Exhibit 1.2 Draft Form of Agency Agreement
Exhibit 1.2
PFSB Bancorp, Inc.
637,500 to 862,500 Shares
(as may be increased to 991,875 Shares)
Common Stock
(Par Value $.01 Per Share)
Purchase Price: $10.00 Per Share
SALES AGENCY AGREEMENT
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Trident Securities, Inc.
4601 Six Forks Road, Suite 400
Raleigh, North Carolina 27609
Dear Sirs:
PFSB Bancorp, Inc., a Missouri corporation (the "Company") and Palmyra
Savings and Building Association, F.A., a federally chartered and insured mutual
savings association (the "Association", in mutual or stock form as the context
may require), hereby confirm, as of ___________, 1999 their respective
agreements with Trident Securities, Inc. ("Trident"), a broker-dealer registered
with the Securities and Exchange Commission ("Commission") and a member of the
National Association of Securities Dealers, Inc. ("NASD"), as follows:
1. Introductory. The Association intends to convert from a federally
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chartered mutual savings association to a federally chartered capital stock
savings bank as a wholly owned subsidiary of the Company (together with the
Offerings, as defined below, the issuance of shares of common stock of the
Association to the Company and the incorporation of the Company, the
"Conversion") pursuant to a plan of conversion adopted by the Association's
Board of Directors on September 24, 1998 (the "Plan"). In accordance with the
Plan, the Company is offering shares of its common stock, par value $.01 per
share (the "Common Stock"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to certain depositors and
borrowers of the Association and to the Association's tax-qualified employee
benefit plans (i.e., the Association's Employee Stock Ownership Plan (the
"ESOP")). Any shares of the Common Stock not sold in the Subscription Offering
are being offered to the general public in a Community Offering (the "Community
Offering"), with preference given to natural persons and the trusts of natural
persons who are permanent residents of Marion, Lewis and Clark Counties,
Missouri (the "Local Community") (the Subscription and Community Offerings are
sometimes referred to collectively as the "Subscription and Community
Offering"), subject to the right of the Company and the Association, in their
absolute discretion, to reject orders in the Community Offering in whole or in
part. It is anticipated that shares of Common Stock not subscribed for in the
Subscription and Community Offering (if any) will be offered to certain members
of the general public on a best efforts basis by a selling group of broker
dealers to be formed and managed by Trident in a syndicated offering
("Syndicated Community Offering") (the Subscription
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and Community Offering and the Syndicated Community Offering are referred to
collectively as the "Offerings"). In the Subscription Offering (and the
Community Offering and the Syndicated Community Offering if applicable), the
Company is offering between 637,500 and 862,500 shares of Common Stock (the
"Shares"), with the possibility of offering up to 991,875 shares without a
resolicitation of subscribers, as contemplated by Part 563b of Title 12 of the
Code of Federal Regulations. With the exception of the ESOP, no person (or group
of persons through a single deposit account) may purchase shares with an
aggregate purchase price of more than $40,000 and no person or entity, together
with associates of and persons acting in concert with such person or other
entity, may purchase shares of Common Stock which in the aggregate exceed 1% of
the total number of shares of Common Stock issued in the Conversion.
The Company and the Association have been advised by Trident that it will
utilize its best efforts to assist the Company with the sale of the Shares in
the Offerings. Prior to the execution of this Agreement, the Company has
delivered to Trident the Prospectus dated ________, 1999 (as hereinafter
defined) and all supplements thereto, if any, to be used in the Offerings have
also been delivered to Trident (or if after the date of this Agreement, will be
promptly delivered to Trident). Such Prospectus contains information with
respect to the Company, the Association and the Shares.
2. Representations and Warranties.
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(a) The Company and the Association jointly and severally represent
and warrant to Trident that:
(i) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto,
on Form SB-2 (No. 333-69191), including a Prospectus relating to the
Offerings, for the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"). Such registration statement has
become effective under the Act and no stop order has been issued with
respect thereto and no proceedings therefor have been initiated or, to
the Company's best knowledge, threatened by the Commission. Except as
the context may otherwise require, such registration statement, as
amended or supplemented, on file with the Commission at the time the
registration statement became effective, including the Prospectus,
financial statements, schedules, exhibits and all other documents
filed as part thereof, as amended and supplemented, is herein called
the "Registration Statement," and the prospectus, as amended or
supplemented, on file with the Commission at the time the Registration
Statement became effective is herein called the "Prospectus," except
that if the prospectus filed by the Company with the Commission
pursuant to Rule 424(b) of the general rules and regulations of the
Commission under the Act (the "SEC Regulations")
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differs from the form of prospectus on file at the time the
Registration Statement became effective, the term "Prospectus" shall
refer to the Rule 424(b) prospectus from and after the time it is
filed with the Commission and shall include any amendments or
supplements thereto from and after their dates of effectiveness or
use, respectively. If any Shares remain unsubscribed following
completion of the Subscription Offering and, if any, the Community
Offering, the Company (i) will, if required by SEC Regulations,
promptly file with the Commission a post-effective amendment to such
Registration Statement relating to the results of the Subscription
Offering and, if any, the Community Offering, any additional
information with respect to the proposed plan of distribution and any
revised pricing information or (ii) if no such post-effective
amendment is required, will file with the Commission a prospectus or
prospectus supplement containing information relating to the results
of the Subscription and the Community Offerings and pricing
information pursuant to Rule 424(c) of the SEC Regulations, in either
case in a form reasonably acceptable to the Company and
Trident.
(ii) The Association has filed an Application for Approval of
Conversion on Form AC, including exhibits (as amended or supplemented,
the "Form AC" and together with the Form H-(e)1-S referred to below,
the "Conversion Application") with the Office of Thrift Supervision
(the "Office") under the Home Owners' Loan Act, as amended (the
"HOLA") and the enforceable rules and regulations, including published
policies and actions, of the Office thereunder (the "OTS
Regulations"), which has been approved by the Office; the Prospectus
and the proxy statement for the solicitation of proxies from members
of the Association for the special meeting to approve the Plan (the
"Proxy Statement") included as part of the Form AC have been approved
for use by the Office. No order has been issued by the Office
preventing or suspending the use of the Prospectus or the Proxy
Statement; and no action by or before the Office revoking such
approvals is pending or, to the Association's best knowledge,
threatened. The Company has filed with the Office the Company's
application on Form H-e(1)-S under the savings and loan holding
company provisions of the HOLA and the OTS Regulations, which has been
conditionally approved.
(iii) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (i) the Registration
Statement and the Prospectus (as amended or supplemented, if amended
or supplemented) complied and will comply in all material respects
with the Act and the SEC Regulations, (ii) the Registration Statement
(as amended or supplemented, if amended or supplemented) did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (iii) the Prospectus (as
amended or supplemented, if
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amended or supplemented) did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Representations or warranties in this subsection shall not apply to
statements or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Association
relating to Trident, by or on behalf of Trident expressly for use in
the Registration Statement or Prospectus.
