay you a fee in the amount of ____ percent (____%) of the dollar
amount of the Common Stock sold on behalf of the Company by you, as evidenced by
the authorized designation of your firm on the order form or forms for payment
therefor to the Company's subscription agent. It is understood, of course, that
payment of your fee shall be made only out of compensation received by us for
the Common Stock sold on behalf of the Company by you, as evidenced in
accordance with the preceding sentence. As soon as practicable after the closing
date of the offering, we shall remit to you, only out of our compensation as
provided above, the fees to which you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
you firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "__________________, Subscription Agent for Federal Trust
Corporation."
This offer is made subject to the terms and conditions herein set forth
and is made only to Approved Brokers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and NASD Rule 2110.
Orders for Common Stock shall be subject to confirmation and we, acting
on behalf of the Company, reserve the right in our unfettered discretion to
reject any order in whole or in part, to accept or reject orders in the order of
their receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company, or by us to give any information or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Common Stock. No Approved Broker is authorized to act as
agent for us when soliciting offers to buy the Common Stock from the public or
otherwise. No Approved Broker shall engage in any stabilizing (as defined in
Rule 100 of Regulation M promulgated under the Securities Exchange Act of 1934)
with respect to the Company's Common Stock during the offering.
We and each Approved Broker assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it shall not use a sweep arrangement and that it shall
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets Rule 15c2-8 promulgated under the Securities
Exchange Act of 1934 as requiring that a Prospectus be supplied to each person
who is expected to receive a confirmation of sale 48 hours prior to delivery of
such person's order form.
We and each Approved Broker further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before noon of the next business day following receipt or
execution of an order form by us to the Company for deposit in a segregated
account or (b) to solicit indications of interest in which event (i) we shall
subsequently contact any customer 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 customer's behalf, (ii) we shall
mail acknowledgments of receipt of orders to each customer confirming interest
on the business day following such confirmation, (iii) we shall debit accounts
of such customers of the third business day ("Debit Date") following receipt of
the confirmation referred to in (i), and (iv) we shall forward complete order
forms together with such funds to the Company on or before twelve noon on the
next business day and each selected dealer acknowledges that if the procedure in
(b) is adopted, our customers' funds are not required to be in their accounts
until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Offering. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Offering.
You agree that at any time or times prior to the termination of this
Agreement you shall, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we shall inform you as to the states
in which we believe the Common Stock has been qualified for sale under, or are
exempt from the requirements of, the respective blue sky laws of such states,
but we assume no responsibility or obligation as to your rights to sell Common
Stock in any state.
Additional copies of the Prospectus and any supplements thereto shall
be supplied in reasonable quantities upon request.
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
Keefe, Bruyette & Woods, Inc.
Page 32
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at Keefe, Bruyette & Woods,
Inc., 211 Bradenton, Dublin, Ohio 43017. The enclosed duplicate copy shall
evidence the agreement between us.
KEEFE, BRUYETTE & WOODS, INC.
By:
Patricia A. McJoynt
Executive Vice President
CONFIRMED AS OF:
___________________, 1997
(Name of Dealer)
By:
Its: