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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
FUTURUS FINANCIAL SERVICES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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<CAPTION>
GEORGIA 6021 58-2485661
<S> <C> <C>
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
1580 WARSAW ROAD, ROSWELL, GEORGIA 30076 (770) 643-2512
(ADDRESS, AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
____________ WINDWARD PARKWAY, ALPHARETTA, GEORGIA 30004 (ADDRESS OF
PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
WILLIAM M. BUTLER
FUTURUS FINANCIAL SERVICES, INC.
1580 WARSAW ROAD
ROSWELL, GEORGIA 30076
(770) 643-2512
(NAME, ADDRESS, AND TELEPHONE NUMBER, OF
AGENT FOR SERVICE)
---------------------------
COPIES TO:
<TABLE>
<S> <C>
KATHRYN L. KNUDSON, ESQ. BOYD C. CAMPBELL, JR., ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP SMITH HELMS MULLISS & MOORE, LLP
191 PEACHTREE STREET, N.E., 16TH FLOOR 201 NORTH TRYON STREET, 30TH FLOOR
ATLANTA, GEORGIA 30303 CHARLOTTE, NORTH CAROLINA 28202
(404) 572-6600 (704) 343-2000
</TABLE>
Approximate date of proposed sale to the public: as soon as practicable
after this Registration Statement has become effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
---------------------------
CALCULATION OF REGISTRATION FEE
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- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER UNIT PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
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Warrants to purchase common stock 200,000(1) $0 $0 $0
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Common stock, no par value, issuable
upon the exercise of the warrants 200,000 $10.00(2) $2,000,000(3) $528(4)
- ---------------------------------------------------------------------------------------------------------------------------
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(1) Warrants to purchase an aggregate of 200,000 shares of common stock at an
exercise price of $10.00 per share will be issued to the organizers in
connection with this offering.
(2) Represents the exercise price per share for each warrant.
(3) Calculated in accordance with Rule 457(i) under the Securities Act of 1933,
as amended.
(4) Includes $489, which was paid on February 11, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PRELIMINARY PROSPECTUS DATED APRIL 7, 2000; SUBJECT TO COMPLETION
The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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1,100,000 SHARES
FUTURUS FINANCIAL SERVICES, INC.
A Proposed Bank Holding Company for
[LOGO]
FUTURUS BANK, N.A. (In Organization)
COMMON STOCK
$10.00 PER SHARE
---------------------
We are offering shares of Futurus Financial Services, Inc. common stock to
raise the money required to start Futurus Bank, N.A., a new national bank in
organization. Futurus Financial Services will be the holding company and sole
shareholder of Futurus Bank after it is organized. Futurus Bank will be
headquartered in Alpharetta, Georgia, and we expect to open Futurus Bank in the
second quarter of 2000. This is our first offering of common stock to the
public, and currently no public market exists for our shares. This is a firm
commitment underwriting. You may purchase a minimum of 100 shares and up to a
maximum of 60,000 shares, although we may waive these limits and accept
subscriptions for more or less shares. We will request that quotations for our
common stock be reported on the Nasdaq OTC Bulletin Board under the symbol
"FUTF."
Our organizers who purchase 20,000 or more shares of common stock in the
offering will receive warrants to purchase one share of common stock for each
share they purchase. Alternatively, organizers who purchase less than 20,000
shares in the offering will receive warrants to purchase one share of common
stock for every two shares they purchase. Once vested, our organizers may
exercise their warrants and purchase additional shares of common stock at an
exercise price of $10 per share. We describe the warrants in more detail under
the heading "Executive Compensation--Organizers' Warrants" on page 39.
OUR COMMON STOCK IS NOT A DEPOSIT OR A BANK ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN OUR COMMON STOCK
INVOLVES RISKS. YOU SHOULD NOT INVEST IN THIS OFFERING UNLESS YOU CAN AFFORD TO
LOSE ALL OF YOUR INVESTMENT. WE HAVE DESCRIBED WHAT WE BELIEVE ARE THE MATERIAL
RISKS OF THIS INVESTMENT UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
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<CAPTION>
PER SHARE TOTAL
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<S> <C> <C>
Public offering price.................................... $10.00 $11,000,000
Underwriting discount.................................... $ .67 $ 741,900
Proceeds to the company, before expenses................. $ 9.33 $10,258,100
</TABLE>
We will pay an underwriter's discount of $.35 per share on shares sold to
our officers and directors, up to 330,000 shares, and $.75 per share on all
other shares sold in the offering. The underwriter's discount shown in the
foregoing table reflects a blended rate based on the assumption that 207,750 of
the shares will have the lower discount. Wachovia Securities has the right to
purchase up to an additional 165,000 shares at $10.00 per share, less the
underwriter's discount of $.75 per share, within 30 days from the date of this
prospectus to cover over-allotments.
The underwriter expects to deliver the shares of common stock on ,
2000.
WACHOVIA SECURITIES, INC.
, 2000
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FUTURUS FINANCIAL SERVICES, INC.
AND
FUTURUS BANK, N.A. (IN ORGANIZATION)
MARKET AREA
[MAP OF PRIMARY SERVICE AREA]
<PAGE>
SUMMARY
THIS SUMMARY DOES NOT CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER BEFORE
INVESTING IN THE COMMON STOCK. WE ENCOURAGE YOU TO READ CAREFULLY THE ENTIRE
PROSPECTUS BEFORE INVESTING. UNLESS OTHERWISE STATED, ALL INFORMATION IN THIS
PROSPECTUS ASSUMES THE UNDERWRITER DOES NOT EXERCISE ITS OVER-ALLOTMENT OPTION.
FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
Futurus Financial Services, Inc. is a Georgia corporation that was
incorporated on August 12, 1999 to organize and serve as the holding company for
Futurus Bank, N.A., a national bank in organization. Futurus Bank will operate
as a community bank emphasizing personalized banking relationships with
individuals and businesses predominantly located in the northern part of
Georgia's Fulton County, which includes the communities of Alpharetta, Windward,
Roswell, Northridge and Sandy Springs.
On February 14, 2000 we received preliminary approval from the Office of the
Comptroller of the Currency to organize Futurus Bank as a national bank in
Alpharetta, Georgia. In order to receive final approval of our application to
organize Futurus Bank, we will be required to raise a minimum of $8,500,000 in
capital, receive FDIC approval of our application for deposit insurance and
implement appropriate banking policies and procedures. We filed an application
with the FDIC for deposit insurance on October 15, 1999, and on March 1, 2000 we
filed an application with the Federal Reserve to become a bank holding company
and to acquire all of the capital stock of Futurus Bank. After receiving all
necessary regulatory approvals, we anticipate beginning operations at a
temporary facility in the second quarter of 2000, and we expect to move to our
permanent facility in the fourth quarter of 2000.
WHY WE ARE ORGANIZING A NEW BANK IN NORTHERN FULTON COUNTY
We believe an attractive opportunity exists in the northern Fulton County
market for a locally headquartered community bank that focuses on personalized
service to individuals and businesses located within our primary service area.
The northern Fulton County market is growing and has a highly diversified
economic base. For example, according to the Greater Northern Fulton Chamber of
Commerce, northern Fulton County's broad economic base ranges from large
corporations such as AT&T Corporation, Compaq Computer Corporation and United
Parcel Service of America, Inc., to an extensive variety of small businesses
that, when combined, comprise approximately 85% of the membership of the local
chamber of commerce. Northern Fulton County is also a popular retail destination
featuring North Point Mall, which, according to mall management, generated more
than $500 million in 1998 annual sales and had a traffic count of over
6.7 million vehicles in 1999.
We believe that northern Fulton County will support continued growth.
According to information compiled by CACI Marketing Systems, Inc., a marketing
research firm, during the nine-year period from 1990 to 1999 the population in
our primary service area grew from 160,592 to 221,864, representing a 38%
increase. Additionally, the United States Census Bureau estimates that over the
next five years average annual household income in the same area will increase
from $67,730 to $76,357. We anticipate that the area's expanding population and
expected growth in household income will increase the deposit base for our
primary service area.
According to the FDIC, bank and thrift deposits in Futurus Bank's primary
service area grew from approximately $2.3 billion in June 1995 to more than
$3.0 billion in June 1999. This multi-billion dollar deposit base is primarily
controlled by national and super-regional banks, which include Bank of America,
Wachovia, First Union, SunTrust and SouthTrust. Although these large financial
institutions are well established in the area, local community banks have been
successful in competing with these large banks for deposits. For example, based
on FDIC deposit information from June 1995 to June 1999, the combined relative
deposit market share for these large regional and super-regional banks has
decreased from 80.8% to 68.4%. During the same period, the combined relative
deposit
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market share of five community banks operating within our primary service area
increased from 10.1% to 20.4%. See "Proposed Business of Futurus Financial
Services and Futurus Bank--Market Opportunities--Competition" on page 22.
Although we expect community banks and thrifts operating within our market
area to compete directly with Futurus Bank, none of these community-oriented
competitors has a location within approximately three miles of our proposed main
office site. As a result, we believe that we have an opportunity to bring
community banking to an underserved, local market. See "Proposed Business of
Futurus Financial Services and Futurus Bank" on page 21.
We recognize that most of our competitors have substantially greater
resources and lending limits than Futurus Bank will have and provide other
services, such as extensive and established branch networks and trust services,
that Futurus Bank does not expect to provide initially. As a result of these
competitive factors, Futurus Bank may have to pay higher interest rates to
attract depositors or extend credit with lower interest rates to attract
borrowers.
DIRECTORS AND OFFICERS
Our management team is led by William M. Butler, the president and chief
executive officer of Futurus Financial Services and the proposed president and
chief executive officer of Futurus Bank. Mr. Butler has over 17 years of
experience in the banking industry and has served in various management
positions throughout his career with both Charter Bank & Trust, Marietta,
Georgia, and Bank South, Atlanta, Georgia. Our management team also includes R.
Wesley Fuller, the executive vice president and chief financial officer of
Futurus Financial Services and the proposed chief financial officer of Futurus
Bank, and Suzanne T. Phipps, the senior vice president of Futurus Financial
Services and the proposed chief lending officer and chief credit officer for
Futurus Bank. Mr. Fuller has over 16 years of experience in bank accounting and
operations, including managing the operations functions for Premier Bancshares
and Premier Bank. Ms. Phipps has approximately 12 years of credit and lending
experience and most recently served as a credit risk officer for Banc of America
Specialty Finance, Inc., an affiliated entity of Bank of America.
Our board of directors consists of our ten organizers who will also be the
directors of Futurus Bank. These directors include:
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- - William M. Butler - Gregory A. Janicki
- - C. Parke Day - Richard W. Stimson
- - Nathan E. Hardwick, IV - Donald S. Shapleigh, Jr.
- - Michael S. Hug - Danny L. Tesney
- - Deborah M. Janicki - Joel P. Weinbach
</TABLE>
Our directors intend to utilize their diverse backgrounds and their
extensive local business relationships to attract clients from all segments of
Futurus Bank's primary service area.
In addition, we expect to benefit from our potential referral relationship
with Real Estate Financial Services, Inc., a retail mortgage lending company
that is principally owned by two members of our board of directors, Gregory A.
Janicki and Deborah M. Janicki. Real Estate Financial Services has expressed an
interest in establishing a referral relationship with us, which may provide
Futurus Bank with an important source of new banking relationships with
individuals and businesses that are locating to the metropolitan Atlanta area
and help build our client base and loan portfolio.
Our directors have been divided into three classes and serve staggered
terms. As a result, roughly one-third of our directors will be elected each
year. One of the purposes for staggering our board, as well as having other
specific provisions in our articles of incorporation and bylaws, is to provide
our board of directors with the opportunity and flexibility to implement our
management philosophy and
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strategy, and to protect Futurus Financial Services' interests. These provisions
may have an effect of limiting our shareholders' ability to change the
composition of our management or discourage some takeover bids. See "Selected
Provisions of the Articles of Incorporation and Bylaws" on page 45.
PRODUCTS AND SERVICES
We plan to offer our products and services through high quality,
personalized delivery systems while providing our clients with the financial
sophistication and array of products typically offered by a larger bank. Futurus
Bank's lending services will include consumer loans, commercial loans to small-
to medium-sized businesses and professional concerns and real estate-related
loans. Futurus Bank will offer a broad array of deposit services including
demand deposits, regular savings accounts, money market deposits, certificates
of deposit and individual retirement accounts. We will also provide additional
services like ATM cards, debit cards, travelers checks, direct deposit,
automatic transfers and courier services for targeted commercial clients. We
intend to offer our services through a variety of delivery systems including
online banking, automated teller machines, telephone banking and, in the future,
additional branch offices.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients and
to create a banking experience that motivates them to tell others about Futurus
Bank. As part of our marketing effort, we will employ a "high tech, high touch"
theme to emphasize our commitment to complement our client-oriented service
approach with user-friendly technologies. We believe that this philosophy,
encompassing the service aspects of community banking with the perceived
convenience of larger banks, will distinguish Futurus Bank from its competitors.
To carry out our philosophy, our business strategy will involve:
- Utilizing technology and strategic outsourcers to provide a broad array of
convenient products and services.
- Hiring and retaining highly experienced and qualified banking personnel,
preferably with established client relationships, and viewing our staff
not as our employees, but as our associates.
- Positioning our main office in a highly visible location that is near a
large concentration of our targeted commercial and residential clients.
- Capitalizing on the directors' and officers' diverse community
involvement, professional expertise, and personal and business contacts
within our primary service area.
- Attracting our initial client base by offering highly competitive interest
rates on our deposit accounts.
- Providing individualized attention with consistent, local decision-making
authority.
- Implementing an aggressive marketing program.
- Capitalizing on industry consolidation within our primary service area.
THE OFFERING AND OWNERSHIP BY OUR ORGANIZERS AND DIRECTORS
We are offering 1,100,000 shares of our common stock for $10.00 per share.
Our organizers and directors intend to purchase 205,000 shares, which will
represent 18.6% of the shares outstanding after the offering. To reward our
organizers for their financial risk and efforts in organizing Futurus Financial
Services and Futurus Bank, they will receive warrants to purchase shares of
common stock at $10.00 per share. Organizers who purchase 20,000 or more shares
of common stock in the offering will receive warrants to purchase one share of
common stock for each share they purchase. Alternatively,
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organizers who purchase less than 20,000 shares in the offering will receive
warrants to purchase one share of common stock for every two shares they
purchase. We hope to sell the remaining shares to individuals and businesses
primarily within the Atlanta metropolitan area who share our desire to support a
new community bank.
The 1,100,000 shares of common stock offered does not include the
underwriter's option to purchase up to 165,000 additional shares, 200,000 shares
issuable upon the exercise of the warrants issued to our organizers or 110,000
shares that we may issue under our stock incentive plan.
USE OF PROCEEDS
We will use $8,500,000 raised in this offering to capitalize Futurus Bank.
This is the amount of capital that our banking regulators will require us to
invest in Futurus Bank prior to its opening. We will use the remaining net
proceeds of this offering to repay the amount drawn on our line of credit, to
provide Futurus Financial Services with working capital and for other general
business purposes. Additionally, Futurus Bank will use the funds that it
receives from Futurus Financial Services to lease the site for its main office,
to construct and furnish the facility and to provide working capital to operate
Futurus Bank. For more detailed information, see "Use of Proceeds" on page 14.
LOCATION OF OFFICES
The address and phone number of our temporary executive offices are:
1580 Warsaw Road
Roswell, Georgia 30076
(770) 643-2512
Our permanent main office and executive offices will be located at:
Windward Parkway
Alpharetta, Georgia 30004
Our main office will be a building with approximately 7,100 square feet
located on a 1.35 acre site that is one-half mile west of Georgia Highway 400 on
Windward Parkway. We anticipate that construction of our main office will begin
in the second quarter of 2000 and will be completed in the fourth quarter of
2000. Until our main office is completed, we plan to begin our operations in a
temporary facility that will be located approximately three miles from our
permanent site. Our temporary facility will be located in the Alpharetta Square
shopping center just south of the Alpharetta Highway (also known as South Main
Street) and Old Milton Parkway intersection. We anticipate that we will open for
business in our temporary facility in the second quarter of 2000.
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RISK FACTORS
THE FOLLOWING PARAGRAPHS DESCRIBE WHAT WE BELIEVE ARE THE MATERIAL RISKS OF
AN INVESTMENT IN THE COMMON STOCK. WE MAY FACE OTHER RISKS AS WELL, WHICH WE
HAVE NOT ANTICIPATED. AN INVESTMENT IN THE COMMON STOCK INVOLVES A SIGNIFICANT
DEGREE OF RISK, AND YOU SHOULD NOT INVEST IN THE COMMON STOCK UNLESS YOU CAN
AFFORD TO LOSE YOUR ENTIRE INVESTMENT. BEFORE DECIDING TO INVEST IN THE COMMON
STOCK, PLEASE CAREFULLY READ THE ENTIRE PROSPECTUS, INCLUDING THE CAUTIONARY
STATEMENT FOLLOWING THE RISK FACTORS REGARDING THE USE OF FORWARD-LOOKING
STATEMENTS.
WE HAVE NO OPERATING HISTORY UPON WHICH TO BASE AN ESTIMATE OF OUR FUTURE
FINANCIAL PERFORMANCE.
We do not have any operating history on which to base any estimate of our
future earning prospects. Futurus Financial Services was only recently formed,
and Futurus Bank will not receive final approval from the Office of the
Comptroller of the Currency to begin operations until after this offering is
completed. Consequently, you will not have access to historical information that
would be helpful in deciding whether to invest in Futurus Financial Services.
WE EXPECT TO INCUR LOSSES INITIALLY, AND YOU MAY NOT RECOVER ALL OR ANY PART OF
YOUR INVESTMENT IF WE DO NOT BECOME PROFITABLE.
Most new banks incur substantial start-up expenses, are not profitable in
the first year of operation and, in some cases, are not profitable for several
years. If we are ultimately unsuccessful, you may not recover all or any part of
your investment in the common stock. Additionally, Futurus Bank's loans will
initially be unseasoned--new loans to new borrowers. As a result, it will take
several years to establish the borrowers' payment histories, making it more
difficult to evaluate reliably the quality of the loan portfolio. Our
profitability will depend on Futurus Bank's profitability, and we can give no
assurance that Futurus Bank will ever operate profitably. Since this is our
first offering, our auditors have included in their audit report a statement
that absent the completion of the offering, there is doubt that we will have the
ability to continue as a going-concern. See "Management's Discussion and
Analysis of Financial Condition and Plan of Operations" on page 18.
