Exhibit 1.2
FLORIDA SAVINGS BANCORP, INC.
$2,000,000 to $5,000,000 Convertible Debentures Due March 31, 2009
SALES AGENT AGREEMENT
---------------------
May 2, 2002
Kendrick, Pierce Securities, Inc.
324 South Hyde Park Avenue, Suite 202
Tampa, Florida 33606
Ladies and Gentlemen:
Florida Savings Bancorp, Inc., a Florida corporation (the "Company"), is
offering (the "Offering") pursuant to the Securities Act of 1933, as amended
(the "1933 Act"), subject to the terms and conditions set forth in the Company's
Registration Statement on Form SB-1, Registration No. 333-84082, (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"SEC"), including the Prospectus dated May 2, 2002 set forth therein (the
"Prospectus"), a minimum of $2,000,000 (the "Minimum Offering") and a maximum of
$5,000,000 (the "Maximum Offering") in aggregate principal amount of 4%
convertible debentures due March 31, 2009 (the "Debentures"), at a price of
$1,000 per Debenture (the "Subscription Price). The minimum subscription for
each investor is $10,000, and certain limits on the maximum number of Debentures
that may be purchased by any person and other restrictions will apply as set
forth in the Prospectus.
The Company has been advised by Kendrick, Pierce Securities, Inc. (the
"Agent") that the Agent will utilize its best efforts in assisting the Company
in the Offering on the terms and subject to the conditions set forth in this
Agreement. The Offering of the Debentures will commence as soon as practicable
following the date of effectiveness (the "Effective Date") of the Registration
Statement.
Section 1. Engagement of the Agent; Sale and Delivery of Debentures. On the
--------------------------------------------------------
basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
hereby engages the Agent to utilize its best efforts in assisting the Company
with the offer and sale of the Debentures in the Offering, and the Agent hereby
accepts such engagement. Subject to the following sentence, the engagement of
the Agent hereunder shall terminate upon the earlier of (a) October 17, 2002,
except that beginning April 18, 2002, either party may terminate this Agreement
upon 30 days' prior written notice to the other party, or (b) upon consummation
of the Offering. If the Company is unable to sell the Minimum Offering amount
prior to July 5, 2002, unless extended by the Company to a date no later than
September 3, 2002, this Agreement shall also terminate and the Company shall
promptly refund to any persons who have subscribed for any of such Debentures
the full amount that the Company shall have received from them, together with
interest thereon as provided in the Prospectus, and no party to this Agreement
shall have any obligation to the other party hereunder, except as set forth in
Sections 4, 6, and 11 hereof.
If all conditions precedent to the consummation of the Offering are
satisfied, including the sale of the Minimum Offering amount of Debentures, the
Company agrees to issue or cause to be issued such Debentures and at the Closing
Time (as defined below) to release for delivery to the subscribers certificates
representing the Debentures against payment to the Company of the aggregate
Subscription Price of the Debentures, less all fees and expenses provided for
herein, at the principal office of the Company or at such other place as shall
be agreed upon between the parties hereto.
The Company's initial closing of the sale of Debentures equal to or in
excess of the Minimum Offering amount is referred to herein as the "Initial
Closing" and the date of the Initial Closing is referred to herein as the
"Initial Closing Time." Following the Initial Closing, the Company may from time
to time close additional sales of Debentures, and each such subsequent closing
is referred to herein as a "Closing" and the date of each subsequent Closing is
referred to herein as a "Closing Time."
The Agent acknowledges and agrees that it is a party to an Escrow Agreement
(the "Escrow Agreement") of even date herewith, by and among the Agent, the
Company and SunTrust Bank, as escrow agent (the "Escrow Agent"), a copy of which
is attached hereto as Exhibit A. The Agent and the Company will promptly upon
receipt deliver all funds received by each of them from subscribers to the
Escrow Agent, which shall deposit the funds received in an interest-bearing
escrow account (the "Escrow Account") until the termination or expiration of the
Offering. Such funds must be accompanied by a copy of each Debenture order form
pursuant to which subscriptions to purchase the Debentures are made, properly
completed and executed and in the form as attached as an exhibit to the
Registration Statement (the "Debenture Order Form"). All such funds and executed
copies of the Debenture Order Forms are to be deposited by the Escrow Agent into
the Escrow Account. All funds received by the Agent from subscribers shall be
made payable to "Florida Savings Bancorp, Inc. Escrow Account" or "SunTrust
Bank, Escrow Agent for Florida Savings Bancorp, Inc." The Agent will promptly
deliver to the Company one photocopy of each Debenture Order Form deposited in
the Escrow Account. Promptly after receipt of a Debenture Order Form and the
funds therefor by the Escrow Agent and delivery of a copy of the Debenture Order
Form, the Escrow Agent will mail an interim receipt, in the form attached as an
exhibit to the Escrow Agreement, to each such subscriber for the aggregate
Subscription Price deposited in the Escrow Account on behalf of each subscriber.
If the Offering shall terminate prior to the sale of the Minimum Offering, all
amounts paid by subscribers to purchase Debentures will be promptly returned to
them, with interest thereon but without deduction for any expenses, as provided
the Escrow Agreement and described in the Prospectus. Further, it is understood
that the Agent and the Company shall have the right to refuse or reject
Debenture Order Forms, in whole or in part, for any reason whatsoever, and to
promptly return all funds received by the Agent to the subscriber upon whose
behalf such funds were submitted to the Agent.
In addition to the expenses specified in Section 4 hereof, the Agent shall
receive a sales fee (the "Sales Fee") equal to (a) 1.5% of the aggregate
Subscription Price of Debentures sold in the Offering to (i) the Company's
shareholders and (ii) certain customers, other associates and members of the
community of the Company, who are set forth on Exhibit B hereto and who are
identified and contacted by officers and directors of the Company in connection
with the
2
Offering ("Preferred Investors"); and (b) 6.0% of the aggregate Subscription
Price of Debentures sold in the Offering to the general public excluding
shareholders of the Company and Preferred Investors. The Agent shall not receive
a Sales Fee for sales of Debentures to members of the Company's Board of
Directors or to officers or employees of the Company. The Sales Fee shall be
payable at the Initial Closing, which Sales Fee shall be reduced by the $15,000
retainer received by the Agent pursuant to the engagement letter dated October
17, 2001 between the Agent and the Company, and at each subsequent Closing.
Section 2. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to the Agent that:
(i) The Company meets the requirements for use of Form SB-1
under the 1933 Act. The Registration Statement, including a Preliminary
Prospectus (as defined below), and such amendments to the Registration Statement
as may have been required to the date of this Agreement, has been prepared by
the Company pursuant to and in conformity with the requirements of the 1933 Act,
and the rules and regulations of the SEC under the 1933 Act (the "1933 Act
Regulations") and has been filed with the SEC under the 1933 Act. Copies of the
Registration Statement, including any amendments thereto, each related
Preliminary Prospectus (meeting the requirements of Rules 430 or 430A of the
1933 Act Regulations) contained therein, and the exhibits, financial statements
and schedules thereto have heretofore been delivered by the Company to the
Agent. If required under the 1933 Act Regulations, a final Prospectus containing
information permitted to be omitted at the time of effectiveness by Rule 430A of
the 1933 Act Regulations will be filed promptly by the Company with the SEC in
accordance with Rule 424(b) of the 1933 Act Regulations. The term "Registration
Statement" as used herein means the Registration Statement as amended at the
Effective Date and, in the event any post-effective amendment thereto becomes
effective prior to the termination of the Offering, the Registration Statement
as so amended, including financial statements and all exhibits and all documents
incorporated by reference therein and, if applicable, the information deemed to
be included by Rule 430A of the 1933 Act Regulations. The term "Prospectus" as
used herein means the Prospectus as first filed with the SEC pursuant to Rule
424(b) of the 1933 Act Regulations or, if no such filing is required, the form
of final Prospectus included in the Registration Statement at the Effective
Date, except that if the Prospectus provided to the Agent by the Company for use
in connection with the Offering differs from the Prospectus on file with the SEC
at the time the Registration Statement becomes effective (whether or not the
Company is required to file with the SEC such revised Prospectus pursuant to
Rule 424(b) of the 1933 Act Regulations), the term Prospectus shall refer to
such revised Prospectus from and after the time it is first provided to the
Agent for such use. The term "Preliminary Prospectus" as used herein shall mean
a preliminary prospectus as contemplated by Rules 430 or 430A of the 1933 Act
Regulations included at any time in the Registration Statement. All references
in this Agreement to financial statements and schedules and other information
that is contained, included, stated or described in the Registration Statement,
Preliminary Prospectus or Prospectus shall be deemed to mean and include all
such financial statements and schedules and other information that is
incorporated by reference in, or deemed to be a part of, the Registration
Statement, Preliminary Prospectus or Prospectus, as the case may be.
3
(ii) The SEC has not issued, and is not to the Knowledge (as
defined below) of the Company threatening to issue, an order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus nor
instituted proceedings for that purpose. Each Preliminary Prospectus at its date
of issue, the Registration Statement and the Prospectus and any amendments or
supplements thereto contain or will contain, as the case may be, all statements
that are required to be stated therein by, and in all material respects conform
or will conform, as the case may be, to the requirements of, the 1933 Act and
the 1933 Act Regulations. Neither the Registration Statement nor any amendment
thereto, as of the Effective Date or applicable date of effectiveness, contains
or will contain, as the case may be, any untrue statement of a material fact or
omits or will omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and neither the Prospectus nor any
supplement thereto contain or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that no representation or warranty is made as to information contained
in or omitted from the Registration Statement in reliance upon and in conformity
with information furnished in writing to the Company by and on behalf of the
Agent expressly for use in the Registration Statement.
For purposes of this Agreement, (x) an individual will be deemed to have
"Knowledge" of a particular fact or matter if such individual is actually aware
of such fact or matter or a prudent individual could be expected to discover or
otherwise become aware of such fact or matter in the course of conducting a
reasonably comprehensive investigation regarding the accuracy of any
representations or warranties contained in this Agreement, and (y) a person
other than an individual will be deemed to have "Knowledge" of a particular fact
or matter if any individual who is serving as an officer or director of such
person has or at any time had Knowledge of such fact or matter (as set forth in
(x) above).
(iii) Hacker, Johnson & Smith, P.A., who are reporting upon the
audited financial statements included in the Registration Statement and the
Prospectus, are independent with respect to the Company as required by the 1933
Act and the 1933 Act Regulations.
(iv) This Agreement and the Escrow Agreement have been duly
authorized, executed and delivered by the Company and, when duly executed by the
Agent, will constitute the valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except in all
cases to the extent that (A) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting the
enforcement of creditors' rights and remedies generally; (B) the availability of
the equitable remedy of specific performance and injunctive relief is subject to
the discretion of the court before which the proceedings may be brought; and (C)
the enforceability of the provisions hereof relating to indemnification and
contribution may be limited by applicable federal, state, or other securities
laws, or the public policy underlying such laws.
(v) The consolidated financial statements, audited and
unaudited (including the notes thereto), included in the Registration Statement
and the Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates
4
indicated and the results of operations and cash flows of the Company and its
subsidiaries for the periods specified. Such consolidated financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods reflected except as may be
otherwise stated therein or disclosed in the Prospectus. The financial statement
schedules, if any, included in the Registration Statement and the Prospectus
present fairly the information required to be stated therein. The selected
financial, pro forma and statistical data included in the Registration Statement
and the Prospectus are accurate in all material respects and present fairly the
information shown therein and have been prepared on a basis consistent with that
of the audited and unaudited consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus.
(vi) The Company is a Florida corporation duly organized and
validly existing, and has active status, under the laws of the State of Florida,
with the requisite corporate power and authority under such laws to own, lease
and operate its properties and conduct its business as described in the
Registration Statement and the Prospectus. Each subsidiary of the Company is an
entity duly organized, validly existing and in good standing, or has active
status, as the case may be, under the laws of its respective jurisdiction of
organization with the requisite corporate power and authority under such laws to
own, lease and operate its properties and conduct its business as described in
the Prospectus. The Company and each of its subsidiaries are duly registered or
qualified to transact business as foreign corporations and are in good standing
in each other jurisdiction in which they own or lease property of a nature, or
transact business of a type, that would make such qualification necessary,
except those jurisdictions where nonqualification would not have a material
adverse effect on the condition (financial or otherwise) results of operations,
business, operations, assets or properties of the Company or any of its
subsidiaries, (individually, a "Subsidiary," and collectively, the
"Subsidiaries") (a "Material Adverse Effect").
(vii) The Company is duly registered with the Office of Thrift
Supervision as a savings and loan holding company under applicable law; the
deposit accounts of Florida Savings Bank (the "Bank"), a Subsidiary of the
Company that conducts business as a savings and loan association are insured by
the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation (the "FDIC"), up to the maximum allowable limits thereof. The
Company has all such corporate power, authority, authorization, approvals and
orders as may be required to enter into this Agreement, to carry out the
provisions and conditions hereof, and to issue and sell the Debentures.
(viii) All of the outstanding shares of capital stock of the
Company's Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable and are owned solely by the Company directly, free
and clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
(ix) The authorized capital stock of the Company consists of
(a) 1,500,000 shares of preferred stock, par value of $.01 per share, none of
which are outstanding, and (b) 3,500,000 shares of common stock, par value of
$.01 per share (the "Common Stock"), of which 757,000 shares are issued and
outstanding, and of which 118,250 shares are reserved and subject to issuance
upon the exercise of options and warrants and 454,550 shares are reserved and
subject to issuance upon the conversion of the Debentures. Except as set forth
in
5
the Prospectus, there are no outstanding warrants, options, conversion
privileges, preemptive rights, or other rights or agreements to purchase or
otherwise acquire or issue any equity securities of the Company.
(x) All shares of capital stock of the Company issued and
outstanding have been duly authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any preemptive right or other
rights to purchase such shares, and the capital stock of the Company conforms in
all material respects to the statements relating thereto in the Prospectus (and
such statements correctly state the substance of the instruments defining the
capitalization of the Company). The Debentures have been duly authorized for
issuance and sale pursuant to this Agreement and the Prospectus and, when issued
and delivered by the Company against payment therefor in accordance with the
terms of this Agreement and as described in the Prospectus, will be validly
issued, shall be valid and binding obligations of the Company, and shall not
have been issued in violation of any preemptive or other rights to purchase
Debentures or Common Stock. The shares of Common Stock issued upon conversion of
the Debentures (the "Conversion Shares") will, when issued, be duly authorized
and validly issued, fully paid and non-assessable. No further approval or
authorization of any shareholder, the Company's Board of Directors, or any other
party is required for the issuance and sale of the Debentures pursuant to this
Agreement and as described in the Prospectus, or the issuance of the Conversion
Shares pursuant to the terms of the Debentures.
(xi) The Debentures conform to the statements relating thereto
contained in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same.
(xii) The issuance and sale of the Debentures by the Company,
the issuance of the Conversion Shares, the compliance by the Company with all of
the provisions of this Agreement and the Escrow Agreement, and the consummation
of the transactions herein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, loan agreement, mortgage, deed of trust or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them is bound or to which any of their respective property or
assets is subject, nor will such action result in any violation of any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or the Subsidiaries or any of their
properties, which conflict breach, default or violation would reasonably be
expected to have a Material Adverse Effect either individually or in the
aggregate; and no consent, approval, authorization, order, license, certificate,
permit, registration or qualification of or with any such court or other
governmental agency or body is required to be obtained by the Company for the
issuance and sale of the Debentures and the issuance of the Conversion Shares,
or the consummation by the Company of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations, licenses,
certificates, permits, registrations or qualifications as have already been
obtained, or as may be required under the 1933 Act or state securities laws.
(xiii) The Company is not required to be registered as an
"investment company" under the Investment Company Act of 1940, as amended.
6
(xiv) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated therein, there has not been
(A) any material adverse change in the business, properties, assets, rights,
operations, results of operations, or condition (financial or otherwise) of the
Company or the Subsidiaries; (B) any transaction that is material to the Company
or the Subsidiaries, except transactions in the ordinary course of business; (C)
any obligation that is material to the Company or the Subsidiaries, direct or
contingent, except obligations incurred in the ordinary course of business; (D)
any change that is material in the capital stock or outstanding indebtedness of
the Company or the outstanding indebtedness of any of the Subsidiaries; or (E)
any dividend or distribution of any kind declared, paid, or made on the capital
stock of the Company or any of the Subsidiaries.
(xv) Neither the Company nor any of the Subsidiaries is in
violation of any provision of their respective articles of incorporation,
charter or bylaws or is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound or to which any of
its properties may be subject.
(xvi) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the Knowledge
of the Company, threatened against the Company or any of the Subsidiaries that
is required to be disclosed in the Prospectus, that could reasonably be expected
to have a Material Adverse Effect, or that could reasonably be likely to have a
material adverse effect on the consummation of the transactions contemplated in
this Agreement. No pending legal or governmental proceedings to which the
Company or any of the Subsidiaries is a party that are not described in the
Prospectus, including ordinary routine litigation incidental to their respective
businesses, if decided adversely, is reasonably likely to have a Material
Adverse Effect.
(xvii) There are no material contracts or documents of a
character required to be described in the Prospectus or filed as exhibits to the
Registration Statement that are not so described or filed.
(xviii) The Company and the Subsidiaries have good and
marketable title to all properties and assets described in the Prospectus as
owned by any of them, free and clear of all liens, charges, encumbrances or
restrictions, except such as (A) are described in the Prospectus or (B) are
neither material in amount nor materially significant in relation to the
business of the Company or the Subsidiaries; all of the leases and subleases
material to the business of the Company or the Subsidiaries and under which any
of them holds properties described in the Prospectus are in full force and
effect, and neither the Company nor any Subsidiary has any notice of any
material claim that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of such corporation to the continued
possession of the leased or subleased premises under any such lease or sublease;
the respective agreements to which any of the Company or the Subsidiaries are a
party as described in the Prospectus are valid and enforceable in accordance
with their terms against the Company or the Subsidiaries, as applicable, except
in all cases to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting the
enforcement of
7
creditors' rights and remedies generally and the availability of the equitable
remedy of specific performance and injunctive relief is subject to the
discretion of the court before which the proceedings may be brought; and, to the
Company's Knowledge, the other contracting party or parties thereto are not in
breach or default under any of such agreements.
(xix) Each of the Company and the Subsidiaries owns, possesses
or has obtained all governmental licenses, permits, certificates, consents,
orders, approvals and other authorizations necessary to own or lease, as the
case may be, and to operate its properties and to carry on its business in the
manner described in the Prospectus, except where the failure to obtain such
governmental licenses, permits, certificates, consents, order, approvals or
other authorizations would not reasonably be expected to have a Material Adverse
Effect, and none of them have received any notice of proceedings relating to
revocation or modification of any such licenses, permits, certificates,
consents, orders, approvals or authorizations, and all such licenses, permits,
certificates, consents, orders, approvals and authorizations are in full force
and effect.
(xx) Each of the Company and the Subsidiaries has filed all
necessary federal, state and local income, franchise and other tax returns and
has paid all taxes as due, and there is no tax deficiency that has been or is
reasonably likely to be asserted against any of them; and all tax liabilities
are adequately provided for on the books of the Company or the Subsidiaries, as
applicable.
(xxi) Each of the Company and the Subsidiaries maintains
insurance of the types and in the amounts reasonably necessary to operate its
business including, but not limited to, insurance covering real and personal
property owned or leased by it against theft, damage, destruction, acts of
vandalism, liability and malpractice and all other risks customarily insured
against, and such fidelity bonds as may be required under applicable law, and
all of which insurance is in full force and effect.
(xxii) No labor problem exists with the employees of the
Company or any Subsidiary or, to the Knowledge of the Company, is imminent; and,
to the Knowledge of the Company, there is no existing or imminent labor
disturbance by the employees of the Company's principal suppliers, contractors
or customers that could reasonably be expected to have a Material Adverse
Effect.
(xxiii) Except as disclosed in the Prospectus, each of the
Company and the Subsidiaries owns or possesses or has the right to use all
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets or other unpatented and/or unpatentable proprietary or
confidential information systems or procedures), trademarks, service marks and
trade names (collectively, "patent and proprietary rights") currently employed
by it in connection with the business now operated by it, except where the
failure to so own, possess or acquire the right to use such patent and
proprietary rights is not reasonably likely to have a Material Adverse Effect,
and neither the Company, nor any of the Subsidiaries has received any notice nor
is otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any patent or proprietary rights.
(xxiv) Neither the Company nor any of the Subsidiaries has been
(by virtue of any action, omission to act, contract to which it is a party or by
which it is bound, or
8
any occurrence or state of facts whatsoever) in violation of any applicable
federal, state, municipal, or local statutes, laws, ordinances, rules,
regulations and/or orders issued pursuant to foreign, federal, state, municipal,
or local statutes, laws, ordinances, rules, or regulations (including those
relating to any aspect of banking, financial institution holding companies,
environmental protection, occupational safety and health, and equal employment
practices) heretofore or currently in effect, except those, if any, described in
the Prospectus, or such violations that have been fully cured or satisfied
without recourse, or where such violation is not reasonably likely to have a
Material Adverse Effect.
(xxv) Neither the Company nor any of the Subsidiaries has any
agreement or understanding with any entity concerning the future acquisition by
any of them of a controlling interest in any entity that is required by the 1933
Act or the 1933 Act Regulations to be disclosed and that is not disclosed in the
Prospectus; and neither the Company nor any of the Subsidiaries has any
agreement or understanding with any entity concerning the future acquisition of
a controlling interest in any of them by any entity that is required by the 1933
Act or the 1933 Act Regulations to be disclosed and that is not disclosed in the
Prospectus.
(xxvi) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with management's
general or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and with applicable law and regulations, and to
maintain accountability for assets; (C) access to material assets is permitted
only in accordance with management's general or specific authorizations; and (D)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) All offers and sales of the securities of the Company
prior to the date hereof were made pursuant to exemptions from the registration
provisions of the 1933 Act and in compliance with the 1933 Act Regulations and
all other applicable state securities laws or regulations. Except pursuant to
this Agreement, the Company knows of no outstanding claims for finder's,
origination, underwriting or placement agent fees with respect to prior offers
or sales of the securities of the Company or with respect to this Offering.
(xxviii) Neither the Company nor any of the Subsidiaries, nor
any of their respective employees or agents, has at any time during the last
five years (A) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation of law, or (B)
made any payment to any foreign, federal or state governmental officer or
official or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any applicable jurisdiction thereof.
(b) Any certificate signed by any authorized officer of the Company
and delivered to the Agent or to counsel for the Agent pursuant to this
Agreement shall be deemed a representation and warranty by the Company to the
Agent as to the matters covered thereby.
(c) The Agent represents and warrants to the Company that:
9
(i) The Agent is registered as a broker-dealer with the NASD.
(ii) The Agent is validly existing as a corporation under the
laws of its jurisdiction of incorporation, with full corporate power and
authority to provide the services to be furnished to the Company hereunder.
(iii) This Agreement and the Escrow Agreement have been duly
authorized, executed and delivered by the Agent and, when duly executed by the
Company, will constitute the valid and binding agreement of the Agent
enforceable against the Agent in accordance with their terms, except in all
cases to the extent that (A) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights and remedies generally or the rights of
creditors or registered broker-dealers whose accounts may be protected by the
Securities Investor Protection Corporation; (B) the availability of the
equitable remedy of specific performance and injunctive relief is subject to the
discretion of the court before which the proceedings may be brought; and (C) the
enforceability of the provisions hereof relating to indemnification and
contribution may be limited by applicable federal, state or other securities
laws, or the public policy underlying such laws.
(iv) The Agent and, to the Agent's Knowledge, its employees,
agents and representatives who shall perform any of the services required
hereunder to be performed by the Agent, shall be duly authorized and shall have
all licenses, approvals and permits necessary to perform such services, and the
Agent is a registered selling agent in the jurisdictions in which the Company is
relying on such registration for the sale of the Debentures.
(v) The execution and delivery of this Agreement by the
Agent, the fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with the charter
or bylaws of the Agent or violate, conflict with or constitute a breach of, or
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, any agreement, indenture or other instrument by
which the Agent is bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court decree,
injunction or order, which breach, default or violation could have a material
adverse effect on the condition (financial or otherwise), operations, business,
assets or properties of the Agent or its ability to perform its obligations
under this Agreement.
(vi) Any funds received by the Agent to purchase Debentures
will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act
of 1934, as amended (the "1934 Act").
(vii) No action or proceeding against the Agent before the SEC,
the NASD, any state securities commission, or any state or federal court is
pending or, to the Agent's Knowledge, threatened concerning the Agent's
activities as a broker-dealer which could have a material adverse effect on the
condition (financial or otherwise), operations, business, assets or properties
of the Agent or its ability to perform its obligations under this Agreement.
10
(viii) The information set forth in the "Sales Agency
Arrangements" section of the Prospectus constitutes the only written information
furnished to the Company by and on behalf of the Agent expressly for use in
connection with the preparation of the Prospectus, and it is correct and
complete in all material respects and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
Section 3. Certain Covenants.
-----------------
(a) The Company covenants with the Agent as follows:
(i) The Company will not at any time file or make any
amendment to the Registration Statement, the Preliminary Prospectus or the
Prospectus of which the Agent shall not have previously been advised and have
previously been furnished a copy, or to which the Agent or counsel for the Agent
shall reasonably object.
(ii) The Company will notify the Agent, promptly after it
shall receive notice thereof, of the time when the Registration Statement has
become effective and will promptly notify the Agent after it shall have received
notice thereof of the time when any post-effective amendment to the Registration
Statement becomes effective or when any supplement to the Prospectus has been
filed.
(iii) The Company will prepare and timely file with the
Commission under Rule 424(b) of the 1933 Act Regulations, if required, a
Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the 1933
Act Regulations or otherwise.
(iv) The Company will advise the Agent, promptly after it has
received notice thereof, of any comments of the SEC with respect to the
Registration Statement, of any request of the SEC for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, or of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or of
the institution or threat of any proceedings for that purpose; the Company will
provide the Agent with copies of all correspondence related thereto; and the
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(v) The Company will deliver or cause to be delivered to the
Agent, without charge, from time to time during the period commencing on the
date hereof and continuing until the earlier of (A) the termination or
expiration of the Offering or (B) the termination of the employment of the Agent
pursuant to Section 2 of this Agreement (the "Offering Period"), such number of
copies of the Registration Statement, Preliminary Prospectus or Prospectus (as
supplemented or amended) as the Agent may reasonably request. The Company
consents to the use of the Preliminary Prospectus and Prospectus by the Agent
and by all dealers in connection with the offering or sale of the Debentures and
for such period of time thereafter as the Prospectus is required by law to be
delivered in connection therewith. The Company will deliver to the Agent at or
before the Effective Date two signed copies of the
11
Registration Statement and all amendments thereto, including all exhibits filed
therewith or incorporated by reference therein.
(vi) The Company will use its best efforts to comply with the
1933 Act and the 1933 Act Regulations so as to permit the completion of the
offer and sale of the Debentures as contemplated in this Agreement and in the
Prospectus. If, at any time during the Offering Period, or when a Preliminary
Prospectus or Prospectus is required by the 1933 Act to be delivered in
connection with offers or sales of the Debentures, any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of counsel for the Agent or counsel for the Company, to amend or supplement the
Prospectus in order that the Preliminary Prospectus or Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered, or if it shall be
necessary, in the reasonable opinion of either such counsel, at any such time to
amend the Preliminary Prospectus or Prospectus or amend or supplement the
Preliminary Prospectus or Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or to make the Preliminary Prospectus or Prospectus comply with such
requirements.
(vii) The Company will use its commercially reasonable efforts
to qualify the Debentures for offering and sale, or to exempt the Debentures
from registration, under the applicable securities laws of such states and other
jurisdictions as the Agent may reasonably designate and to maintain such
qualifications or exemptions in effect for a period of not less than one year
from the Effective Date; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. The Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Debentures have been qualified or exempted as above provided.
(viii) The Company will use the net proceeds received by it from
the sale of the Debentures in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(ix) For a period of three years after the Closing Time, the
Company will furnish to the Agent copies of all annual reports, quarterly
reports and current reports filed with any federal bank regulatory agency or the
SEC, and such other documents, reports, proxy statements and information as
shall be furnished by the Company to its shareholders generally and to the
Debenture holders, every material press release in respect to the Company or its
affairs that is released or prepared by the Company, and any additional
information of a public nature concerning the Company or its business that the
Agent may reasonably request.
(x) So long as any Debentures remain outstanding, the Company
will furnish to all holders of the Debentures copies of its audited financial
statements within 120 days of the end of each fiscal year.
12
(xi) The Company will file with the SEC, when due, all
securities sales reports due and all other reports required by Section 15(d) of
the 1934 Act, as amended (the "1934 Act"), until such time as the Company is
permitted by the 1934 Act and the rules and regulations of the SEC thereunder to
deregister as a reporting company and the Company does so deregister.
(xii) During the Offering Period, the Company will not issue
any press releases or other communications directly or indirectly and will hold
no press conferences with respect to the Company, the financial condition,
results of operations, business properties, assets or liabilities of the
Company, or the offering of the Debentures, without the prior written consent of
the Agent, except as otherwise required by law.
(xiii) The Company shall pay the legal fees and related filing
fees of counsel to the Company to prepare one or more "blue sky" surveys (each,
a "Blue Sky Survey") for use in connection with the offering of the Debentures
as contemplated by the Prospectus, and a copy of each such Blue Sky Survey shall
be delivered to the Agent.
(xiv) The Company will, at its expense, upon the issuance of
the Debentures, prepare and distribute to each of the Agent and counsel to the
Agent copies of the Debentures as issued and copies of all correspondence or
other documents related thereto.
(xv) Except as provided for by this Agreement, during a period
of 180 days from the date of the Prospectus, the Company will not, without the
prior written consent of the Agent, directly or indirectly, offer, sell, offer
to sell, or otherwise issue any capital stock or Debentures, or any other
securities of the Company that are substantially similar to the Debentures or
that are convertible into capital stock, or sell or grant options, rights, or
warrants with respect to any shares of capital stock (other than the grant of
options pursuant to option plans or agreements issued pursuant to a stock option
plan approved by the Board of Directors of the Company).
(xvi) If required by law or the rules of any electronic trading
system or any securities exchange on which the Common Stock or the Debentures
may be listed, the Company will maintain a transfer agent and a registrar
(which, if permitted by applicable laws and rules, may be the same entity as the
transfer agent) for its Common Stock or Debentures, as the case may be.
(b) The Agent covenants with the Company that the Agent shall remain
a registered selling agent in all such jurisdictions in which the Company is
relying on such registration for the sale of the Debentures until the Offering
is consummated or terminated.
Section 4. Payment of Expenses.
-------------------
The Company covenants and agrees with the Agent that the Company will pay
or cause to be paid (directly or by reimbursement) all of the obligations of the
Company under this Agreement, including (a) the preparation, printing and filing
of the Registration Statement and the Prospectus (including financial statements
and exhibits and any or all documents related thereto), as originally prepared
and as amended, and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Agent; (b) the preparation, printing and
13
distribution of this Agreement, the Debentures and Blue Sky Survey; (c) the
issuance and delivery of the Debentures, including any transfer taxes payable
upon the sale of such securities; (d) fees and disbursements of counsel in
connection with the Blue Sky Survey; (e) the fees and disbursements of the
Company's counsel and accountants; (f) SEC and NASD filing fees; (g) the
qualification of the Debentures under the applicable securities laws; (h)
itemized and out-of-pocket expenses incurred by the Agent (which such expenses,
including legal fees for counsel retained by the Agent, shall not exceed
$50,000 in the aggregate); (i) the fees and expenses of the Escrow Agent; and
(j) all other costs incident to the performance of the Company's obligations
hereunder.
Full payment of Agent's expenses remaining unpaid shall be made in same-day
funds at the Initial Closing and each subsequent Closing or, if the Offering is
not completed or is terminated for any reason, within five business days of
receipt by the Company of a written request from the Agent for reimbursement of
expenses.
Section 5. Conditions of Agent's Obligations. The obligations of the Agent
---------------------------------
pursuant to this Agreement are subject to the accuracy of the representations
and warranties of the Company contained herein or in certificates of the
officers of the Company delivered pursuant to the provisions hereof, as of the
date hereof, the Initial Closing Time and each subsequent Closing Time, to the
performance by the Company of its obligations hereunder and to the following
further conditions, except the extent waived in writing by the Agent:
(a) At the Initial Closing Time and each subsequent Closing Time,
the Agent shall have received;
(i) The favorable opinion, dated as of the Initial Closing
Time and each subsequent Closing Time, of Muldoon Murphy & Faucette LLP, counsel
for the Company, in form and substance reasonably satisfactory to counsel for
the Agent, substantially in the form set forth in Exhibit C.
