Exhibit 1.4
BB&T FINANCIAL CORPORATION
(a North Carolina corporation)
Common Stock
($2.50 Par Value)
AGENCY AGREEMENT
January __, 1994
TRIDENT SECURITIES, INC.
4601 Six Forks Road, Suite 400
Raleigh, North Carolina 27609
Dear Sirs:
BB&T FINANCIAL CORPORATION, a North Carolina corporation (the "Company"),
hereby confirms its agreement with Trident Securities, Inc. (the "Agent"), with
respect to the issuance and sale by the Company of up to an estimated _______
shares (the "Shares") of common stock, $2.50 par value per share, of the Company
(the "Common Stock"), and with respect to the solicitation by the Agent of
offers to purchase shares of Common Stock as described in Section 2 hereof.
Prior to the date hereof, a Plan of Conversion dated as of May 27, 1993, as
amended on December 13, 1993 (the "Plan") was adopted by Home Savings Bank of
Albemarle S.S.B., Albemarle, North Carolina ("Home Savings"). Home Savings will
convert from a North Carolina chartered mutual savings bank to a North Carolina
chartered stock savings bank pursuant to the Plan, and the Company will acquire
all the shares of capital stock to be issued by Home Savings in such conversion
(the "Home Savings Common Stock"), all in accordance with the provisions of an
Agreement and Plan of Reorganization dated as of May 27, 1993 between the
Company and Home Savings (the "Conversion Agreement"). Collectively, the
transactions contemplated by the Plan and the Conversion Agreement are herein
sometimes collectively referred to as the "Conversion Merger" and the
acquisition of Home Savings by the Company pursuant to the Conversion Agreement
is sometimes referred to as the "Acquisition."
In accordance with the Plan and pursuant to the Conversion Agreement, the
Company is offering to certain depositors and borrowers of Home Savings as of
certain record dates nontransferable rights to subscribe for the Shares in a
subscription offering (the "Subscription Offering"). An employee stock
ownership plan and trust established for the benefit of the Home Savings'
employees (the "ESOP") will have first priority to purchase Shares in the
Subscription Offering equal to 1% of the Common Stock anticipated to be
outstanding at the opening of business on the day following the effective date
of the Conversion Merger. In the Subscription Offering, persons holding a
Qualifying Deposit in Home Savings as of the Eligibility Record Date ("Eligible
Member Subscribers") will receive nontransferable rights to subscribe
("Subscription Rights") for a whole number of Shares in a minimum aggregate
dollar amount of $500 and a maximum aggregate dollar amount of $100,000 (or
$200,000 in the case of Eligible Member Subscribers with multiple account
relationships or with a single account with more than $25,000 on deposit at Home
Savings in either case as of the Eligibility Record Date) upon either (or both)
of the following prices and terms, in the Eligible Member Subscriber's
discretion: (x) the 85% Price, as defined in the Plan, subject to the
restriction that shares purchased at the 85% Price may not be transferred by
sale, gift or otherwise for a period of six months from the Closing Date, except
in the case of the death of the Subscriber; and/or (y) the 95% Price, as defined
in the Plan, with no restriction on transfer. An
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Eligible Member Subscriber with only one account relationship of less than
$25,000 may purchase in the Subscription Offering an additional number of Shares
having an aggregate purchase price of up to $100,000 at the BB&T Market Price,
as defined in the Plan, up to an aggregate of not more than $200,000. In
addition, members of Home Savings eligible to vote at the special meeting of
members to consider and vote upon the Plan ("Voting Members") who are not also
Eligible Member Subscribers will receive Subscription Rights for a whole number
of Shares in a minimum aggregate dollar amount of $500 and a maximum aggregate
dollar amount of $200,000 at the BB&T Market Price, as defined in the Plan.
Concurrently with the Subscription Offering, and subject to the priorities
granted by the Plan, the Company intends to offer any Shares not sold in the
Subscription Offering to (i) natural persons residing in Stanley County, North
Carolina, (ii) IRA, Keogh and similar retirement accounts established by or for
the benefit of individuals described in clause (i), and (iii) corporations,
partnerships, and similar entities headquartered in Stanley County, North
Carolina (collectively, "Community Offering Residents") in a community offering
("Community Offering"). Each Community Offering Resident will be eligible to
purchase up to $200,000 of BB&T Common Stock at the 95% Price, as defined in the
Plan. The Subscription Offering and the Community Offering are collectively
referred to herein as the "Offerings." Under the Plan, no minimum number of
Shares need be sold in the Offerings in order to consummate the Conversion
Merger and Acquisition. It is anticipated that Shares not sold in the
Subscription Offering or the Community Offering will not be sold in a public
offering or otherwise pursuant to the Plan. It is understood, however, that the
Administrator of the Savings Institutions Division of the North Carolina
Department of Commerce (the "Administration") may condition final approval of
the Conversion Merger on the sale of a minimum number of Shares. The Shares
actually sold in the Offerings are referred to herein as the "Conversion Stock."
Each prospective investor subscribing to purchase Shares in the Subscription
Offering and each prospective investor subscribing to purchase Shares in the
Community Offering will be required to execute and deliver, through the Agent, a
stock order form (a "Stock Order Form"), in each case in the form delivered with
the Prospectus hereinafter referred to.
The respective obligations of the Company and Home Savings to consummate the
transactions contemplated by the Conversion Agreement, including the Offerings,
are subject to the satisfaction (or, in some cases, waiver) of certain
conditions in the Conversion Agreement, including (i) receipt of certain
required regulatory approvals, (ii) approval of the Plan by the Voting Members,
(iii) receipt of an opinion from KPMG Peat Marwick with respect to certain tax
matters, (iv) material performance by Home Savings of all obligations and
compliance with all covenants required by the Conversion Agreement, (v) that the
Company shall not have determined in good faith that there has been a material
adverse change in the condition or operations of Home Savings since September
30, 1992, and (vi) that the average closing price of the Common Stock reported
on the National Association of Securities Dealers Automated Quotation System
National Market System ("NASDAQ/NMS") for the ten trading days prior to the
Closing Date not be less than $25.00 per share. Subsequent to the Conversion
Merger and Acquisition, the Company intends to merge Home Savings (the "Bank
Merger") with and into Branch Banking and Trust Company, a North Carolina
commercial bank wholly owned by the Company ("BB&T-NC"). Regulatory approval of
the Bank Merger is not a condition precedent to the obligations of the parties
hereunder.
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "1933 Act"), a
registration statement on Form S-3 (File No. 33-49749) for the registration of
3,215,400 shares of Common Stock and has filed Post-Effective Amendment No. 2 to
such Registration Statement, dated December __, 1993, containing a prospectus
relating to the Offerings. Such Post-Effective Amendment No. 2 has been
declared effective under the 1933 Act by the Commission on January __, 1994 (the
"Effective Time"). Such Post-Effective Amendment at the Effective Time, and the
prospectus relating to the Offerings constituting a part thereof (including, in
the case of such Post-Effective Amendment No. 1, and of such prospectus, all
exhibits thereto and all documents incorporated or deemed incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act and all
exhibits to such documents), as from time to time amended or supplemented
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), the 1933 Act, the rules and regulations of the Commission
(including the forms prescribed therein) thereunder (the "1933 Act Regulations")
or otherwise, are referred to herein as the "Registration Statement," and the
"Prospectus," respectively, except that
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if the prospectus which is used in the Offerings differs from the prospectus for
the Offerings on file at the Commission at the Effective Time (whether or not
such revised prospectus is required to be filed by the Company 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 used in the Offerings but
shall in no event include any part of Annex I, Annex II or Annex III thereto,
which Annexes (as stated in the Prospectus) were not filed as part of the
Registration Statement and do not constitute part of the Prospectus.
The Company desires to engage the Agent to assist the Company in selling the
Shares in the Offerings, and the Agent desires to accept such engagement, on the
following terms and conditions.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Agent as follows:
(a) At the Effective Time, the Registration Statement and the Prospectus
complied in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Registration Statement 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, at the Effective Time (unless the term "Prospectus" refers
to a prospectus used in the Offerings which differs from the prospectus
relating to such offerings on file with the Commission at the Effective Time,
in which case at the time such prospectus is first used in such offerings),
and at Closing Time (as defined in Section 2 hereof), the Prospectus and
Annexes thereto and any supplemental sales literature authorized in writing
by Scott E. Reed, Senior Executive Vice President and Treasurer of the
Company, or Jerome C. Herring, Vice President and Secretary of the Company
(each, an "Authorized Officer"), for use in connection with the Offerings to
which such prospectus relates (when read in conjunction with such
prospectus), did not or will not, as the case may be, contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to the
information, if any, in the Prospectus regarding the Agent, made in reliance
upon, and in conformity with information furnished in writing to the Company
by the Agent under the heading "The Offerings -- Plan of Distribution" and on
the front cover page of the Prospectus (any such information being herein
called the "Agent's Information").
(b) Each time a post-effective amendment to the Registration Statement
became or becomes, as the case may be, effective, the Registration Statement
and the Prospectus, complied or will comply, as the case may be, in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and the Registration Statement did not or will not, as the case
may be, 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 the Prospectus, each time a
post-effective amendment to the Registration Statement relating to the
Offerings became or becomes, as the case may be, effective (unless the term
"Prospectus" refers to a prospectus which has been provided to the Agents by
the Company for use in the Offerings which differs from the Prospectus on
file at the Commission at the time such post-effective amendment to the
Registration Statement became or becomes, as the case may be, effective, in
which case at the time it is first provided to the Agent for such use) and at
Closing Time, will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this subsection
shall not apply to the Agent's Information.
(c) Each document incorporated or deemed incorporated by reference into
the Prospectus and the Registration Statement pursuant to Item 12 of Form S-3
under the 1933 Act ("Incorporated Information"), at the time it was or
hereafter is filed with the Commission, complied or will comply, as the case
may be, in all material respects with the requirements of the 1934 Act and
the 1934 Act Regulations, and, when read together and with the other
information in the Prospectus (and in any supplemental sales literature
authorized in writing by an Authorized Officer, in connection with the
Offerings) at the Effective Time, at the time each post-effective amendment
was or hereafter is declared effective, during the time a Prospectus is
required to be delivered by the 1933 Act, and at Closing Time,
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did not or will not, as the case may be, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(d) In order to effect the Company's acquisition of Home Savings pursuant
to Section 3(a)(2) of the Bank Holding Company Act of 1956, as amended (the
"BHCA"), and the regulations for bank holding companies promulgated by the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") thereunder (the "BHCA Regulations") and pursuant to Article 3 of
Chapter 54C of the North Carolina General Statutes (the "NCGS") and the rules
and regulations for North Carolina savings institution holding companies
promulgated by the Administrator thereunder (the "NCGS Holding Company
Regulations"), the Company has caused to be filed a FR Y-2 Application, dated
December __, 1993 (the "BHCA Application"), with the Federal Reserve Board
and an Acquisition Application, dated December __, 1993 (the "Acquisition
Application"), with the Administrator (collectively, the "Holding Company
Applications") seeking authorization for the Company to acquire the Home
Savings Common Stock in the Acquisition. The Conversion Application (as
defined in Section (iii) of Exhibit A hereto) has been approved by the
Administrator. At or prior to Closing Time, each Holding Company Application
has been approved by the Federal Reserve Board and by the Administrator, as
the case may be.
(e) None of the Administrator, the Commission nor any states securities or
blue sky authority ("State Commissioner") has, by order or otherwise,
prevented or suspended the use of the Prospectus, the Annexes thereto or any
supplemental sales literature authorized in writing by an Authorized Officer
for use in connection with the Offerings, which prospectus, annex or
literature was actually used in the Offerings.
(f) At Closing Time, the conditions precedent to the Conversion Merger in
accordance with the Plan, the Conversion Agreement, and all other applicable
laws, regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Conversion Merger
and Acquisition imposed upon the Company by the Federal Reserve Board and the
Administrator shall be completed in all material respects other than those
which the Federal Reserve Board, or the Administrator, as the case may be,
expressly permit to be completed after the effective time of the Conversion
Merger and Acquisition or which the Company has waived pursuant to Section 3
hereof. At Closing Time, the Company shall have no notice or knowledge that
any person shall have sought to obtain review of the final action of the
Administrator or the Federal Reserve Board in approving the Plan or the
Acquisition.
(g) The accountants who certified the financial statements and supporting
schedules of the Company included or incorporated by reference in the
Registration Statement were and are (A) independent public accountants as
required by the 1933 Act and the 1933 Act Regulations (including Commission
Regulation S-X); and such accountants are, with respect to the Company and
its subsidiaries, (B) independent within the meaning of Rule 101 of the Code
of Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings, and (C) independent auditors
within the meaning of the rules, regulations, resolutions and practice of the
Administrator relating to North Carolina savings banks and their holding
companies.
(h) The financial statements of the Company included or incorporated by
reference in the Registration Statement and in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of
the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations (including Rule 3-05 of Commission Regulation S-X) and no other
financial statements of the Company are required to be included in the
Registration Statement or the Prospectus, and said financial statements
present fairly the financial position of the Company and its subsidiaries on
a consolidated basis as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement or in the Prospectus, such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis and such financial statements are consistent in
all material respects with financial statements and other reports filed by
the Company and its subsidiaries with the Commission and the Federal Reserve
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Board except to the extent that the accounting principles employed in such
filings conform to the requirements of such regulatory authorities and not
necessarily to generally accepted accounting principles; the supporting
schedules included or incorporated by reference in the Registration Statement
and in the Prospectus present fairly the information required to be stated
therein; and the pro forma financial statements of the Company and its
subsidiaries, Home Savings, Old Stone Bank of North Carolina, a Federal
Savings Bank, High Point, North Carolina and its subsidiaries ("Old Stone"),
Mutual Savings Bank of Rockingham County, Inc., S.S.B. and its subsidiaries
("Mutual Savings") Citizens Savings Bank, S.S.B., Inc., Newton, North
Carolina and its subsidiaries ("Citizens of Newton"), Scotland Savings Bank,
S.S.B., Laurinburg, North Carolina ("Scotland"), Citizens Savings Bank, Inc.,
S.S.B., Mooresville, North Carolina and its subsidiaries ("Citizens
Savings"), Asheville Savings Bank, SSB, Asheville, North Carolina and its
subsidiaries ("Asheville Savings") and L.S.B. Bancshares, Inc. and its
subsidiaries, Lexington, South Carolina ("L.S.B."), all of which are recent
or pending acquisitions (collectively, "Pending Acquisitions") included or
incorporated by reference in the Registration Statement and in the Prospectus
comply as to form in all material respects with the applicable requirements
of Commission Regulation S-X and reflect all adjustments necessary to
summarize fairly the pro forma financial position of the Company, Home
Savings, and the institutions involved in the Pending Acquisitions and their
respective subsidiaries at the dates indicated and the pro forma results of
their operations for the periods specified. It is understood and agreed that
the Company has relied upon the audited and unaudited financial statements of
Home Savings, and the institutions involved in the Pending Acquisitions in
preparing such pro forma financial statements, and the Company makes no
representation or warranty as to the accuracy or adequacy of such financial
statements.
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated herein
or as otherwise disclosed or incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, (A) there has not been
any material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition, financial
or otherwise, or the earnings or business affairs of the Company or of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (B) there have not been any
transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material to the
Company or to the Company and its subsidiaries considered as one enterprise
and (C) except for regular dividends on the Common Stock, there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock, and (D) there has not been any change in the
capital stock of the Company except for open-market stock repurchases, the
issuance of shares of Common Stock upon the completion of a Pending
Acquisition, the exercise of outstanding options or other issuances under
Company plans, the conversion of outstanding securities or pursuant to the
dividend reinvestment plan.
(j) The Company and its subsidiaries possess such licenses, permits and
other governmental and regulatory authorizations as are currently required
for the conduct of their respective businesses; all such licenses, permits
and other governmental and regulatory authorizations are in full force and
effect, and the Company and its subsidiaries are in all material respects
complying therewith; neither the Company nor any of its subsidiaries has
received notice of any proceeding or action relating to the revocation or
modification of any such license, permit or other governmental or regulatory
authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a Material Adverse
Effect. For purposes of this Agreement, "Material Adverse Effect" means any
material adverse effect or any development that could reasonably be expected
to result in a material adverse effect on the conduct of the business or on
the condition, financial or otherwise, or the earnings or business affairs of
the Company or of the Company and its subsidiaries considered as one
enterprise.
(k) The authorized, issued and outstanding capital stock of the Company is
as set forth on the dates indicated in the Prospectus under the captions
"Capitalization" and "Description of Capital Stock of BB&T Financial;" the
issued and outstanding shares of the Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable; the Shares have
been duly and validly authorized for issuance and, when issued and delivered
by the Company pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan, will be duly and validly issued and
fully
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paid and non-assessable and will be issued to purchasers free and clear
(except for any pledge made in connection with the financing obtained by the
ESOP to purchase Shares in the Subscription Offering) of any security
interest, mortgage, pledge, lien, encumbrance or claim; the issuance of the
Shares is not subject to preemptive or other similar rights, except to the
extent that Subscription Rights under the Plan may be deemed to be preemptive
rights; and the terms and provisions of the Common Stock and the other
capital stock of the Company conform in all material respects to the
descriptions hereof contained or incorporated by reference in the Prospectus.
(l) Upon consummation of the Conversion Merger, the liquidation account
for the benefit of eligible account holders of Home Savings will be duly
established in accordance with the requirements of the North Carolina
Conversion Law and Regulations; and, in the event of a complete liquidation
of Home Savings or any successor thereto, including without limitation,
BB&T-NC, each eligible account holder who continues to maintain a deposit
account in Home Savings and, following the Bank Merger, in BB&T-NC, will be
entitled to receive a liquidation distribution to the extent specified in the
North Carolina Conversion Law and Regulations, from the liquidation account
at such institution in the amount of the then current adjusted subaccount
balance for each of such eligible account holder's deposit accounts and then
held before any liquidation distribution may be made to the holders of shares
of capital stock of such institution.
(m) The Company (A) is duly registered as a bank holding company under the
BHCA and the BHCA Regulations and the North Carolina Bank Holding Company Act
of 1984 ("NCBHCA") and regulations thereunder and as a savings institution
holding company under the NCGS and the NCGS Holding Company Regulations, and
(B) within 90 days of consummation of the acquisition of Old Stone, will be
duly registered as a savings and loan holding company under the Home Owners'
Loan Act ("HOLA") and regulations thereunder; the Company has been duly
incorporated and is validly existing and in good standing as a corporation
under the laws of the State of North Carolina, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as provided in the Prospectus and the Incorporated Information; and
the Company is duly qualified as a foreign corporation to transact business
and in good standing in each jurisdiction in which such qualification or good
standing is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or be in good standing would not have a Material Adverse Effect.
(n) Each subsidiary of the Company has been duly incorporated and is
validly existing and in good standing as a corporation under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to
own, lease and operate its properties and to conduct its business as provided
in the Prospectus and the Incorporated Information, and is duly qualified to
transact business and in good standing in each jurisdiction in which such
qualification or good standing is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing, would not have a Material
Adverse Effect. The deposits of BB&T-NC, Branch Banking and Trust Company of
South Carolina ("BB&T-SC") and each other commercial bank, savings bank or
savings and loan association subsidiary of the Company are insured by the
FDIC to the fullest extent allowable under applicable law, and no proceedings
for the termination or revocation of such insurance are pending or, to the
knowledge of the Company, threatened; the activities of each subsidiary of
the Company are permitted to subsidiaries of a bank holding company, a
savings and loan holding company (if the Company is a savings and loan
holding company) and a savings institution holding company or to
state-chartered banks by the laws administered by and the rules, regulations,
resolutions and practices of the Federal Reserve Board, the FDIC, the North
Carolina Commissioner of Banks (the "Commissioner"), the OTS, the
Administrator and the South Carolina Board of Financial Institutions (the "SC
Board"), as the case may be, except in each case for any lack of permission
that, singularly or taken in the aggregate, would not have a Material Adverse
Effect; all of the issued and outstanding capital stock of each subsidiary of
the Company has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company directly or indirectly, fee and
clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
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(o) The Company has taken all corporate action necessary to execute,
deliver and perform this Agreement and the Conversion Agreement, and this
Agreement and the Conversion Agreement have been duly executed by and are
valid and binding agreements of the Company enforceable in accordance with
their terms, except as enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and by judicial limitations on the right of specific
performance and except as the enforceability of the indemnification and
contribution provisions may be limited by applicable securities laws.
(p) Neither the Company nor any of its subsidiaries is in violation of its
charter or by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
license, indenture, mortgage, loan agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, which violation
or default would have a Material Adverse Effect. The execution, delivery and
performance of this Agreement and the Conversion Agreement, the issuance and
delivery of the Conversion Stock and the consummation of the transactions
contemplated herein, therein and thereby will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them may be bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or any law, rule, or regulation, or administrative, court,
arbitration decree or holding, which breach, default, creation, imposition or
violation would have a Material Adverse Effect.
(q) The Company and each of its subsidiaries have good and marketable
title to all properties and assets for which ownership is material to the
business of the Company and its subsidiaries considered as one enterprise and
to those properties and assets described or referred to in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions; and all of the leases and subleases material to the business of
the Company and its subsidiaries considered as one enterprise under which the
Company or any of its subsidiaries holds properties, including those
described or referred to in the Prospectus, are valid and binding and the
Company is in compliance therewith.
(r) Neither the Company nor any of its subsidiaries is in violation of any
written order, memorandum of understanding, capital or other directive,
agreement or understanding with, or resolutions (collectively, for purposes
hereof, a "Directive") requested by the Federal Reserve Board, the OTS, the
Commissioner, the FDIC, the Administrator or any other bank or savings and
loan regulatory agency which may have jurisdiction over the Company or its
subsidiaries to make any material change in the method of conducting its
business; the Company and its subsidiaries have conducted and are conducting
their businesses so as to comply in all material respects with all applicable
statutes and regulations (including, without limitation, all regulations,
decisions, directives and orders of the Federal Reserve Board, the OTS, the
Commissioner, the FDIC, the Administrator and any other bank or savings and
loan regulatory agency which may have jurisdiction over the Company or its
subsidiaries); there is no charge, investigation, action, suit or proceeding
before or by any court or governmental, regulatory or arbitration agency,
body or authority, domestic or foreign, now pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries which
is required to be disclosed in the Registration Statement and the Prospectus
(other than as disclosed therein), or which would have a Material Adverse
Effect, or which would materially and adversely affect the properties or
assets thereof or which would materially and adversely affect the performance
of this Agreement or the Conversion Agreement, the issuance and delivery of
the Conversion Stock or the consummation of the transactions herein, therein
or thereby contemplated; all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any of
their respective properties or assets is the subject which are not described
or referred to in the Prospectus, including ordinary routine litigation
incidental to their business, are, considered in the aggregate, not material,
and there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other agreements or instruments required by
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the 1933 Act or by the 1933 Act Regulations to be described or incorporated
by reference in the Prospectus or described, filed or incorporated by
reference as exhibits to the Registration Statement which have not been so
described, filed or incorporated by reference.
(s) The Company and each of its subsidiaries have filed all necessary
federal, state and foreign income, franchise, intangible and other tax
returns and have paid all taxes shown as due thereon (or obtained appropriate
extensions); except for matters described or referred to in the Prospectus,
there are no tax deficiencies which have been asserted or threatened against
the Company or any of its subsidiaries which, individually or in the
aggregate, might have a Material Adverse Effect; the federal income tax
returns of the Company have been audited and settled by the Internal Revenue
Service ("IRS") for all years to and including the fiscal year ending
December 31, 1987 and there is no liability for federal income tax asserted
against the Company or any of its subsidiaries for that or any prior year and
the Company has not been requested by the IRS to extend the statute of
limitations for any tax year.
(t) The Company maintains insurance of the type and in the amounts
generally deemed adequate for its business and consistent with insurance
maintained by similar companies in similar businesses, including, but not
limited to, general liability insurance, product liability insurance and
insurance covering all material real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect.
(u) The Company and each of its subsidiaries are in compliance in all
material respects with the applicable financial record keeping and reporting
requirements of the Currency and Foreign Transaction Reporting Act of 1970,
as amended, and the regulations and rules thereunder.
(v) The Common Stock is and, upon issuance, the Conversion Stock will be
designated by the National Association of Securities Dealers, Inc. ("NASD")
as a NASDAQ/NMS security; the Company is in compliance with the NASDAQ/NMS
Listing Agreement and no proceedings to terminate the designation of the
Common Stock as a NASDAQ/NMS security are pending or threatened and the
Company is not aware of any basis for such proceedings.
(w) No approval, authorization, consent or other order of any public
board, body or authority is required for the execution and delivery by the
Company of this Agreement or the Conversion Agreement, the issuance of the
Conversion Stock or the consummation of the Conversion Merger and the
Acquisition, except that no representation is made with respect to any
approval or qualification required under any state securities or blue sky
laws.
(x) No labor dispute by the employees of the Company or any subsidiary
thereof, exists or, to the knowledge of the Company, is threatened which
might be expected to have a Material Adverse Effect.
(y) The Prospectus includes or incorporates by reference, if and to the
extent required, appropriate disclosure of the material effects that
compliance with federal, state and local provisions which have been enacted
or adopted, regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment, may have upon the
capital expenditures, earnings and competitive position of the Company and
its subsidiaries, consistent with Commission Regulation S-K, Item 101(c)(xii)
and with published Commission interpretations thereof.
(z) The summary and selected consolidated financial and statistical data,
and the tables in the Prospectus fairly present the information contained
therein, and are consistent with and derived from, the Company financial
statements incorporated or deemed incorporated by reference in the
Registration Statement and in the Prospectus. The financial and statistical
information required by Commission Industry Guide 3 "Statistical Disclosure
by Bank Holding Companies" to be included in the Prospectus or any filings
incorporated therein by reference, present fairly the information set forth
therein, and is in compliance with the 1933 Act, the 1934 Act, the 1933 Act
and/or 1934 Act Rules and Regulations and
8
said Guide 3, and such data are consistent with the Company financial
statements set forth or incorporated in the Registration Statement and the
Prospectus.
(aa) The Company is not an "investment company" nor a company "controlled"
by an "investment company," within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
Any certificate signed by any officer of the Company and delivered to the Agent
or to counsel for the Agent pursuant to the terms of this Agreement which makes
specific reference to this Agreement shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby.
SECTION 2. APPOINTMENT AS AGENT; OFFERING AND SALE OF CONVERSION STOCK;
CLOSING
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Agent is hereby
appointed as exclusive agent of the Company in the Offerings for the purpose of
facilitating the sale of Conversion Stock for the account of the Company. The
Agent will be paid in respect of any purchases of the Conversion Stock solicited
by such Agent in the manner referred to in paragraph (g) of this Section. The
Community Offering shall commence simultaneously with the Subscription Offering
on the day that the Prospectus is first made available to the Agent by the
Company for delivery in connection with the Offerings. The Offerings shall
continue until 5:00 P.M., Eastern Standard Savings Time, on February 10, 1994,
or such later date as is determined by the Company or until the Offerings are
otherwise terminated in accordance with the Conversion Agreement and the Plan
(the "Offering Termination Date").
Subject to the performance by the Company of all of its obligations to be
performed hereunder, and to the completeness and accuracy of all of the
representations and warranties contained herein or acquired hereby, the Agent
hereby accepts such agency and agrees on the terms and conditions herein set
forth to act as agent for the Company in facilitating sales of Conversion Stock
in the Offerings. The Agent's agency hereunder, which is coupled with an
interest and, therefore, is not terminable by the Company without such Agent's
permission, except as otherwise expressly so provided in this Section 2 and
Section 9 hereof, shall continue until the Offering Termination Date. Any
termination of an Agent's agency or of this Agreement in compliance with Section
9 hereof shall be without obligation on the Agent's part or on the part of the
Company except as provided in Section 4 hereof, and except that the rights to
indemnification and contribution provided in Section 6 and Section 7 hereof,
respectively, shall continue after such termination of this Agency Agreement.
(b) If the Conversion Merger is not consummated either because of the failure
to satisfy a condition precedent under Article V of the Conversion Agreement or
because of a termination under Article VI of the Conversion Agreement, then all
funds received by the Company from subscribers and other prospective purchasers
shall be (i) returned with interest and without deduction of any escrow or other
fee or expense as described in the Prospectus, or (ii) if made by authorized
withdrawal direction from a deposit account at Home Savings, released from such
direction as described in the Prospectus; and the Agent's agency and this
Agreement shall terminate without obligation on such Agent's part or on the part
of the Company except as provided in this Section 2 and Section 4 hereof and
except that the rights to indemnification and contribution provided in Sections
6 and 7 hereof, respectively, shall continue after such termination of this
Agency Agreement.
(c) If the Offerings are not terminated as described in paragraph (b) of this
Section and if the conditions in Section 5 hereof are satisfied or waived, then,
at the time and on the date determined by the Company, but within 15 business
days after the Offering Termination Date unless otherwise agreed to by the
parties hereto, the Conversion Stock shall be issued and sold and the Conversion
Merger and Acquisition shall be consummated.
(d) The Company has used its best efforts to ensure that appropriate
arrangements have been made for placing the funds received from subscriptions
for Shares or other offers to purchase Shares in a special segregated
interest-bearing deposit account held by Home Savings for the benefit of each
subscriber in the Subscription Offering and until the Closing Time with
provision for delivery to the Company upon issuance of the Conversion Stock, or
provision for refund if the Offerings are terminated without issuance of the
Conversion Stock. The Company agrees to issue or have issued the Conversion
Stock sold in the Offerings at Closing Time
9
against payment therefor by release of funds from the special individual
interest-bearing deposit accounts referred to above and to deliver or arrange
for the delivery of certificates for such Conversion Stock in such authorized
denominations and registered in such names as may be indicated on the Order
Forms or otherwise directly to the purchasers thereof as promptly as practicable
after the Closing Time with provision for refund of any unfilled subscription
orders with interest and without deduction of any escrow or other fee or expense
as described in the Prospectus.
(e) Payment of the purchase price for the shares of Conversion Stock shall be
made at such place as shall be agreed upon by the Agent and the Company, at such
time and on such business day as shall be determined pursuant to paragraph (c)
of this Section (such time and date of payment being herein called "Closing
Time").
(f) The Agent shall receive in immediately available funds at the Offering
Termination Date, a nonrefundable financial advisory fee of $70,000, which is
the balance of the advisory fee of $105,000 set forth in a letter agreement,
dated June 24, 1993, among the Company, Home Savings and the Agent (the "Agent
Engagement Letter"), which remains unpaid as of the date hereof.
(g) The Agent shall receive in immediately available funds at Closing Time as
compensation for its services hereunder, in addition to the financial advisory
fee specified in paragraph (f) of this Section and any expenses payable pursuant
to Section 4 hereof and the provisions of Sections 6 and 7 hereof, one and
three-quarters percentum (1.75%) of the aggregate dollar amount of all shares of
Conversion Stock sold in the Offerings, excluding any such Conversion Stock sold
to directors and executive officers and any stock benefit plans including the
ESOP and restricted stock plans of the Company and Home Savings, and such
directors' and officers' "associates" (as defined in the Plan) or to any stock
benefit plans including the ESOP and any restricted stock plans.
SECTION 3. COVENANTS. The Company hereby covenants and agrees with the Agent
as follows:
(a) The Company will use its best efforts to cause any supplemental sales
literature authorized in writing by an Authorized Officer for use in connection
with the Offerings to be authorized for use in final form by the Administrator
and will notify the Agent immediately and confirm the notice in writing (i) when
any post-effective amendment to the Registration Statement (and any other
amendment thereto) relating to the Offerings has been declared effective by the
Commission, (ii) of the transmittal to the Commission for filing of any
amendment or supplement to the Prospectus or any document that will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Administrator, the Commission or any State Commissioner with
respect to the transactions contemplated by this Agreement, (iv) of any request
by the Federal Reserve Board, FDIC, the Administrator, the Commission or any
State Commissioner for any amendment or supplement to the Conversion
Application, the Registration Statement or the Prospectus as the case may be, or
for additional information, commitments or conditions to any of the transactions
contemplated herein, therein or thereby, (v) of the issuance by the FDIC, the
Administrator, the Commission or any State Commissioner or court of competent
jurisdiction of any order suspending any of the Subscription Offering, and/or
the Community Offering, or the use of the Prospectus or the threat of any such
action by any such entity, (vi) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any action
by the Commission under Sections 21B or 21C of the 1934 Act against the Company
or of the initiation or threat of any proceedings for that purpose, and (vii) of
the receipt of any notification with respect to the suspension of the
qualification of the Shares for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
make reasonable efforts to prevent the issuance of any order referred to in
clauses (v), (vi) or (vii) above and, if any such order shall at any time be
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company will give the Agent notice of its intention or, to the extent
possible, the intent of Home Savings to file or prepare any amendments or
supplement to the Conversion Application, or the Registration Statement or any
amendment or supplement to a Prospectus (whether, in the case of the
Registration Statement and the Prospectus, by the filing of Incorporated
Information pursuant to the 1934 Act, the 1933 Act or otherwise and, in the case
of a Prospectus, including any revised prospectus which the Company proposes for
use by the Agent in connection with the Community Offering from the Prospectus
then being so
10
used by the Agent), and the Company will furnish the Agent with copies of any
such amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Agent or counsel for the
Agent shall reasonably object in writing.
(c) The Company shall cause Home Savings to deliver to the Agent as many
conformed copies as the Agent may reasonably request of the Conversion
Application, with exhibits. In addition, the Company will deliver to the Agent
such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto relating to the Offerings (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) as the Agent may reasonably
request.
(d) The Company will furnish to the Agent, from time to time during the
period when a Prospectus relating to the Offerings is required to be delivered
under the 1933 Act, the number of copies of the Prospectus (as amended or
supplemented) as the Agent may reasonably request for the purposes contemplated
by the 1933 Act or the 1933 Act Regulations.
(e) During the period when a Prospectus relating to the Offerings is required
to be delivered, the Company will comply, at its own expense, with all
requirements imposed upon it by the Administrator, by the applicable rules and
regulations of and laws administered by the Administrator, including the North
Carolina Conversion Law and Regulations, and by the Commission under the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations
(including, without limitation, Rule 10b-6 under the 1934 Act), insofar as
necessary to permit the continuance of sales or dealing in shares of Common
Stock during such period in accordance with the provisions hereof and the
Prospectus. The Company will not take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Common Stock.
(f) If any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Agent, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser or to amend or
supplement the Registration Statement or the Prospectus (including in each case
the Incorporated Information) in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to counsel for the
Agent), whether by filing Incorporated Information pursuant to the 1933 Act, the
1934 Act or otherwise, so that, as so amended or supplemented, the Prospectus
will not contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time the Prospectus is delivered to an
offeree, not misleading and the Registration Statement and the Prospectus will
comply with such requirements.
(g) The Company will endeavor, in cooperation with the Agent, to qualify the
Shares for offering and sale under the applicable securities laws of such
jurisdictions as the Company shall determine consistent with the Plan and all
applicable laws and regulations, and will maintain such qualifications in effect
for so long as is required for the distribution of the Conversion Stock;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify to do business in any jurisdiction
in which it is not so qualified. In each jurisdiction where any of the Shares
shall have been qualified as above provided, the Company will file such
statements and reports in each year as are or may be reasonably required by the
laws of such jurisdiction.
(h) During the period when a Prospectus is required to be delivered under the
1933 Act, the Company will timely file all documents required to be filed by it
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15 of the 1934 Act.
For so long as the Common Stock is registered under the 1934 Act, the Company
will furnish to its stockholders after the end of each fiscal year such reports
and other information as are required to be furnished to its stockholders under
the 1934 Act (including full consolidated financial statements of the Company
and its subsidiaries, certified by independent public accountants).
(i) During the period commencing on the date of this Agreement and ending on
the fourth anniversary hereof, the Company will furnish to the Agent, a paper
copy of each report of the Company furnished
11
generally to stockholders of the Company or furnished to or filed with the
Commission under the 1934 Act or any national securities exchange or system on
which any class of securities of the Company is listed at the time such report
is delivered to stockholders of the Company, the Commission or such exchange or
system, as the case may be.
(j) The Company will use the net proceeds from the sale of the Conversion
Stock, in all material respects as described in the Prospectus under the caption
"Use of Proceeds", and consistent with any resolutions, orders and approvals of
the Conversion Merger and Acquisition by the Administrator or other regulatory
authorities.
(k) The Company shall not deliver the Conversion Stock until each and every
condition set forth in Section 5 hereof has been satisfied, unless such
condition is waived in writing by the Agent.
(l) Other than as permitted by the North Carolina Conversion Law and
Regulations, the 1933 Act and the 1933 Act Regulations, the Company shall not
distribute any prospectus, offering circular or other offering material in
connection with the offering and sale of the Conversion Stock.
(m) The Company will make generally available to its security holders (within
the meaning of Rule 158 under the 1933 Act) as soon as practicable, but not
later than 60 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of said Rule 158) 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 and each post-effective amendment thereto.
(n) The Company will take such actions as are necessary to register the
Conversion Stock for quotation on the NASDAQ/NMS; during the period that the
Company has a class of securities traded in the over-the-counter market and
quoted on NASDAQ/NMS, the Company will file with the NASD all documents and
notices required by the NASD of issuers with securities quoted on the NASDAQ/NMS
and will not take any action which would cause the NASD to terminate the
designation of the Common Stock as a NASDAQ/NMS security.
(o) The Company shall advise the Agent, if necessary, as to the allocation of
the Conversion Stock in the event of an oversubscription of the Subscription
and/or the Community Offerings, and in such event shall cooperate with and
provide and cause Home Savings to provide the Agent with accurate and complete
written instructions for allocating the shares of Conversion Stock in accordance
with the Plan. The Agent shall be entitled to rely on such written instructions
and shall be held harmless by the Company and have no liability in respect to
its reliance thereon, including, without limitation, liability related to the
denial, in whole or in part, or the grant of a subscription unless such
liability is based on the Agent's failure to follow such written instructions
through negligence or willful misconduct.
(p) As between the Company and the Agent, the Company shall have sole
responsibility for determining, in accordance with the Plan and the North
Carolina Conversion Law and Regulations, the status of persons and entities,
whether as Members, eligible account holders, other members, supplemental
account holders, Community Offering Residents or otherwise (as defined in the
Plan and the North Carolina Conversion Law and Regulations) for purposes of
determining their right to receive Subscription Rights and their eligibility to
purchase or priority in purchasing shares of Conversion Stock.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all out-of-pocket
expenses incident to the performance of its obligations under this Agreement
including, but not limited to, (i) the preparation, issuance and delivery of
certificates for the Conversion Stock to the purchasers, (ii) the reasonable
fees and disbursements of the counsel and accountants of the Company and the
Agent, (iii) the qualification of the Shares under securities laws in accordance
with the provisions of Section 3(g), including filing fees and the fees and
disbursements of counsel in connection therewith and in connection with the
preparation of the Blue Sky Survey, (iv) the printing and delivery to the Agent
in such quantities as the Agent shall reasonably request of copies of the
Registration Statement and all amendments thereto, the Prospectus and Annexes
thereto, each amendment or supplement to any of the foregoing and the other
documents prepared in connection with the Conversion Merger, and (v) the
printing and delivery to the Agent in such quantities as the Agent may
reasonably request
12
of copies of the Blue Sky Survey and this Agreement. Notwithstanding the
foregoing, the provisions of the Conversion Agreement shall govern the
respective obligations of the Company and Home Savings with respect to the
foregoing between themselves.
If this Agreement is terminated by the Agent in accordance with the provisions
of Section 5 or Section 9(a), the Company shall reimburse the Agent upon demand
for all of its out-of-pocket expenses, including, but not limited to, the
reasonable fees and disbursements of counsel for the Agent in accordance with
the terms of the Agent Engagement Letter.
SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The obligations of the Agent
hereunder are subject to the accuracy of the representations and warranties of
the Company and Home Savings contained herein or in an Exhibit hereto or in any
certificate delivered pursuant hereto as of the date hereof and Closing Time, to
the performance by the Company of its obligations hereunder, and to the
following further conditions:
(a) Any supplemental sales literature authorized in writing by an
Authorized Officer for use in connection with the Offerings shall have been
approved orally or in writing for use in final form by the Administrator not
later than 6:30 P.M. on the date hereof, or at such later time and date as
may be approved by the Agent. At Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act, no actions shall have been taken under Sections 21B or 21C of the
1934 Act against the Company nor shall have any proceedings therefor been
initiated or threatened by the Commission and no order suspending the
Subscription Offering, the Community Offering, or the use of the Prospectus
and Annexes thereto (or such supplemental sales literature) shall have been
issued or proceedings therefore initiated or threatened by the Administrator
or any other agency, body or authority.
(b) At Closing Time, the Agents shall have received:
(1) The favorable opinion, dated as of Closing Time, of Jerone C.
Herring, Esq., Vice President, Secretary and General Counsel of the
Company, in form and substance satisfactory to counsel for the Agent, to
the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of North Carolina.
(ii) The Company has corporate power and authority to own,
lease and operate its properties to conduct its business as described
in the Prospectus.
(iii) The Company is duly registered as (A) a bank holding
company under the BHCA and the BHCA Regulations, the NCBHCA and
regulations thereunder, (B) a savings institution holding company
under the NCGS and the NCGS Holding Company Regulations and (C) if
applicable, a savings and loan holding company under the HOLA and the
regulations thereunder,
(iv) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification or good standing is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(v) Each of BB&T-NC, BB&T-SC, BB&T Financial Corporation of
South Carolina, each other commercial bank, savings bank or savings
and loan subsidiary of the Company and any other subsidiary whose
assets or results of operations are material to the Company (a
"Material Subsidiary") has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business
as provided in the Prospectus and the
13
Incorporated Information, and is duly qualified to transact business
and is in good standing in each jurisdiction in which such
qualification or good standing is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have
a Material Adverse Effect; the activities of each Material Subsidiary
of the Company are in all material respects permitted to subsidiaries
of a bank holding company, a savings institution holding company and,
if applicable, a savings and loan holding company by the laws
administered by and the rules, regulations, resolutions and practices
of the Federal Reserve Board, the FDIC, the Commissioner, the OTS, the
Administrator and the SC Board, as the case may be. The deposits of
BB&T-NC, BB&T-SC and each other commercial bank, savings bank or
savings and loan association subsidiary of the Company are insured by
the FDIC to fullest extent allowable under applicable law, and no
proceedings for the termination or revocation of such insurance are
pending or, to such counsel's knowledge, threatened.
(vi) Each Material Subsidiary of the Company is a direct or
indirect subsidiary of the Company; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly
authorized and validly issued, is fully paid and non-assessable, and
is owned by the Company (or by a wholly-owned subsidiary of the
Company) of record, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth at the dates indicated in the Prospectus under
the caption "Description of Capital Stock of BB&T Financial --
General;" the issued and outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
non-assessable; the Conversion Stock has been duly and validly
authorized for issuance and, when issued and delivered by the Company
pursuant to the Plan against payment of the consideration calculated
as set forth in the Plan, will be duly and validly authorized for
issuance and, when issued, fully paid and non-assessable and will not
be subject to any security interest, mortgage, pledge, lien,
encumbrance or claim (except for any pledge made in connection with
the financing by the ESOP for the purchase of the Shares); and the
issuance of the Conversion Stock is not subject to preemptive rights,
except to the extent that subscription rights under the Plan may be
deemed to be preemptive rights.
(viii) The Acquisition Application has been approved by the
Administrator, and, at the date of such approval, and at all times
subsequent thereto up to and including the Closing Time, the
Acquisition Application complied as to form in all material respects
with the applicable requirements of the NCGS and the NCGS Holding
Company Regulations.
(ix) This Agreement and the Conversion Agreement have been duly
authorized, executed and delivered by, and are valid and binding
agreements of, the Company enforceable in accordance with their terms,
except as enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and by judicial limitations on the right
of specific performance and except as the enforceability of the
indemnification and contribution provisions may be limited by
applicable securities laws.
(x) No approval, authorization, consent or other order of any
public board, body or authority is required in connection with the
execution and delivery of this Agreement or the Conversion Agreement,
the issuance of the Conversion Stock, or the consummation of the
Conversion Merger and Acquisition except as have been obtained, and
except as may be required under the securities or Blue Sky laws of
various jurisdictions.
14
(xi) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus complied when filed as to
form in all material respects with the 1934 Act and the 1934 Act
Regulations; no actions have been taken by the Commission against the
Company under Sections 21B or 21C of the 1934 Act nor, to such
counsel's knowledge, have any such actions threatened by the
Commission.
(xii) The information in the Registration Statement and the
Prospectus under the captions "Supervision and Regulation of BB&T
Financial" and "Description of Capital Stock of BB&T Financial" and in
the Company's latest annual report on Form 10-K filed with the
Commission under the headings "Description of Business -- Regulation"
and "Legal Proceedings" to the extent such information constitutes
matters of federal or state law or legal conclusions with respect
thereto, has been reviewed by such counsel and is accurate in all
material respects.
(xiii) The terms and provisions of the Common Stock conform in all
material respects to the description thereof contained in the
Prospectus, and the form of certificate used to evidence the shares of
Conversion Stock is in due and proper form for the enforcement of the
rights and limitations of rights pertaining to the Common Stock which
are set forth in the Amended Articles of Incorporation of the Company
and under the laws of the State of North Carolina.