FAILURE TO IMPLEMENT OUR BUSINESS STRATEGIES MAY ADVERSELY AFFECT OUR FINANCIAL
PERFORMANCE.
If we cannot implement our business strategies, we will be hampered in our
ability to develop business and serve our clients, which could in turn have an
adverse effect on our financial performance. The organizers have developed a
business plan that details the strategies that we intend to implement in our
efforts to achieve profitable operations. Our business strategies include
establishing a "high tech, high touch" niche, hiring highly qualified associates
and opening our strategically located, full service office in the fourth quarter
of 2000. Even if our business strategies are successfully implemented, they may
not have the favorable impact on operations that we anticipate. See "Proposed
Business of Futurus Financial Services and Futurus Bank--Philosophy and
Strategy" on page 23.
DEPARTURES OF OUR KEY PERSONNEL OR DIRECTORS MAY IMPAIR OUR OPERATIONS.
If any of our executive officers were to leave Futurus Bank, our operations
could suffer due to the costs associated with recruiting new personnel and
orienting them to our business. Particularly, we believe William M. Butler is
important to our success, and if he terminates his employment with us, our
financial condition and results of operations may be adversely affected.
Mr. Butler has been instrumental in our organization and will be the key
management official in charge of our daily business operations. While we have
entered into a three-year employment agreement with Mr. Butler we cannot be
assured of his continued service.
Additionally, our directors' community involvement, diverse backgrounds and
extensive local business relationships are important to our success. For
example, we expect to benefit from our
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potential relationship with Real Estate Financial Services. If Mr. or
Mrs. Janicki, the owners of Real Estate Financial Services, or any of our other
directors discontinue his or her relationship with us for whatever reason, or if
the composition of our board of directors changes materially, our growth could
be adversely affected. See "Management" on page 31.
A DELAY IN BEGINNING FUTURUS BANK'S OPERATIONS WILL RESULT IN ADDITIONAL LOSSES.
A delay in the start of Futurus Bank's operations will increase pre-opening
expenses and postpone Futurus Bank's realization of potential revenues. This
could cause our accumulated deficit to increase as a result of continuing
operating expenses, such as salaries and other administrative expenses, coupled
with our lack of revenue. Although we expect to receive all final regulatory
approvals and to begin business in the second quarter of 2000, we can give no
assurance as to when, if at all, these events will occur.
IF REGULATORY CONDITIONS ARE NOT SATISFIED, WE MAY DISSOLVE AND LIQUIDATE AND
YOU MAY ONLY RECEIVE A PORTION, IF ANY, OF YOUR INVESTMENT.
If we do not receive final approval for Futurus Bank to start its banking
operations, we anticipate that we will dissolve Futurus Financial Services. If
we dissolve Futurus Financial Services after the close of the offering,
shareholders will receive only a portion, if any, of their original investment
because we will have used the proceeds of the offering to pay all expenses of
the offering, organizational and pre-opening expenses and capital costs incurred
through the time that Futurus Financial Services is finally dissolved. Although
we have applied for the requisite regulatory approvals to begin banking
operations, final approvals may not be granted in a timely manner, if at all.
The closing of this offering is not conditioned upon the receipt of final
regulatory approvals.
WE WILL FACE STRONG COMPETITION FOR CLIENTS, ESPECIALLY FROM LARGE AND MORE
ESTABLISHED FINANCIAL INSTITUTIONS, WHICH MAY HINDER US FROM OBTAINING CLIENTS
AND MAY CAUSE US TO PAY HIGHER INTEREST RATES ON OUR DEPOSITS OR CHARGE LOWER
INTEREST RATES ON OUR LOANS THAN OUR COMPETITORS' RATES FOR AN EXTENDED PERIOD.
We anticipate offering very competitive loan and deposit rates as we
establish ourselves in the market, but if excessive competition forces us to
offer more aggressive pricing indefinitely, our net interest margin will suffer
and our financial performance will be negatively impacted. Futurus Bank will
compete with numerous other lenders and deposit-takers, including other
commercial banks, savings and loan associations, credit unions, finance
companies, mutual funds, insurance companies and brokerage and investment
banking firms. With multiple financial institutions already doing business in
the northern Fulton County area, and given the chance that additional
competitors may enter the market in the future, we will be faced with continuous
competition. Moreover, some of these competitors are not subject to the same
degree of regulation as we will be and may have greater resources than will be
available to us. Competition from non-traditional financial institutions may
also affect our success due to the Gramm-Leach-Bliley Act of 1999. See "Proposed
Business of Futurus Financial Services and Futurus Bank--Market
Opportunities--Competition" on page 22.
WE MAY NOT BE ABLE TO COMPETE WITH OUR LARGER COMPETITORS FOR LARGER CLIENTS
BECAUSE OUR LENDING LIMITS WILL BE LOWER THAN THEIRS.
Our lending limit will be significantly less than the limits for most of our
competitors, and may hinder our ability to establish relationships with larger
businesses in our market area. A national bank's legal lending limit to a single
borrower is roughly equal to 15% of its capital and surplus plus an additional
10%, if the amount that exceeds 15% is fully secured by readily marketable
collateral. Based on Futurus Bank's proposed capitalization, Futurus Bank's
initial legal lending limit will be approximately $1,275,000 for loans not fully
secured plus an additional $850,000, or an estimated total
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of $2.1 million, for loans that meet the federal guidelines. These legal limits
will increase or decrease as Futurus Bank's capital increases or decreases as a
result of its earnings or losses, among other reasons. Our management team has
also adopted an internal lending limit of $1 million, which will initially be
lower than the applicable legal limit. Based on either our internal lending
limit or our legal lending limit, Futurus Bank will need to sell participations
in its loans to other financial institutions in order to meet the lending needs
of our clients requiring extensions of credit above these limits. However, our
strategy to accommodate larger loans by selling participations in those loans to
other financial institutions may not be successful. See "Proposed Business of
Futurus Financial Services and Futurus Bank--Lending Services--Lending Limits"
on page 25.
GOVERNMENT REGULATION MAY HAVE AN ADVERSE EFFECT ON OUR PROFITABILITY AND
GROWTH.
We are subject to extensive government supervision and regulation. Our
ability to achieve profitability and to grow could be adversely affected by
state and federal banking laws and regulations that limit the manner in which we
make loans, purchase securities and pay dividends. These regulations are
intended primarily to protect depositors, not shareholders. In addition, the
burden imposed by federal and state regulations may place us at a competitive
disadvantage compared to competitors who are less regulated. Future legislation
or government policy may also adversely affect the banking industry or our
operations. In particular, various provisions of the Gramm-Leach-Bliley Act,
which took effect on March 11, 2000, eliminate many of the federal and state law
barriers to affiliations among banks and securities firms, insurance companies
and other financial services providers. We believe the elimination of these
barriers may significantly increase competition in our industry. See
"Supervision and Regulation" on page 53.
CHANGES IN INTEREST RATES MAY DECREASE OUR NET INTEREST INCOME.
Our profitability depends substantially on Futurus Bank's net interest
income, which is the difference between the interest income earned on its loans
and other assets and the interest expense paid on its deposits and other
liabilities. A large change in interest rates may significantly decrease our net
interest income and eliminate our profitability. Most of the factors that cause
changes in market interest rates, including economic conditions, are beyond our
control. While we intend to take measures to minimize the effect that changes in
interest rates will have on our net interest income and profitability, these
measures may not be effective. See "Management's Discussion and Analysis of
Financial Condition and Plan of Operations--Liquidity and Interest Rate
Sensitivity" on page 19.
AN ECONOMIC DOWNTURN, ESPECIALLY ONE AFFECTING OUR PRIMARY SERVICE AREA, MAY
REDUCE OUR DEPOSIT BASE AND THE DEMAND FOR OUR LOANS AND OTHER PRODUCTS AND MAY
DECREASE OUR EARNINGS.
As a holding company for a community bank, our success will depend on the
general economic condition of the region in which we operate, which we cannot
forecast with certainty. Unlike many of our larger competitors, the majority of
Futurus Bank's borrowers and depositors will be individuals and small- to
medium-sized businesses located or doing business in Georgia's Fulton, Forsyth,
Cobb and Gwinnett counties. As a result, our operations and profitability may be
more adversely affected by a local economic downturn than those of our larger,
more geographically diverse competitors. Factors that adversely affect the
economy in these counties could reduce our deposit base and the demand for our
products and services, which may decrease our earnings. For example, an adverse
change in the local economy could make it more difficult for borrowers to repay
their loans, which could lead to loan losses for Futurus Bank. See "Proposed
Business of Futurus Financial Services and Futurus Bank" on page 21.
9
<PAGE>
OUR ABILITY TO PAY DIVIDENDS TO OUR SHAREHOLDERS IS LIMITED AND DEPENDS ON
FUTURUS BANK'S ABILITY TO PAY DIVIDENDS AND THE JUDGMENT OF OUR BOARD OF
DIRECTORS.
Futurus Financial Services will initially have no source of income other
than dividends that it receives from Futurus Bank. Our ability to pay dividends
will depend on Futurus Bank's ability to pay dividends to Futurus Financial
Services. Additionally, bank holding companies and national banks are both
subject to significant regulatory restrictions on the payment of cash dividends.
In light of these restrictions and our plans to build capital, it will be our
policy to reinvest earnings for an undetermined period of time. As a result, we
do not plan to pay dividends until we recover any losses that we may have
incurred and become profitable. Our future dividend policy will depend on our
earnings, capital requirements, financial condition and other factors that the
boards of directors of Futurus Financial Services and Futurus Bank consider
relevant. See "Dividends" on page 17.
WE DETERMINED THE PUBLIC OFFERING PRICE ARBITRARILY, AND OUR FUTURE STOCK PRICE
MAY FLUCTUATE BELOW THE INITIAL PUBLIC OFFERING PRICE ONCE THE SHARES BECOME
FREELY TRADEABLE.
Futurus Financial Services and the underwriter arbitrarily set the public
offering price after considering prevailing market conditions and the price of
comparable publicly traded companies. Because we have no operating history, the
public offering price could not be based on historical measures of our financial
performance. Therefore, the public offering price may not reflect the market
price for the common stock after the offering. Several factors will cause the
market price to fluctuate after the offering, and the price for the common stock
may drop below its initial public offering price. These factors include our
results of operations, financial analysts' future estimates of our earning
potential, economic conditions in our market area and trends in the banking
industry. See "Underwriting" on page 51.
WE WILL NOT HAVE A LARGE NUMBER OF SHAREHOLDERS NOR A LARGE NUMBER OF SHARES
OUTSTANDING AFTER THE OFFERING, WHICH MAY LIMIT YOUR ABILITY TO SELL YOUR SHARES
OF COMMON STOCK.
Prior to the offering, there has been no public market for Futurus Financial
Services' common stock and the development of an active trading market normally
requires a significant number of shares and shareholders. We plan to issue
1,100,000 shares of our common stock in this offering, excluding the
underwriter's over-allotment option of 165,000 additional shares. If an active
trading market does not develop or continue after the offering, you may not be
able to sell your shares at or above the price at which these shares are being
offered to the public. Although we have applied to list the common stock on the
Nasdaq OTC Bulletin Board, an active trading market may not develop or continue
after the offering. Additionally, the sale of a large block of shares
outstanding after the close of the offering could adversely effect the market
price of the common stock. We anticipate that our directors and executive
officers will purchase 207,750 shares or 18.9% of our common stock in the
offering, which will be subject to resale limitations after the close of the
offering. Specifically, our directors and executive officers have agreed with
the underwriter not to sell the shares they purchase in the offering for a
period of 180 days after the date of this prospectus without the underwriter's
consent. After the 180-day period, the shares held by our organizers and
executive officers will be eligible for sale subject to the resale limitations
of Rule 144 of the Securities Act. You should consider carefully the limited
liquidity of your investment before purchasing any shares of the common stock.
See "Underwriting" on page 51 and "Shares Eligible for Future Sale" on page 50.
EXERCISE OF WARRANTS AND STOCK OPTIONS WILL CAUSE DILUTION OF YOUR OWNERSHIP IN
FUTURUS FINANCIAL SERVICES.
Our organizers and executive officers and other individuals employed by us
may exercise their warrants or options to purchase common stock, which would
result in the dilution of your proportionate interest in Futurus Financial
Services. At the close of the offering, we expect that
10
<PAGE>
shareholders who are not directors or executive officers of Futurus Financial
Services will own 892,250 shares, or approximately 81.1%, of our outstanding
common stock. Upon completion of this offering, however, we will issue to our
organizers warrants to purchase a total of up to 200,000 shares of common stock,
and will issue to our executive officers, under our stock incentive plan,
options to purchase up to a total of 47,500 shares of common stock. If these
warrants and options granted to our organizers and executive officers were
exercised in full, the ownership percentage of our shareholders who are not
directors or executive officers would drop from 81.1% to 66.2% of our
outstanding common stock. The warrants issued to our organizers will vest in
one-third annual increments over three years and will be exercisable at a price
of $10.00 per share. The options issued to our executive officers will vest in
one-fifth annual increments over five years and will be exercisable at a price
of $10.00 per share. The remaining 62,500 shares reserved for issuance under our
stock incentive plan may be granted to associates employed by us in a manner
consistent with the plan and on terms determined by our compensation committee
to be in our best interest. See "Executive Compensation" on page 37.
WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL ON TERMS FAVORABLE TO US, IF AT
ALL.
In the future, should we need additional capital to support our business,
expand our operations or maintain our minimum capital requirements, we may not
be able to raise additional funds through the issuance of additional shares of
common stock or other securities. Even if we are able to obtain capital through
the issuance of additional shares of common stock or other securities, the sale
of these additional shares could significantly dilute your ownership interest
and may be made at prices lower than the price we are selling shares in this
offering. In addition, the holders of warrants or options could exercise them at
a time when we could otherwise obtain capital by offering additional securities
on terms more favorable to us than those provided by the warrants or options.
OUR BOARD OF DIRECTORS IS AUTHORIZED TO ISSUE ADDITIONAL SHARES OF COMMON STOCK
AND SHARES OF PREFERRED STOCK WHICH, IF ISSUED, MAY DILUTE YOUR OWNERSHIP
INTEREST, REDUCE THE MARKET PRICE OF OUR COMMON STOCK AND ADVERSELY AFFECT YOUR
VOTING RIGHTS.
Our board of directors is authorized by our articles of incorporation to
issue additional shares of common stock and shares of preferred stock without
the consent of our shareholders. If we issue additional shares of common stock
after the close of the offering, your percentage interest in Futurus Financial
Services would be diluted. Additionally, preferred stock, when issued, may rank
senior to common stock with respect to voting rights, payment of dividends, and
amounts received by shareholders upon liquidation, dissolution or winding up.
The existence of rights that are senior to common stock may reduce the price of
our shares of common stock. Other than the issuance of common stock subject to
warrants and options granted to our organizers and executive officers, we do not
have any current plans to issue any shares of common stock or preferred stock
after the close of the offering.
OUR DIRECTORS AND OFFICERS COULD HAVE THE ABILITY TO INFLUENCE SHAREHOLDER
ACTIONS IN A MANNER THAT MAY BE ADVERSE TO YOUR PERSONAL INVESTMENT OBJECTIVES.
Together, our directors and executive officers may be able to influence the
outcome of directors elections or block a significant transaction, such as a
merger or acquisition, that might otherwise be approved by the shareholders. For
example, to be elected, a director nominee generally must receive more votes
than any other nominee for the same seat on the board of directors; a merger or
acquisition not adopted by two-thirds of or board of directors generally must be
approved by a two-thirds vote of the shareholders; and, most other matters
generally require that more shares be voted for rather than against the
proposal. We anticipate that our directors and executive officers will directly
or indirectly own 207,750 shares or 18.9% of our outstanding common stock after
the close of the offering. Additionally, we will be issuing warrants and options
to our directors and executive
11
<PAGE>
officers. Although these warrants and options will vest over time, if our
directors and executive officers exercised all of their warrants and options,
they could directly or indirectly own 455,250 shares, representing 33.8% of our
outstanding common stock. Consequently, our directors and executive officers, as
a group, may hold enough shares to effectively block a potential merger or
acquisition, or any other important matter requiring the affirmative vote of
two-thirds of our outstanding common stock, and may significantly influence the
outcome of a vote on any other matter. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page 45.
WE MAY NOT ALLOCATE ALL OF THE NET PROCEEDS IN THE MOST PROFITABLE MANNER.
After capitalizing Futurus Bank with $8.5 million, our board of directors
and management will have broad discretion in allocating a total of approximately
$1.3 million, or 12.6%, of the net proceeds of the offering. Although we
principally intend to use these proceeds to maintain appropriate liquidity, we
may also use these proceeds to provide additional capital to Futurus Bank, to
purchase United States government securities or certificates of deposit of
Futurus Bank or for other general corporate purposes. Additionally, our
anticipated allocation of these proceeds could change if we are faced with
unexpected liquidity issues. Because the allocation of these proceeds will
directly affect our earnings, it will be difficult to predict our results of
operations. Although we intend to utilize the funds to serve our best interests,
we cannot assure you that our allocation will ultimately reflect the most
profitable application of these proceeds. See "Use of Proceeds" on page 14.
YOU MAY BE DEPRIVED OF AN OPPORTUNITY TO SELL YOUR SHARES AT A PREMIUM OVER
MARKET PRICES BECAUSE GEORGIA STATE LAW AND OUR ARTICLES OF INCORPORATION LIMIT
THE ABILITY OF OTHERS TO ACQUIRE US.
In many cases, shareholders receive a premium for their shares when a
company is purchased by another. Under Georgia law, however, no bank holding
company may acquire control of Futurus Financial Services until Futurus Bank has
been incorporated for five years. In addition, state and federal law and our
articles of incorporation make it difficult for anyone to purchase Futurus
Financial Services without approval of our board of directors. These provisions
include the existence of preferred stock, staggered terms for the directors,
restrictions on the ability to change the number of directors or to remove a
director, supermajority voting requirements, flexibility in considering
acquisition proposals and, for five years, limitations on an investor's ability
to own 10% or more of our voting stock. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page 45.
12
<PAGE>
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements concerning Futurus
Financial Services and Futurus Bank and their operations, performance, financial
conditions and likelihood of success. Forward-looking statements are based on
many assumptions and estimates, and include statements about the competitiveness
of the banking industry, potential regulatory obligations, our business
strategies and other statements that are not historical facts. When used in this
prospectus, the words "may," "would," "could," "will," "expect," "anticipate,"
"believe," "intend," "plan" and "estimate," and similar expressions generally
identify forward-looking statements. Because forward-looking statements involve
risks and uncertainties that are beyond our control, actual results may differ
materially from those expressed in the forward-looking statements. The most
significant of these risks, uncertainties and other factors are discussed under
the heading "Risk Factors" beginning on page 7 of this prospectus. We urge you
to carefully consider these factors prior to making an investment in our common
stock.
13
<PAGE>
USE OF PROCEEDS
We estimate that we will receive net proceeds of $10,123,100 from the sale
of 1,100,000 shares of common stock in the offering, after deducting the
estimated underwriting discount of $741,900 and estimated offering expenses of
$135,000. If the underwriter exercises its over-allotment option in full, we
will receive $1,526,250 in additional net proceeds, after deducting an
additional underwriting discount of $123,750. We established a line of credit
with the Banker's Bank in the amount of $500,000 at 0.50% less than the prime
rate, as published in the Money Rates section of THE WALL STREET JOURNAL, to pay
our pre-opening expenses prior to the completion of the offering. In
February 2000, we increased this line of credit to $700,000 due to the
possibility of incurring construction costs associated with our permanent
facility prior to the close of the offering. We intend to pay off this line of
credit with proceeds that we receive from this offering. The following two
sections describe our proposed use of proceeds based on our present plans and
business conditions.
USE OF PROCEEDS BY FUTURUS FINANCIAL SERVICES
The following table shows the anticipated use of the proceeds by Futurus
Financial Services. We describe Futurus Bank's anticipated use of proceeds in
the following section.
<TABLE>
<CAPTION>
PERCENTAGE
OF GROSS
AMOUNT PROCEEDS
----------- ----------
<S> <C> <C>
Gross proceeds from offering................................ $11,000,000 100.0%
Underwriter's discount...................................... $ 741,900 6.7%
Organizational expenses..................................... $ 344,000 3.1%
Offering expenses........................................... $ 135,000 1.2%
Investment in capital stock of Futurus Bank................. $ 8,500,000 77.3%
-----------
Remaining proceeds.......................................... $ 1,279,100 11.6%
===========
</TABLE>
As shown, we will use $8.5 million to capitalize Futurus Bank. We will
initially invest the remaining net proceeds, and any proceeds received upon the
exercise of the underwriter's over-allotment option, in United States government
securities or deposit them with Futurus Bank. In the long-term, we will use
these funds for operational expenses and other general corporate purposes,
including the provision of additional capital to Futurus Bank, if necessary.
Although we do not have any specific plans for expansion, we may also use the
proceeds to open additional facilities or acquire other financial institutions
if deemed appropriate.
USE OF PROCEEDS BY FUTURUS BANK
The following table shows the anticipated use of the proceeds allocated to
Futurus Bank. These proceeds will be in the form of an investment in Futurus
Bank's common stock by Futurus Financial Services. During the period between the
opening of Futurus Bank and the completion of our permanent facility, we will be
conducting operations from a temporary facility. Futurus Bank will pay $1,750
per month for the temporary facility until July 31, 2000, at which time monthly
rent will increase to $1,800 per month. When completed, we will move into our
permanent facility at an initial base rent payment of $14,312.50 per month, plus
an initial monthly rental agency commission of $715.63. We expect our permanent
facility to be completed in the fourth quarter of 2000 with our permanent
facility lease payments beginning in November 2000. The following table shows
the cost of the temporary and permanent facilities for a period of 12 months
from the completion of this offering. Leasehold improvements, furniture,
fixtures and equipment will be capitalized and amortized over the life of the
14
<PAGE>
lease or over the estimated useful life of the asset. Futurus Bank will use the
remaining proceeds to make loans, purchase securities and otherwise conduct
business operations.
<TABLE>
<CAPTION>
PERCENTAGE OF
FUTURUS BANK'S
AMOUNT INITIAL CAPITALIZATION
---------- ----------------------
<S> <C> <C>
Investment by Futurus Financial Services in Futurus Bank's
common stock.............................................. $8,500,000 100.0%
Construction of our main office building, including
furniture, fixtures and equipment......................... $1,047,000(1) 12.3%
Renovation of our temporary facility........................ $ 78,000 0.9%
Rental payments for temporary building facility (7
months)................................................... $ 12,450 0.2%
Rental payments for permanent building facility (5
months)................................................... $ 75,141 0.9%
----------
Remaining proceeds.......................................... $7,287,409 85.7%
==========
</TABLE>
- ------------------------
(1) We estimate that total construction costs for our main office building,
including furniture, fixtures and equipment, will be $1,497,000. However,
under our lease agreement with Pioneer Real Estate Development, Inc.,
Pioneer will be contributing $450,000 towards these construction costs.
15
<PAGE>
CAPITALIZATION
The following table shows Futurus Financial Services' capitalization as of
December 31, 1999 and its pro forma consolidated capitalization, as adjusted to
give effect to the receipt of the net proceeds from the sale of 1,100,000 shares
of common stock in the offering.
Upon Futurus Financial Services' incorporation, Gregory A. Janicki, chairman
of the board of directors of Futurus Financial Services, purchased one share of
common stock at a price of $10.00. Futurus Financial Services will redeem this
share for $10.00 upon the issuance of shares in this offering. The number of
shares shown as outstanding after giving effect to the offering, and the book
value of those shares, do not include shares of common stock issuable upon the
exercise of the warrants held by the organizers or stock options issuable under
our stock incentive plan. For additional information regarding the number and
terms of these warrants and options, see "Executive Compensation--Organizers'
Warrants" and "--Stock Incentive Plan" on page 39.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY ACTUAL AS ADJUSTED
- -------------------- ------ -----------
<S> <C> <C>
Preferred stock, no par value, 2,000,000 shares
authorized; no shares issued or
outstanding.................................. -- --
Common stock, no par value, 10,000,000 shares
authorized; 1 share issued and outstanding;
1,100,000 shares issued and outstanding as
adjusted(1).................................. $ 10 $ 10,123,100
Deficit accumulated during the development
stage........................................ (183,566)(2) (344,000)(3)
--------- ------------
Total shareholders' equity............... $(183,556) $ 9,779,100
========= ============
Book value per share(4)........................ N/A $ 8.89
========= ============
</TABLE>
- ------------------------
(1) The expenses of the offering will be charged against this account. We
estimate that the offering expenses will be $876,900, which includes
$741,900 in underwriting discounts and $135,000 in other offering expenses,
including legal, accounting and printing expenses and registration fees.
(2) This deficit reflects pre-opening expenses incurred through December 31,
1999, consisting primarily of legal and consulting fees.
(3) The "As Adjusted" accumulated deficit results from estimated organizational
and pre-opening expenses of $344,000 incurred through Futurus Bank's target
opening date in the second quarter of 2000. Actual organizational and
pre-opening expenses may be higher and may therefore increase the deficit
accumulated during the pre-opening stage and further reduce shareholders'
equity.
(4) After giving effect to the receipt of the net proceeds from this offering,
there is an immediate dilution in the book value per share of $1.11,
resulting from recognition of organizational and pre-opening expenses and
charging the offering expenses against common stock.
16
<PAGE>
DIVIDENDS
Initially, we intend to retain all of our earnings to support our operations
and to expand our business. Additionally, we are subject to significant
regulatory restrictions on the payment of cash dividends. In light of these
restrictions and our need to retain and build capital, we do not plan to pay
dividends until we become profitable and recover any losses incurred during our
initial operations. Our payment of future dividends and our dividend policy will
depend on our earnings, capital requirements and our financial condition, as
well as other factors that our board of directors considers relevant. See
"Supervision and Regulation--Payment of Dividends" on page 58.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLAN OF OPERATIONS
Futurus Financial Services' financial statements and related notes, which
are included in this prospectus, provide additional information relating to the
following discussion of our financial condition. See "Index to Financial
Statements."
Futurus Financial Services was incorporated on August 12, 1999 to serve as a
holding company for Futurus Bank, N.A., a national bank in organization. Since
we organized, our main activities have been:
- seeking, interviewing and selecting our directors and officers;
- preparing our business plan;
- securing a line of credit;
- applying for a national bank charter;
- applying for FDIC deposit insurance;
- applying to become a bank holding company; and
- raising equity capital through this offering.
From our inception on August 12, 1999 up to the close of the offering,
Futurus Financial Services' operations have been and will continue to be funded
through a line of credit from The Bankers Bank. At December 31, 1999, the total
amount available on the line of credit was $500,000, of which $170,000 was drawn
down. In February 2000, the line of credit was increased to $700,000. Eight of
our ten organizers have guaranteed a portion of the line of credit, each in the
amount of $131,250. The line of credit bears interest at 0.50% less than the
prime rate, as published in the Money Rates section of THE WALL STREET JOURNAL,
and is due on February 11, 2001. Futurus Financial Services plans to repay the
line of credit after the close of the offering.
FINANCIAL RESULTS
From August 12, 1999 through December 31, 1999, the net loss amounted to
$183,566. The estimated net loss for the period from August 12, 1999 through
May 15, 2000, the anticipated opening date of Futurus Bank, is $344,000, which
is attributable to the following estimated expenses:
<TABLE>
<S> <C>
Officer compensation........................................ $123,000
Legal, consulting and professional fees..................... 141,000
Other pre-opening expenses.................................. 80,000
--------
Total..................................................... $344,000
========
</TABLE>
OFFICES
On March 14, 2000, Futurus Financial Services entered into an agreement to
lease a 1.35 acre lot located on Windward Parkway, one-half mile west of Georgia
Highway 400. The leased property will be the site for our main office, which is
expected to have approximately 7,100 square feet of office space. Construction
of the permanent facility is expected to begin in the second quarter of 2000
with $450,000 of the estimated $1.5 million construction costs being funded by
the landlord, Pioneer Real Estate Development, Inc. After Futurus Bank is
capitalized, it will assume our lease with Pioneer and will pay the remaining
balance of the construction costs. The term of the office lease is 12 years,
with two five-year renewal options with initial monthly rent being $14,312.50.
In connection with the leased property, Futurus Financial Services will pay an
initial rental agency commission to The Myrick Company in the amount of
$14,312.50, and is further obligated to pay The Myrick Company 5% of all
18
<PAGE>
remaining rents, due monthly as rent is paid. The Myrick Company is a real
estate brokerage firm that we retained to locate the site for our permanent
facility and is unaffiliated with Futurus Financial Services, our directors and
executive officers. Our obligation to The Myrick Company will be assumed by
Futurus Bank.
Until our permanent facility is completed, we will conduct our operations in
a temporary facility, which is approximately three miles from our proposed
permanent location. Our temporary facility will be located in the Alpharetta
Square shopping center at 201 South Main Street, Alpharetta, Georgia, just south
of the Alpharetta Highway (also known as South Main Street) and Old Milton
Parkway intersection. The initial lease term for our temporary facility began
February 15, 2000 and ends July 31, 2000, at which time the lease will convert
to a month-to-month arrangement. Until July 31, 2000, Futurus Bank will pay
monthly rent in the amount of $1,750 for the temporary facility. After July 31,
2000, rent for our temporary facility will increase to $1,800 per month. We
expect to be open for business in our temporary facility in the second quarter
of 2000.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Since Futurus Financial Services has been in the organizational stage, there
are no results of operations to present at this time. Nevertheless, once Futurus
Bank begins operations, net interest income, Futurus Financial Services' primary
source of earnings, will fluctuate with significant interest rate movements. To
lessen the impact of these fluctuations, we intend to structure the balance
sheet so that repricing opportunities exist for both assets and liabilities in
roughly equal amounts at approximately the same time intervals. Imbalances in
these repricing opportunities at any point in time constitute interest rate
sensitivity.
Interest rate sensitivity refers to the responsiveness of interest-bearing
assets and liabilities to change in market interest rates. The rate sensitive
position, or "gap," is the difference in the volume of rate sensitive assets and
liabilities at a given time interval. The general objective of gap management is
to actively manage rate sensitive assets and liabilities in order to reduce the
impact of interest rate fluctuations on the net interest margin. We will
generally attempt to maintain a balance between rate sensitive assets and
liabilities as the exposure period is lengthened to minimize Futurus Bank's
overall interest rate risk.
We will regularly evaluate the balance sheet's asset mix in terms of several
variables:
- yield;
- credit quality;
- appropriate funding sources; and
- liquidity.
To effectively manage the balance sheet's liability mix, we plan to focus on
expanding our deposit base and converting assets to cash as necessary.
As Futurus Bank continues to grow, we will continuously structure its rate
sensitivity position in an effort to hedge against rapidly rising or falling
interest rates. Futurus Bank's asset and liability committee will meet on a
monthly basis to develop a strategy for the upcoming period.
Liquidity represents the ability to provide steady sources of funds for loan
commitments and investment activities, as well as to maintain sufficient funds
to cover deposit withdrawals and payment of debt and operating obligations. We
can obtain these funds by converting assets to cash or by attracting new
deposits. Futurus Bank's ability to maintain and increase deposits will serve as
its primary source of liquidity.
19
<PAGE>
Other than this offering, we know of no trends, demands, commitments, events
or uncertainties that should result in or are reasonably likely to result in
Futurus Financial Services' liquidity increasing or decreasing in any material
way in the foreseeable future.
CAPITAL ADEQUACY
There are now two primary measures of capital adequacy for banks and bank
holding companies: (1) risk-based capital guidelines and (2) the leverage ratio.
The risk-based capital guidelines measure the amount of a bank's required
capital in relation to the degree of risk perceived in its assets and its
off-balance sheet items. Under the risk-based capital guidelines, capital is
divided into two "tiers." Tier 1 capital consists of common shareholders'
equity, noncumulative and cumulative perpetual preferred stock and minority
interests. Goodwill is subtracted from the total. Tier 2 capital consists of the
allowance for loan losses, hybrid capital instruments, term subordinated debt
and intermediate term preferred stock. Banks are required to maintain a minimum
risk-based capital ratio of 8.0%, with at least 4.0% consisting of Tier 1
capital.
The second measure of capital adequacy relates to the leverage ratio. The
Office of the Comptroller of the Currency has established a 3.0% minimum
leverage ratio requirement. The leverage ratio is computed by dividing Tier 1
capital into total assets. In the case of Futurus Bank and other banks that are
experiencing growth or have not received the highest regulatory rating from
their primary regulator, the minimum leverage ratio should be 3.0% plus an
additional cushion of at least 1% to 2%, depending upon risk profiles and other
factors.
20
<PAGE>
PROPOSED BUSINESS OF FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
BACKGROUND
FUTURUS FINANCIAL SERVICES. We incorporated Futurus Financial Services as a
Georgia corporation on August 12, 1999 to serve as a bank holding company that
will own 100% of the capital stock of Futurus Bank. Futurus Financial Services
plans to use $8.5 million of the net proceeds of this offering to purchase the
capital stock of Futurus Bank. Initially, we will have no business operations
other than owning and managing Futurus Bank.
On March 1, 2000, we filed an application with the Federal Reserve to become
a bank holding company. We have chosen this holding company structure because we
believe it will provide flexibility that would not otherwise be available. With
a holding company structure, we may assist Futurus Bank in maintaining its
required capital ratios by borrowing money and contributing the proceeds of that
debt to Futurus Bank as primary capital. Additionally, under provisions of the
Gramm-Leach-Bliley Act, which took effect March 11, 2000, a holding company may
engage in activities that are financial in nature or incidental or complementary
to a financial activity, including some insurance transactions, real estate
development activities and merchant banking activities, in which Futurus Bank
will be prohibited from engaging. Although we do not presently intend to engage
in other activities, we will be able to do so with a proper notice or filing to
the Federal Reserve if we believe that there is a need for these services in our
market area, that we can be successful in these activities and that these
activities could be profitable. See "Supervision and Regulation--Futurus
Financial Services" on page 53.
FUTURUS BANK. On February 14, 2000 we received preliminary approval from
the Office of the Comptroller of the Currency to organize Futurus Bank. In order
to receive final approval, we will be required to raise a minimum of $8,500,000
in capital, receive approval of our application to the FDIC for deposit
insurance and implement appropriate banking policies and procedures. After
receiving all necessary regulatory approvals, we anticipate beginning operations
at a temporary facility in the second quarter of 2000, and we expect to move to
our permanent facility in the fourth quarter of 2000.
MARKET OPPORTUNITIES
PRIMARY SERVICE AREA. The boundaries for Futurus Bank's initial primary
service area are represented by the Fulton County/Forsyth County and Cherokee
County lines to the north, the Fulton County/Gwinnett County line to the east,
Interstate 285 to the south, and the Fulton County/Cobb County line to the west.
Accordingly, the primary service area represents a geographic area that includes
the Alpharetta, Windward, Roswell, Sandy Springs and Northridge communities in
northern Fulton County.
Futurus Bank will be located adjacent to the Windward development in
Alpharetta, Georgia, a focal point of Futurus Bank's primary service area. The
Greater North Fulton Chamber of Commerce has described Windward as one of
Atlanta's premier mixed-use developments and a unique environment in which to
live and work. Totaling more than 3,400 acres, Windward includes a 1,000-acre
business community. As estimated by the local Chamber of Commerce, there are
more than 13,000 people employed by businesses located in Windward, and the
residential area is home to more than 1,500 families. The Windward residential
community offers more than a dozen distinct neighborhoods, including a 195-acre
lake and two private golf courses.
LOCAL ECONOMY. Northern Fulton County is a significant focal point of
Atlanta's metropolitan area with its diversified economic base. This economic
base includes major operations of American Honda Motor Company, Inc., AT&T
Corporation, CibaVision Ltd., Compaq Computer Corporation, E*Trade
Securities, Inc., Equifax, Inc., GTE Corporation, Holiday Inn Worldwide,
Kimberly-Clark, Inc., Lucent Technologies, Inc., McKesson HBOC, Inc., Nortel
Communications, Siemens Energy & Automation, Inc. and United Parcel Service of
America, Inc. The presence of these corporations has
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fueled the growth of small businesses in northern Fulton County. According to
the Greater Northern Fulton Chamber of Commerce, the strength of the local
economy relies heavily on its large and highly diversified small business
community, which makes up approximately 85% of the Chamber's membership.
The characteristics of the individuals and small businesses in the primary
service area represent the type of client that Futurus Bank will target for its
client base. We believe that northern Fulton County represents a dynamic and
unique market with its well diversified and growing customer base. We also
believe that the primary service area presents an environment that will support
Futurus Bank's formation and growth. As a community bank, Futurus Bank will be
designed to serve the needs of the residents and small- to medium-sized
businesses within this growing economy. We believe continued economic growth in
the northern Fulton County market will be important to Futurus Bank's long term
success.