(iv) The Company has been duly incorporated as a Missouri
corporation and the Association has been duly organized as a mutual
savings association under the laws of the United States, and each of
them is validly existing and in good standing under the laws of the
jurisdiction of its organization with full power and authority to own
its property and conduct its business as described in the Prospectus;
the Association is a member of the Federal Home Loan Bank of Des
Moines; and the deposit accounts of the Association are insured by the
Savings Association Insurance Fund ("SAIF") administered by the
Federal Deposit Insurance Corporation ("FDIC") up to the applicable
limits. Neither the Company or the Association is required to be
qualified to do business as a foreign corporation in any jurisdiction
where non-qualification would have a material adverse effect on the
Company and the Association, taken as a whole. The Association does
not own equity securities of or an equity interest in any business
enterprise, except as described in the Prospectus. Upon amendment of
the Association's charter and bylaws as provided in the OTS
Regulations and completion of the sale by the Company of the Shares as
contemplated by the Prospectus, (i) the Association will convert
pursuant to the Plan to a federally chartered capital stock savings
bank with full power and authority to own its property and conduct its
business as described in the Prospectus, (ii) all of the authorized
and outstanding capital stock of the Association will be owned of
record and beneficially by the Company, and (iii) the Company will
have no direct subsidiary other than the Association.
(v) The Association has good and marketable title to all assets
material to its business and to those assets described in the
Prospectus as owned by it, free and clear of all material liens,
charges, encumbrances or restrictions, except for liens for taxes not
yet due, except as described in the Prospectus and except as would not
in the aggregate have a material adverse effect upon the operations or
financial condition of the Association; and all of the leases and
subleases material to the operations or financial condition of the
Association, under which it holds properties, including those
described in the Prospectus, are in full force and effect as described
therein.
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(vi) The Association has obtained all licenses, permits and other
governmental authorizations currently required for the conduct of its
business, all such licenses, permits and other governmental
authorizations are in full force and effect and the Association is in
all material respects complying therewith, except where the failure to
hold or comply with such licenses, permits or governmental
authorizations would not have a material adverse effect on the Company
and the Association, taken as a whole;
(vii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary actions on the part of each of
the Company and the Association, and this Agreement is a valid and
binding obligation with valid execution and delivery of each of the
Company and the Association, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally or the rights
of creditors of savings and loan holding companies the accounts of
whose subsidiary are insured by the FDIC or by general equity
principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law, and except to the extent that the
provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A of the Federal Reserve Act,
12 U.S.C. Section 371c ("Section 23A")).
(viii) There is no litigation or governmental proceeding pending
or, to the best knowledge of the Company or the Association,
threatened against or involving the Company, the Association, or any
of their respective assets which individually or in the aggregate
would reasonably be expected to have a material adverse effect the
condition (financial or otherwise), results of operations and
business, including the assets and properties of the Company and the
Association, taken as a whole.
(ix) The Company and the Association have received the opinions
of Muldoon, Murphy & Faucette with respect to federal income tax
consequences of the Conversion and of Moore, Horton & Carlson, P.C.,
with respect to Missouri income tax consequences of the Conversion, to
the effect that the Conversion will constitute a tax-free
reorganization under the Internal Revenue Code of 1986, as amended,
and will not be a taxable transaction for the Association or the
Company under the laws of Missouri, and the facts relied upon in such
opinions are accurate and complete.
(x) Each of the Company and the Association has all such
corporate power, authority, authorizations, approvals and orders as
may be required to enter
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into this Agreement and to carry out the provisions and conditions
hereof, subject to the limitations set forth herein and subject to the
satisfaction of certain conditions imposed by the Office in connection
with its approvals of the Form AC and the Application H-(e)1-S, and
except as may be required under the securities, or "blue sky", laws of
various jurisdictions, and in the case of the Company, as of the
Closing Date, will have such approvals and orders to issue and sell
the Shares to be sold by the Company as provided herein, and in the
case of the Association, as of the Closing Date, will have such
approvals and orders to issue and sell the Shares of its Common Stock
to be sold to the Company as provided in the Plan, subject to the
issuance of an amended charter in the form required for federally
chartered capital stock savings banks (the "Stock Charter"), the form
of which Stock Charter has been approved by the Office.
(xi) Neither the Company nor the Association is in violation of
any rule or regulation of the Office or the FDIC that could reasonably
be expected to result in any enforcement action against the Company,
the Association, or their officers or directors that would have a
material adverse effect on the condition (financial or otherwise),
operations, businesses, assets or properties of the Company and the
Association, taken as a whole.
(xii) The financial statements and the related notes or
schedules which are included in the Registration Statement and are
part of the Prospectus fairly present the consolidated financial
condition, income, retained earnings and cash flows of the Association
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 the SEC Regulations and the
applicable accounting regulations of the Office. Such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as set forth therein, and such financial statements
are in all material respects consistent with financial statements and
other reports filed by the Association with supervisory and regulatory
authorities except as such generally accepted accounting principles
may otherwise require. The tables in the Prospectus accurately
present the information purported to be shown thereby at the
respective dates thereof and for the respective periods therein.
(xiii) There has been no material change in the condition
(financial or otherwise), results of operations or business, including
assets and properties, of the Company and the Association, taken as a
whole, since the latest date as of which such condition is set forth
in the Prospectus, except as set forth therein; and the
capitalization, assets, properties and business of each of the Company
and the Association conform to the descriptions thereof contained in
the Prospectus. Neither the Company nor the Association has any
material liabilities of any kind, contingent or otherwise, except as
set forth in the Prospectus.
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Neither the Company nor the Association has any material liabilities
of any kind, contingent or otherwise, except as set forth in the
Prospectus.
(xiv) There has been no breach or default (or the occurrence of
any event which, with notice or lapse of time or both, would
constitute a default) under, or creation or imposition of any lien,
charge or other encumbrance upon any of the properties or assets of
the Company or the Association pursuant to any of the terms,
provisions or conditions of, any agreement, contract, indenture, bond,
debenture, note, instrument or obligation to which the Company or the
Association is a party or by which any of them or any of their
respective assets or properties may be bound or is subject, or
violation of any governmental license or permit or any enforceable
published law, administrative regulation or order or court order,
writ, injunction or decree, which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the Company and the Association taken as a whole; all agreements
which are material to the condition (financial or otherwise), results
of operations or business of the Company and the Association, taken as
a whole are in full force and effect, and no party to any such
agreement has instituted or, to the best knowledge of the Company or
the Association threatened any action or proceeding wherein the
Company or the Association would be alleged to be in default
thereunder.
(xv) Neither the Company nor the Association is in violation of
its respective articles of incorporation, charter or bylaws. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company and the Association do
not conflict with or result in a breach of the respective articles of
incorporation, charter or bylaws of the Company or the Association (in
either mutual or stock form) or constitute a material breach of or
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, give rise to any right of
termination, cancellation or acceleration contained in, or result in
the creation or imposition of any lien, charge or other encumbrance
upon any of the properties or assets of the Company or the Association
pursuant to any of the terms, provisions or conditions of, any
material agreement, contract, indenture, bond, debenture, note,
instrument or obligation to which the Company or the Association is a
party or violate any governmental license or permit or any enforceable
published law, administrative regulation or order or court order,
writ, injunction or decree (subject to the satisfaction of certain
conditions imposed by the Office in connection with its approval of
the Conversion Application), which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations or business of the Company and
the Association, taken as a whole.
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(xvi) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and prior to the
Closing Date (as hereinafter defined), except as otherwise may be
indicated or contemplated therein, neither the Company nor the
Association has issued any securities which will remain issued at the
Closing Date or incurred any liability or obligation, direct or
contingent, or borrowed money, except liabilities, obligations or
borrowings in the ordinary course of business, or entered into any
other transaction not in the ordinary course of business and
consistent with prior practices, which is material in light of the
business of the Company and the Association, taken as a whole.
(xvii) Upon consummation of the Conversion, the authorized,
issued and outstanding equity capital of the Company shall be within
the range set forth in the Prospectus under the caption
"Capitalization," and no capital stock of the Company shall be
outstanding immediately prior to the Closing Date; the issuance and
the sale of the Shares have been duly authorized by all necessary
corporate action of the Company and approved by the Office and, when
issued in accordance with the terms of the Plan and paid for, shall be
validly issued, fully paid and nonassessable and shall conform to the
description thereof contained in the Prospectus; the issuance of the
Shares is not subject to preemptive rights, except as set forth in the
Prospectus; and good title to the Shares will be transferred by the
Company to the purchasers thereof upon issuance thereof against
payment therefor, free and clear of all claims, encumbrances, security
interests and liens against the Company whatsoever. The certificates
representing the Shares will conform in all material respects with the
requirements of applicable laws and regulations. The issuance and sale
of the capital stock of the Association to the Company has been duly
authorized by all necessary corporate action of the Association and
the Company and appropriate regulatory authorities (subject to the
satisfaction of various conditions imposed by the Office in connection
with its approval of the Conversion Application), and such capital
stock, when issued in accordance with the terms of the Plan, will be
fully paid and nonassessable and will conform in all material respects
to the description thereof contained in the Prospectus.
(xviii) No approval of any regulatory or supervisory or other
public authority is required in connection with the execution and
delivery of this Agreement or the issuance of the Shares, except for
the declaration of effectiveness of any required post-effective
amendment by the Commission and approval thereof by the Office and
approval of the Company's Application H-(e)1-S, the issuance of the
Stock Charter by the Office and as may be required under the
securities laws of various jurisdictions.
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(xix) All contracts and other documents required to be filed as
exhibits to the Registration Statement or the Conversion Application
have been filed with the Commission and/or the Office, as the case may
be.
(xx) Moore, Horton & Carlson, P.C., which has audited the
financial statements of the Association at September 30, 1998 and 1997
and for the years ended September 30, 1998 and 1997 included in the
Prospectus, is an independent public accountant with respect to the
Company and the Association within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations, Section
571.2(c)(3).
(xxi) For the past five years, or in the case of the Company,
such lesser period corresponding to the Company's existence, the
Company and the Association have timely filed all required federal,
state and local franchise tax returns, and no deficiency has been
asserted with respect to such returns by any taxing authorities, and
the Company and the Association have paid all taxes that have become
due and, to the best of their knowledge, have made adequate reserves
for known future tax liabilities, except where any failure to make
such filings, payments and reserves, or the assertion of such a
deficiency, would not have a material adverse effect on the condition
(financial or otherwise) of the Company and the Association, taken as
a whole.
(xxii) All of the loans represented as assets of the Association
on the most recent statement of financial condition of the Association
included in the Prospectus meet or are exempt from all requirements of
federal, state or local law pertaining to lending, including without
limitation truth in lending (including the requirements of Regulation
Z and 12 C.F.R. Part 226 and Section 563.99), real estate settlement
procedures, consumer credit protection, equal credit opportunity and
all disclosure laws applicable to such loans, except for violations
which, if asserted, would not have a material adverse effect on the
Company and the Association, taken as a whole.
(xxiii) The records of account holders, depositors and other
members of the Association delivered to Trident by the Association or
its agent for use during the Conversion have been prepared or reviewed
by the Association and, to the best knowledge of the Company and the
Association, are reliable and accurate.
(xxiv) Neither the Company nor the Association nor, to the best
knowledge of the Company and the Association, the employees of the
Company or the Association, has made any payment of funds of the
Company or the Association
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prohibited by law, and no funds of the Company or the Association have
been set aside to be used for any payment prohibited by law.
(xxv) To the best knowledge of the Company and the Association,
the Company and the Association are in compliance with all laws, rules
and regulations relating to the discharge, storage, handling and
disposal of hazardous or toxic substances, pollutants or contaminants
and neither the Company nor the Association believes that the Company
and Association is subject to liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, or any similar law, except for violations which, if asserted,
would not have a material adverse effect on the Company and the
Association, taken as a whole. There are no actions, suits,
regulatory investigations or other proceedings pending or, to the best
knowledge of the Company or the Association, threatened against the
Company or the Association relating to the discharge, storage,
handling and disposal of hazardous or toxic substances, pollutants or
contaminants. To the best knowledge of the Company and the
Association, no disposal, release or discharge of hazardous or toxic
substances, pollutants or contaminants, including petroleum and gas
products, as any of such terms may be defined under federal, state or
local law, has been caused by the Company or the Association or, to
the best knowledge of the Company or the Association, has occurred on,
in or at any of the facilities or properties of the Company or the
Association, except such disposal, release or discharge which would
not have a material adverse effect on the Company and the Association,
taken as a whole.
(xxvi) At the Closing Date, the Company and the Association will
have completed the conditions precedent to, and shall have conducted
the Conversion in all material respects in accordance with, the Plan,
the HOLA, the OTS Regulations and all other applicable laws,
regulations, published decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion
imposed by the Office, or appropriate waivers shall have been
obtained.
(b) Trident represents and warrants to the Company and the Association
that:
(i) Trident is registered as a broker-dealer with the Commission
and a member of the NASD, and is in good standing with the Commission
and the NASD.
(ii) Trident is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to provide the services to be
furnished to the Company and the Association hereunder.
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(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action on the part of Trident,
and this Agreement is a legal, valid and binding obligation of
Trident, enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts of whom may be
protected by the Securities Investor Protection Corporation or by
general equity principles, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and except to the
extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy or pursuant to Section 23A).
(iv) Each of Trident, and to Trident's knowledge, its employees,
agents and representatives who shall perform any of the services
required hereunder to be performed by Trident shall be duly authorized
and shall have all licenses, approvals and permits necessary to
perform such services, and Trident is a registered selling agent in
the jurisdictions listed in Exhibit A hereto and will remain
registered in such jurisdictions in which the Company is relying on
such registration for the sale of the Shares, until the Conversion is
consummated or terminated.
(v) The execution and delivery of this Agreement by Trident, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with
the corporate charter or bylaws of Trident or violate, conflict with
or constitute a breach of, or default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, any
material agreement, indenture or other instrument by which Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) All funds received by Trident to purchase the Common Stock
will be handled in accordance with Rule 15c2-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's best knowledge,
threatened against Trident any action or proceeding before the
Commission, the NASD, any state securities commission or any state or
federal court concerning Trident's activities as a broker-dealer.
3. Employment of Trident; Sale and Delivery of the Shares. On the basis
------------------------------------------------------
of the representations and warranties herein contained, but subject to the terms
and conditions herein set
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forth, the Company and the Association hereby employ Trident as their agent to
utilize its best efforts in assisting the Company with the Company's sale of the
Shares in the Offerings. The employment of Trident hereunder shall terminate
(a) forty-five (45) days after the Offerings close, unless the Company and the
Association, with the approval of the Office, are permitted to extend such
period of time, or (b) upon consummation of the Conversion, whichever date shall
first occur.
In the event the Company is unable to sell a minimum of 637,500 Shares of
Common Stock (or such lesser amount as the Office may permit) within the period
herein provided, this Agreement shall terminate, and the Company and the
Association shall refund promptly to any person who has subscribed for any of
the Shares, the full amount which it may have received from them, together with
interest as provided in the Prospectus, and no party to this Agreement shall
have any obligation to the other party hereunder, except as set forth in
Sections 6, 8(a) and 9 hereof. Appropriate arrangements for placing the funds
received from subscriptions for Shares in a special interest-bearing account
with the Association until all Shares are sold and paid for were made prior to
the commencement of the Subscription and Community Offering, with provision for
prompt refund to the purchasers as set forth above, or for delivery to the
Company if all Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company or at such other place as shall be agreed
upon between the parties hereto. The date upon which Trident is paid the
compensation due hereunder is herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber to forward the aggregate offering price of the Common Stock ordered
on or before twelve noon on the next business day following receipt or execution
of an order form by Trident to the Association for deposit in a segregated
account or (b) to solicit indications of interest in which event (i) Trident
will subsequently contact any potential subscriber indicating interest to
confirm the interest and give instructions to execute and return an order form
or to receive authorization to execute the order form on the subscriber's
behalf, (ii) Trident will mail acknowledgments of receipt of orders to each
subscriber confirming interest on the business day following such confirmation,
(iii) Trident will debit accounts of such subscribers on the third business day
("debit date") following receipt of the confirmation referred to in (i), and
(iv) Trident will forward completed order forms together with such funds to the
Association on or before twelve noon on the next business day following the
debit date for deposit in a segregated account. Trident acknowledges that if
the procedure in (b) is adopted, subscribers' funds are not required to be in
their accounts until the debit date.
Trident Securities, Inc.
Sales Agency Agreement
Page 13
In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder:
(a) a management fee of one hundred thirty-five thousand dollars
($135,000) and (ii) if applicable, for any stock sold in the
Syndicated Community Offering by other NASD member firms
under selected dealer's agreements, the commission shall not
exceed a fee to be agreed upon jointly by Trident and the
Association to reflect market requirements at the time of a
stock allocation in the Syndicated Community Offering. All
such fees are to be payable in same-day funds to Trident on
the Closing Date.
(b) Trident shall be reimbursed for reasonable allocable
expenses, including but not limited to travel,
communications, legal fees and expenses and postage,
incurred by it whether or not the Offerings are successfully
completed; provided, however, that neither the Company nor
the Association shall pay or reimburse Trident for any of
the foregoing expenses accrued after Trident shall have
notified the Company or the Association of its election to
terminate this Agreement pursuant to Section 11 hereof or
after such time as the Company or the Association shall have
given notice in accordance with Section 12 hereof that
Trident is in breach of this Agreement. Trident's
reimbursable out of pocket expenses will not exceed $12,500,
and its reimbursable legal fees will not exceed $30,000.
Full payment to defray Trident's reimbursable expenses shall
be made in next-day funds on the Closing Date or, if the
Conversion is not completed and is terminated for any
reason, within ten (10) business days of receipt by the
Company of a written request from Trident for reimbursement
of its expenses. Trident acknowledges receipt of $10,000
advance payment from the Association which shall be credited
against the total reimbursement due Trident hereunder.
(c) Notwithstanding the limitations on reimbursement of Trident
for allocable expenses provided in the immediately preceding
paragraph (b), in the event that a resolicitation or other
event causes the Offerings to be extended beyond their
original expiration date, Trident shall be reimbursed for
its allocable expenses incurred during such extended period,
provided that the allowance for allocable expenses provided
for in the immediately preceding paragraph (b) above have
been exhausted and subject to the following: such
reimbursement shall be in amount equal to the product
obtained by dividing $12,500 (original reimbursable out-of-
pocket expenses) by the total number of days of the
unextended Subscription Offering (calculated from the date
of the Prospectus to the intended close of the Subscription
Offering as stated
Trident Securities, Inc.
Sales Agency Agreement
Page 14
in the Prospectus) and multiplying such product by the
number of days of the extension (that number of days from
the date of the supplemental prospectus used in the extended
Subscription Offering to the closing of the extension of the
Subscription Offering described in such supplemental
prospectus).
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Association
shall also pay all expenses of the Conversion incurred by them or on their prior
approval including but not limited to their attorneys' fees, NASD filing fees,
and attorneys' fees relating to any required state securities laws research and
filings, telephone charges, air freight, rental equipment, supplies, transfer
agent charges, fees relating to auditing and accounting and costs of printing
all documents necessary in connection with the Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
--------
assisting the Company on a best efforts basis in offering a minimum of 637,500
and a maximum of 862,500 Shares, with the possibility of offering up to 991,875
Shares (except as the Office may permit to be decreased or increased) in the
Subscription and Community Offerings, and if necessary, the Syndicated Community
Offering. The Shares are to be offered to the public at the price set forth on
the cover page of the Prospectus and the first page of this Agreement.
5. Further Agreements. The Company and the Association jointly and
------------------
severally covenant and agree that:
(a) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident or its counsel immediately upon
discovery, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement becomes effective or any supplement
to the Prospectus has been filed, (ii) of the issuance by the Commission of
any stop order relating to the Registration Statement or of the initiation
or the threat of any proceedings for that purpose, (iii) of the receipt of
any notice with respect to the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, and (iv) of the receipt of
any comments from the staff of the Commission relating to the Registration
Statement. If the Commission enters a stop order relating to the
Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible moment.
Trident Securities, Inc.
Sales Agency Agreement
Page 15
(c) During the time when the Prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter
amended, and by the SEC Regulations and the OTS Regulations, as from time
to time in force, so far as necessary to permit the continuance of offers
and sales of or dealings in the Shares in accordance with the provisions
hereof and the Prospectus. If during the period when the Prospectus is
required to be delivered in connection with the offer and sale of the
Shares any event relating to or affecting the Company and the Association,
taken as a whole, shall occur as a result of which it is necessary, in the
opinion of counsel for Trident, with concurrence of counsel of the Company,
to amend or supplement the Prospectus in order to make the Prospectus not
false or misleading as to a material fact in light of the circumstances
existing at the time it is delivered to a purchaser of the Shares, the
Company forthwith shall prepare and furnish to Trident a reasonable number
of copies of an amendment or amendments or of a supplement or supplements
to the Prospectus (in form and substance satisfactory to counsel for
Trident) which shall amend or supplement the Prospectus so that, as amended
or supplemented, the Prospectus shall not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time
the Prospectus is delivered to a purchaser of the Shares, not misleading.