(xiv) To the best of such counsel's knowledge after due inquiry,
there is no charge, investigation, action, suit or proceeding before
or by any court, governmental, regulatory or arbitration agency, body
or authority, domestic or foreign, now pending or, to the knowledge of
such counsel, threatened against the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as disclosed therein), or
which would have a Material Adverse Effect, or would materially and
adversely affect the properties or assets of BB&T taken as a whole or
which would materially and adversely affect the performance of this
Agreement or the Conversion Agreement, the issuance and delivery of
the Conversion Stock or the consummation of the transactions herein,
therein or thereby contemplated; all pending legal, governmental or
regulatory proceedings to which the Company or any of its subsidiaries
is a party or of which any of their respective properties or assets is
the subject which are not described in the Registration Statement and
the Prospectus, including ordinary routine litigation incidental to
their business, are, considered in the aggregate, not material.
(xv) To the best of such counsel's knowledge after due inquiry,
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other agreements or instruments required by the 1933 Act or
by the 1933 Act Regulations to be described or incorporated by
reference in the Prospectus or to be described, filed or incorporated
by reference as exhibits of the Registration Statement which have not
been so described, filed or incorporated by reference, and, to such
counsel's knowledge, no material default exists in the due performance
or observance by the Company of any obligation, agreement, covenant or
condition contained in any note, lease or other agreement or
instrument so described, filed or incorporated by reference.
(xvi) The Company has fulfilled its obligations required to effect
the Conversion Merger and Acquisition in all material respects in
accordance with the applicable requirements of North Carolina law and
regulations, the Conversion Agreement and all other applicable
regulations, and published decisions and orders thereunder, including
all material applicable terms, conditions, requirements and conditions
precedent to the Conversion Merger and Acquisition imposed upon the
Company by the Federal Reserve Board and the Administrator.
15
(xvii) No order has been issued by the Administrator, the Commission
or any State Commissioner to suspend the consummation of the
Offerings, and no action for any such purposes has been instituted or,
to such counsel's knowledge, threatened by the Administrator, the
Commission or any State Commissioner; and to such counsel's knowledge,
no person has sought to obtain judicial review or reconsideration of
the final action of the Administrator or the Federal Reserve Board in
approving the Plan, the Conversion Merger, the Acquisition, or
otherwise.
(xviii) The Company and its subsidiaries possess such licenses,
permits and other governmental and regulatory authorizations as are
currently required for the conduct of their respective businesses,
except for such licenses, permits and other governmental and
regulatory authorizations which if not so obtained would not have a
Material Adverse Effect; and all such material licenses, permits and
other governmental and regulatory authorizations are in full force and
effect, and the Company and its subsidiaries are in all material
respects complying therewith.
(xix) Neither the Company nor any of its Material Subsidiaries is
in violation of its charter or by-laws or, to the best of such
counsel's knowledge after due inquiry, in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which any
of the property or assets of the Company or any of their property may
be bound or to which any of the property or assets of the Company or
any of its Material Subsidiaries is subject, which violation or
default would have a Material Adverse Effect; the execution, delivery
and performance of this Agreement and the Conversion Agreement by the
Company, the issuance and delivery of the Conversion Stock pursuant to
the Plan and the consummation by the Company of the transactions
contemplated herein, therein and thereby have been duly authorized by
all necessary corporate action by the Company and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any material lien, charge or encumbrance
upon any property or assets of the Company or any of its Material
Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any of its Material Subsidiaries is a party or by which any
of them may be bound or to which any of the property or assets of the
Company or any of its Material Subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any of its Material Subsidiaries or any law,
rule or regulation, or administrative, court or arbitration decree or
decision, which breach, rule or regulation, or administrative, court
or arbitration decree or decision, which breach, default, creation,
imposition or violation would have a Material Adverse Effect.
(2) The favorable opinion, dated as of the Closing Time, of Arnold &
Porter, special counsel for the Company, in form and substance satisfactory to
counsel for the Agent, to the effect that:
(i) The Company is duly registered as a bank holding company under
the BHCA and the BHCA Regulations, and, if applicable, as a savings
and loan holding company under the HOLA and the regulations
thereunder.
(ii) The BHCA Application has been approved by the Federal Reserve
Board and at the date of such approval, the BHCA Application complied
as to form in all material respects with the applicable requirements
of the BHCA and the BHCA Regulations, with such modifications and
revisions as were agreed to by the Federal Reserve Bank of Richmond
acting pursuant to delegated authority.
16
(iii) This Agreement has been duly authorized, and delivered by
the Company; provided that such counsel need express no opinion as to
the enforceability of this Agreement.
(iv) The Registration Statement has become effective under the
1933 Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement under the
1933 Act has been issued and no proceedings with respect thereto are
pending or threatened by the Commission.
(v) No approval, authorization, consent or order of or filing
with the OTS, the FDIC, the Federal Reserve Board, the Office of the
Comptroller of the Currency, the Commission or any other federal
regulatory commission, board, body, authority or agency, is required
to be obtained or made by the Company in connection with the execution
and delivery by the Company of this Agreement or the Conversion
Agreement, the issuance of the Conversion Stock or the consummation of
the Conversion Merger and the Acquisition, other than registration of
the Shares under the 1933 Act, and any other approval, authorization,
consent, order or filing which has already been obtained or made
(other than any approvals required in connection with the Bank
Merger); provided, however, no opinion need be expressed with respect
to any approval or qualification required under any state securities
or blue sky laws.
(vi) Considered in light of such counsel's understanding of the
applicable law (including the requirements of Form S-3 and the
character of the Prospectus) and such counsel's experience in its
practice thereunder, the Registration Statement (other than documents
incorporated by reference, any financial statements and other
financial and statistical information, as to all of which such counsel
need express no opinion or belief), complied in all material respects
as to form with the requirements of the 1933 Act and the 1933 Act
Regulations as in effect on the date of the effectiveness of the
Registration Statement.
(vii) The descriptions of federal laws, rules and regulations of
the United States contained in the Registration Statement and the
Prospectus under the caption "The Offerings -- Certain Federal Income
Tax Consequences" and "Supervision and Regulation of BB&T Financial"
constituted accurate summaries thereof in all material respects as of
the date of the Prospectus.
(viii) The terms and provisions of the Shares conform in all
material respects to the description thereof in the Prospectus under
the caption "Description of Capital Stock of BB&T Financial."
(ix) To such counsel's knowledge, without independent inquiry,
there are no actions, suits or proceedings pending or threatened
against the Company before or by any federal, state or local
governmental, regulatory, or arbitral commission, board, body,
authority or agency (A) which are required to be disclosed by the 1933
Act and the 1933 Act Regulations in the Prospectus but are not so
described, or (B) which, if determined adversely to BB&T, would have a
Material Adverse Effect, or (C) of which such counsel is aware, which
in such counsel's opinion is reasonably likely to result in a
judgment, decree or order having a material adverse effect on the
consummation of the Conversion Merger and Acquisition or the
transactions contemplated by this Agreement.
(x) To such counsel's knowledge, without independent inquiry,
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other agreements or instruments required by Item 601(b)(10)
of Commission Regulation S-K to be filed or incorporated by reference
as an exhibit to the Registration Statement which have not been so
filed or incorporated (provided, however, that for the purposes of
this
17
paragraph (x), the exhibits required by the Registration Statement
shall be deemed to be those required by a registration statement on
Form S-3, and no opinion would be given by such counsel as to whether
any requirements for exhibits in any report, registration statement,
declaration or form incorporated by reference in the Registration
Statement have been complied with in such report, Registration
Statement, declaration or form).
(xi) To such counsel's knowledge, no order has been issued by the
Federal Reserve Board or the Commission to suspend the Offerings; to
such counsel's knowledge without independent investigation, no action
for any such purposes has been instituted or threatened by the Federal
Reserve Board or the Commission; and to such counsel's knowledge
without independent investigation, no person has sought to obtain
judicial review of the final action of the Administrator in connection
with his approval of the Plan or otherwise.
(3) The favorable opinion, dated as of the Closing Time, of Brooks,
Pierce, McLendon, Humphrey & Leonard, L.L.P., special counsel for Home Savings,
in form and substance satisfactory to counsel for the Agent, to the effect that:
(i) Home Savings is a North Carolina chartered stock savings bank
duly organized and validly existing under the laws of the State of
North Carolina, and is duly qualified to transact business and is in
good standing in each jurisdiction where such qualification is
required, except where failure to so qualify or be in good standing
would not have a material adverse effect on the business or operations
of Home Savings, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and Annexes thereto (the Prospectus and Annexes thereto
collectively referred to as the "Proxy Statement"); Home Savings is in
good standing under the laws of the State of North Carolina and under
the income, franchise and intangible tax laws of the State of North
Carolina (to the extent the State of North Carolina provides
certificates generally as to such matters); Home Savings is a member
in good standing of the Federal Home Loan Bank of Atlanta; Home
Savings' deposits are insured by SAIF to the fullest extent allowable
under applicable law, and no proceedings for the termination or
revocation of such insurance are pending or, to such counsel's
knowledge, threatened; Home Savings does not have any direct or
indirect subsidiaries.
(iii) The Conversion Agreement has been duly executed and delivered
by Home Savings, and the Plan has been duly adopted by Home Savings
and its Voting Members, and the Conversion Agreement is a valid and
binding agreement of Home Savings enforceable in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and by judicial limitations on equitable
remedies and except as the enforceability of the indemnification and
contribution provisions may be limited by applicable securities laws.
(iv) The shares of Home Savings Common Stock issued to the Company
pursuant to the Plan and the Conversion Agreement have been duly and
validly issued and are fully paid and non-assessable, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or claim
created, permitted or suffered by Home Savings.
(v) To such counsel's knowledge and based upon an Officers'
Certificate, there is no charge, investigation, action, suit or
proceeding before or by any court, governmental, regulatory or
arbitration agency, body or authority, domestic or foreign, now
pending or threatened against Home Savings which is required to be
disclosed in the Registration Statement, the Prospectus and/or the
Proxy Statement (other than as disclosed therein), or which would have
a material adverse effect on the business or
18
operations of Home Savings, or which would materially and adversely
affect the properties or assets thereof or which would materially and
adversely affect the performance of the Plan, the Conversion Agreement
or this Agreement, the issuance and delivery of Home Savings Common
Stock or the Conversion Stock or the consummation of the transactions
herein, therein or thereby contemplated; all pending legal,
governmental, regulatory or arbitration proceedings to which Home
Savings is a party or of which any of its properties or assets is the
subject which are not described in the Registration Statement, the
Prospectus or the Proxy Statement, including ordinary routine
litigation incidental to their businesses, are, considered in the
aggregate, not material.
(vi) To such counsel's knowledge and based upon an Officers'
Certificate, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other agreements or instruments to which
Home Savings or any of its subsidiaries is a party which are required
by the 1933 Act or by the 1933 Act Regulations to be described or
incorporated by reference in the Prospectus, to be described or
otherwise disclosed in the Proxy Statement or any exhibits thereto or
described, filed or incorporated by reference as exhibits to the
Registration Statement which have not been so described, filed or
incorporated by reference, and, to such counsel's knowledge, no
default exists or which, upon notice, the lapse of time or both, would
exist in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
so described, filed or incorporated by reference.