RETAIL. We believe a significant economic factor of the primary service
area is the presence of North Point Mall. The one-mile stretch of land located
east of Georgia Highway 400 between Mansell Road and Haynes Bridge Road
represents one of the largest commercial retail shopping areas in the Atlanta
metropolitan area. The largest shopping center in the area is North Point Mall,
which is anchored by six major department stores and 180 specialty shops. In
addition, ToysRUs, Service Merchandise, Target, major furniture stores, numerous
bank branches, movie theaters, eating establishments and commercial office
buildings are located in close proximity to North Point Mall.
POPULATION. Our primary service area represents a diverse market that
includes a growing population with numerous new and established residential
neighborhoods and small- to medium-sized businesses. Additionally, there are a
growing number of large employers continuing to relocate to the area. The
accessibility of Georgia Highway 400, sometimes referred to as "The Golden
Corridor," has been a key to the population growth and economic development of
northern Fulton County.
The cities of Alpharetta and Roswell represent an important part of Futurus
Bank's primary service area. According to estimates released by the United
States Census Bureau as recently as July 1, 1998, Alpharetta ranked first in
Georgia in terms of population growth between 1990 and 1998, with a percentage
increase of 91%, and Roswell ranked twelfth with a population increase of 19%.
The total population of the primary service area reported by the U.S. Census was
160,592 in 1990. According to CACI Marketing Systems, Inc., a marketing research
firm, this population figure was estimated to be 221,864 in 1999 and is
projected to reach 254,520 by 2004. Additionally, the median family income was
estimated by CACI to be $67,730 in 1999 and is projected to reach $76,357 by
2004.
COMPETITION. According to the FDIC, Bank and thrift deposits in Futurus
Bank's primary service area grew from approximately $2.3 billion in June 1995 to
more than $3.0 billion in June 1999. This multi-billion dollar deposit base is
primarily controlled by national and super-regional banks, which include Bank of
America, Wachovia, First Union, SunTrust and SouthTrust. Although these large
financial institutions are well established in the area, local community banks
have been successful in competing with these large banks for deposits. According
to the FDIC, the following trends occurred in deposit market share from
June 1995 to June 1999:
- Total deposits for the national and super-regional banks described above
grew 10.6%, compared to 30.6% growth in the overall deposit market.
- The slower relative growth of these large banks resulted in their combined
relative deposit market share falling from 80.8% to 68.4%.
- Five community-oriented banks operating in the service area during the
entire four-year period saw their total deposits grow 164.2%. These banks
included Bank of North Georgia, Milton
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National Bank, which was acquired by BB&T in January 2000, Fidelity
National Bank, First Colony Bank and Tucker Federal Bank.
- These five community banks increased their combined relative deposit
market share from 10.1% to 20.4%.
In addition to offering competitive banking products, we believe that
community banks must provide personalized service and must make timely, local
decisions in order to compete successfully. We also believe that recent
acquisitions of several community banks in the Atlanta market may diminish the
quality of banking services available to small- and medium-sized businesses and
consumers in the market. Further consolidation is likely to create additional
opportunities for community banks to capture deposits from affected clients who
may be dissatisfied with their new financial institutions.
We will compete directly with many of the institutions previously named.
Additionally, two new start-up banks have established operations within our
primary service area since 1998. Although community banks and thrifts operating
within our market area will compete directly with Futurus Bank for banking
products and services, none of these community banking institutions has a
location within approximately three miles of our proposed main office site. As a
result, we believe that we have an opportunity to bring community banking to an
underserved, local market.
We recognize that most of our competitors have substantially greater
resources and lending limits than Futurus Bank will have and provide other
services, such as extensive and established branch networks and trust services,
that Futurus Bank does not expect to provide initially. As a result of these
competitive factors, Futurus Bank may have to pay higher interest rates to
attract depositors or extend credit with lower interest rates to attract
borrowers. However, we will attempt to minimize these competitive factors and
attract new banking relationships by offering our clients what we believe is a
new and innovative banking experience through our "high tech, high touch"
approach to community banking. For example, we intend to differentiate Futurus
Bank from our competitors primarily through our significant involvement in the
communities we serve, the quality of our associates and our strategic
application of current technologies that we anticipate will make banking with
Futurus Bank both convenient and enjoyable.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients and
to create a banking experience that motivates them to tell others about our
banking services. As part of our marketing effort, we will employ a "high tech,
high touch" theme to emphasize our commitment to complement our client-oriented
service approach with user-friendly technologies. Futurus Bank will adopt this
philosophy to attract clients and acquire new deposits in our market as well as
deposits now controlled by other financial institutions in our primary service
area. Additionally, we believe that significant local ownership and control will
be a major factor in furthering our ability to respond more efficiently to our
clients' needs and will aid in Futurus Bank's growth and success. To implement
our philosophy and to grow and expand our operations, we intend to put into
practice the following strategies:
ADVANCED TECHNOLOGY. Futurus Bank intends to use advanced banking and
communications technology to deliver services that will match the level of
sophistication of Futurus Bank's anticipated client base. By positioning Futurus
Bank as a community bank committed to enhancing its service quality and
convenience through user-friendly technologies, we expect to establish
meaningful client relationships from both new and existing residents and
businesses in the area.
EXPERIENCED SENIOR MANAGEMENT. We are assembling a senior management team
that possesses extensive experience in the banking industry, as well as
substantial business and banking contacts in our market. For example, our
president and chief executive officer, William M. Butler, has over 17 years of
banking experience. See "Management" on page 31.
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SKILLED ASSOCIATES. We will strive to hire highly trained and seasoned
staff that can bring with them existing client relationships established through
prior banking experience. By hiring associates with established client
relationships, Futurus Bank will be able to grow more rapidly than if we hired
associates who required time to develop a sufficient client base. Additionally,
we plan to train our associates to answer questions about all of our products
and services so that the first associate a client encounters will be able to
resolve all of the client's banking-related questions.
INDIVIDUAL CLIENT FOCUS. We will focus on providing individualized service
and attention to our clients, which will include individuals and small-to
medium-sized businesses. We will concentrate on establishing and maintaining
long-term client relationships by working to ensure that our clients have
positive banking experiences. As our associates, officers and directors become
familiar with each client on an individual basis, we will be able to respond to
credit requests more quickly and be more flexible in approving loans based on
collateral quality and personal knowledge of the client's banking needs.
HIGHLY VISIBLE SITE. Futurus Bank's main office location is highly visible
and near a large concentration of our targeted commercial business and
residential clients. We believe this will enhance Futurus Bank's image as a
strong competitor. Additionally, our nearest competing community bank is
approximately three miles away from our main office, providing us with what we
believe is a better opportunity to develop a community banking niche.
COMMUNITY-ORIENTED BOARD OF DIRECTORS. Our board of directors consists
primarily of long-time metropolitan Atlanta residents with extensive contacts in
our primary service area. The board of directors also represents a wide array of
business experience and community involvement, and their continued active
involvement will provide an opportunity to promote Futurus Bank and its products
and services. We anticipate that our directors will bring substantial business
and banking contacts to Futurus Bank as a result of their experience,
involvement and community standing.
OFFICER AND DIRECTOR CALL PROGRAM. We intend to implement an active officer
and director call program to promote Futurus Bank's philosophy. The purpose of
this call program will be to personally visit prospective clients, introduce
Futurus Bank's "high tech, high touch" philosophy and invite them to do business
with us.
PROPOSED RELATIONSHIP WITH REAL ESTATE FINANCIAL SERVICES. We expect to
benefit from our proposed referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two of
our directors, Gregory A. Janicki and Deborah M. Janicki. Real Estate Financial
Services regularly refers consumer and commercial business to various financial
institutions located in the metropolitan Atlanta area. Once Futurus Bank begins
its operations, we anticipate that Real Estate Financial Services may be a
consistent and important source of new banking relationships, helping us to
build our client base. Additionally, because Real Estate Financial Services does
not generally fund commercial loans, consumer second mortgages, home equity
loans or home equity lines of credit, we believe that our relationship with Real
Estate Financial Services may also generate loan product leads for our lending
officers.
LOCAL DECISION-MAKING. We will emphasize local decision-making with
experienced bankers and will focus on both associate retention and the delivery
of personal, professional and responsive service. If Futurus Bank expands into
other communities, it intends to maintain its policy of making decisions
locally. This will allow Futurus Bank to be more responsive to client requests
and to the needs of clients within the particular community.
MARKETING AND ADVERTISING. Futurus Financial Services has retained The
Stern Marketing Group, a national marketing firm located in Berkley, California,
to promote Futurus Bank and to develop its "high tech, high touch" image as a
technologically responsive, community-focused bank that emphasizes prompt,
professional and personalized service to individuals and businesses. Futurus
Bank will also
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sponsor various community activities in our primary service area and will use
media services such as local newspapers and direct mail campaigns to promote its
products and services.
CAPITALIZE ON TREND TOWARD CONSOLIDATION. We believe that consolidation in
the banking industry will continue and will result in many individuals and
small- to medium-sized businesses being dissatisfied with the upheaval in their
banking relationships. We expect to capitalize on this continued industry
consolidation. By positioning ourselves as a true community bank that is
interested in delivering unparalleled personal service, we believe that we will
draw many of those dissatisfied clients to us.
OFFER FEE-GENERATING PRODUCTS AND SERVICES. Futurus Bank's range of
services, pricing strategies, interest rates paid and charged, and hours of
operation will be structured to attract its target clients and grow its market
share. Futurus Bank will strive to offer small- to medium-sized businesses,
professionals, entrepreneurs and consumers the best loan services available
while charging appropriate fees for these services. Additionally, we anticipate
using sophisticated technology and third-party service providers to perform
selected functions at a lower cost in order to enhance non-interest income.
LENDING SERVICES
LENDING POLICY. We will offer a full range of lending products, including
commercial, real estate and consumer loans to individuals and small-to
medium-sized businesses and professional concerns. We will compete for these
loans with competitors who are well established in the northern Fulton County
area and have greater resources and lending limits. As a result, we may
initially have to offer more flexible pricing and terms to attract borrowers.
We estimate that Futurus Bank's loan portfolio will be comprised of the
following:
<TABLE>
<CAPTION>
LOAN CATEGORY RATIO
- ------------- --------
<S> <C>
Commercial loans to small- and medium-sized businesses...... 60%
Real estate related loans................................... 30%
Consumer loans.............................................. 10%
</TABLE>
Based on our executive officers' past lending experience, we believe that,
when properly managed and monitored, none of these categories represents a
significantly higher risk than the other. Additionally, Futurus Bank plans to
avoid concentrations of loans to a single industry or secured by a particular
type of collateral.
LOAN APPROVAL AND REVIEW. Futurus Bank's loan approval policies will
provide for various levels of officer lending authority. When the amount of
total loans to a single borrower exceeds that individual officer's lending
authority, an officer with a higher lending limit or Futurus Bank's Loan
Committee will determine whether to approve the loan request. Futurus Bank will
not make any loans to any of its directors or executive officers unless its
board of directors, excluding the interested party, first approves the loan, and
the terms of the loan are no more favorable than would be available to any
comparable borrower.
LENDING LIMITS. Futurus Bank's lending activities will be subject to a
variety of lending limits imposed by federal law. Differing limits apply based
on the type of loan or the nature of the borrower, including the borrower's
relationship to the bank. In general, however, Futurus Bank will be able to loan
any one borrower a maximum amount equal to either:
- 15% of Futurus Bank's capital and surplus; or
- 25% of its capital and surplus if the amount that exceeds 15% is fully
secured by readily marketable collateral.
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Based on its proposed capitalization and projected pre-opening expenses,
Futurus Bank's initial legal lending limit will be approximately $1,275,000 for
loans not fully secured plus an additional $850,000, or a total of approximately
$2.1 million, for loans that meet the federal guidelines. These legal limits
will increase or decrease as Futurus Bank's capital increases or decreases as a
result of its earnings or losses, among other reasons. Our management team has
adopted an internal lending limit of $1 million, which will initially be lower
than the applicable legal limit. However, based on either our internal lending
limit or our legal lending limit, Futurus Bank will need to sell participations
in its loans to other financial institutions in order to meet all of the lending
needs of our clients requiring extensions of credit above these limits.
CREDIT RISKS. The principal economic risk associated with each category of
loans that Futurus Bank expects to make is the creditworthiness of the borrower.
Borrower creditworthiness is affected by general economic conditions and the
strength of the relevant business market segment. General economic factors
affecting a borrower's ability to repay include interest, inflation and
employment rates, as well as other factors affecting a borrower's customers,
suppliers and employees.
The well established financial institutions in the northern Fulton County
market are likely to make proportionately more loans to medium- to large-sized
businesses than Futurus Bank will make. Many of Futurus Bank's anticipated
commercial loans will likely be made to small- to medium-sized businesses that
may be less able to withstand competitive, economic and financial pressures than
larger borrowers.
COMMERCIAL LOANS. We expect that loans for commercial purposes in various
lines of businesses will be one of the primary components of Futurus Bank's loan
portfolio. The terms of these loans will vary by purpose and by type of
underlying collateral, if any. Futurus Bank will typically make equipment loans
for a term of five years or less at fixed or variable rates, with the loan fully
amortized over the term. Equipment loans generally will be secured by the
financed equipment, and the ratio of the loan principal to the value of the
financed equipment or other collateral will generally be 80% or less. Loans to
support working capital will typically have terms not exceeding one year and
will usually be secured by accounts receivable, inventory or personal guarantees
of the principals of the business. For loans secured by accounts receivable or
inventory, principal will typically be repaid as the assets securing the loan
are converted into cash, and for loans secured with other types of collateral,
principal will typically be due at maturity. The quality of the commercial
borrower's management and its ability both to properly evaluate changes in the
supply and demand characteristics affecting its markets for products and
services and to effectively respond to such changes are significant factors in a
commercial borrower's creditworthiness.
REAL ESTATE LOANS. Futurus Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include commercial loans where Futurus Bank takes a security interest in
real estate out of an abundance of caution and not as the principal collateral
for the loan, but will exclude home equity loans, which are classified as
consumer loans.
- COMMERCIAL REAL ESTATE. Commercial real estate loan terms generally will
be limited to five years or less, although payments may be structured on a
longer amortization basis. Interest rates may be fixed or adjustable,
although rates typically will not be fixed for a period exceeding
60 months. Futurus Bank will generally charge an origination fee of one
percent. We will attempt to reduce credit risk on our commercial real
estate loans by emphasizing loans on owner-occupied office and retail
buildings where the ratio of the loan principal to the value of the
collateral as established by independent appraisal does not exceed 80% and
net projected cash flow available for debt service equals 120% of the debt
service requirement. In addition, Futurus Bank generally will require
personal guarantees from the principal owners of the property supported by
a review by Futurus Bank's management of the principal owners' personal
financial statements. Risks associated with commercial real estate loans
include fluctuations in
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the value of real estate, new job creation trends, tenant vacancy rates
and the quality of the borrower's management. Futurus Bank will limit its
risk by analyzing borrowers' cash flow and collateral value on an ongoing
basis.
- CONSTRUCTION AND DEVELOPMENT LOANS. We will make construction and
development loans both on a pre-sold and speculative basis. If the
borrower has entered into an agreement to sell the property prior to
beginning construction, then the loan is considered to be on a pre-sold
basis. If the borrower has not entered into an agreement to sell the
property prior to beginning construction, then the loan is considered to
be on a speculative basis. Construction and development loans are
generally made with a term of nine to twelve months and interest is paid
quarterly. The ratio of the loan principal to the value of the collateral
as established by independent appraisal typically will not exceed 75%.
Speculative loans will be based on the borrower's financial strength and
cash flow position. Loan proceeds will be disbursed based on the
percentage of completion and only after the project has been inspected by
an experienced construction lender or independent appraiser. Risks
associated with construction loans include fluctuations in the value of
real estate and new job creation trends.
- RESIDENTIAL REAL ESTATE. Futurus Bank's residential real estate loans will
consist of residential second mortgage loans and residential construction
loans only. We will offer fixed and variable rates on our mortgages with
the amortization of second mortgages generally not exceeding 15 years and
the rates generally not being fixed for over 60 months. These loans will
be made in accordance with Futurus Bank's appraisal policy and with the
ratio of the loan principal to the value of collateral as established by
independent appraisal not exceeding 95%. We expect that these
loan-to-value ratios will be sufficient to compensate for fluctuations in
real estate market value and to minimize losses that could result from a
downturn in the residential real estate market.
CONSUMER LOANS. Futurus Bank will make a variety of loans to individuals
for personal, family and household purposes, including secured and unsecured
installment and term loans, home equity loans and home equity lines of credit.
Consumer loan repayments depend upon the borrower's financial stability and are
more likely to be adversely affected by divorce, job loss, illness and personal
hardships. Because many consumer loans are secured by depreciable assets such as
boats, cars and trailers the loan should be amortized over the useful life of
the asset. To minimize the risk that the borrower cannot afford the monthly
payments, all fixed monthly obligations should not exceed 38% of the borrower's
gross monthly income. The borrower should also be continuously employed for at
least 12 months prior to obtaining the loan. The loan officer will review the
borrower's past credit history, past income level, debt history and, when
applicable, cash flow and determine the impact of all these factors on the
ability of the borrower to make future payments as agreed. We expect that the
principal competitors for consumer loans will be the established banks in the
Futurus Bank market.
LENDING OFFICERS. Futurus Bank intends to initially hire a commercial
lender and a consumer lender in order to develop our loan portfolios. Each
lender will have experience within the northern Fulton County market and will be
expected to bring substantial business to Futurus Bank.
INVESTMENTS
In addition to loans, Futurus Bank will make other investments primarily in
obligations of the United States or obligations guaranteed as to principal and
interest by the United States and other taxable securities. No investment in any
of those instruments will exceed any applicable limitation imposed by law or
regulation. The Asset and Liability Committee will review the investment
portfolio on an ongoing basis in order to ensure that the investments conform to
Futurus Bank's policy as set by the board of directors. The Asset and Liability
Committee will be chaired by C. Parke Day and will also include Joel P.
Weinbach, Danny L. Tesney and Nathan E. Hardwick, IV.
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ASSET AND LIABILITY MANAGEMENT
The Asset and Liability Committee will manage Futurus Bank's assets and
liabilities and will strive to provide a stable, optimized net interest margin,
adequate liquidity and a profitable after-tax return on assets and return on
equity. The committee will conduct these management functions within the
framework of written loan and investment policies that Futurus Bank will adopt.
The committee will attempt to maintain a balanced position between rate
sensitive assets and rate sensitive liabilities. Specifically, it will chart
assets and liabilities on a matrix by maturity, effective duration and interest
adjustment period and attempt to manage any gaps in maturity ranges.
DEPOSIT SERVICES
Futurus Bank will seek to establish a broad base of core deposits, including
savings accounts, checking accounts, money market accounts, a variety of
certificates of deposit and IRA accounts. To attract deposits, Futurus Bank will
employ an aggressive marketing plan in its overall service area and will feature
a broad product line and competitive rates and services. The primary sources of
deposits will be residents of, and businesses and their employees located in,
Futurus Bank's primary market area. Futurus Bank plans to obtain these deposits
through personal solicitation by its officers and directors, direct mail
solicitations and advertisements published in the local media. In order to
attract its initial deposit base, Futurus Bank may offer higher interest rates
on various deposit accounts.
OTHER BANKING SERVICES
Other anticipated banking services include limited cash management services,
on-line banking services, travelers checks, direct deposit of payroll and social
security checks, night depository, ATM cards and debit cards. Futurus Bank plans
to become associated with one or more nationwide networks of automated teller
machines that our clients will be able to use throughout Georgia and other
regions. We do not plan to charge our clients for the use of these automated
teller machines since we will initially have only one location. However, other
financial institutions may charge our customers for the use of their automated
teller machines. We also plan to offer MasterCard-Registered Trademark- and
VISA-Registered Trademark- credit card services through a correspondent bank as
an agent for Futurus Bank. Futurus Bank does not plan to exercise trust powers
during its initial years of operation. It may in the future offer a full-service
trust department, but cannot do so without the prior approval of the Office of
the Comptroller of the Currency. We plan to offer discount brokerage services
through a third party that has not been selected.
Futurus Bank will also offer its targeted commercial clients a courier
service that will pick up non-cash deposits and minimal cash deposits of up to
approximately $200 from the client's place of business and deliver them to the
bank. We believe that this will be an important service for our clients because
Futurus Bank will initially have only one location. Futurus Bank will provide
this service through a third party, which has not yet been chosen, that is
approved by the Public Service Commission for bank-related work.
FUTURE SERVICES
In addition to the services described above, we anticipate that at some time
in the future we will also offer to our clients permissible insurance products.
We will probably delay offering these products until both Futurus Financial
Services and Futurus Bank are operating profitably.
INFORMATION SYSTEMS AND THE YEAR 2000
The year 2000 issue confronting Futurus Financial Services and Futurus Bank
and their suppliers, clients, clients' suppliers and competitors centers on the
inability of computer systems to recognize the year 2000 and other year
2000-sensitive dates such as February 29, 2000 or January 1, 2001. Many
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existing computer programs and systems originally were programmed with six-digit
dates that provided only two digits to identify the calendar year in the date
field. After the new millennium, these programs and computers may recognize "00"
as the year 1900 rather than the year 2000. If computer systems are not able to
identify the year 2000, many computer applications could fail or create
incorrect results.
Since we do not intend to begin our banking operations until the second
quarter of 2000, we will not face the same date recognition issues as other
financial institutions that were in operation at January 1, 2000. Futurus
Financial Services, Futurus Bank, or any of their service providers,
correspondents, vendors or clients may, however, experience a disruption of
business resulting from a year 2000 problem occurring after January 1, 2000.
Such a disruption could cause a delay in beginning our banking operations. We
will use software and hardware developed by independent third parties to provide
us with our intended information systems. As a result, we will depend on the
efforts of those vendors to ensure that their data processing systems
accommodate year 2000 information on January 1, 2000 as well as any later year
2000-sensitive date.
We believe most year 2000 issues that could affect our operations will have
surfaced prior to when we begin our banking operations. Consequently, we do not
expect any year 2000 issues to have a material effect on our operations.
ASSOCIATES
When we begin operations, Futurus Bank projects that it will have 13
full-time associates and one part-time associate. We do not expect that Futurus
Financial Services will have any associates who are not also associates of
Futurus Bank.
OFFICES
On March 14, 2000, Futurus Financial Services entered into a contract with
Pioneer Real Estate Development, Inc. to lease a 1.35 acre lot located on
Windward Parkway, one-half mile west of Georgia Highway 400 in Alpharetta,
Georgia. The leased property will be the proposed site for our permanent
facility. The term of the lease will be for 12 years, with two five-year renewal
options. Rent will range from $14,312.50 to $17,795.79 per month, plus a monthly
rental agency fee ranging from $715.63 to $889.79, over the initial 12-year
lease period. Construction of our permanent facility is expected to begin in the
second quarter of 2000 with completion anticipated in the fourth quarter of
2000. The permanent facility will be a single-story, contemporary style
building, and will include four drive-up windows, two of which will initially be
operational, and one automated teller machine. The total construction cost of
the building, including furniture, fixtures and equipment, is estimated at
$1.5 million, with Pioneer Real Estate Development, Inc., as landlord,
contributing approximately $450,000 of that amount. Futurus Bank, after being
capitalized by Futurus Financial Services, will contribute the balance of
approximately $1.05 million.
Futurus Bank's proposed location will offer high visibility in an area with
significant traffic flow. The Windward area is a central location for business,
residential, leisure and shopping activities and is near Georgia Highway 400, a
major highway serving the community.
In the interim, Futurus Bank will operate out of a temporary facility
located in the Alpharetta Square shopping center at 201 South Main Street,
Alpharetta, Georgia, just south of the Alpharetta Highway (also known as South
Main Street) and Old Milton Parkway intersection, which is approximately three
miles from our proposed permanent location. The rental fee for the temporary
office space is $1,750 per month until July 31, 2000, at which time the rental
fee will increase to $1,800 on a month-to-month basis. The lease for our
temporary facility began February 15, 2000, and we expect to complete our
renovations and move into our temporary facility in April 2000. Until we
relocate to our permanent office location, we plan to conduct only limited
banking services out of our temporary facility, which will include making loans
and taking deposits.
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Prior to moving into our temporary facility, our executive offices will
continue to be located at 1580 Warsaw Road, Roswell, Georgia. The monthly rental
fee for our Warsaw Road location is $1,055. The corresponding lease agreement
will terminate on August 31, 2000. We anticipate that total rental expense
associated with the Warsaw Road location will be $8,440 during 2000.
Although we have no specific plans for expansion, we may expand our presence
in Futurus Bank's market by adding branches in other strategic locations if
deemed appropriate. We realize that by adding new branches, Futurus Bank may
gain new channels through which it can build its deposit base and solicit new
clients. Accordingly, we will carefully evaluate future opportunities for
strategic expansion as they become available.
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MANAGEMENT
GENERAL
The following table sets forth the number and percentage of outstanding
shares of common stock we expect to be beneficially owned by the organizers and
executive officers after the completion of this offering. All of our organizers
will serve as directors. The addresses of our organizers are the same as the
address of Futurus Financial Services. Prior to the offering, Gregory A. Janicki
purchased one share of common stock for $10.00. We will redeem this share after
the offering. The numbers of shares indicated in the table are based on
"beneficial ownership" concepts as defined by the Securities and Exchange
Commission. Beneficial ownership includes shares that are either owned or may be
acquired within 60 days by the principal, a spouse, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal. This
table separately discloses the number of warrants and options that will be
granted to each organizer or executive officer.
<TABLE>
<CAPTION>
SHARES ANTICIPATED
TO BE OWNED
FOLLOWING THE
OFFERING WARRANTS AND OPTIONS
------------------- --------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER
- ------------------------ -------- -------- --------------------
<S> <C> <C> <C>
William M. Butler(1)..................................... 5,000 * 27,500
C. Parke Day............................................. 20,000 1.8 20,000
Nathan E. Hardwick, IV................................... 35,000 3.2 35,000
Michael S. Hug........................................... 20,000 1.8 20,000
Deborah M. Janicki(2).................................... 30,000 2.7 30,000
Gregory A. Janicki(2).................................... 30,000 2.7 30,000
Richard W. Stimson....................................... 20,000 1.8 20,000
Donald S. Shapleigh, Jr.................................. 5,000 * 2,500
Danny L. Tesney.......................................... 20,000 1.8 20,000
Joel P. Weinbach......................................... 20,000 1.8 20,000
R. Wesley Fuller(3)...................................... 2,500 * 15,000
Suzanne T. Phipps(4)..................................... 250 * 7,500
All Directors and Executive Officers as a Group (12
persons)............................................... 207,750 18.9 247,500
</TABLE>
- ------------------------
* Represents ownership of less than 1.0%.
(1) Mr. Butler will receive an option to purchase 25,000 shares of common stock
under our stock incentive plan, as well as a warrant to purchase 2,500
shares.
(2) Gregory A. Janicki and Deborah M. Janicki each intends to purchase 30,000
shares of common stock. As husband and wife, they will also be deemed to be
the beneficial owner of each other's shares. Consequently, each will be
deemed to beneficially own 60,000 shares.
(3) We intend to grant Mr. Fuller an option to purchase 10,000 shares of common
stock under our stock incentive plan. Further, we intend to grant
Mr. Fuller an additional option to purchase 5,000 shares if Futurus Bank
meets specified performance goals.
(4) We intend to grant Ms. Phipps an option to purchase 5,000 shares of common
stock under our stock incentive plan. Further, we intend to grant
Ms. Phipps an additional option to purchase 2,500 shares if Futurus Bank
meets specified performance goals.
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<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS OF FUTURUS FINANCIAL SERVICES
The following table sets forth the age of our executive officers and
directors and the positions that they hold with Futurus Financial Services as of
January 1, 2000. Each person listed below as a director has served as a director
of Futurus Financial Services since August 12, 1999. Our president and chief
executive office has served us in this capacity since August 20, 1999. The
president and chief executive officer, chief financial officer and directors of
Futurus Financial Services will also hold these same positions with Futurus
Bank. Futurus Financial Services' articles of incorporation provide for a
staggered board of directors so that, as nearly as possible, one-third of the
directors are elected each year to serve three-year terms. The terms of office
of the classes of directors expire as follows: Class I at the first annual
meeting of shareholders, which we intend to hold in the spring of 2001;
Class II at the second annual meeting of shareholders; and Class III at the
third annual meeting of shareholders. Our executive officers serve at the
discretion of the board of directors. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page 45.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH FUTURUS FINANCIAL SERVICES
- ---- -------- ------------------------------------------
<S> <C> <C>
CLASS I DIRECTORS:
William M. Butler......................... 42 Director, President and Chief Executive
Officer
C. Parke Day.............................. 34 Director, Secretary
Nathan E. Hardwick, IV.................... 34 Director
Michael S. Hug............................ 41 Director
CLASS II DIRECTORS:
Deborah M. Janicki........................ 46 Director
Gregory A. Janicki........................ 47 Chairman of the Board of Directors
Richard W. Stimson........................ 50 Director
CLASS III DIRECTORS:
Donald S. Shapleigh, Jr................... 51 Director
Danny L. Tesney........................... 42 Director, Treasurer
Joel P. Weinbach.......................... 35 Director
EXECUTIVE OFFICERS NOT ALSO DIRECTORS:
R. Wesley Fuller.......................... 40 Chief Financial Officer, Executive Vice
President
Suzanne T. Phipps......................... 35 Senior Vice President
</TABLE>
Each of the directors of Futurus Financial Services is a proposed director
of Futurus Bank. Each of Futurus Bank's proposed directors will, upon approval
of the Office of the Comptroller of the Currency, serve until Futurus Bank's
first shareholders meeting, which will convene shortly after Futurus Bank
receives its charter. Futurus Financial Services, as the sole shareholder of
Futurus Bank, will nominate each proposed director to serve as director of
Futurus Bank at that meeting. After the first shareholders meeting, directors of
Futurus Bank will serve for a term of one year and will be elected by Futurus
Financial Services each year at Futurus Bank's annual meeting of shareholders.
Futurus Bank's officers will be appointed or elected by its board of directors
and will hold office at the will of its board.
Deborah M. Janicki and Gregory A. Janicki, who are husband and wife, are the
only directors or executive officers that have a family relationship as close as
first cousins.
The following is a biographical summary of each of our directors and
executive officers:
WILLIAM M. BUTLER. Mr. Butler was raised in northern Atlanta and has spent
the majority of his banking career in this market. He is a graduate of Furman
University with a Bachelor of Arts in Economics/Business Administration.
Currently, Mr. Butler is attending the Stonier Graduate School of
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<PAGE>
Banking. Mr. Butler has been a banker for over 17 years and has served in
various management positions throughout his career. Most recently, from
May 1997 to August 1999, Mr. Butler served as senior vice president and senior
lender of Charter Bank & Trust, Marietta, Georgia. In this position, Mr. Butler
was second in command and was responsible for all commercial lending activity
for Charter Bank & Trust, a $165 million community bank. After joining Charter
Bank & Trust in 1997, Mr. Butler was instrumental in growing the bank's total
loans outstanding from $73 million to $98 million and improving the overall
credit quality of the bank's loan portfolio, as measured by the level of
adversely rated assets. Prior to joining Charter Bank & Trust, from April 1996
to December 1996, Mr. Butler was the vice president of administration with
Caldwell-Spartin, a software company. Mr. Butler's banking experience also
includes a position as division manager with Bank South, Atlanta, Georgia from
June 1990 until January 1996 when the bank was acquired by NationsBank
Corporation (now Bank of America Corporation).
C. PARKE DAY. Mr. Day is a real estate developer/investor and principal
owner of Parke Day Properties, LLC, which he founded in 1992. Parke Day
Properties, LLC is located in Norcross, Georgia and the company has been active
in northern Fulton County, Georgia. Prior to his real estate career, Mr. Day
worked as a political campaign field coordinator from 1990 to 1992 and as a
manager for Midway Plantation, Inc. from 1988 to 1989. Mr. Day was born in
Atlanta and raised in Dunwoody, Georgia, and his community involvement includes
the Atlanta Unit of the American Cancer Society, the Dunwoody Baptist Foundation
and the Cecil B. Day Foundation. As a member of the Northern Fulton Chamber of
Commerce, Mr. Day has numerous business and personal contacts in the northern
Fulton County area.
NATHAN E. HARDWICK, IV. Mr. Hardwick is the managing partner of Jackson &
Hardwick, a real estate law firm with offices throughout the metropolitan
Atlanta area. Since joining the firm in 1991, Mr. Hardwick has been responsible
for every business aspect of the firm including bank accounts and escrow
reconciliation. As managing partner, he is currently in charge of the day-to-day
activities including overseeing the firm's eight offices. Through his firm, and
individually, Mr. Hardwick is active in various community, civic and charitable
activities.
MICHAEL S. HUG. Mr. Hug is a registered architect, and is currently the
managing partner of Zaic Hug & Associates, L.L.C., an architectural and interior
design firm located in Alpharetta, Georgia. From 1989 to 1992, Mr. Hug was an
associate architect with Culpepper, McAuliffe & Meaders, Inc. in Atlanta,
Georgia and from 1982 to 1989, he was an associate architect with Smallwood,
Reynolds, Stewart & Stewart, Inc. in Atlanta, Georgia. Throughout his career,
Mr. Hug has been actively involved in various community organizations. As part
of his community involvement, Mr. Hug has been a business partner for Manning
Oaks Elementary School, an assistant baseball coach in Atlanta and Alpharetta,
Georgia, a head soccer coach for YMCA-Buckhead and an assistant pack leader for
a local Cub Scout organization.
DEBORAH M. JANICKI. Ms. Janicki is senior vice president and co-owner of
Real Estate Financial Services, Roswell, Georgia, a mortgage lending company
with offices in metropolitan Atlanta, Georgia, metropolitan Charlotte, North
Carolina, and metropolitan Greenville, South Carolina. Ms. Janicki started Real
Estate Financial Services in 1995 with her husband, Gregory Janicki. Since 1986,
Ms. Janicki has also been president of Northern Suburban Brokers, Inc., a real
estate services firm in Alpharetta, Georgia. From 1992 to 1994, she was a vice
president for New Homes America of Georgia, and from 1986 to 1992, she was a
broker and owner of RE/MAX Northern Suburban. Ms. Janicki's community and
professional activities include the Georgia Association of Realtors, Georgia
Association of Mortgage Brokers, Student Venture of Atlanta, Atlanta Residential
Young Council of Realtors and RE/MAX of Georgia Broker/Owner's Council.
GREGORY A. JANICKI. Mr. Janicki is the president and co-owner of Real
Estate Financial Services, Roswell, Georgia, a mortgage lending company with
offices in metropolitan Atlanta, Georgia,
33
<PAGE>
metropolitan Charlotte, North Carolina, and metropolitan Greenville, South
Carolina. Mr. Janicki started Real Estate Financial Services in 1995 with his
wife, Deborah Janicki. From 1990 to 1994, Mr. Janicki was vice president and
co-owner of First Realty Mortgage Corporation, a mortgage broker located in
Roswell, Georgia. Before 1990, Mr. Janicki spent ten years with two major
corporations in various sales management and executive positions. Mr. Janicki is
author of the book LIFE MASTERY: THE ULTIMATE POWER OF RELATIONSHIPS, and he is
a motivational public speaker and trainer in the areas of sales and management.
Throughout his career, Mr. Janicki has been actively involved in community
activities, including the Student Venture of Atlanta and Georgia Association of
Mortgage Brokers. Mr. Janicki received a Bachelor of Science Degree in
Industrial Technology from the University of Wisconsin-Stout in 1973.
DONALD S. SHAPLEIGH, JR. Mr. Shapleigh is executive vice president of sales
for Directo, Inc., Norcross, Georgia. Directo is a financial services company
that offers direct deposit payroll services and related financial products to
individuals who do not have bank accounts. Mr. Shapleigh is also a member of the
board of directors of Net.B@nk and Net.B@nk, Inc. Before joining Directo in
1999, Mr. Shapleigh spent 27 years as a banker in the Atlanta market. From 1995
to 1999, he was president and chief operating officer of Net.B@nk in Atlanta;
from 1991 to 1994, he was an executive officer for SouthTrust Bank in Atlanta;
and from 1971 to 1991, he served as an executive officer for Bank South, N.A. in
Atlanta. Throughout his career, Mr. Shapleigh has remained active in community
affairs including the United Way, Dunwoody Country Club, Habitat for Humanity
and little league baseball.
RICHARD W. STIMSON. Mr. Stimson recently accepted a new position as vice
president of legal affairs for Nokia of the Americas with the Nokia Corporation.