The Company will not file or use any amendment or supplement to the
Registration Statement or the Prospectus of which Trident has not first
been furnished a copy or to which Trident shall reasonably object after
having been furnished such copy. For the purposes of this subsection the
Company and the Association shall furnish such information with respect to
themselves as Trident from time to time may reasonably request.
(d) The Company has taken or will take all reasonably necessary
action as may be required to qualify or register the Shares for offer and
sale by the Company under the securities or blue sky laws of such
jurisdictions as Trident and either the Company or its counsel may agree
upon; provided, however, that the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction. In each jurisdiction where such qualification or registration
shall be effected, the Company, unless Trident agrees that such action is
not necessary or advisable in connection with the distribution of the
Shares, shall file and make such statements or reports as are, or
reasonably may be, required by the laws of such jurisdiction.
(e) Appropriate entries will be made in the financial records of the
Association sufficient to establish a liquidation account for the benefit
of Eligible Account Holders and Supplemental Eligible Account Holders in
accordance with the requirements of the Office.
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Exchange Act prior to completion of the
stock offering pursuant to the
Trident Securities, Inc.
Sales Agency Agreement
Page 16
Plan and shall request that such registration statement be effective upon
completion of the Conversion. The Company shall maintain the effectiveness
of such registration for a minimum period of three years or for such
shorter period as may be required by applicable law.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the regulations promulgated under the
Act) covering a twelve-month period beginning not later than the first day
of the Company's fiscal quarter next following the effective date (as
defined in said Rule 158) of the Registration Statement.
(h) For a period of three (3) years from the date of this Agreement
(unless the Common Stock shall have been deregistered under the Exchange
Act), the Company will furnish to Trident, as soon as publicly available
after the end of each fiscal year, a copy of its annual report to
shareholders for such year; and the Company will furnish to Trident (i) as
soon as publicly available, a copy of each report or definitive proxy
statement of the Company filed with the Commission under the Exchange Act
or mailed to shareholders, and (ii) from time to time, such other public
information concerning the Company as Trident may reasonably request.
(i) The Company shall use the net proceeds from the sale of the
Shares consistently with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived by Trident.
(k) The Company shall advise Trident, if necessary, as to the
allocation of deposits, in the case of Eligible Account Holders and
Supplemental Eligible Account Holders, and votes, in the case of Other
Members, and of the Shares in the event of an oversubscription and shall
provide Trident final instructions as to the allocation of the Shares
("Allocation Instructions") in such event and such information shall be
accurate and reliable. Trident shall be entitled to rely on such
instructions and shall have no liability in respect of its reliance
thereon, including without limitation, no liability for or related to any
denial or grant of a subscription in whole or in part.
(l) The Company and the Association will take such actions and
furnish such information as are reasonably requested by Trident in order
for Trident to ensure compliance with the NASD's "Interpretation Relating
to Free-Riding and Withholding."
Trident Securities, Inc.
Sales Agency Agreement
Page 17
(m) At the Closing Date, the Company and the Association will have
completed the conditions precedent to, and shall have conducted the
Conversion in all material respects in accordance with, the Plan, the OTS
Regulations and all other applicable laws, regulations, published decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed by the Office.
6. Payment of Expenses. Whether or not the Conversion is consummated,
-------------------
the Company and the Association shall pay or reimburse Trident for (a) all
filing fees paid or incurred by Trident in connection with all filings with the
NASD with respect to the Subscription and Community Offerings and, (b) in
addition, if the Company is unable to sell a minimum of 637,500 Shares of Common
Stock or such lesser amount as the Office may permit or the Conversion is
otherwise terminated, the Company and the Association shall reimburse Trident
for allocable expenses incurred by Trident relating to the offering of the
Shares as provided in Section 3 hereof; provided, however, that neither the
Company nor the Association shall pay or reimburse Trident for any of the
foregoing expenses accrued after Trident shall have notified the Company or the
Association of its election to terminate this Agreement pursuant to Section 11
hereof or after such time as the Company or the Association shall have given
notice in accordance with Section 12 hereof that Trident is in breach of this
Agreement.
7. Conditions of Trident's Obligations. Except as may be waived by
-----------------------------------
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the Association of their obligations hereunder and to the following
conditions:
(a) At the Closing Date, Trident shall receive the favorable opinion
of Muldoon, Murphy & Faucette, special counsel for the Company and the
Association, dated the Closing Date, addressed to Trident, in form and
substance reasonably satisfactory to counsel for Trident and to the effect
that:
(i) The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of Missouri, and
the Association is validly existing as a mutual savings association
under the laws of the United States, each with full corporate power
and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) the Association is a member of the Federal Home Loan Bank
of Des Moines, and the deposit accounts of the Association are insured
by the SAIF up to the applicable legal limits;
Trident Securities, Inc.
Sales Agency Agreement
Page 18
(iii) the activities of the Association, as such activities
are described in the Prospectus, are permitted under federal and
Missouri law to subsidiaries of a Missouri business corporation and
the Association does not have any subsidiaries other than the
Subsidiary;
(iv) the Plan complies with, and the Conversion has been
effected in all material respects in accordance with the HOLA and the
OTS Regulations; all of the terms, conditions, requirements and
provisions with respect to the Plan and the Conversion imposed by the
Office, except with respect to the filing or submission of certain
required post-Conversion reports or other materials by the Company or
the Association, have been complied with by the Company and the
Association; and, to the knowledge of such counsel, no person has
sought to obtain regulatory or judicial review of the final action of
the Office in approving the Plan;
(v) the Company has authorized Common Stock as set forth in the
Registration Statement and the Prospectus, and the description of the
Common Stock in the Registration Statement and the Prospectus is
accurate in all material respects;
(vi) the issuance and sale of the Shares have been duly
authorized by all necessary corporate action on the part of the
Company; the Shares, upon receipt of payment and issuance in
accordance with the terms of the Plan and this Agreement, will be
validly issued, fully paid, nonassessable and, except as disclosed in
the Prospectus, free of preemptive rights, and purchasers of the
Shares from the Company, upon issuance thereof against payment
therefor, will acquire such Shares free and clear of all claims,
encumbrances, security interests and liens created by the Company;
(vii) the form of certificate used to evidence the Shares is in
proper form and complies in all material respects with the applicable
requirements of Missouri law;
(viii) the issuance and sale of the capital stock of the
Association to the Company have been duly authorized by all necessary
corporate action of the Association and the Company and have received
the approval of the Office, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of the Plan, will be
validly issued, fully paid and nonassessable and owned of record and,
to the knowledge of such counsel, beneficially by the Company;
(ix) subject to the satisfaction of the conditions to the
Office's approval of the Conversion Application, no further approval,
authorization, consent or other
Trident Securities, Inc.