(ii) The favorable opinion, dated as of the Initial Closing
Time and each subsequent Closing Time, of Broad and Cassel, counsel for the
Agent, in form and substance satisfactory to the Agent.
(iii) The letters from Hacker, Johnson & Smith P.A. dated the
Effective Date, the Initial Closing Time and each subsequent Closing Time,
respectively, addressed to the Agent in the form reasonably approved by the
Agent, containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters and sales agents delivered
according to Statement of Financial Accounting Standards No. 72 (or any
successor bulletin), with respect to the audited financial statements and the
other financial information in the Registration Statement and the Prospectus.
(b) At the Initial Closing Time and each subsequent Closing Time,
(i) the Registration Statement and the Prospectus, as may then be amended or
supplemented, shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) there shall not have been, since the
respective dates as of which information is given in the Prospectus, any
material
14
adverse change in the condition (financial or otherwise), earnings, business
affairs or assets of the Company or the Subsidiaries, whether or not arising in
the ordinary course of business, (iii) no action, suit or proceeding at law or
in equity shall be pending or, to the Knowledge of the Company, threatened
against the Company or any Subsidiary that would be required to be set forth in
the Prospectus other than as set forth therein and no proceedings shall be
pending or, to the Knowledge of the Company, threatened against the Company or
any Subsidiary before or by any federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding could
reasonably be expected to have a Material Adverse Effect, other than set forth
in the Prospectus, (iv) the Company shall have complied, in all material
respects, with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Initial Closing Time and each
subsequent Closing Time, as applicable, (v) the other representations and
warranties of the Company set forth in Section 2(a) of this Agreement shall be
accurate in all respects as though expressly made at and as of the Initial
Closing Time and each subsequent Closing Time, as applicable, and (vi) no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
Knowledge of the Company, threatened by the SEC or any bank regulatory agency.
At the Initial Closing Time and each subsequent Closing Time, the Agent shall
have received a certificate of the President and of the Chief Financial Officer
of the Company, dated as of the Initial Closing Time and each subsequent Closing
Time, as applicable, to such effect.
(c) At the Initial Closing Time and each subsequent Closing Time, counsel
for the Agent shall have been furnished with all such documents, certificates
and opinions as they may request for the purpose of enabling them to pass upon
the issuance and sale of the Debentures as contemplated in this Agreement and
the matters referred to in Section 5 of this Agreement, and in order to evidence
the accuracy and completeness of any of the representations, warranties or
statements of the Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company at or prior to the Initial Closing Time and
each subsequent Closing Time in connection with the authorization, issuance and
sale of the Debentures as contemplated in this Agreement shall be satisfactory
in form and substance to the Agent and its counsel.
(d) The Company shall have paid, or made arrangements satisfactory to the
Agent for the payment of, all such expenses as may be required by Section 4
hereof.
(e) The Debentures shall have been qualified or registered for sale, or are
subject to an available exemption from such qualification or registration, under
the Blue Sky or securities laws of such jurisdictions as shall have been
specified by the Agent, and the Offering contemplated by this Agreement shall
have been cleared by the NASD.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by the Agent on notice to the Company at any time at or prior
to the Initial Closing Time or any subsequent Closing Time, or, if the Agent so
elects, the Agent may waive in writing any such conditions that have not been
fulfilled, or may extend the time of their fulfillment. If the Agent terminates
this Agreement as provided herein, such termination shall be without liability
of any party to any
15
other party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 4, 6, 7 and 11 of this Agreement shall
remain in effect.
Section 6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each of the Agent,
the officers, directors, employees, agents and counsel of the Agent, 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 loss, liability, claim,
damage, and expense whatsoever (which shall include, but not be limited to,
amounts incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim or investigation whatsoever
and any and all amounts paid in settlement of any claim or litigation), as and
when incurred, arising out of, based upon or in connection with (i) any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission 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, contained in (A) the Registration
Statement and the Prospectus (as from time to time amended and supplemented), or
in any amendment or supplement thereto or in any document incorporated by
reference therein, or required to be delivered with the Prospectus or (B) in any
application or other document or communication (collectively referred to as an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Debentures under the Blue Sky or securities laws thereof
or filed with the SEC or any electronic trading system or securities exchange,
unless such statement or omission or alleged statement or omission was made in
reliance upon and in conformity with written information concerning the Agent,
or the compensation of the Agent, furnished to the Company by the Agent
expressly for inclusion in any Prospectus, or in any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant or agreement of the Company contained in this
Agreement; provided, however, that the indemnity in this paragraph (a): (x)
shall not apply to any settlement by the Agent or any person entitled to
indemnification hereunder effected without the prior written consent of the
Company (not to be unreasonably withheld); (y) shall not apply to the extent
that any loss, claim, damage or liability is found in a final non-applicable
judgment by a court of competent jurisdiction to have resulted directly from the
Agent's willful misconduct or gross negligence; and (z) shall not apply to any
suit, action or proceeding initiated by the Company against the Agent to enforce
the terms of this Agreement. For purposes of this section, the term "expense"
shall include, but not be limited to, counsel fees and costs, court costs,
out-of-pocket costs and compensation for the time spent by the Agent's
directors, officers, employees and counsel according to his or her normal hourly
billing rates. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have to the Agent or the persons entitled to
the benefit of these indemnification provisions.
(b) The Agent agrees to indemnify and hold harmless the Company, its
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 and expense described in the
indemnity contained in subsection (a) above, as incurred, but only with respect
to (i) untrue statements or omissions, or alleged untrue statements or
omissions, of a material fact made in reliance upon and in conformity with
written information
16
about the Agent, or the compensation of the Agent, furnished to the Company by
the Agent expressly for inclusion in the Prospectus or (ii) any breach of any
representation, warranty, covenant or agreement of the Agent contained in this
Agreement; provided, however, that the indemnity in this paragraph (b): (x)
shall not apply to any settlement by the Company or any person entitled to
indemnification hereunder effected without the prior written consent of the
Agent (not to be unreasonably withheld); and (y) shall not apply to any suit,
action or proceeding initiated by the Agent against the Company to enforce the
terms of this Agreement. The Company acknowledges that the statements set forth
under the caption "Sales Agency Arrangements" in the Prospectus constitute the
only information furnished in writing by or on behalf of the Agent for inclusion
in the Prospectus.