(vii) The Plan, the Conversion Agreement, and all other agreements
relating to the Conversion Merger and Acquisition have been duly
authorized, approved and adopted by the board of directors of Home
Savings, and, to such counsel's knowledge and based upon an Officers'
Certificate, the Administrator's approval of the Plan and the
Conversion Merger and Acquisition remain in full force and effect and
have not been modified in any material respect; the Plan has been duly
approved and adopted by the eligible voting members of Home Savings;
to such counsel's knowledge, Home Savings has conducted the Conversion
Merger and Acquisition in all material respects in accordance with
applicable requirements of the North Carolina Conversion Law and
Regulations, the Plan, the Conversion Agreement and all other
applicable regulations, and published decisions and orders thereunder,
including all material applicable terms, conditions, requirements and
conditions precedent to the Conversion Merger and Acquisition imposed
upon Home Savings by the Administrator; to such counsel's knowledge
and based upon an Officers' Certificate, Home Savings has performed
all its covenants and agreements contained in the Plan and the
Conversion Agreement, and satisfied the conditions precedent to the
Conversion Merger and Acquisition in all material respects in
accordance with the Plan, the Conversion Agreement, the applicable
North Carolina Conversion Law and Regulations (including the
Administrator's interpretations thereunder), and all other applicable
laws, regulations, decisions and orders, including all material terms,
conditions, requirements and provisions precedent to the Conversion
Merger and Acquisition imposed upon Home Savings by the Administrator,
other than those which the Administrator, expressly permits to be
completed after consummation of the Conversion Merger and Acquisition;
to such counsel's knowledge, no order has been issued by the
Administrator, the Commission or any State Commissioner to suspend the
Conversion Merger and Acquisition, the Subscription Offering, the
Community Offering; and no action for any such purpose has been
instituted or, to such counsel's knowledge, threatened by the
Administrator, the Commission or any State Commissioner; and to such
counsel's knowledge, no person has sought to obtain judicial review or
reconsideration of the final action of the Administrator in approving
the Plan.
19
(viii) Home Savings possesses such licenses, permits and other
governmental and regulatory authorizations as are currently required
for the conduct of its businesses, except for such licenses, permits
and other governmental and regulatory authorizations which if not so
obtained would not have a material adverse effect on the business or
operations of Home Savings, and all such material licenses, permits
and other governmental and regulatory authorizations are in full force
and effect, and, to such counsel's knowledge, Home Savings is in all
material respects complying therewith.
(ix) Home Savings is not in violation of its charter, by-laws or,
to such counsel's knowledge, 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 Home Savings is a
party or to which Home Savings or any of the property or assets of
Home Savings is subject, which violation or default would have a
material adverse effect on the business or operations of Home Savings;
the execution and delivery of the Plan and the Conversion Agreement by
Home Savings, the issuance and delivery to the Company of Home Savings
Common Stock and the consummation of the transactions contemplated
herein, therein and thereby have been duly authorized by all necessary
corporate action by Home Savings and, to such counsel's knowledge and
based upon an Officer's Certificate, will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of Home Savings pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which
Home Savings is a party or by which any of them may be bound, or to
which any of the property or assets of Home Savings is subject (other
than certain insurance policies now held for the benefit of Home
Savings, its officers, directors and others which will be cancelled as
a result of the consummation of the transactions contemplated by the
Conversion Agreement and the Plan), nor will such action result in any
violation of the provisions of the charter or by-laws of Home Savings
or any applicable law, rule or regulation, or court, administrative or
arbitration decree or decision, which breach, default, creation,
imposition or violation might have a material adverse effect on the
business or operations of Home Savings.
(xi) The Conversion Application has been approved by the
Administrator; and at the date of such approval, such Application
complied as to form in all material respects with the applicable
requirements of the North Carolina Conversion Law and Regulations,
with such modifications as were in such counsel's opinion appropriate
for the nature of the transactions described in such Applications.
As used in this subsection 5(b)(3), the phrase "knowledge" means the
conscious awareness of counsel for Home Savings. Where used in this
subsection 5(b)(3), an "Officer's Certificate" shall mean a certificate of
an executive officer of Home Savings, acceptable to counsel to the Agent,
which is dated as of the date of the opinion, and upon which certificate
Home Savings' counsel has relied in giving its opinion and nothing to the
contrary has come to the knowledge of Home Savings' counsel.
(4) The favorable opinion, dated as of Closing Time, of Housley
Goldberg & Kantarian, P.C., counsel for the Agent, with respect to the
matters set forth in clauses (i), (vii) (with respect to the issuance of
the Conversion Stock only) and (ix) (with respect to this Agreement only)
of subsection (b)(1) and clause (iv) of subsection (b)(2) of this Section.
In rendering such opinion, Housley Goldberg & Kantarian, P.C. may rely on
the opinions of Jerome C. Herring, Esq. or counsel to Home Savings as to
matters of North Carolina law as such counsel deems proper in the exercise
of its judgment.
In giving their opinions, each counsel specified in this Section 5(b) shall
additionally state that nothing has come to such counsel's attention that would
lead such counsel to believe that the Registration Statement
20
(except as to financial statements, notes to financial statements, financial
tables and other financial and statistical data contained therein and Agent's
information as to which counsel need not comment), at the Effective Time (or if
an amendment to the Registration Statement has been filed by the Company with
the Commission subsequent to the Effective Time, then at the time of the
effectiveness of the most recent such amendment), 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 not misleading or that the
Prospectus, at the date thereof or at Closing Time, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statement therein, in the light of the
circumstances under which they were made, not misleading.
Jerone C. Herring, Esq., Arnold & Porter, Brooks, Pierce, McLendon, Humphrey &
Leonard, L.L.P. and Housley Goldberg & Kantarian, P.C. may rely (i) upon
certificates of appropriate government or regulatory officials, (ii) as to
matters of fact, upon certificates and written statements of officers and
employees of and accountants for the Company, or any of its subsidiaries, or
Home Savings, and (iii) as to matters of law as to which such counsel is not
qualified to opine, on one or more opinions of local counsel in form and
substance satisfactory to counsel to the Agent. In addition, Jerone C. Herring,
Esq. may rely on one or more opinions of counsel in form and substance
satisfactory to counsel to the Agent with respect to the incorporation and
activities of any savings association or savings bank subsidiary of the Company.
(c)(1) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse
change or any development that could reasonably be expected to result in
a material adverse change in the condition, financial or otherwise, or in
the earnings or business affairs of the Company, or of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Agent shall have received a
certificate of the Chairman and the principal financial or accounting
officer of the Company, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change or development; (ii) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time; (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time; (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and, to such persons'
knowledge, no proceedings for the purpose have been initiated or
threatened by the Commission; and (v) no order suspending any of the
Offerings has been issued and, to such persons' knowledge, no proceedings
for that purpose have been initiated or threatened by the Commission, the
Administrator or any State Commissioner and no person has sought to
obtain reconsideration or judicial review of the action of the
Administrator in approving the Plan in accordance with the North Carolina
Conversion Law and Regulations or of the Federal Reserve Board or the
Administrator in approving the Acquisition.
(2) On the date hereof and at Closing Time there shall not have been,
since the date hereof (in the case of Closing Time) or since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any
development that could reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of Home Savings, whether or not arising in
the ordinary course of business, and the Agent shall have received a
certificate of the President and the principal financial or accounting
officer of Home Savings, dated the date hereof or as of Closing Time, as
the case may be, to the effect that (i) there has been no such material
adverse change or development; (ii) the representations and warranties in
Exhibit A hereto are true and correct with the same force and effect as
though expressly made at and as of the date hereof or Closing Time, as
the case may be; and (iii) to such persons' knowledge, no order
suspending any of the Offerings have been issued and no proceedings for
that purpose have been initiated or threatened by the Administrator or
any other agency, body or authority and no person has sought to obtain
reconsideration or judicial review of the action of the Administrator in
approving the Plan in accordance with the North Carolina Conversion Law
and Regulations.
21
(d) At the time of the execution of this Agreement, the Agent shall
have received from KPMG Peat Marwick a letter dated such date, in form
and substance satisfactory to the Agent, to the effect that (i) they are
with respect to the Company and its subsidiaries independent public
accountants within the meaning of the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the consolidated financial
statements and supporting schedules audited by them and included or
incorporated by reference in the Registration Statement and the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations (including Commission Regulation
S-X); (iii) based upon limited procedures set forth in detail in such
letter, nothing has come to their attention which causes them to believe
that (A) the unaudited consolidated interim financial statements and
supporting schedules of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations (including
Commission Regulation S-K, Item 301 with respect to the selected
financial data of the Company), or that any material modifications should
be made to such statements for them to be in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus, (B) at a specified date
not more than five days prior to the date of this Agreement, there have
been any changes in the capital stock or consolidated long-term debt of
the Company and its consolidated subsidiaries or any increases in
consolidated short-term borrowed funds of the Company or any decreases in
consolidated total assets or stockholders' equity of the Company and
subsidiaries, in each case as compared with the amounts shown in the June
30, 1993 consolidated financial statements of the Company or, during the
period from June 30, 1993 to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as
compared with the corresponding period of the preceding year, in
consolidated interest income, net interest income, income before income
taxes or net income of the Company and its subsidiaries, except in all
instances for increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur or increases or
decreases which are disclosed in such letter, and (C) the unaudited pro
forma consolidated condensed financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Commission Regulation
S-X and that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements; (iv) in
addition to the examination referred to in their opinion and the limited
procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are derived
from the accounting, financial and other records of the Company and its
subsidiaries, Home Savings, and the entities involved in the Pending
Acquisitions and the respective subsidiaries thereof together with any
other subsidiaries, which are included or incorporated by reference in
the Registration Statement and the Prospectus and which are specified by
the Agent, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Company and its subsidiaries.
(e) At Closing Time, the Agent shall have received from KPMG Peat
Marwick a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section (except that the specified date referred
to shall be a date not more than five days prior to Closing Time) and
stating that they have updated their opinion to the Boards of Directors
of the Company and Home Savings included as an exhibit to the
Registration Statement as to certain income tax consequences of the
Conversion Merger and Acquisition.
(f) At Closing Time, the Agent shall have received a letter from
Trident Financial Corporation ("Trident Financial"), dated as of Closing
Time, (i) confirming that Trident
22
Financial is independent of the Company, Home Savings and their
respective subsidiaries and is experienced and expert in the area of
corporate appraisals within the meaning of Rule .0717(a) of the North
Carolina Conversion Law and Regulations, (ii) stating that the appraisal
prepared by Trident Financial with regard to Home Savings complies in all
material respects with the applicable requirements of the North Carolina
Conversion Law and Regulations, and (iii) further stating that their
opinion of the pro forma market value of Home Savings expressed in its
appraisal as of October 18, 1993 and as most recently updated, remains in
effect.
(g) At Closing Time, counsel for the Agent shall have been furnished
with such documents, certificates and opinions as such counsel may
reasonably require which confirm the satisfactory completion of all
conditions to the Conversion Merger and Acquisition and for the purpose
of enabling them to pass upon the sale of the Conversion Stock to be
issued and sold in the Offerings as herein contemplated and related
proceedings or in order to evidence the accuracy or completeness of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the sale of the Conversion Stock to be issued and sold in
the Offerings as herein contemplated shall be reasonably satisfactory in
form and substance to the Agent and counsel for the Agent.
If any condition specified in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be terminated by the Agent
by notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
SECTION 6. INDEMNIFICATION. (a) In addition to any rights to
indemnification granted to the Agent by this or any other agreement, the Company
agrees to indemnify and hold harmless the Agent, and each person, if any, who
controls the Agent within the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained or incorporated by reference in
the Registration Statement in the form in which it initially became effective
(or in any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expenses
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all reasonable expense, whatsoever (including the
fees and disbursements of counsel chosen by the Agent), as incurred,
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that the indemnity agreement in this subsection (a) shall not
apply to any loss, liability, claim, damage or expense to the extent it arises
out of any untrue statement or omission or alleged untrue statement or omission
made in the Registration Statement (or in any amendment thereto) or in the
Prospectus in reliance upon and in conformity with the Agent's Information or
written information furnished to the Company by the Agent expressly for use in
the Registration Statement or the Prospectus and included under the caption "The
23
Offerings -- Plan of Distribution" (if any such Agent's Information or other
information is included therein) and on the front cover page of the Prospectus.