Sales Agency Agreement
Page 19
order of any federal governmental board or body is required in
connection with the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the Conversion, except
with respect to the issuance to the Association of the Stock Charter
by the Office and as may be required under the "blue sky" or state
securities laws of various jurisdictions;
(x) the execution and delivery of this Agreement and the
consummation of the Conversion have been duly and validly authorized
by all necessary corporate action on the part of each of the Company
and the Association;
(xi) the statements in the Prospectus under the captions
"Dividend Policy," "Regulation," "Taxation," "Restrictions on
Acquisition of the Holding Company, "Registration Requirements" and
"Description of Capital Stock of the Holding Company," insofar as they
are, or refer to, statements of law or legal conclusions (excluding
financial data included therein, as to which an opinion need not be
expressed), have been prepared or reviewed by such counsel and are
correct in all material respects;
(xii) the Conversion Application, the Registration Statement, the
Prospectus and the Proxy Statement, in each case as amended, comply as
to form in all material respects with the requirements of the Act, the
SEC Regulations, the HOLA and the OTS Regulations, as the case may be
(except as to information with respect to Trident included therein and
financial statements, notes to financial statements, financial tables
and other financial and statistical data, including the appraisal,
included therein, as to which no opinion need be expressed); to such
counsel's knowledge, all documents and exhibits required to be filed
with the Conversion Application and the Registration Statement have
been so filed and the description in the Conversion Application and
the Registration Statement of such documents and exhibits are accurate
in all material respects.
(xiii) the Form AC has been approved by the Office, and the
Prospectus and the Proxy Statement have been authorized for use by the
Office; the Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission; no proceedings
are pending by or before the Commission or the Office seeking to
revoke or rescind the orders declaring the Registration Statement
effective or approving the Conversion Application or, to the knowledge
of such counsel, are contemplated or threatened (provided that for
this purpose such counsel need not regard any litigation or
governmental procedure to be "threatened" unless the potential
litigant or government authority has manifested to the management of
the Company or the Association, or to such counsel, a present
intention to initiate such litigation or proceeding);
Trident Securities, Inc.
Sales Agency Agreement
Page 20
(xiv) the execution and delivery of this Agreement, and the
consummation of the Conversion by the Company and the Association do
not conflict with or result in a breach of the respective articles of
incorporation, charter or bylaws of the Company or the Association (in
either mutual or stock form); and
(b) At the Closing Date, Trident shall receive the favorable opinion of
__________, counsel for the Company and Association, dated the Closing
Date, addressed to Trident, in the form and substance reasonably
satisfactory to counsel for Trident and the effect that:
(i) to the knowledge of such counsel, the Association has
obtained all licenses, permits and other governmental authorizations
currently required for the conduct of its business as such business is
described in the Prospectus, all such licenses, permits and other
governmental authorizations are in full force and effect and the
Association is in all material respects complying therewith, except
where the failure to hold such licenses, permits or governmental
authorizations or the failure to so comply would not have a material
adverse effect on the Company and the Association, taken as a whole;
(ii) there are no material legal or governmental
proceedings pending or, to the knowledge of such counsel, threatened
against or involving the assets of the Company or the Association
(provided that for this purpose such counsel need not regard any
litigation or governmental procedure to be "threatened" unless the
potential litigant or government authority has manifested to the
management of the Company or the Association, or to such counsel, a
present intention to initiate such litigation or proceeding);
(iii) this Agreement is a legal, valid and binding
obligation of each of the Company and the Association, enforceable in
accordance with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization,
receivership, conservatorship or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of depository institutions whose accounts are insured by the
FDIC or savings and loan holding companies the accounts of whose
subsidiaries are insured by the FDIC or by general equity principles,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent that the
provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A, as to which no opinion need
be rendered);
Trident Securities, Inc.
Sales Agency Agreement
Page 21
(iv) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the Association do
not constitute a material breach of or default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, give rise to any right of termination, cancellation or
acceleration contained in, or result in the creation or imposition of
any lien, charge or other encumbrance upon any of the properties or
assets of the Company or the Association pursuant to any of the terms,
provisions or conditions of, any material agreement, contract,
indenture, bond, debenture, note, instrument or obligation to which
the Company or the Association is a party or violate any governmental
license or permit or any enforceable published law, administrative
regulation or order or court order, writ, injunction or decree
(subject to the satisfaction of certain conditions imposed by the
Office in connection with its approval of the Conversion Application),
which breach, default, encumbrance or violation would have a material
adverse effect on the condition (financial or otherwise), operations,
business, assets or properties of the Company and the Association,
taken as a whole; and
(v) to the knowledge of such counsel, there has been no material
breach of any provision of the Company's or the Association's
respective articles of incorporation, charter or bylaws or breach or
default (or the occurrence of any event which, with notice or lapse of
time or both, would constitute a default) under any agreement,
contract, indenture, debenture, bond, note, instrument or obligation
to which the Company or the Association is a party or by which any of
them or any of their respective assets or properties may be bound, or
any governmental license or permit, or a violation of any enforceable
published law, administrative regulation or order, or court order,
writ, injunction or decree which breach, default, encumbrance or
violation would have a material adverse effect on the condition
(financial or otherwise), operations, business, assets or properties
of the Company and the Association, taken as a whole.
In rendering such opinions required under clauses 7(a) and 7(b) above, such
counsels may rely as to matters of fact on certificates of officers and
directors of the Company and the Association and certificates of public
officials delivered pursuant hereto. Such counsels may assume that any
agreement is the valid and binding obligation of any parties to such agreement
other than the Company and the Association. Such opinions may be governed by,
and interpreted in accordance with, the Legal Opinion Accord (the "Accord") of
the ABA Section of Business Law (1991), and, as a consequence, such opinions are
subject to the qualifications, exceptions, definitions, limitations on coverage
and other limitations, all as more particularly described in the Accord, and
they should be read in conjunction therewith. Further, references in such
opinions to such counsels' "knowledge" may be limited to "actual knowledge" as
defined in the Accord (or knowledge based on certificates). In addition, the
"General Qualifications" set forth in the Accord
Trident Securities, Inc.
Sales Agency Agreement
Page 22
apply to the opinions set forth in such opinions. Such opinions may be limited
to present statutes, regulations and judicial interpretations and to facts as
they presently exist; in rendering such opinions, such counsels need assume no
obligation to revise or supplement them should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise; and such
counsels need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any regulations or any policy
statements issued by any regulatory agency, whether or not promulgated pursuant
to any such legislation, would affect the validity of the execution and delivery
by the Company and the Association of this Agreement or the issuance of the
Shares.
(c) At the Closing Date, Trident shall receive the letter of Muldoon,
Murphy & Faucette, special counsel for the Company and the Association,
dated the Closing Date, addressed to Trident, in form and substance
reasonably satisfactory to counsel for Trident and to the effect that:
based on such counsel's participation in conferences with representatives
of the Company, the Association, the independent appraiser, the independent
certified public accountants, Trident and its counsel, review of documents
and understanding of applicable law (including the requirements of Form SB-
2 and the character of the Registration Statement contemplated thereby) and
the experience such counsel has gained in its practice under the Act,
nothing has come to such counsel's attention that would lead it to believe
that the Registration Statement, as amended (except as to information in
respect of Trident contained therein and except as to the appraisal,
financial statements, notes to financial statements, financial tables and
other financial and statistical data contained therein, as to which such
counsel need express no comment), at the time it became effective contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein not misleading, or that the Prospectus, as amended (except as to
information in respect of Trident contained therein and except as to the
appraisal, financial statements, notes to financial statements, financial
tables and other financial and statistical data contained therein as to
which such counsel need express no comment), at the time the Prospectus was
filed with the Commission under Rule 424(b), or as of the date of the
Prospectus if no 424(b) Prospectus is filed, and at the Closing Date,
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (in making this
statement such counsel may state that it has not undertaken to verify
independently the information in the Registration Statement or Prospectus
and, therefore, does not assume any responsibility for the accuracy or
completeness thereof).
