Exhibit (1)(a)
TRIDENT SECURITIES LETTERHEAD
September 11, 1997
Board of Directors
Anson Savings Bank, SSB
211 South Greene Street
Wadesboro, North Carolina 28170
Re: Conversion Stock Marketing
Gentlemen:
This letter sets forth the terms of the proposed engagement between TRIDENT
SECURITIES, INC. ("TRIDENT") and Anson Savings Bank, SSB (the "Bank") concerning
our investment banking services in connection with the conversion of the Bank
from a mutual to a capital stock form of organization.
TRIDENT is prepared to assist the Bank in connection with the offering of
its shares of common stock during the subscription offering and community
offering as such terms are defined in the Bank's Plan of Conversion. The
specific terms of the services contemplated hereunder shall be set forth in a
definitive sales agency agreement (the "Agreement") between TRIDENT and the Bank
to be executed on the date the offering circular/prospectus is declared
effective by the appropriate regulatory authorities. The price of the shares
during the subscription offering and community offering will be the price
established by the Bank's Board of Directors, based upon an independent
appraisal as approved by the appropriate regulatory authorities, provided such
price is mutually acceptable to TRIDENT and the Bank.
In connection with the subscription offering and community offering,
TRIDENT will act as financial advisor and exercise its best efforts to assist
the Bank in the sale of its common stock during the subscription offering and
community offering. Additionally, TRIDENT may enter into agreements with other
National Association of Securities Dealers, Inc., ("NASD") member firms to act
as selected dealers, assisting in the sale of the common stock. TRIDENT and the
Bank will determine the selected dealers to assist the Bank during the community
offering. At the appropriate time, TRIDENT in conjunction with its counsel,
will conduct an examination of the relevant documents and records of the Bank as
TRIDENT deems necessary and appropriate. The Bank will make all documents,
records and other information deemed necessary by TRIDENT or its counsel
available to them upon request.
For its services hereunder, TRIDENT will receive the following compensation
and reimbursement from the Bank:
1. A commission equal to two and one half percent (2.5%) of the aggregate
dollar amount of capital stock sold in the subscription and community
offerings, excluding any shares of conversion stock sold to the Bank's
directors, executive officers and the employee benefit plan.
Additionally, commissions will be excluded on those shares sold to
"associates" of the Bank's directors and executive officers. The term
"associates" as used herein shall have the same meaning as that found
in the Bank's Plan of Conversion.
2. For stock sold by other NASD member firms under selected dealer's
agreements, the commission shall not exceed a fee to be agreed upon
jointly by TRIDENT and the Bank to reflect market requirements at the
time of the stock allocation in a Syndicated Community Offering.
3. The foregoing fees and commissions are to be payable to TRIDENT at
closing as defined in the Agreement to be entered into between the
Bank and TRIDENT.
4. TRIDENT shall be reimbursed for allocable expenses incurred by them,
including legal fees, whether or not the Agreement is consummated.
TRIDENT's out-of-pocket expenses will not exceed $10,000 and its legal
fees will not exceed $27,500. The Bank will forward to TRIDENT a check
in the amount of $10,000 as an advance payment to defray the allocable
expenses of TRIDENT.
It further is understood that the Bank will pay all other expenses of the
conversion including but not limited to its attorneys' fees, NASD filing fees,
and filing and registration fees and fees of either TRIDENT's attorneys or the
attorneys relating to any required state securities law filings, telephone
charges, air freight, rental equipment, supplies, transfer agent charges, fees
relating to auditing and accounting and costs of printing all documents
necessary in connection with the foregoing.
For purposes of TRIDENT's obligation to file certain documents and to make
certain representations to the NASD in connection with the conversion, the Bank
warrants that: (a) the Bank has not privately placed any securities within the
last 18 months; (b) there have been no material dealings within the last 12
months between the Bank and any NASD member or any person related to or
associated with any such member; (c) none of the officers or directors of the
Bank has any affiliation with the NASD; (d) except as contemplated by this
engagement letter with TRIDENT, the Bank has no financial or management
consulting contracts outstanding with any other person; (e) the Bank has not
granted TRIDENT a right of first refusal with respect to the underwriting of any
future offering of the Bank stock; and (f) there has been no intermediary
between TRIDENT and the Bank in connection with the public offering of the
Bank's shares, and no person is being compensated in any manner for providing
such service.
Board of Directors
September 11, 1997
Page 3
The Bank agrees to indemnify and hold harmless TRIDENT and each person, if
any, who controls the firm against all losses, claims, damages or liabilities,
joint or several and all legal or other expenses reasonably incurred by them in
connection with the investigation or defense thereof (collectively, "Losses"),
to which they may become subject under the securities laws or under the common
law, that arise out of or are based upon the conversion or the engagement
hereunder of TRIDENT. If the foregoing indemnification is unavailable for any
reason, the Bank agrees to contribute to such Losses in the proportion that its
financial interest in the conversion bears to that of the indemnified parties.
If the Agreement is entered into with respect to the common stock to be issued
in the conversion, the Agreement will provide for indemnification, which will be
in addition to any rights that TRIDENT or any other indemnified party may have
at common law or otherwise. The indemnification provision of this paragraph will
be superseded by the indemnification provisions of the Agreement entered into by
the Bank and TRIDENT.
This letter is merely a statement of intent and is not a binding legal
agreement except as to paragraph (4) above with regard to the obligation to
reimburse TRIDENT for allocable expenses to be incurred prior to the execution
of the Agreement and the indemnity described in the preceding paragraph. While
TRIDENT and the Bank agree in principle to the contents hereof and propose to
proceed promptly, and in good faith, to work out the arrangements with respect
to the proposed offering, any legal obligations between TRIDENT and the Bank
shall be only as set forth in a duly executed Agreement. Such Agreement shall
be in form and content satisfactory to TRIDENT and the Bank, as well as their
counsel, and TRIDENT's obligations thereunder shall be subject to, among other
things, there being in TRIDENT's opinion no material adverse change in the
condition or obligations of the Bank or no market conditions which might render
the sale of the shares by the Bank hereby contemplated inadvisable.
Board of Directors
September 11, 1997
Page 4
Please acknowledge your agreement to the foregoing by signing below and
returning to TRIDENT one copy of this letter along with the advance payment of
$10,000. This proposal is open for your acceptance for a period of thirty (30)
days from the date hereof.
Yours very truly,
TRIDENT SECURITIES, INC.
By: /s/ Willis Smith, II
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Willis Smith, II
Senior Vice President
Agreed and accepted to this 26th day
of September, 1998.
Anson Savings Bank, SSB
By: /s/ Eugene M. Ward,
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Eugene M. Ward, President