He will begin his new position on May 1, 2000, and will be principally involved
in legal and governmental affairs for Nokia's mobile phone products. Prior to
accepting his new position with Nokia, and for the past 21 years, Mr. Stimson
has worked for the GTE Corporation, including serving as GTE's vice president
and deputy general counsel with worldwide responsibility for GTE's litigation
and antitrust matters and with executive oversight of GTE's wireless,
air-to-ground and telecommunications services legal activities. Additionally,
from 1981 to 1983, Mr. Stimson served as chief counsel to Commissioner Anthony
Sousa, Federal Energy Regulatory Commission, Washington, D.C., where he advised
on various national energy matters. Mr. Stimson is admitted to practice law in
Michigan, North Carolina, Indiana and Texas and has been an active participant
in the American Bar Association. Mr. Stimson is a member of Mt. Pisgah United
Methodist Church and has previously been active in the American Cancer Society,
the United Way, the Multiple Sclerosis Society and the Boy Scouts of America.
DANNY L. TESNEY. Mr. Tesney is a residential real estate salesman with
RE/MAX Professional in Suwanee, Georgia and vice president/treasurer and
co-owner of C. Tesney & Associates, Inc., a real estate sales firm also located
in Suwanee, Georgia. Mr. Tesney's charitable work benefits the Children's
Miracle Network and Cystic Fibrosis, and he is presently a member of the Atlanta
Chamber of Commerce.
JOEL P. WEINBACH. Mr. Weinbach is a partner in Silicon Stemcell, a business
incubator located in Columbia, South Carolina that develops technology-oriented
businesses. Presently he is involved with various startup technology companies,
and has invested in numerous companies with Atlanta operations. In addition,
Mr. Weinbach is president of Yieldstar.com, a yield-management expert system
delivered through the internet to the multifamily housing industry. He formerly
owned a technology consulting firm with over 300 employees and office locations
in North Carolina, South Carolina, Georgia, Texas and Alabama. He has worked
with numerous banks and credit unions as clients and he has been involved with
designing bank networks, communications systems and information technology
operating procedures. He is a former board member of Windward Technology, an
Atlanta-based systems integrator that was acquired by a public company.
Mr. Weinbach has been a member of the
34
<PAGE>
National Board of Advisors for The College of Math and Science and The College
of Social Work at the University of South Carolina since 1996.
R. WESLEY FULLER. Mr. Fuller is the chief financial officer and executive
vice president of Futurus Financial Services and the proposed chief financial
officer of Futurus Bank. Prior to joining us, Mr. Fuller served as a senior vice
president of Premier Bancshares and executive vice president of Premier Bank
where he was responsible for managing the operations functions of the bank.
During his tenure at Premier, from November 1997 to April 2000, Mr. Fuller was
instrumental in coordinating the combination of nine bank charters into a single
institution in less than 18 months while managing the operations of the bank as
it grew from approximately $300 million to approximately $2 billion in assets.
From January 1994 to October 1997, Mr. Fuller served as the first vice president
of Central and Southern Bank of Georgia where he managed the retail banking side
of three different branches, as well as directed the operations of Central and
Southern Bank. Prior to his experience at Central and Southern Bank, from 1983
to 1993, Mr. Fuller served in various capacities with Bank Corporation of
Georgia and its subsidiaries, First South Bank and Ameribank, including vice
president, controller, data processing manager and banking officer. Mr. Fuller
graduated from Georgia College in 1983 with a degree in accounting, and is a
1996 graduate of the BAI Graduate School of Banking.
SUZANNE T. PHIPPS. Ms. Phipps is the senior vice president of Futurus
Financial Services and the proposed chief credit officer and chief lending
officer of Futurus Bank. Ms. Phipps has approximately 12 years of credit and
lending experience. From August 1998 to February 2000, Ms. Phipps served as a
credit risk officer for Banc of America Specialty Finance, Inc., Alpharetta,
Georgia, an affiliate of Bank of America, where she assessed and monitored the
lending risk within a $1.5 billion commercial loan portfolio. As part of her
responsibilities as a credit risk officer, Ms. Phipps also helped establish
asset quality standards and recommended structural changes where needed to
ensure quality loan growth. Prior to joining Banc of America Specialty Finance,
Ms. Phipps served from August 1996 to August 1998 as a credit policy officer for
NationsCredit Distribution Finance, Inc., Atlanta, Georgia. In this capacity,
Ms. Phipps reviewed and approved requests for floor plan financing for a
$425 million loan portfolio, as well as audited field offices to verify credit
policies and loan documentation compliance. Additionally, from January 1996 to
August 1998, Ms. Phipps served as a relationship manager for NationsBank, and
from December 1993 to January 1996, as a commercial banking officer and a
corporate services manager with Bank South, Atlanta, Georgia. Ms. Phipps
received her bachelor's degree in business administration in 1987 from Georgia
State University.
BOARD COMMITTEES
Futurus Financial Services' board of directors has established the
committees described below. The members of each committee will be the same for
Futurus Bank as they are for Futurus Financial Services.
COMPENSATION COMMITTEE. The Compensation Committee establishes compensation
levels for officers of Futurus Financial Services and Futurus Bank, reviews
management organization and development, reviews significant benefit programs
and establishes and administers executive compensation programs, including our
stock incentive plan. The Compensation Committee is chaired by Richard W.
Stimson with Gregory A. Janicki, William M. Butler and Donald S. Shapleigh, Jr.
as members.
EXECUTIVE COMMITTEE. The Executive Committee is authorized, between
meetings of the board of directors, to perform all duties and exercise all
authority of the board except for those duties and authorities specifically
granted to other committees of the board or which are exclusively reserved to
the full board. The committee will make recommendations to the board regarding
matters that are important to the overall management and expansion of Futurus
Financial Services and Futurus Bank, including annual budgets and strategic
business plans. Additionally, this committee will be responsible
35
<PAGE>
for recommending nominations for expired board seats and additional board
members. The Executive Committee is chaired by Gregory A. Janicki with William
M. Butler, Richard W. Stimson and Donald S. Shapleigh, Jr. as members.
LOAN COMMITTEE. The Loan Committee will be responsible for establishing or
approving, in conjunction with management, all major policies and procedures
pertaining to loan policy, including:
- establishing the loan approval system;
- approving all loans in excess of a predetermined amount;
- reviewing all past due reports, rated loan reports, non-accrual reports
and other reports and indicators of overall loan portfolio quality;
- establishing measurements for adequacy of the loan loss reserve; and
- reviewing any other matters pertaining to the loan portfolio such as yield
and concentrations.
The Loan Committee is chaired by Donald S. Shapleigh, Jr. with Deborah M.
Janicki, Danny L. Tesney, William M. Butler and Michael S. Hug as members.
AUDIT, COMPLIANCE AND CRA COMMITTEE. The principal responsibilities of this
committee are to ensure that the board receives objective information regarding
policies, procedures and controls of Futurus Bank with respect to auditing,
accounting, internal accounting controls and financial reporting. The committee
will also work to ensure that Futurus Bank is in full compliance with applicable
laws and regulations. Among other things, this will require the following:
- recommending the appointment of an independent auditor on an annual basis;
- reviewing the independent auditors' report and management's response;
- reviewing all reports from regulatory authorities and management's
response;
- establishing independent reviews and audits;
- establishing appropriate levels of director and officer insurance and
blanket bond insurance coverage; and
- reviewing CRA compliance.
The Audit, Compliance and CRA Committee is chaired by Joel P. Weinbach with
Richard W. Stimson and Gregory A. Janicki as members.
ASSET/LIABILITY COMMITTEE. The Asset/Liability Committee will be
responsible for the overall investment strategy of Futurus Financial Services
and Futurus Bank. This will include liquidity management, risk management, net
interest margin management, monitoring deposit level trends and pricing,
monitoring asset level trends and pricing, and portfolio investment decisions.
The Asset/ Liability Committee is chaired by C. Parke Day with Joel P. Weinbach,
Danny L. Tesney and Nathan E. Hardwick, IV as members.
MARKETING COMMITTEE. It will be the duty of the Marketing Committee to seek
advice, support and commitment from the entire board of directors regarding the
development of safe and sound banking business through board members' contacts
within the community. We believe that a new bank's success depends on this
commitment, and members of this committee will regularly contact other board
members for their help in introducing high quality potential clients to Futurus
Bank. The Marketing Committee will also serve as a forum to determine the credit
needs of the community. The Marketing Committee is chaired by Gregory A. Janicki
with Michael S. Hug, Deborah M. Janicki, C. Parke Day, William M. Butler and
Nathan E. Hardwick, IV as members.
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<PAGE>
EXECUTIVE COMPENSATION
1999 COMPENSATION
The following table shows information for 1999 regarding compensation for
services rendered in all capacities to Futurus Financial Services by its
president and chief executive officer. No executive officer earned more than
$100,000 in salary and bonus in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
YEAR SALARY($) BONUS($) COMPENSATION($)
-------- --------- -------- ---------------
<S> <C> <C> <C> <C>
William M. Butler,............................... 1999(1) 48,047 0 0(2)
President and Chief Executive Officer
</TABLE>
- ------------------------
(1) Reflects the period of time from August 20, 1999 through December 31, 1999,
during which time Mr. Butler was classified as an independent contractor.
(2) We have omitted information on "perks" and other personal benefits because
the aggregate value of these items does not meet the minimum amount required
for disclosure under the Securities and Exchange Commission's regulations.
EMPLOYMENT AGREEMENTS
WILLIAM M. BUTLER. Effective August 20, 1999, Futurus Financial Services
and Futurus Bank entered into a three-year employment agreement with William M.
Butler regarding Mr. Butler's employment as our president and chief executive
officer. Under the terms of the agreement, Mr. Butler will receive a salary of
$120,000 per year, plus benefits, and may be entitled to receive annual bonus
compensation as awarded by the Compensation Committee based on Futurus Bank's
earnings. For Mr. Butler to be eligible for any annual performance bonuses,
Futurus Bank must first:
- receive a "satisfactory" or better rating by the OCC in its most current
OCC Report of Supervisory Activity with a Uniform Financial Institution
Rating of not less than "2";
- receive a classification rating of "adequately capitalized" or better, as
defined by OCC regulations;
- be in operation for more than one year; and
- become and remain profitable as of its most recent fiscal year-end.
Once eligible, Mr. Butler may receive an annual performance bonus in an amount
up to 25% of his base salary for meeting or exceeding the board of director's
annual plan for Futurus Bank. Furthermore, based on the same eligibility
criteria, Mr. Butler may receive a separate bonus in an amount equal to 15% of
Futurus Bank's pre-tax profits, up to 25% of his base salary.
Mr. Butler's agreement also provides that Futurus Financial Services will
grant Mr. Butler an incentive stock option to purchase 25,000 shares of our
common stock at an exercise price of $10.00 per share. Mr. Butler's option will
be issued under our stock incentive plan and will constitute 22.7% of the shares
reserved for issuance under the plan. Mr. Butler's option will generally become
exercisable in equal one-fifth annual increments over a five-year period
beginning on the one-year anniversary after this prospectus becomes effective.
At the end of the initial three-year term of Mr. Butler's agreement, and at
the end of each succeeding 12-month period, the agreement will be extended for
an additional 12-month period unless
37
<PAGE>
either of the parties to the agreement gives notice of his or its intent not to
extend the agreement. We will be obligated to pay Mr. Butler his base salary for
12 months if one of the following terminating events occurs:
- Mr. Butler becomes permanently disabled;
- Futurus Bank abandons its organizational efforts;
- Futurus Bank terminates Mr. Butler's employment without cause; or
- Mr. Butler terminates his employment for cause.
Additionally, upon a change of control of Futurus Financial Services,
Mr. Butler will be entitled to severance compensation in an amount equal to
12 months of his base salary if we or our successor terminates his employment
other than for cause. Cause for terminating employment is defined in the
agreement.
The agreement also generally provides that, for a period of 18 months
following the termination of Mr. Butler's employment, he will not compete with
Futurus Bank in the banking business nor solicit our clients nor the associates
employed by us. The non-competition and non-solicitation provisions of the
agreement only apply if Mr. Butler terminates his employment without cause or in
connection with a change of control, or if we terminate his employment with
cause.
R. WESLEY FULLER. We intend to enter into a three-year employment agreement
with R. Wesley Fuller regarding Mr. Fuller's employment as our chief financial
officer. Under the proposed terms of the agreement, Mr. Fuller will receive a
salary of $95,000 per year, plus benefits, and may be entitled to receive annual
bonus compensation as awarded by our compensation committee based on Futurus
Bank's earnings. Mr. Fuller's annual performance bonus would be contingent on
the same eligibility criteria discussed earlier for Mr. Butler. If the bonus
criteria are met, Mr. Fuller may receive up to 25% of his base salary in the
form of an annual bonus.
Mr. Fuller's proposed agreement also provides that Futurus Financial
Services will grant Mr. Fuller an incentive stock option to purchase 10,000
shares of our common stock at an exercise price of $10.00 per share. Mr. Fuller
may receive an additional stock option to purchase 5,000 shares of our common
stock if Futurus Bank meets or exceeds 110% of the board of directors' annual
plan for fiscal year 2001. Mr. Fuller's options, if granted, would be issued
under our stock incentive plan and may constitute up to 13.6% of the shares
reserved for issuance under the plan. Mr. Fuller's options would generally
become exercisable in equal one-fifth annual increments over a five-year period.
The proposed agreement also generally provides that, for a period of
18 months following the termination of Mr. Fuller's employment, he will not
compete with Futurus Bank in the banking business nor solicit our clients nor
the associates employed by us. The non-competition and non-solicitation
provisions of the proposed agreement would only apply if Mr. Fuller terminates
his employment without cause or in connection with a change of control, or if we
terminate his employment with cause.
The initial term of Mr. Fuller's proposed agreement is three years, and
would be renewable and terminable under the same conditions as stated earlier
for Mr. Butler's employment agreement.
SUZANNE T. PHIPPS. We intend to enter into a three-year employment
agreement with Suzanne T. Phipps regarding Ms. Phipps' employment as our chief
lending officer and chief credit officer. Under the terms of the proposed
agreement, Ms. Phipps will receive a salary of $77,000 per year, plus benefits,
and may be entitled to receive annual bonus compensation as awarded by our
compensation committee based on Futurus Bank's earnings. Ms. Phipps' annual
performance bonus would be contingent on the same eligibility criteria discussed
earlier for Mr. Butler. If the bonus criteria are met, Ms. Phipps may receive up
to 25% of her base salary in the form of an annual bonus.
38
<PAGE>
Ms. Phipps' proposed agreement also provides that Futurus Financial Services
will grant Ms. Phipps an incentive stock option to purchase 5,000 shares of our
common stock at an exercise price of $10.00 per share. Ms. Phipps may receive an
additional stock option to purchase 2,500 shares of our common stock if Futurus
Bank meets or exceeds 110% of the board of directors' annual plan for fiscal
year 2001. Ms. Phipps' options, if granted, would be issued under our stock
incentive plan and may constitute up to 6.8% of the shares reserved for issuance
under the plan. Ms. Phipps' options would generally become exercisable in equal
one-fifth annual increments over a five-year period.
The proposed agreement also generally provides that, for a period of
18 months following the termination of Ms. Phipps employment, she will not
compete with Futurus Bank in the banking business nor solicit our clients nor
the associates employed by us. The non-competition and non-solicitation
provisions of the proposed agreement would only apply if Ms. Phipps terminates
her employment without cause or in connection with a change of control, or if we
terminate her employment with cause.
The initial term of Ms. Phipps' proposed agreement is three years, and would
be renewable and terminable under the same conditions as stated earlier for
Mr. Butler's employment agreement.
DIRECTOR COMPENSATION
Our payment of director compensation will depend on various factors,
including our profitability. When deemed appropriate, we anticipate paying cash
director fees of $250 per board of directors meeting attended and $100 per
committee meeting attended. Prior to paying director compensation, we will adopt
director compensation policies that conform to applicable law.
ORGANIZERS' WARRANTS
The organizers intend to purchase a total of 205,000 shares of common stock
in the offering at a price of $10.00 per share. This represents 18.6% of the
shares that will be outstanding after the offering, or 16.2% if the
underwriter's over-allotment option is exercised in full.
Eight of our ten organizers have guaranteed a portion of the $700,000 line
of credit with The Bankers Bank, each in the amount of $131,250 or 150% of their
pro rata interest in the credit facility. In recognition of the efforts made and
financial risks undertaken by our organizers in organizing Futurus Financial
Services and Futurus Bank, we will issue to our organizers, at no cost to them,
warrants to purchase additional shares of our common stock at a price of $10.00
per share, subject to adjustment for stock splits, recapitalizations or other
similar events. If an organizer purchases 20,000 or more shares of common stock
in this offering, we will issue that organizer a warrant to purchase one share
of common stock for each share purchased. If an organizer purchases less than
20,000 shares, we will issue that organizer a warrant to purchase one share of
common stock for every two shares purchased. Our organizers may purchase up to
200,000 shares through the exercise of these warrants. The warrants will vest in
one-third annual increments over a period of three years beginning on the
one-year anniversary of the date of this prospectus. The warrants will remain
exercisable for the ten-year period following the date of this prospectus.
Additionally, if Futurus Bank's capital falls below the minimum level determined
by the Office of the Comptroller of the Currency, we may be directed to require
our organizers to exercise or forfeit their warrants.
STOCK INCENTIVE PLAN
GENERAL. Futurus Financial Services' 2000 Stock Incentive Plan provides us
with the flexibility to grant incentive stock options and non-qualified stock
options to our organizers, directors, executive officers and other individuals
employed by us for the purpose of giving them a proprietary interest in and
encouraging them to remain involved with Futurus Financial Services or Futurus
Bank. The board of directors has reserved 110,000 shares of common stock, an
amount equal to 10% of the shares of
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common stock expected to be sold in the offering, for issuance under the plan.
The number of shares reserved for issuance may be adjusted in the event of a
stock split, recapitalization or similar event as described in the plan.
Our executive officers will be issued stock option awards under the plan in
connection with the employment agreements that we have entered into with them.
See "Executive Compensation--Employment Agreements" on page 37.
ADMINISTRATION. The plan is administered by our Compensation Committee. The
committee members are appointed by the board of directors of Futurus Financial
Services, which considers the standards contained in both Section 162(m) of the
Internal Revenue Code and Rule 16(b)(3) under the Securities Exchange Act when
appointing members to the committee. The committee will have the authority to
grant awards under the plan, to determine the terms of each award, to interpret
the provisions of the plan and to make all other determinations that it may deem
necessary or advisable to administer the plan.