(d) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or
pass upon the matters required by Trident, and for the purpose of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained,
Trident Securities, Inc.
Sales Agency Agreement
Page 23
including but not limited to, resolutions of the Board of Directors of the
Company and the Association regarding the authorization of this Agreement
and the transactions contemplated hereby.
(e) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material change in the condition
(financial or otherwise), business or results of operations of the Company
and the Association, taken as a whole, since the latest date as of which
such condition is set forth in the Prospectus, except as referred to
therein; (ii) there shall have been no transaction entered into by the
Company or the Association after the latest date as of which the financial
condition of the Company or the Association is set forth in the Prospectus
other than transactions referred to or contemplated therein, transactions
in the ordinary course of business, and transactions which are not material
to the Company and the Association, taken as a whole; (iii) neither the
Company nor the Association shall have received from the Office or
Commission any direction (oral or written) to make any change in the method
of conducting their respective businesses which is material to the business
of the Company and the Association, taken as a whole, with which they have
not complied; (iv) no action, suit or proceeding, at law or in equity or
before or by any federal or state commission, board or other administrative
agency, shall be pending or threatened against the Company or the
Association or affecting any of their respective assets, wherein an
unfavorable decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or income of the
Company and the Association, taken as a whole; and (v) the Shares shall
have been qualified or registered for offering and sale by the Company
under the securities or blue sky laws of such jurisdictions as Trident and
the Company shall have agreed upon.
(f) At the Closing Date, Trident shall receive a certificate of the
principal executive officer and the principal financial officer of each of
the Company and the Association, dated the Closing Date, to the effect
that: (i) they have examined the Prospectus and, at the time the Prospectus
became authorized by the Commission and the Office for use, the Prospectus
did not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading with
respect to the Company or the Association; (ii) since the date the
Prospectus became authorized by the Commission and the Office for use, no
event has occurred which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth, including
specifically, but without limitation, any material change in the business,
condition (financial or otherwise) or results of operations of the Company
or the Association, and the conditions set forth in clauses (ii) through
(iv) inclusive of subsection (e) of this Section 7 have been satisfied;
(iii) no order has been issued by the Commission or the Office to suspend
the Subscription Offering or the Community Offering or the effectiveness of
the Prospectus, and no action for such purposes has been instituted or to
the best knowledge
Trident Securities, Inc.
Sales Agency Agreement
Page 24
of such officers, threatened by the Commission or the Office; (iv) to the
best knowledge of such officers, no person has sought to obtain review of
the final actions of the Office and division approving the Plan; and (v)
all of the representations and warranties contained in Section 2 of this
Agreement are true and correct, with the same force and effect as though
expressly made on the Closing Date.
(g) At the Closing Date, Trident shall receive, among other
documents, (i) copies of the letters from the Office authorizing the use of
the Prospectus and the Proxy Statement, (ii) a copy of the order of the
Commission declaring the Registration Statement effective; (iii) copies of
the letters from the Office evidencing the corporate existence of the
Association; (iv) a copy of the letter from the appropriate Missouri
authority evidencing the incorporation (and, if generally available from
such authority, good standing) of the Company; (v) a copy of the Company's
articles of incorporation certified by the appropriate Missouri
governmental authority; and, (vi) a copy of the letter from the Office
approving the Association's Stock Charter.
(h) As soon as available after the Closing Date, Trident shall
receive a certified copy of the Association's Stock Charter executed by the
Office.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Moore, Horton & Carlson, P.C.,
independent certified public accountants, addressed to Trident and the
Company, in substance and form satisfactory to counsel for Trident, with
respect to the financial statements and certain financial information
contained in the Prospectus.
(j) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Moore, Horton & Carlson,
P.C., independent certified public accountants, dated the Closing Date and
addressed to Trident and the Company, confirming the statements made by
them in the letter delivered by them pursuant to the preceding subsection
as of a specified date not more than five (5) days prior to the Closing
Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident. Any certificates
signed by an officer or director of the Company or the Association prepared for
Trident's reliance and delivered to Trident or to counsel for Trident shall be
deemed a representation and warranty by the Company and the Association to
Trident as to the statements made therein. If any condition to Trident's
obligations hereunder to be fulfilled prior to or at the Closing Date is not so
fulfilled, Trident may terminate this Agreement or, if Trident so elects, may
waive any such conditions which have not been fulfilled, or may extend the time
of their
Trident Securities, Inc.
Sales Agency Agreement
Page 25
fulfillment. If Trident terminates this Agreement as aforesaid, the
Company and the Association shall reimburse Trident for its expenses as provided
in Section 3(b) hereof.
8. Indemnification.
---------------
(a) The Company and the Association jointly and severally agree to
indemnify and hold harmless Trident, its officers, directors and employees
and each person, if any, who controls Trident within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any and all
loss, liability, claim, damage and expense whatsoever and shall further
promptly reimburse such persons for any legal or other expenses reasonably
incurred by each or any of them in investigating, preparing to defend or
defending against any such action, proceeding or claim (whether commenced
or threatened) arising out of or based upon (i) any misrepresentation by
the Company or the Association in this Agreement or any breach of warranty
by the Company or the Association with respect to this Agreement or arising
out of or based upon any untrue or alleged untrue statement of a material
fact or the omission or alleged omission of a material fact required to be
stated or necessary to make not misleading any statements contained in (A)
the Registration Statement or the Prospectus or (B) any application
(including the Form AC and the Form H-(e)1-S) or other document or
communication (in this Section 8 collectively called "Application")
prepared or executed by or on behalf of the Company or the Association or
based upon information furnished by or on behalf of the Company or the
Association, whether or not filed in any jurisdiction, to effect the
Conversion or qualify the Shares under the securities laws thereof or filed
with the Office or Commission, unless such statement or omission was made
in reliance upon and in conformity with information furnished to the
Company or the Association with respect to Trident by or on behalf of
Trident expressly for use in the Prospectus or any amendment or supplement
thereof or in any Application, as the case may be, or (ii) the
participation by Trident in the Conversion; provided, however, that this
indemnification agreement will not apply to any loss, liability, claim,
damage or expense found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the bad faith, willful
misconduct or gross negligence of any party who may otherwise be entitled
to indemnification pursuant to this Section 8(a). This indemnity shall be
in addition to any liability the Company and the Association may have to
Trident otherwise.