(b) The Agent agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or in any
amendment thereto) or the Prospectus under the caption "The Offerings -- Plan of
Distribution" (if any such Agent's Information or other is included therein) and
on the front cover page of the Prospectus in reliance upon and in conformity
with the Agent's Information or written information furnished to the Company by
such Agent expressly for use in the Registration Statement or the Prospectus.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of the indemnity
agreement in this Section 6. An indemnifying party may participate at its own
expense in the defense of any such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel or any other counsel specially retained by counsel) separate
from their own counsels for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegation or circumstances.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Agent shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company and the Agent, as incurred, in such proportions that the Agent is
responsible for that portion represented by the percentage that the commission
it receives pursuant to Section 2 hereof bears to the aggregate offering price
of the Conversion Stock (including such commissions) and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person,
if any, who controls the Agent within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act shall have the same rights to contribute as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company and Home Savings submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Agent or any controlling person
thereof, or by or on behalf of the Company and Home Savings, and shall survive
delivery of the Conversion Stock.
SECTION 9. TERMINATION OF AGREEMENT. (a) The Agent may terminate this
Agreement, by notice to the Company at any time at or prior to Closing Time (i)
if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Registration Statement, any
material adverse change or any development that could reasonably be expected to
result in a material adverse change in the condition, financial or otherwise, or
the earnings or business affairs of the Company, or the Company and its
subsidiaries considered as one enterprise, or Home Savings and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets of the United States or any outbreak or escalation of
hostilities or other calamity or crises the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Agent, impracticable to market the Shares or to enforce contracts for the sale
of Shares, or (iii) if (A) trading in the Common Stock on the NASDAQ/NMS has
been suspended, or (B) trading generally on the NASDAQ/NMS, the American Stock
Exchange or the New York Stock Exchange has been suspended, or (C)
24
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by the NASDAQ/NMS, the American Stock
Exchange or the New York Stock Exchange or by order of the Commission or any
other governmental authority, or (iv) if a banking moratorium has been declared
by federal, New York or North Carolina authorities.
(b) The Company, upon written notice, may terminate this Agreement with
respect to the Agent upon a material breach hereof by such Agent.
(c) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
SECTION 10. CONFIDENTIALITY; COOPERATION.
(a) The Agent shall not without the written consent of the Company
disclose material nonpublic information contained in any regulatory report of
the Company if disclosure thereof would in its reasonable judgment violate any
federal law or regulation.
(b) The Agent agrees to cooperate with the Company and Home Savings in
connection with the performance of its duties hereunder.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, sent
by overnight delivery services or transmitted by any standard form of
telecommunication as provided below:
If to the Agent: Trident Securities, Inc.
4601 Six Forks Road, Suite 400
Raleigh, North Carolina 27609
Attention: William M. Moore, Jr.
Facsimile No.: (919) 787-1670
with a copy to: Housley Goldberg & Kantarian, P.C.
1220 19th Street, N.W., Suite 700
Washington, D.C. 20036
Attention: Gary R. Bronstein, Esq.
Facsimile No.: (202) 822-0140
If to the Company: BB&T Financial Corporation
225 West Nash Street
Wilson, North Carolina 27893
Attention: Scott E. Reed
Facsimile No.: (919) 399-4871
with a copy to: Arnold & Porter
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Attention: L. Stevenson Parker, Esq.
Facsimile No.: (202) 872-6720
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Agent, the Company and its successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation (including, without limitation, any depositor,
creditor, borrower or member of Home Savings), other than the Agent, the Company
and their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim, whether as a
third party beneficiary or otherwise under or in respect of this Agreement or
any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Agent, the Company, their respective
25
successors, and such controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation.
SECTION 13. GOVERNING LAW AND TIMES. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina applicable
to agreements made and to be performed in such State. Specified times of day
refer to Eastern Time.
SECTION 14. COUNTERPARTS. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same agreement.
SECTION 15. AMENDMENT. This Agreement may be amended only by a subsequent
writing signed by the Agent and the Company.
SECTION 16. HEADINGS. The index, headings and subheadings in this Agreement
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 17. ENTIRE AGREEMENT. This Agreement, together with the exhibits and
schedules thereto, and any terms incorporated by reference herein, constitutes
the entire understanding between and among the Parties with respect to the
subject matter hereof and shall supersede any prior agreements and
understandings among the parties with respect to such subject matter.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between the Agent
and the Company in accordance with its terms.
Very truly yours,
BB&T FINANCIAL CORPORATION
By:
--------------------------------------------
Name: Scott E. Reed
Title: Senior Executive Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
TRIDENT SECURITIES, INC.
By:
--------------------------------
Name: Timothy E. Lavelle
Title: President
Home Savings hereby joins in the foregoing Agreement, undertakes that it will
be bound thereby and that it will do and perform all the acts therein provided
to be done by it.
HOME SAVINGS BANK OF ALBEMARLE, S.S.B.
By:
---------------------------------------------
Name: Carl M. Hill
Title: President and Chief Executive Officer
26
EXHIBIT A
TO THE
AGENCY AGREEMENT
REPRESENTATIONS AND WARRANTIES
OF
HOME SAVINGS BANK OF ALBEMARLE, S.S.B.
All capitalized terms used but not defined in this Exhibit shall have the
respective meanings thereof assigned in the Agency Agreement to which this is an
Exhibit.
Home Savings makes the following representations and warranties to the Agent
pursuant to Section 5(c)(2) of the Agency Agreement:
(i) (a) At the Effective Time, the Registration Statement and the
Prospectus, insofar as they relate to Home Savings, complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations, and
the Registration Statement, insofar as it relates to Home Savings, did not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and, at the Effective Time (unless the term "Prospectus" refers to a
prospectus used in connection with the Subscription Offering or the Community
Offering which differs from the Prospectus on file with the Commission at the
Effective Time, in which case at the time such prospectus is first used in the
Subscription Offering or the Community Offering) and at Closing Time, the
Prospectus and Annexes thereto and any supplemental sales literature authorized
by the Company or Home Savings for use in connection with the Subscription
Offering or the Community Offering, insofar as they relate to Home Savings (when
read in conjunction with the Prospectus) did not or will not, as the case may
be, contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to
the Agent's Information. There are no contracts, indentures, mortgages, loan
agreements, notes, leases or other agreements or instruments to which Home
Savings is a party to or to which any of them or their respective properties and
assets are subject or bound, which are required by the 1933 Act and 1933 Act
Regulations or the North Carolina Conversion Law and Regulations, to be
described or incorporated by reference in the Prospectus or described in or
filed or incorporated by reference as exhibits to the Registration Statement,
the Conversion Application, as defined hereinafter, or the Proxy Statement, as
defined hereinafter, which have not been so described, filed or incorporated by
reference.
(b) Home Savings was and is exclusively responsible for the
information concerning Home Savings and its subsidiaries contained in the
Conversion Application, as defined hereinafter, and Prospectus and Annexes
thereto (the Prospectus and Annexes thereto collectively referred to as the
"Proxy Statement"), and in any amendments or supplements thereto. Home Savings
will make such changes, and provide such supplements or amendments, to the
Conversion Application, as defined hereinafter, the Proxy Statement, and any
marketing material related to Home Savings' solicitation of proxies (the "Proxy
Solicitation") with respect to the Conversion Merger and/or the Offerings,
which, in the opinion of the Agent and its counsel (and not reasonably
objectionable to Home Savings and its counsel), are necessary or desirable to
comply in all material respects with all applicable statutes, rules and
regulations with respect to such Proxy Statement, the Prospectus and materials
related to the Proxy Solicitation and/or the Offerings (collectively, the
"Disclosure Requirements"). The Proxy Statement does not and will not contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements contained
therein not misleading at the time such documents are filed with the
Administrator, when the Proxy Statement becomes effective and at the date the
Proxy Statement is first mailed to Voting Members. Home Savings has mailed or
caused to be mailed the Proxy Statement together with all related Proxy
Solicitation materials, in forms in compliance with the applicable regulations,
including, without limitation, the North Carolina Conversion Law and
Regulations, to each depositor, borrower or other voting member of Home Savings
entitled to receive such a Proxy Statement under the North Carolina Conversion
Law and Regulations, on a timely basis and in the manner and form required by
the North Carolina Conversion Law and Regulations.
27
(ii) Each time a post-effective amendment to the Registration Statement
became or becomes, as the case may be, effective, the Registration Statement
and the Prospectus insofar as they relate to Home Savings, complied or will
comply, as the case may be, in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations, and the Registration Statement,
insofar as it relates to Home Savings, did not or will not, as the case may be,
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 the Prospectus, insofar as it relates to Home Savings, each
time a post-effective amendment to the Registration Statement became or becomes
effective (unless the term "Prospectus" refers to a prospectus which has been
provided to the Agent by the Company for use in connection with the Offerings
which differs for the applicable Prospectus on file at the Commission at the
time such post-effective amendment to the Registration Statement became or
becomes, as the case may be, effective, in which case at the time it is first
provided to the Agent for such use) and at Closing Time, will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to the Agent's
Information.
(iii) Pursuant to Article 3 of Chapter 54C of the NCGS and the rules and
regulations promulgated thereunder by the Administrator, including all published
interpretations, rulings and decisions of the Administrator issued thereunder
and all waivers, interpretations and orders issued by the Administrator to Home
Savings thereunder (the "North Carolina Conversion Law and Regulations"), Home
Savings has filed with the Administrator an application for conversion (the
"Conversion Application") and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof, including
copies of the Proxy Statement and the Prospectus. Home Savings will promptly
file the Prospectus with the Administrator and will promptly file such further
amendments and supplements to the Conversion Application as may be necessary or
desirable in connection with the Conversion Merger and Acquisition. At the
date hereof and at all times subsequent hereto, up to and including the Closing
Time, the Conversion Application complies and will comply in all materials
respects with the applicable provisions of the North Carolina Conversion Law and
Regulations (including the Administrator's interpretations thereunder). The
Administrator has, by letter dated November 12, 1993, approved the Conversion
Application, and such approval remains in full force and effect.
(iv) The Proxy Statement, form of proxy, notice of meeting and any other
communication, written or oral, used in the Proxy Solicitation have complied and
will comply in all material respects with the applicable provisions of the North
Carolina Conversion Law and Regulations and at the time of their use did not
contain any statement which, at the time and in light of the circumstances under
which it was made, was false or misleading with respect to any material fact, or
which omitted to state any material fact necessary in order to make the
statements therein not false or misleading or necessary to correct any statement
in an earlier communication with respect to the Proxy Solicitation which had
become false or misleading, and at the time of mailing, Home Savings had
received all required authorizations of the Administrator for the use of such
Proxy Statement and the other Proxy Solicitation materials; the Prospectus and
any supplemental sales literature authorized in writing by an Authorized Officer
or by Home Savings for use in connection with the Subscription Offering or the
Community Offering are in compliance in all material respects with the
applicable provisions of the North Carolina Conversion Law and Regulations and,
at or prior to the Effective Time, received all required authorizations of the
Administrator for use in final form.
(v) At Closing Time, the Plan and the Conversion Agreement shall have been
duly adopted by Home Savings by all necessary action of its board of directors
and voting members, and such approvals shall remain in full force and effect
through the Closing Time.
(vi) At Closing Time, Home Savings shall have completed all the conditions
precedent to the Conversion and Acquisition in accordance in all material
respects with the Plan, the Conversion Agreement, the North Carolina Conversion
Law and Regulations and all other applicable laws, regulations, decisions and
orders, including all material terms, conditions, requirements and provisions
precedent to the Conversion Merger and Acquisition imposed upon Home Savings by
the Administrator other than those which the Administrator expressly permitted
to be completed after the Conversion Merger and Acquisition becomes effective.