The plan permits the committee to grant stock options to eligible persons.
The committee may grant these options on an individual basis or design a program
providing for grants to a group of eligible persons. The committee determines,
within the limits of the plan, the number of shares of common stock subject to
an option, to whom an option is granted, the exercise price and forfeiture or
termination provisions of each option. Unless otherwise permitted by the
committee, a holder of a stock option generally may not transfer the option
during his or her lifetime.
OPTION TERMS. The plan provides for incentive stock options and
non-qualified stock options. The committee will determine whether an option is
an incentive stock option or a non-qualified stock option when it grants the
option, and the option will be evidenced by an agreement describing the material
terms of the option. The maximum number of shares of common stock with respect
to which options may be granted during any one-year period to any participant
may not exceed 75,000.
The committee determines the exercise price of an option. The exercise price
of an incentive stock option may not be less than the fair market value of the
common stock on the date of the grant, or less than 110% of the fair market
value if the participant owns more than 10% of the outstanding common stock of
Futurus Financial Services or its affiliates. When the incentive stock option is
exercised, Futurus Financial Services will be entitled to place a legend on the
certificates representing the shares of common stock purchased upon exercise of
the option to identify them as shares of common stock purchased upon the
exercise of an incentive stock option. The exercise price of non-qualified stock
options may not be less than 85% of the fair market value of the common stock on
the date that the option is awarded, based upon any reasonable measure of fair
market value. The committee may permit the exercise price to be paid in cash, by
the delivery of previously owned shares of common stock, through a cashless
exercise executed through a broker or by having a number of shares of common
stock otherwise issuable at the time of exercise withheld. The committee may
make cash awards designed to cover tax obligations of participants that result
from the receipt or exercise of a stock option.
The committee will also determine the term of an option, which may not
exceed ten years. Additionally, any incentive stock option granted to a
participant who owns more than 10% of the outstanding common stock of Futurus
Financial Services or its affiliates will not be exercisable more than five
years after the date the option is granted. Subject to any further limitations
in the applicable agreement, if a participant's employment is terminated, an
incentive stock option will expire and become unexercisable no later than three
months after the date of termination of employment. If, however, termination of
employment is due to death or disability, one year may be substituted for the
three-month period. Incentive stock options are also subject to the further
restriction that the aggregate fair market value, determined as of the date of
the grant, of common stock as to which any incentive stock option first becomes
exercisable in any calendar year is limited to $100,000 per recipient. If
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incentive stock options covering common stock with a value in excess of $100,000
first become exercisable in any one calendar year, the excess will be
non-qualified options. For purposes of determining which options, if any, have
been granted in excess of the $100,000 limit, options will be considered in the
order they were granted.
TERMINATION OF OPTIONS. The terms of particular options may provide that
they terminate, among other reasons, upon the holder's termination of employment
or other status with Futurus Financial Services or any affiliate, upon a
specified date, upon the holder's death or disability, or upon the occurrence of
a change in control of Futurus Financial Services or Futurus Bank. An agreement
may provide that if the holder dies or becomes disabled, the holder's estate or
personal representative may exercise the option. The committee may, within the
terms of the plan and the applicable agreement, cancel, accelerate, pay or
continue an option that would otherwise terminate for the reasons discussed
above.
CERTAIN REORGANIZATIONS. The plan provides for appropriate adjustment, as
determined by the committee, in the number and kind of shares and the exercise
price subject to unexercised options in the event of any change in the
outstanding shares of common stock by reason of any subdivision or combination
of shares, payment of a stock dividend or other increase or decrease in the
number of outstanding shares effected without the receipt of consideration. In
the event of certain corporate reorganizations, the committee may, within the
terms of the plan and the applicable agreement, substitute, cancel (with or
without consideration), accelerate, remove restrictions or otherwise adjust the
terms of an option.
AMENDMENT AND TERMINATION OF THE PLAN. The board of directors has the
authority to amend or terminate the plan. The board of directors is not required
to obtain shareholder approval to amend or terminate the plan, but may condition
any amendment or termination of the plan upon shareholder approval if it
determines that shareholder approval is necessary or appropriate under tax,
securities, or other laws. The board's action may not adversely affect the
rights of a holder of a stock option without the holder's consent.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion outlines
generally the federal income tax consequences of participation in the plan.
Individual circumstances may vary and each participant should rely on his or her
own tax counsel for advice regarding federal income tax treatment under the
plan.
- INCENTIVE STOCK OPTIONS. A participant who exercises an incentive stock
option will not be taxed when he or she exercises the option or a portion
of the option. Instead, the participant will be taxed when he or she sells
the shares of common stock purchased upon exercise of the incentive stock
option. The participant will be taxed on the difference between the price
he or she paid for the common stock and the amount for which he or she
sells the common stock. If the participant does not sell the shares of
common stock prior to two years from the date of grant of the incentive
stock option and one year from the date the common stock is transferred to
him or her, any gain will be a capital gain, and we will not be entitled
to a corresponding deduction. If the participant sells the shares of
common stock at a gain before that time, the difference between the amount
the participant paid for the common stock and the lesser of its fair
market value on the date of exercise or the amount for which the stock is
sold will be taxed as ordinary income and we will be entitled to a
corresponding deduction. If the participant sells the shares of common
stock for less than the amount he or she paid for the stock prior to the
one- or two-year period indicated, no amount will be taxed as ordinary
income, and the loss will be taxed as a capital loss. Exercise of an
incentive stock option may subject a participant to, or increase a
participant's liability for, the alternative minimum tax.
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- NON-QUALIFIED OPTIONS. A participant will not recognize income upon the
grant of a non-qualified option or at any time before the exercise of the
option or a portion of the option. When the participant exercises a
non-qualified option or portion of the option, he or she will recognize
compensation taxable as ordinary income in an amount equal to the excess
of the fair market value of the common stock on the date the option is
exercised over the price paid for the common stock, and Futurus Financial
Services will then be entitled to a corresponding deduction.
Depending upon the time period for which shares of common stock are held
after exercise of a non-qualified option, the sale or other taxable disposition
of shares acquired through the exercise of a non-qualified option generally will
result in a short- or long-term capital gain or loss equal to the difference
between the amount realized on the disposition and the fair market value of such
shares when the non-qualified option was exercised.
Special rules apply to a participant who exercises a non-qualified option by
paying the exercise price, in whole or in part, by the transfer of shares of
common stock to Futurus Financial Services and to a participant who is subject
to the reporting requirements of Section 16 of the Securities Exchange Act of
1934, as currently in effect.
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RELATED PARTY TRANSACTIONS
We expect to enter into banking and other business transactions in the
ordinary course of business with our directors and officers, including members
of their families and corporations, partnerships or other organizations in which
they have a controlling interest. If these transactions occur, each transaction
will:
- In the case of banking transactions, be on substantially the same terms,
including price or interest rate and collateral, as those prevailing at
the time for comparable transactions with unrelated parties, and any
banking transactions will not be expected to involve more than the normal
risk of collectibility or present other unfavorable features to Futurus
Bank;
- In the case of business transactions, be on terms no less favorable than
could be obtained from an unrelated third party; and
- In the case of all related party transactions, be approved by a majority
of the directors, including a majority of the directors who do not have an
interest in the transaction.
In addition to transactions in the ordinary course of our business, our
operations have been and will continue to be funded through a line of credit
from The Bankers Bank. On December 31, 1999, the total amount of our line of
credit was $500,000, of which $170,000 was outstanding. In February 2000, we
increase our line of credit to $700,000. The loan bears interest at 0.50% below
the prime rate, as printed in the Money Rates section of THE WALL STREET
JOURNAL, and is due on February 11, 2001. Eight of our ten organizers have
guaranteed a portion of the line of credit, each in the amount of $131,250. We
plan to repay the line of credit after the close of the offering.
We expect to have a referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two
members of our board of directors, Gregory A. Janicki and Deborah M. Janicki.
Currently, Real Estate Financial Services refers both commercial and consumer
business to various financial institutions. Our proposed referral relationship
with Real Estate Financial Services will satisfy the conditions above and will
be on terms comparable to those of Real Estate Financial Services' existing
relationships with other financial institutions.
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DESCRIPTION OF CAPITAL STOCK OF FUTURUS FINANCIAL SERVICES
COMMON STOCK
Our articles of incorporation authorize our board of directors, without
shareholder approval, to issue up to 10,000,000 shares of common stock, no par
value, of which at least 1,100,000 shares will be issued in this offering. As of
the date of this prospectus, 110,000 shares of our common stock, or an amount
equal to 10% of the shares of common stock offered in this prospectus, were
reserved for issuance under our stock incentive plan and 200,000 shares of our
common stock were reserved for issuance upon the exercise of the warrants to be
granted to our organizers.
All shares of our common stock will be entitled to share equally in
dividends from legally available funds, when, as and if declared by our board of
directors. We do not anticipate that we will pay any cash dividends on our
common stock in the near future. If we were to voluntarily or involuntarily
liquidate or dissolve, all shares of our common stock would be entitled to share
equally in all of our remaining assets available for distribution to our
shareholders. Each holder of common stock will be entitled to one vote for each
share on all matters submitted to the shareholders. Whenever we issue new shares
of capital stock, holders of our common stock will not have any right to acquire
authorized but unissued capital stock of Futurus Financial Services. No
cumulative voting, redemption, sinking fund or conversion rights or provisions
apply to our common stock. All shares of our common stock issued in the offering
as described in this prospectus will be fully paid and non-assessable.
PREFERRED STOCK
Our articles of incorporation also authorize our board of directors, without
shareholder approval, to issue up to 2,000,000 shares of preferred stock, no par
value. Our board of directors may determine the terms of the preferred stock.
Preferred stock may have voting rights, subject to applicable law and as
determined by our board of directors. Although we have neither issued nor have
any present plans to issue any preferred stock, the ownership and control of
Futurus Financial Services by the holders of our common stock would be diluted
if we were to issue preferred stock that had voting rights.
TRANSFER AGENT
The transfer agent and registrar for our common stock is SunTrust Bank,
Atlanta, Georgia.
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SELECTED PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS
PROTECTIVE PROVISIONS
GENERAL. Shareholders' rights and related matters are governed by the
Georgia Business Corporation Code and Futurus Financial Services' articles of
incorporation and bylaws. Futurus Financial Services' articles of incorporation
and bylaws contain protective provisions that would have the effect of impeding
an attempt to change or remove Futurus Financial Services' management or to gain
control of Futurus Financial Services in a transaction not supported by its
board of directors. These provisions are discussed in more detail below. In
general, one purpose of these provisions is to assist Futurus Financial
Services' board of directors in playing a role in connection with attempts to
acquire control of Futurus Financial Services. They allow the board of directors
to further and protect Futurus Financial Services' interests, and those of its
shareholders as appropriate under the circumstances, by enhancing the board's
ability to maximize the value to be received by the shareholders upon a sale.
Although Futurus Financial Services' management believes the protective
provisions are beneficial to Futurus Financial Services' shareholders, they also
may tend to discourage some takeover bids. As a result, Futurus Financial
Services' shareholders may be deprived of opportunities to sell some or all of
their shares at prices that represent a premium over prevailing market prices.
On the other hand, defeating undesirable acquisition offers can be a very
expensive and time-consuming process. To the extent that the protective
provisions discourage undesirable proposals, Futurus Financial Services may be
able to avoid those expenditures of time and money.
The protective provisions also may discourage open market purchases by a
potential acquirer. These purchases could increase the market price of the
common stock temporarily, enabling shareholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the provisions
could decrease the market price of the common stock by making the stock less
attractive to persons who invest in securities in anticipation of price
increases from potential acquisition attempts. The provisions also could make it
more difficult and time consuming for a potential acquirer to obtain control of
Futurus Financial Services by replacing its board of directors and management.
Furthermore, the provisions could make it more difficult for Futurus Financial
Services' shareholders to replace the board of directors or management, even if
a majority of the shareholders believes that replacing them would be in Futurus
Financial Services' best interests. As a result, the protective provisions could
tend to keep the incumbent board of directors and management in place.
Futurus Financial Services' articles of incorporation also contain a
provision that eliminates the potential personal liability of directors for
monetary damages in specific circumstances. In addition, Futurus Financial
Services' bylaws contain certain provisions that provide indemnification for our
directors, agents and the associates employed by us. The protective provisions
and the provisions relating to elimination of liability and indemnification of
directors, agents and our associates are discussed more fully below.
PREFERRED STOCK. The existence of preferred stock could impede a takeover
of Futurus Financial Services without the approval of our board of directors.
This is because the board of directors could issue shares of preferred stock to
persons friendly to current management, which could render more difficult or
discourage any attempt to gain control of Futurus Financial Services through a
proxy contest, tender offer, merger or otherwise. In addition, the issuance of
shares of preferred stock with voting rights may adversely affect the rights of
the holders of common stock and, in various circumstances, could decrease the
market price of the common stock.
STAGGERED TERMS FOR BOARD OF DIRECTORS. Futurus Financial Services' board
of directors is divided into three classes. Directors serve staggered terms,
which means that roughly one-third of the directors will be elected each year at
Futurus Financial Services' annual meeting of shareholders. The initial term
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of the Class I directors expires in 2001, the initial term of the Class II
directors expires in 2002 and the initial term of the Class III directors
expires in 2003. Thereafter, each director will serve for a term of three years.
This means that unless the existing directors were to resign, it would take at
least two annual meetings of Futurus Financial Services' shareholders to replace
a majority of its directors. Any amendment of this provision adopted by less
than two-thirds of the entire board of directors would require the affirmative
vote of the holders of at least two-thirds of the outstanding shares of common
stock; otherwise, the amendment would only require the affirmative vote of at
least a majority of the outstanding shares of common stock.
CHANGE IN NUMBER OF DIRECTORS. Futurus Financial Services' articles of
incorporation provides that any change in the number of directors, as set forth
in its bylaws, would have to be made by the affirmative vote of two-thirds of
the entire board of directors or by the affirmative vote of the holders of at
least two-thirds of the issued and outstanding shares of common stock.
REMOVAL OF DIRECTORS. Futurus Financial Services' articles of incorporation
provide that one or more directors may be removed for cause during their terms
only by the affirmative vote of the holders of a majority of the issued and
outstanding shares of common stock entitled to vote in an election of directors.
Directors may also be removed during their terms without cause only by the
affirmative vote of the holders of two-thirds of the issued and outstanding
shares of common stock entitled to vote in an election of directors. Any
amendment of this provision adopted by less than two-thirds of the entire board
of directors would require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of common stock; otherwise, the amendment
would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
SUPERMAJORITY VOTING ON SELECTED TRANSACTIONS. Futurus Financial Services'
articles of incorporation, with exceptions, require that any merger or similar
transaction involving Futurus Financial Services or any sale or other
disposition of all or substantially all of its assets will require the
affirmative vote of a majority of Futurus Financial Services' directors then in
office and the affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock. However, if Futurus Financial Services'
board of directors has approved the particular transaction by the affirmative
vote of two-thirds of the entire board, then the applicable provisions of
Georgia law would govern and shareholder approval of the transaction would
require only the affirmative vote of the holders of a majority of the
outstanding shares of common stock entitled to vote on the transaction. Any
amendment of this provision adopted by less than two-thirds of the entire board
of directors would require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of common stock; otherwise, the amendment
would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
LIMITATIONS ON SELECTED ACQUISITIONS OF VOTING SECURITIES. Under the Change
in Bank Control Act, a person who wishes to acquire (as defined) 10% or more of
a bank holding company's voting securities must file a notice with the Federal
Reserve 60 days prior to the acquisition to give the Federal Reserve an
opportunity to disapprove the proposed acquisition. During our first five years
of operations, our articles of incorporation provide that if a person is
required to file a notice with the Federal Reserve under the Change in Bank
Control Act, then the person must also file a notice with our board of directors
at the same time. Our board of directors also has 60 days to disapprove an
acquisition if it finds, in its sole discretion, that the acquisition would not
be in the best interests of Futurus Financial Services and its shareholders. In
determining what is in the best interests of Futurus Financial Services and its
shareholders, our board of directors is required to give due consideration to
all relevant factors, including the short- and long-term effects of the
acquisition on the associates employed by us, our clients, our shareholders and
our other constituents, and the impact of the acquisition, as perceived by our
board of directors, on its ability to effectively manage Futurus Financial
Services and achieve its strategic objectives. If our board of directors
disapproves the acquisition, which requires the affirmative
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vote of at least two-thirds of the directors then in office, and the acquisition
is nevertheless consummated, that portion of voting securities held by the
acquirer exceeding 10% of our outstanding voting securities will not be entitled
to any voting rights. This provision will cease to be effective on April 1,
2005. Any amendment of this provision adopted by less than two-thirds of the
entire board of directors will require the affirmative vote of the holders of at
least two-thirds of the outstanding shares of common stock; otherwise, the
amendment would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
EVALUATION OF AN ACQUISITION PROPOSAL. Futurus Financial Services' articles
of incorporation provide the factors that the board of directors must consider
in evaluating whether an acquisition proposal made by another party is in the
best interests of Futurus Financial Services and its shareholders. The term
"acquisition proposal" refers to any offer of another party to:
- Make a tender offer or exchange offer for the common stock or any other
equity security of Futurus Financial Services;
- Merge Futurus Financial Services with another corporation; or
- Purchase or otherwise acquire all or substantially all of the properties
and assets owned by Futurus Financial Services.
The board, in evaluating an acquisition proposal, is required to consider
all relevant factors, including:
- The expected social and economic effects of the transaction on the
associates employed by us, our clients and other constituents, such as our
suppliers of goods and services;
- The expected social and economic effects on the communities within which
we operate; and
- The payment being offered by the other corporation in relation to (a) our
current value at the time of the proposal as determined in a freely
negotiated transaction and (b) the board of directors' estimate of our
future value as an independent company at the time of the proposal.
We have included this provision in our articles of incorporation because
serving our community is one of the reasons we are organizing Futurus Bank. As a
result, the board believes its obligation in evaluating an acquisition proposal
extends beyond evaluating merely the payment being offered in relation to the
market or book value of the common stock at the time of the proposal.
While the value of what is being offered to shareholders in exchange for
their stock is the main factor when weighing the benefits of an acquisition
proposal, the board believes it is appropriate also to consider all other
relevant factors. For example, the board will evaluate what is being offered in
relation to the current value of Futurus Financial Services at the time of the
proposal as determined in a freely negotiated transaction and in relation to the
board's estimate of the future value of Futurus Financial Services as an
independent concern at the time of the proposal. A takeover bid often places the
target corporation virtually in the position of making a forced sale, sometimes
when the market price of its stock may be depressed. The board believes that
frequently the payment offered in such a situation, even though it may exceed
the value at which shares are then trading, is less than that which could be
obtained in a freely negotiated transaction. In a freely negotiated transaction,
management would have the opportunity to seek a suitable partner at a time of
its choosing and to negotiate for the most favorable price and terms that would
reflect not only Futurus Financial Services' current value, but also its future
value.