(b) The Company shall indemnify and hold Trident harmless for any
liability whatsoever arising out of (i) the Allocation Instructions or (ii)
any records of account holders, depositors, borrowers and other members of
the Association delivered to Trident by the Association or its agents for
use during the Conversion; provided, however, that this indemnification
agreement will not apply to any loss, liability, claim, damage or expense
found in a final judgment by a court of competent jurisdiction to have
resulted primarily from the bad faith, willful misconduct or gross
negligence of any party who may
Trident Securities, Inc.
Sales Agency Agreement
Page 26
otherwise be entitled to indemnification pursuant to this Section 8(b).
This indemnity shall be in addition to any liability the Company and the
Association may have to Trident otherwise.
(c) Trident agrees to indemnify and hold harmless the Company and
the Association, their officers, directors and employees and each person,
if any, who controls the Company and the Association within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Association to
Trident, but only with respect to (i) statements or omissions, if any, made
in the Prospectus or any amendment or supplement thereof, in any
Application or to a purchaser of the Shares in reliance upon, and in
conformity with, written information furnished to the Company or the
Association with respect to Trident by or on behalf of Trident expressly
for use in the Prospectus or in any Application; (ii) any misrepresentation
by Trident in Section 2(b) of this Agreement; or (iii) any liability of the
Company or the Association which is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have principally
and directly resulted from gross negligence or willful misconduct of
Trident.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with the other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than the reasonable cost of
investigation except as otherwise provided herein. In the event the
indemnifying party elects to assume the defense of any such action and
retain counsel acceptable to the indemnified party, the indemnified party
may retain additional counsel, but shall bear the fees and expenses of such
counsel unless (i) the indemnifying party shall have specifically
authorized the indemnified party to retain such counsel or (ii) the parties
to such suit include such indemnifying party and the indemnified party, and
such indemnified party shall have been advised by counsel that one or more
material legal defenses may be available to the indemnified party which may
not be available to the indemnifying party, in which case the indemnifying
party shall not be entitled to assume the defense of such suit
notwithstanding
Trident Securities, Inc.
Sales Agency Agreement
Page 27
the indemnifying party's obligation to bear the fees and expenses of such
counsel. An indemnifying party against whom indemnity may be sought shall
not be liable to indemnify an indemnified party under this Section 8 if any
settlement of any such action is effected without such indemnifying party's
consent. To the extent required by law, this Section 8 is subject to and
limited by the provisions of Section 23A.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the Company and/or
the Association other than in accordance with its terms, the Company or the
Association and Trident shall contribute to the aggregate losses, liabilities,
claims, damages, and expenses of the nature contemplated by said indemnity
agreement incurred by the Company or the Association and Trident (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Association, on the one hand, and Trident, on the other hand,
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above, but
also the relative fault of the Company or the Association, on the one hand, and
Trident, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Association, on the one hand, and Trident, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from the Conversion received by the Company and the Association bear to the
total fees and expenses received by Trident under this Agreement. The relative
fault of the Company or the Association, on the one hand, and Trident, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Association or by Trident and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Association and Trident agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, Trident shall not be required
to contribute any amount in excess of the amount by which fees owed Trident
pursuant to this Agreement exceeds the amount of any damages which Trident has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f)
Trident Securities, Inc.
Sales Agency Agreement
Page 28
of the Act) shall be entitled to contribution from any person who is not guilty
of such fraudulent misrepresentation. To the extent required by law, this
Section 8 is subject to and limited by the provisions of Section 23A.
10. Survival of Agreements, Representations and Indemnities. The
--------------------------------------------------------
respective indemnities of the Company and the Association and Trident and the
representations and warranties of the Company and the Association and of Trident
set forth in or made pursuant to this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Association
or any controlling person or indemnified party referred to in Section 8 hereof,
and shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Association and any such controlling persons shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
11. Termination. Trident may terminate this Agreement by giving the
-----------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make
it, in Trident's reasonable opinion, impracticable to proceed with the
offering of the Shares; or if trading on the New York Stock Exchange shall
have suspended; or if the United States shall have become involved in a war
or major hostilities; or if a general banking moratorium has been declared
by a state or federal authority which has material effect on the
Association or the Conversion; or if a moratorium in foreign exchange
trading by major international banks or persons has been declared; or if
there shall have been a material change in the capitalization, financial
condition or business of the Company, or if the Association shall have
sustained a material or substantial loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act,
whether or not said loss shall have been insured; or if there shall have
been a material change in the condition, financial or otherwise, or
prospects of the Company or the Association.
(b) If Trident elects to terminate this Agreement as provided in
this Section, the Company and the Association shall be notified promptly by
Trident by telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the
reasons set forth in subsection (a) above, and to fulfill their
obligations, if any, pursuant to Sections 3, 6, 8(a) and 9 of this
Agreement and upon demand, the Company and the Association shall pay
Trident the full amount so owing thereunder.
Trident Securities, Inc.
Sales Agency Agreement
Page 29
(d) The Association may terminate the Conversion in accordance with
the terms of the Plan. Such termination shall be without liability to any
party, except that the Company and the Association shall be required to
fulfill their obligations pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of
this Agreement.
12. Notices. All communications hereunder, except as herein otherwise
-------
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or faxed and confirmed to Trident Securities, Inc., 4601 Six
Forks Road, Suite 400, Raleigh, North Carolina 27609, Attention: Mr. R. Lee
Burrows, Jr. (with a copy to Housley Kantarian & Bronstein, P.C., 1220 19th
Street, N.W., Washington, DC 20036, Attention: Howard S. Parris, Esquire) and if
sent to the Company, the Association or any Subsidiary, shall be mailed,
delivered or telegraphed and confirmed to PFSB Bancorp, Inc., Palmyra Savings
and Building Association, F.A., 123 West Lafayette Street, Palmyra, Missouri
63461, Attention: Mr. Eldon R. Mette, President of the Company and the
Association (with a copy to Muldoon, Murphy & Faucette, 5101 Wisconsin Avenue,
N.W., Washington, D.C. 20016, Attention: Paul M. Aggugia, Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company, the Association and the controlling
and other persons referred to in Section 8 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Construction. Unless governed by preemptive federal law, this
------------
Agreement shall be governed by and construed in accordance with the substantive
laws of Missouri.
15. Counterparts and Definitions. This Agreement may be executed in
----------------------------
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute but one and the same
instrument. Any initially capitalized terms not defined herein shall have the
meanings ascribed thereto in the Prospectus.
* * *
Trident Securities, Inc.
Sales Agency Agreement
Page 30
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
PFSB BANCORP, INC. PALMYRA SAVINGS AND BUILDING
ASSOCIATION, F.A.
By: By:
---------------------------- -----------------------------
Eldon R. Mette Elden R. Mette
President President
Date: Date:
--------------------------- ---------------------------
Agreed to and accepted:
TRIDENT SECURITIES, INC.
By:
---------------------------
Date:
---------------------------
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
--
listed below:
Alabama Montana
Alaska Nebraska
Arizona Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of North Dakota (Trident Securities, Inc. only, no
Columbia agents)
Florida Ohio
Georgia Oklahoma
Idaho Oregon
Illinois Pennsylvania
Indiana Rhode Island
Iowa South Carolina
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
---
listed below:
Hawaii
South Dakota