(c) An indemnified party shall give prompt notice to the indemnifying party
if any action, suit, proceeding or investigation is commenced in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve the indemnifying party from its obligations
to indemnify hereunder, except to the extent that the indemnifying party has
been prejudiced in any material respect by such failure. If it so elects within
a reasonable time after receipt of such notice, an indemnifying party may assume
the defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and payment of all expenses of the
indemnified party in connection with such action. Such indemnified party shall
have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such action or the
indemnifying party shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or such indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
it that are different from or additional to those available to the indemnifying
party, in any of which events such fees and expenses shall be borne by the
indemnifying party and the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party. The indemnifying
party shall be liable for any settlement of any claim against the indemnified
party (or its directors, officers, employees, affiliates or controlling
persons), made with the indemnifying party's written consent, which consent
shall not be unreasonably withheld. The indemnifying party shall not, without
the written consent of the indemnified party, settle or compromise any claim
against the indemnifying party based upon circumstances giving rise to an
indemnification claim against the indemnifying party hereunder unless such
settlement or compromise provides that the indemnified party and any other
indemnified parties shall be unconditionally and irrevocably released from all
liability in respect to such claim.
(d) In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court that such indemnification may not be
enforced in such case, even though the express provisions hereof provide for
indemnification in such case, then the Company, on the one hand, and the Agent,
on the other hand, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage and expense
in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the Agent, on the other hand, from the
Offering, and also the relative fault of the Company, on the one hand, and the
Agent, on the other hand, in connection with the statements, acts or omissions
that resulted in such loss, liability claim, damage and expense, and any other
17
relevant equitable considerations shall also be considered. The relative
benefits received by the Company on the one hand and the Agent on the other hand
shall be deemed to be in the same proportions as the total net proceeds from the
Offering received by the Company bear to the total fees received by the Agent
under this Agreement. The relative fault of the Company on the one hand and the
Agent on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Agent and the parties' relative intent,
Knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata allocation or
by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth in
this Section, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim. No
person found liable for fraudulent misrepresentation or omission shall be
entitled to contribution from any person who is not found liable for such
fraudulent misrepresentation or omission. Notwithstanding the foregoing, the
Agent shall not be obligated to contribute any amount hereunder that exceeds the
amount of the Sales Fee paid by the Company to the Agent in the aggregate with
respect to the Debentures.
(e) The indemnity and contribution agreements contained herein are in
addition to any liability that the Company may otherwise have to the Agent.
Section 7. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
The representations, warranties, indemnities, agreements and other statements of
the Company or its officers, directors, employees and agents, and of the Agent
or its officers, directors, employees and agents, set forth in or made pursuant
to this Agreement, will remain operative and in full force and effect regardless
of any investigation made by or on behalf of the or the Company, respectively,
and will survive delivery of and payment for the Debentures.
Section 8. Termination of Agreement.
------------------------
(a) The Agent may terminate this Agreement, by notice to the Company, at
any time at or prior to the Initial Closing Time or any subsequent Closing Time
(i) if there has been, since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the Company
or any of the Subsidiaries, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any outbreak or escalation of existing
hostilities or other national or international calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
the Agent's reasonable judgment, impracticable to market the Debentures or
enforce the subscriptions to purchase such securities, or (iii) if trading
generally on the New York Stock Exchange or in the over-the-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
by order of the SEC, NASD or any
18
other governmental authority with appropriate jurisdiction over such matters, or
(iv) if a banking moratorium has been declared by either federal or Florida
authorities, or (v) if there shall have been such material and substantial
change in the market for securities in general or in political, financial or
economic conditions as in the Agent's reasonable judgment makes it inadvisable
to proceed with the Offering, or the sale and delivery of the Debentures on the
terms contemplated by the Prospectus, or (vi) if the Agent reasonably determines
(which determination shall be in good faith) that there has not been
satisfactory disclosure of all relevant financial information relating to the
Company in the Company's disclosure documents and that the sale of the
Debentures is inadvisable given such disclosures, or (vii) if the Company shall
have failed, refused or been unable, on or prior to the Initial Closing Time or
any subsequent Closing Time, to perform any agreement on its part to be
performed, or because any other condition of the Agent's obligations hereunder
required to be fulfilled by the Company is not fulfilled.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4 hereof. Notwithstanding any such
termination, the provisions of Sections 4, 6, 7 and 11 of this Agreement hereof
shall remain in effect.
Section 9. Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices shall be addressed as follows:
If to the Agent:
Kendrick, Pierce Securities, Inc.
324 South Hyde Park Avenue, Suite 202
Tampa, Florida 33606
Attention: Russell L. Hunt
with a copy to:
Broad and Cassel
7777 Glades Road
Suite 300
Boca Raton, Florida 33434
Attention: Nina S. Gordon, P.A.
If to the Company:
Florida Savings Bancorp, Inc.
8181 Southwest 117th Street
Pinecrest, FL 33156
Attention: Bernard Janis, Chairman of the Board
19
with a copy to:
Muldoon Murphy & Faucette LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attention: Christina M. Gattuso, Esquire
Section 10. Parties. This Agreement is made solely for the benefit of the
-------
Agent and the officers, directors, employees, agent and counsel of the Agent
specified in Section 6, the Company and, to the extent expressed, any person
controlling the Company or the Agent, and their respective executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of the Debentures.
Section 11. Arbitration. Any claims, controversies, demands, disputes or
-----------
differences between or among the parties hereto or any persons bound hereby
arising out of, or by virtue of, or in connection with, or otherwise relating to
this Agreement shall be, submitted to and settled by arbitration conducted in
Tampa, Florida before one or three arbitrators, each of whom shall be
Knowledgeable in the field of securities law and investment banking. Such
arbitration shall otherwise be conducted in accordance with the rules of the
American Arbitration Association. The parties hereto agree to share equally the
responsibility for all fees of the arbitrators, abide by any decision rendered
as final and binding, and waive the right to appeal the decision or otherwise
submit the dispute to a court of law for a jury or non-jury trial. The parties
hereto specifically agree that neither party may appeal or subject the award or
decision of any such arbitrator to appeal or review in any court of law or in
equity or in any other tribunal, arbitration system or otherwise. Judgment upon
any award granted by such arbitrator may be enforced in any court having
jurisdiction thereof.
Section 12. Governing Law and Time. This Agreement shall be governed by the
----------------------
laws of the State of Florida. Specified times of the day refer to Tampa, Florida
time.
Section 13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
20
If the foregoing correctly sets forth the parties' understanding, please so
indicate in the space provided below for that purpose, whereupon this Agreement
will constitute a binding agreement between the Company and the Agent.