At Closing Time, Home Savings shall have no knowledge or notice that any person
has sought or intends to seek to obtain reconsideration or judicial review of
the final action of the Administrator in approving the Plan or otherwise.
28
(vii) Trident Financial, which prepared the valuation of Home Savings as part
of the Conversion Merger and Acquisition, is independent with respect to Home
Savings within the meaning of the North Carolina Conversion Law and Regulations.
(viii) The accountants who certified the financial statements and supporting
schedules of Home Savings forming the bases of the financial and/or statistical
information relating to Home Savings included or incorporated by reference in
the Prospectus, Proxy Statement and/or the Registration Statement were at the
time of such certification independent within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings and independent public
accountants as required by the 1933 Act and 1933 Act Regulations; and such
accountants were at the time of such certification, with respect to Home Savings
and its subsidiaries, independent auditors within the meaning of the rules,
regulations, resolutions and practice of the Administrator relating to North
Carolina savings banks and savings and loan associations.
(ix) The financial statements of Home Savings that form the basis for the
financial and/or statistical information regarding Home Savings included or
incorporated by reference in the Registration Statement, Prospectus and the
Proxy Statement present fairly the financial position of Home Savings as of the
dates indicated and the results of their operations and cash flows for the
periods specified and no other financial statements of Home Savings are required
to be included in the Proxy Statement or the Conversion Application; except as
otherwise stated in the Registration Statement or the Prospectus and the Proxy
Statement, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis and such
financial statements are consistent in all materials respects with financial
statements and other reports filed by Home Savings with the FDIC and the
Administrator except that the accounting principles employed in such other
filings conform to the requirements of the FDIC and the Administrator and not
necessarily to generally accepted accounting principles.
(x) Since the respective dates as of which information is given in the
Registration Statement, the Prospectus and the Proxy Statement, except as
otherwise stated therein, (A) there has not been any material adverse change in
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of Home Savings, whether or not arising in the ordinary
course of business, and (B) there have not been any transactions entered into by
Home Savings, other than those in the ordinary course of business, which are
material to Home Savings.
(xi) Home Savings possesses such licenses, permits and other governmental
and regulatory authorizations as are required for the conduct of its business;
all such licenses, permits and other governmental and regulatory authorizations
are in full force and effect and Home Savings is in all material respects
complying therewith; Home Savings has not received notice of any proceeding or
action relating to the revocation or modification of any such license, permit or
other governmental or regulatory authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, might
have a material adverse effect on the conduct of the business or the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of Home Savings.
(xii) At the Closing Time, the shares of Home Savings Common Stock to be
issued to the Company pursuant to the Plan and the Conversion Agreement shall
have been duly and validly authorized for issuance and, when issued and
delivered by Home Savings pursuant to the Plan and Conversion Agreement against
payment therefor in the amount of all net proceeds from the sale of the
Conversion Stock pursuant to the Plan, will be duly and validly issued and fully
paid and non-assessable and will be issued to the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim, created,
permitted or suffered by Home Savings.
(xiii) Upon consummation of the Conversion Merger and Acquisition,
liquidation accounts for the benefit of eligible account holders and
supplemental eligible account holders, if any, of Home Savings will have been
duly established in accordance with the requirements of the North Carolina
Conversion Law and Regulations. In the event of a complete liquidation of Home
Savings or any successor thereto, including, without limitation, BB&T-NC, each
eligible account holder and each supplemental eligible account holder, if any,
who continues to maintain a deposit account in Home Savings or in such successor
thereto and will be entitled to
29
receive a liquidation distribution to the extent specified in the North Carolina
Conversion Law and Regulations from the liquidation account at Home Savings or
its successors in the amount of the then current adjusted subaccount balance for
each of such eligible account holders' or supplemental eligible account holders'
deposit accounts then held, before any liquidation distribution may be made to
the holders of shares of capital stock of Home Savings or its successors.
(xiv) Home Savings is a North Carolina chartered mutual savings bank and at
Closing Time will be a North Carolina chartered stock savings bank, in each case
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Proxy Statement and the
Prospectus. Home Savings is in good standing under the laws of the United
States and the State of North Carolina, and is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification or good standing is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of Home Savings and its subsidiaries considered as one
enterprise: Home Savings does not have any direct or indirect subsidiaries and
does not own, beneficially or otherwise, more than 5% of a class of equity
securities of any other entity.
(xv) Home Savings is a member in good standing of the Federal Home Loan
Bank of Atlanta; the deposit accounts of Home Savings are insured by SAIF to the
fullest extent allowable under law and no proceedings for the termination or
revocation of such insurance are pending or, to the knowledge of Home Savings,
threatened.
(xvi) Home Savings has taken all corporate action necessary to adopt and
perform the Plan, and to execute, deliver and perform the Conversion Agreement,
and the Conversion Agreement is a valid and binding agreement of Home Savings
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, reorganization, insolvency, receivership,
conservatorship, moratorium or similar laws affecting creditors' rights
generally and by judicial limitations on equitable remedies and except as the
enforceability of the indemnification and contribution provision may be limited
by applicable securities laws.
(xvii) Home Savings is not in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, license, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which Home Savings is
a party or by which it may be bound or to which any of the property or assets of
Home Savings is subject, which violation or default might have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of Home Savings. The adoption and
performance of the Plan, and the execution, delivery and performance of the
Conversion Agreement, the issuance and delivery to the Company of Home Savings
Common Stock and the consummation of the transaction contemplated herein,
therein and thereby will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of Home Savings pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which Home Savings is a party or by which it may be bound, or to
which any of the property or assets of Home Savings is subject (other than
certain insurance policies now held for the benefit of Home Savings, its
officers, directors and others which will be cancelled as a result of the
consummation of the transactions contemplated by the Conversion Agreement and
the Plan), nor will such action result in any violation of the provisions of the
charter or by-laws of Home Savings or any applicable law, rule, regulation, or
court, administrative or arbitration decree, resolution, order or decision which
breach, default, creation, imposition or violation might have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of Home Savings.
(xix) Home Savings has good and marketable title to all properties and
assets for which ownership is material to the business of Home Savings, and to
those properties and assets described in the Prospectus and/or the Proxy
Statement as owned by it, free and clear of all security interests, liens,
mortgages, charges, pledges, encumbrances, restrictions or adverse claims; and
all of the leases and subleases material to the business of Home Savings under
which Home Savings holds properties, including, without limitation, those
described in the Prospectus and/or the Proxy Statement, are valid, subsisting
and binding.
30
(xx) Home Savings is not in violation of any directive, order, agreement,
resolution or understanding of kind (regardless of form) from or with the FDIC
or the Administrator specifying any material restriction of, or requiring any
material change in, Home Savings' conduct of its business. Home Savings has
conducted and are conducting their businesses so as to comply in all material
respects will all applicable statutes and regulations (including, without
limitation, all regulations, decisions, directives and orders of the
Administrator and the FDIC); there is no charge, investigation, action, suit or
proceeding before or by any court, governmental, regulatory or arbitration
agency, body or authority, domestic or foreign, now pending or, to the knowledge
of Home Savings, threatened against Home Savings which is required to be
disclosed in the Registration Statement and the Prospectus and/or the Proxy
Statement (other than as disclosed therein), or which might have a material
adverse effect on the condition, financial or otherwise, or the earning,
business affairs or business prospects of Home Savings, or which might
materially and adversely affect the properties or assets thereof or which would
materially and adversely affect the performance of the Plan or Conversion
Agreement, the issuance and delivery of Home Savings Common Stock or the
Conversion Stock or the consummation of the transactions herein, therein or
thereby contemplated. All pending legal, governmental, regulatory and
arbitration proceedings to which Home Savings is a party or of which any of
their respective properties or assets is the subject which are not described in
the Prospectus and/or the Proxy Statement, including ordinary routine litigation
incidental to their businesses, are, considered in the aggregate, not material.
There are no contracts, indentures, mortgages, loan agreements, notes, leases or
other agreements or instruments to which Home Savings is a party which are
required by the 1933 Act, the 1933 Act Regulations or the North Carolina
Conversion Law and Regulations to be described or incorporated by reference in
the Prospectus or described, filed or incorporated by reference as exhibits to
the Registration Statement and/or Proxy Statement or the Conversion Application
which have not been so described, filed or incorporated by reference.
(xxi) Home Savings has filed all necessary federal, state and foreign
income, franchise, intangible and other tax returns and have paid all taxes
shown as due thereon (or obtained appropriate extension); except for matters
referred to in the Prospectus or the Proxy Statement, there are no tax
deficiencies which have been asserted or threatened against Home Savings which,
individually or in the aggregate, might have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of Home Savings. The federal income tax returns of Home Savings have
not been audited through September 30, 19__ and there is no liability for
federal income tax asserted against Home Savings for any year prior to the tax
liabilities for Home Savings' current tax year, all of which have accrued, and
all payment of which have been made in full prior to delinquency.
(xxii) Home Savings maintains insurance of the type and in the amounts
generally deemed adequate for its business and consistent with insurance
maintained by similar companies in similar businesses, including, but not
limited to, general liability insurance, product liability insurance and
insurance covering all real and personal property owned or leased by Home
Savings against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.
(xxiii) Home Savings is in compliance in all material respects with the
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transaction Reporting Act of 1970, as amended, and the regulations
and rules thereunder.
(xxiv) No approval, authorization, consent or other order of any public,
governmental or board, or body is required for the execution and delivery by
Home Savings of the Conversion Agreement, the issuance of Home Savings Common
Stock or the Conversion Stock, or the consummation of the Conversion Merger and
Acquisition except as indicated in the Blue Sky Survey delivered to the Agent.
(xxv) The various certificates and other facts presented in support of the
tax opinions to be rendered in connection with the Conversion Merger by KPMG
Peat Marwick, insofar as they relate to Home Savings, are true, correct and
complete in all material respects, and Home Savings has not and will not take
any action inconsistent with such facts.
(xxvi) No labor dispute by the employees of Home Savings exists or, to Home
Savings' knowledge, is threatened, which might have a material adverse effect
upon the conduct of the business or on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of Home Savings.
31
(xxvii) During the period when the Prospectus is required to be delivered,
Home Savings will comply, at its own expense, with all requirements imposed upon
it by the Commission, the FDIC, or the Administrator, as the case may be, by the
applicable rules and regulations of and laws administered by the Commission, the
FDIC or the Administrator, including the North Carolina Conversion Law and
Regulations, the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations (including, without limitation, Rule 10b-6 under the 1934 Act),
insofar as necessary to permit the continuance of sales or dealing in shares of
Common Stock during such period in accordance with the provisions hereof and the
Prospectus.
(xxviii) Other than as permitted by the North Carolina Conversion Law and
Regulations, the 1933 Act and the 1933 Act Regulations, Home Savings shall not
distribute any prospectus, offering circular or other offering material or any
proxy solicitation material in connection with the offering and sale of the
Conversion Stock or the solicitation of proxies with respect to the meeting of
Home Savings' voting members to be held to consider and vote upon the Conversion
Merger and Acquisition. Any such material shall be delivered to the Agent a
reasonable time before its intended use and filing with the Administrator, and
no filing or use shall be made thereof unless expressly permitted by the Agent,
and as permitted by the Commission and/or the Administrator.
(xxix) To the best of Home Savings' knowledge, the records of account
holders, depositors, borrowers and other members of Home Savings which have been
delivered to the Agent by or on behalf of Home Savings, or to the Conversion
Agent for use during the Conversion Merger, are reliable and accurate in all
material respects.
32