FLORIDA SAVINGS BANCORP, INC.
By: /s/ Robert L. Bonnet
-----------------------------------------------------
Name: Robert L. Bonnet
------------------------------------------------
Title: President & COO
-----------------------------------------------
CONFIRMED AND ACCEPTED this 2nd day of May, 2002, on behalf of the
undersigned.
KENDRICK, PIERCE SECURITIES, INC.
By: /s/ Russell Hunt
------------------------------------------------------
Name: Russell Hunt
------------------------------------------------
Title: Managing Director
-----------------------------------------------
21
EXHIBIT C
---------
The opinion of counsel to the Company to be delivered pursuant to Section
5(a)(i) of the Sales Agent Agreement shall be to the effect that:
1. The Company is a corporation organized, validly existing and in active
status under the laws of the state of Florida with requisite corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Prospectus. Each of the Subsidiaries is organized, validly
existing and in good standing or in active status under the laws of its
respective jurisdiction of incorporation, with requisite corporate power and
authority to own, lease, and operate its respective properties and conduct its
business as described in the Prospectus.
2. The deposit accounts of the Bank are insured by the Savings Association
Insurance Fund of the FDIC up to the maximum amount allowable by law, and no
proceedings for the termination or revocation of such membership or insurance
have been instituted or, to counsel's Knowledge, are pending or threatened.
3. The issued and outstanding shares of capital stock of the Company
consist of _____________________ and have been duly authorized and validly
issued, are fully paid and non-assessable, and there are no statutory,
contractual or other preemptive, preferential or other rights to subscribe for
or purchase any shares of capital stock of the Company; and to our Knowledge, no
shares of capital stock of the Company have been issued in violation of such
rights as may have previously existed.
4. All of the issued and outstanding shares of capital stock of each of the
Subsidiaries have been duly and validly authorized and issued and are fully
paid and non-assessable and are owned by the company, to counsel's Knowledge,
free and clear of any security interests, liens, pledges, claims or other
encumbrances.
5. The certificates for the Debentures to be delivered hereunder are in due
and proper form and conform to the requirements of applicable law; and when
issued against payment of the agreed consideration therefor in accordance with
the Agreement, the Debentures to be sold by the Company will be valid and
binding obligations of the Company free of any preemptive, preferential or other
rights to subscribe for or purchase the Debentures, and will be free and clear
of any lien, claim, security interest or encumbrance, or of any restriction on
transfer imposed by the Company or pursuant to federal or state securities laws
or regulations; and the Conversion Shares, when issued in accordance with the
terms of the Debentures, will be duly authorized and validly issued, fully paid
and non-assessable, free of any preemptive, preferential or other rights to
subscribe for or purchase Common Stock, and will be free and clear of any lien,
claim, security interest or encumbrance, or of any restriction on transfer
imposed by the Company or pursuant to federal or state securities laws or
regulations.
6. All offers and sales by the Company of its capital stock before the date
hereof were at all relevant times duly registered under or exempt from the
registration requirements of, and were made in compliance with the requirements
of, the 1933 Act, and were duly registered
C-1
under or the subject of an available exemption from the registration
requirements of any applicable "Blue Sky" laws.
7. The Company has the requisite corporate power and authority to execute,
deliver and perform the Agreement and to issue, sell and deliver the Debentures
to be sold by it as provided therein; and the Agreement has been duly
authorized, executed and delivered by the Company, and constitutes a legal
valid, and binding obligation of the Company and is enforceable against the
Company in accordance with its terms, except in all cases to the extent that (i)
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting the enforcement of
creditors' rights and remedies generally, (ii) enforceability may be limited by
general equity principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law, (iii) the enforceability of the
provisions hereof relating to indemnification and contribution may be limited by
applicable federal, state, or other securities laws, or the public policy
underlying such laws.
8. The Company is not an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment Company Act
of 1940, as amended.
9. The statements set forth in the Prospectus under the captions
"Regulation and Supervision" and "Description of Capital Stock of Florida
Savings Bancorp," insofar as they purport to describe the provisions of the laws
referred to therein, fairly summarize the legal matters described therein.
10. No stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings therefor have
been instituted or, to counsel's Knowledge, are pending or threatened by the SEC
or any bank regulatory agency.
11. The Registration Statement and the Prospectus and any amendment or
supplement thereto (except for the financial statements and other financial and
statistical data included therein or omitted therefrom, as to which such counsel
need express no opinion), as of their respective effective or issue dates,
comply or complied as to form in all material respects to the requirements of
the 1933 Act and the 1933 Act Regulations.
12. No legal or governmental proceedings have been instituted to which the
Company or any Subsidiary is a party or of which any material properties of the
Company or any Subsidiary are the subject or that would affect the consummation
of the transactions contemplated in the Agreement, and counsel has no Knowledge
of any such proceedings that are threatened or contemplated by governmental
authorities or threatened by others.
13. To counsel's Knowledge, no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments are required to be described in
the Prospectus other than those described therein, and such instruments as are
summarized in the Prospectus are fairly summarized in all material respects.
14. No approval, authorization, consent, registration, qualification or
other order of any governmental agency or entity is required in connection with
the execution and delivery of
C-2
the Agreement, the issuance and sale of the Debentures, the issuance of the
Conversion Shares, or the consummation by the Company of the transactions
contemplated by the Agreement.
15. The execution and delivery of the Agreement and sale of the Debentures,
the compliance by the Company with the provisions of the Debentures and the
Agreement, and the consummation of the transactions therein contemplated will
not conflict with or constitute (a) a breach of, or default under the articles
of incorporation, charter or bylaws of the Company or any Subsidiary; or (b) to
counsel's Knowledge, a breach or default under any contact, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
Subsidiary is a party or by which any of them or any of their respective
properties may be bound, nor will such action result in a violation on the part
of the Company or any Subsidiary of any applicable law or regulation or court
decree, except where such breach, default or violation will not have a Material
Adverse Effect.
16. Counsel has participated in the preparation of the Registration
Statement and the Prospectus and no facts have come to the attention of such
counsel to lead it to believe (a) that the Registration Statement and the
Prospectus and any amendment or supplement thereto (except for the financial
statements, schedules notes to financial statements and other financial,
accounting or statistical data included therein or omitted therefrom, as to
which such counsel need express no opinion), as of its respective effective or
issue dates, contained an untrue statement of a material fact or omitted 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 (b) that the Registration Statement and the Prospectus and
any amendment or supplement thereto (except for the financial statements and
other financial, accounting or statistical data included therein or omitted
therefrom as to which such counsel need express no opinion) at the Initial
Closing Time and each subsequent Closing Time includes an untrue statement of a
material fact or omitted or omits 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.
C-3