One effect of the provision requiring our board of directors to take into
account specific factors when considering an acquisition proposal may be to
discourage a tender offer in advance. Often an offeror consults the board of a
target corporation before or after beginning a tender offer in an attempt to
prevent a contest from developing. In our board's opinion, this provision will
strengthen its
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position in dealing with any potential offeror that might attempt to acquire
Futurus Financial Services through a hostile tender offer. Another effect of
this provision may be to dissuade shareholders who might be displeased with the
board's response to an acquisition proposal from engaging Futurus Financial
Services in costly litigation.
The articles of incorporation would not make an acquisition proposal
regarded by the board as being in Futurus Financial Services' best interests
more difficult to accomplish. It would, however, permit the board to determine
that an acquisition proposal was not in Futurus Financial Services' best
interests, and thus to oppose it, on the basis of the various factors that the
board deems relevant. In some cases, opposition by the board might have the
effect of maintaining incumbent management.
Any amendment of this provision adopted by less than two-thirds of the
entire board of directors would require the affirmative vote of the holders of
at least two-thirds of the outstanding shares of common stock; otherwise, the
amendment would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
INDEMNIFICATION
Futurus Financial Services' bylaws contain indemnification provisions that
provide that directors, officers, employed associates and agents of Futurus
Financial Services (collectively, the "insiders") will be indemnified against
expenses that they actually and reasonably incur if they are successful on the
merits of a claim or proceeding. In addition, the bylaws provide that Futurus
Financial Services will advance to its insiders reasonable expenses of any claim
or proceeding so long as the insider furnishes Futurus Financial Services with
(1) a written affirmation of his or her good faith belief that he or she has met
the applicable standard of conduct and (2) a written statement that he or she
will repay any advances if it is ultimately determined that he or she is not
entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately determined on
its merits, the indemnification provisions provide that Futurus Financial
Services will indemnify insiders when they meet the applicable standard of
conduct. The applicable standard of conduct is met if the insider acted in a
manner he or she in good faith believed to be in or not opposed to Futurus
Financial Services' best interests and, in the case of a criminal action or
proceeding, if the insider had no reasonable cause to believe his or her conduct
was unlawful. Futurus Financial Services' board of directors, its shareholders
or independent legal counsel determines whether the insider has met the
applicable standard of conduct in each specific case.
Futurus Financial Services' bylaws also provide that the indemnification
rights contained in the bylaws do not exclude other indemnification rights to
which an insider may be entitled under any bylaw, resolution or agreement,
either specifically or in general terms approved by the affirmative vote of the
holders of a majority of the shares entitled to vote. Futurus Financial Services
can also provide for greater indemnification than is provided for in the Bylaws
if it chooses to do so, subject to approval by its shareholders. Futurus
Financial Services may not, however, indemnify an insider for liability arising
out of circumstances that would cause the insider to remain liable for his or
her actions as described under "--Limitation of Liability" on page 49.
The indemnification provisions of the bylaws specifically provide that
Futurus Financial Services may purchase and maintain insurance on behalf of any
insider against any liability asserted against and incurred by him or her in his
or her capacity as a director, officer, employed associate or agent whether or
not Futurus Financial Services would have had the power to indemnify against
such liability.
Futurus Financial Services is not aware of any pending or threatened action,
suit or proceeding involving any of its insiders for which indemnification from
Futurus Financial Services may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Futurus
Financial Services under the foregoing provisions,
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or otherwise, Futurus Financial Services has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
LIMITATION OF LIABILITY
Futurus Financial Services' articles of incorporation eliminate, with
exceptions, the potential personal liability of a director for monetary damages
to Futurus Financial Services and to its shareholders for breach of a duty as a
director. There is no elimination of liability for:
- a breach of duty involving appropriation of a business opportunity of
Futurus Financial Services;
- an act or omission not in good faith or involving intentional misconduct
or a knowing violation of law;
- a transaction from which the director derives an improper material
tangible personal benefit; or
- any payment of a dividend or approval of a stock repurchase that is
illegal under the Georgia Business Corporation Code.
This provision does not eliminate or limit the right of Futurus Financial
Services or its shareholders to seek injunctive or other equitable relief not
involving monetary damages.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the offering, Futurus Financial Services will have
1,100,000 shares of common stock outstanding, or 1,265,000 if the underwriter
exercises its over-allotment option in full. These shares of common stock will
be freely tradable without restriction, except that "affiliates" of Futurus
Financial Services must comply with the resale limitations of Rule 144 under the
Securities Act. Rule 144 defines an "affiliate" of a company as a person who
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the company. Affiliates of a
company generally include its directors, officers and principal shareholders. A
total of 207,750 shares owned directly or indirectly by our affiliates will not
be available for sale for a period of 180 days after the date of this prospectus
without the underwriter's consent. After the 180-day period, the shares held by
our affiliates will be eligible for sale subject to the resale limitations of
Rule 144 discussed below.
In general, under Rule 144, affiliates will be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:
- 1% of the outstanding shares of common stock; or
- the average weekly trading volume during the four calendar weeks preceding
his or her sale.
Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about
Futurus Financial Services. Affiliates will not be subject to the volume
restrictions and other limitations under Rule 144 beginning 90 days after their
status as an affiliate terminates.
Even though Rule 144 would otherwise permit the sale of shares held by
affiliates beginning 90 days after the date of this prospectus, Futurus
Financial Services and the organizers have each agreed with the underwriter that
they will not sell, contract to sell, or otherwise dispose of any shares of
common stock or any securities convertible into or exchangeable for any shares
of common stock for a period of 180 days from the date of this prospectus
without the underwriter's prior written consent except in limited circumstances.
We intend to issue warrants to purchase up to a total of 200,000 shares of
common stock, representing an amount equal to 18.2% of the common stock sold in
the offering. We have also reserved 110,000 shares of common stock, representing
10.0% of the common stock sold in the offering, for issuance under our stock
incentive plan. Of the 110,000 shares reserved for our stock incentive plan, up
to 47,500 shares or 43.2% of the reserved shares will be awarded under the terms
of the employment agreements entered into with our executive officers. We intend
to register the shares issuable upon exercise of these warrants and options.
Upon registration, these shares will be eligible for resale in the public market
without restriction by persons who are not affiliates of Futurus Financial
Services, and to the extent they are held by affiliates, under Rule 144 without
a holding period.
Prior to the offering, there has been no public market for the common stock,
and we cannot predict the effect, if any, that the sale of shares or the
availability of shares for sale will have on the market price prevailing from
time to time. Nevertheless, sales of substantial amounts of common stock in the
public market could adversely affect prevailing market prices and our ability to
raise equity capital in the future.
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UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among
Futurus Financial Services and the underwriter named below, the underwriter has
agreed to purchase from Futurus Financial Services, and Futurus Financial
Services has agreed to sell to the underwriter, the number of shares of common
stock listed opposite the underwriter's name below.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF OVER-ALLOTMENT
FIRM SHARES SHARES
----------- --------------
<S> <C> <C>
Wachovia Securities, Inc.................................... 1,100,000 165,000
</TABLE>
The underwriting agreement provides that the underwriter's obligations are
subject to approval of certain legal matters by counsel and to various other
conditions customary in a firm commitment, underwritten public offering. The
underwriter is required to purchase and pay for the shares offered by this
prospectus other than those covered by the over-allotment option described
below.
The underwriting discount that will apply to shares purchased in this
offering by Futurus Financial Services' officers and directors, up to 330,000
shares, will equal 3.5% of the public offering price, or $.35 per share. The
underwriting discount that will apply to all other shares purchased in this
offering will equal 7.5% of the public offering price listed on the cover page
of this prospectus, or $.75 per share.
The underwriter proposes to offer the common stock directly to the public at
the public offering price listed on the cover page of this prospectus and to
securities dealers at that price less a concession not in excess of $ per
share. The underwriter may allow, and the selected dealers may reallow, a
concession not in excess of $ per share to other brokers and dealers. We expect
that the shares of common stock will be ready for delivery on or about
, 2000. After the offering, the offering price and other selling
terms may change.
The public offering price was determined arbitrarily by Futurus Financial
Services and the underwriter after considering several factors. These factors
include prevailing market conditions and the price of comparable publicly traded
companies.
Futurus Financial Services has granted the underwriter an option,
exercisable within 30 days after the date of this prospectus, to purchase up to
165,000 additional shares of common stock to cover over-allotments, if any, at
the public offering price listed on the cover page of this prospectus, less the
applicable 7.5% underwriting discount. The underwriter may purchase these shares
only to cover over-allotments made in connection with this offering.
In addition, Futurus Financial Services has granted to the underwriter a
right of first refusal to serve as exclusive or lead advisor on all corporate
finance transactions undertaken or considered by Futurus Financial Services for
a period of three years after the date of this prospectus.
The underwriter does not intend to sell shares of common stock to any
account over which it exercises discretionary authority.
Futurus Financial Services and each of our directors and executive officers
has agreed with the underwriter not to sell, contract to sell, or otherwise
dispose of any shares of common stock or any securities that can be converted
into or exchanged for shares of common stock for a period of 180 days from the
date of this prospectus without the underwriter's prior written consent, except
in limited circumstances. The underwriter and its affiliates may on occasion be
a client of, engage in transactions with, and perform services for Futurus
Financial Services or Futurus Bank in the ordinary course of business.
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Futurus Financial Services has agreed to indemnify the underwriter against
certain liabilities, including liabilities under the Securities Act of 1933, as
currently in effect, or to contribute to payments that the underwriter may be
required to make in connection with these liabilities.
In connection with this offering, the underwriter may purchase and sell
common stock in the open market. These transactions may include over-allotment
and stabilizing transactions, and purchases to cover syndicate short positions
created in connection with this offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the common stock, and syndicate short positions involve
the underwriter's sale of a greater number of shares of common stock than it is
required to purchase from Futurus Financial Services in the offering. These
activities may stabilize, maintain or otherwise affect the market price of the
common stock, which may be higher than the price that might otherwise prevail in
the open market. The underwriter may effect these transactions on the Nasdaq OTC
Bulletin Board or otherwise and may discontinue them at any time.
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SUPERVISION AND REGULATION
Both Futurus Financial Services and Futurus Bank will be subject to
extensive state and federal banking regulations that impose restrictions on and
provide for general regulatory oversight of our operations. These laws are
generally intended to protect depositors and not shareholders. The following
discussion describes the material elements of the regulatory framework that will
apply.
FUTURUS FINANCIAL SERVICES
Since Futurus Financial Services will own all of the capital stock of
Futurus Bank, it will be a bank holding company under the federal Bank Holding
Company Act of 1956. As a result, Futurus Financial Services will primarily be
subject to the supervision, examination, and reporting requirements of the Bank
Holding Company Act and the regulations of the Federal Reserve.
ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank
holding company to obtain the Federal Reserve's prior approval before:
- acquiring direct or indirect ownership or control of any voting shares of
any bank if, after the acquisition, the bank holding company will directly
or indirectly own or control more than 5% of the bank's voting shares;
- acquiring all or substantially all of the assets of any bank; or
- merging or consolidating with any other bank holding company.
Additionally, the Bank Holding Company Act provides that the Federal Reserve
may not approve any of these transactions if it would result in or tend to
create a monopoly or, substantially lessen competition or otherwise function as
a restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned and the convenience and needs
of the community to be served. The Federal Reserve's consideration of financial
resources generally focuses on capital adequacy, which is discussed below.
Under the Bank Holding Company Act, if adequately capitalized and adequately
managed, Futurus Financial Services or any other bank holding company located in
Georgia may purchase a bank located outside of Georgia. Conversely, an
adequately capitalized and adequately managed bank holding company located
outside of Georgia may purchase a bank located inside Georgia. In each case,
however, restrictions may be placed on the acquisition of a bank that has only
been in existence for a limited amount of time or will result in specified
concentrations of deposits. For example, Georgia law prohibits a bank holding
company from acquiring control of a financial institution until the target
financial institution has been incorporated for five years. As a result, no bank
holding company may acquire control of Futurus Financial Services until after
the fifth anniversary date of Futurus Bank's incorporation.
CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is rebuttably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:
- the bank holding company has registered securities under Section 12 of the
Securities Act of 1934, or
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- no other person owns a greater percentage of that class of voting
securities immediately after the transaction.
We intend to register our common stock under the Securities Exchange Act of
1934. The regulations provide a procedure for challenge of the rebuttable
control presumption.
PERMITTED ACTIVITIES. On November 12, 1999 President Clinton signed the
Gramm-Leach-Bliley Act, which amends the Bank Holding Company Act and greatly
expands the activities in which bank holding companies and affiliates of banks
are permitted to engage. The Act eliminates many federal and state law barriers
to affiliations among banks and securities firms, insurance companies, and other
financial service providers. The provisions of the Act relating to permitted
activities of bank holding companies and affiliates of banks became effective on
March 11, 2000. Since we do not intend to begin our operations until May 2000,
the following discussion describes the activities in which Futurus Financial
Services will be permitted to engage under the Bank Holding Company Act, as
amended by the Gramm-Leach-Bliley Act.
Generally, if Futurus Financial Services qualifies and elects to become a
financial holding company, which is described below, it may engage in activities
that are:
- financial in nature;
- incidental to a financial activity; or
- complementary to a financial activity and do not pose a substantial risk
to the safety or soundness of depository institutions or the financial
system generally.
In determining whether a particular activity is financial in nature or
incidental or complementary to a financial activity, the Federal Reserve must
consider (1) the purpose of the Bank Holding Company and Gramm-Leach-Bliley
Acts, (2) changes or reasonable expected changes in the marketplace in which
financial holding companies compete and in the technology for delivering
financial services, and (3) whether the activity is necessary or appropriate to
allow financial holding companies to effectively compete with other financial
service providers and to efficiently deliver information and services. The Act
expressly lists the following activities as financial in nature:
- lending, trust and other banking activities;
- insuring, guaranteeing, or indemnifying against loss or harm, or providing
and issuing annuities, and acting as principal, agent, or broker for these
purposes, in any state;
- providing financial, investment, or advisory services;
- issuing or selling instruments representing interests in pools of assets
permissible for a bank to hold directly;
- underwriting, dealing in or making a market in securities;
- other activities that the Federal Reserve may determine to be so closely
related to banking or managing or controlling banks as to be a proper
incident to managing or controlling banks;
- foreign activities permitted outside of the United States if the Federal
Reserve has determined them to be usual in connection with banking
operations abroad;
- merchant banking through securities or insurance affiliates; and
- insurance company portfolio investments.
To qualify to become a financial holding company, our depository institution
subsidiaries must be well capitalized and well managed and must have a Community
Reinvestment Act rating of at least "satisfactory." Additionally, we must file
an election with the Federal Reserve to become a financial
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holding company and provide the Federal Reserve with 30 days written notice
prior to engaging in a permitted financial activity. Although we do not have any
immediate plans to file an election with the Federal Reserve to become a
financial holding company, one of the primary reasons we selected the holding
company structure was to have increased flexibility. Accordingly, if deemed
appropriate in the future, we may elect to become a financial holding company.
Under the Bank Holding Company Act, a bank holding company, which has not
qualified or elected to become a financial holding company, is generally
prohibited from engaging in or acquiring direct or indirect control of more than
5% of the voting shares of any company engaged in nonbanking activities unless,
prior to the enactment of the Gramm-Leach-Bliley Act, the Federal Reserve found
those activities to be so closely related to banking as to be a proper incident
to the business of banking. Activities that the Federal Reserve has found to be
so closely related to banking as to be a proper incident to the business of
banking include:
- factoring accounts receivable;
- acquiring or servicing loans;
- leasing personal property;
- conducting discount securities brokerage activities;
- performing selected data processing services;
- acting as agent or broker in selling credit life insurance and other types
of insurance in connection with credit transactions; and
- performing selected insurance underwriting activities.
Despite prior approval, the Federal Reserve may order a bank holding company
or its subsidiaries to terminate any of these activities or to terminate its
ownership or control of any subsidiary when it has reasonable cause to believe
that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
any of its bank subsidiaries.
SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy, Futurus
Financial Services is expected to act as a source of financial strength for
Futurus Bank and to commit resources to support Futurus Bank. This support may
be required at times when, without this Federal Reserve policy, Futurus
Financial Services might not be inclined to provide it. In addition, any capital
loans made by Futurus Financial Services to Futurus Bank will be repaid only
after its deposits and various other obligations are repaid in full. In the
unlikely event of Futurus Financial Services' bankruptcy, any commitment by it
to a federal bank regulatory agency to maintain the capital of Futurus Bank will
be assumed by the bankruptcy trustee and entitled to a priority of payment.
FUTURUS BANK
Since Futurus Bank will be charted as a national bank, it will primarily be
subject to the supervision, examination and reporting requirements of the
National Bank Act and the regulations of the Office of the Comptroller of the
Currency. The Office of the Comptroller of the Currency will regularly examine
Futurus Bank's operations and has the authority to approve or disapprove
mergers, the establishment of branches and similar corporate actions. The Office
of the Comptroller of the Currency also has the power to prevent the continuance
or development of unsafe or unsound banking practices or other violations of
law. Additionally, Futurus Bank's deposits will be insured by the FDIC to the
maximum extent provided by law. Futurus Bank will also be subject to numerous
state and federal statutes and regulations that will affect its business,
activities and operations.
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BRANCHING. National banks are required by the National Bank Act to adhere
to branching laws applicable to state banks in the states in which they are
located. Under current Georgia law, Futurus Bank may open branch offices
throughout Georgia with the prior approval of the Office of the Comptroller of
the Currency and the Georgia Department of Banking and Finance. In addition,
with prior regulatory approval, Futurus Bank will be able to acquire branches of
existing banks located in Georgia. Futurus Bank and any other national or
state-chartered bank generally may branch across state lines by merging with
banks in other states if allowed by the applicable states' laws. Georgia law,
with limited exceptions, currently permits branching across state lines through
interstate mergers.
Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, Georgia has not opted-in to this provision.
Therefore, interstate merger is the only method through which a bank located
outside of Georgia may branch into Georgia. This provides a limited barrier of
entry into the Georgia banking market, which protects us from an important
segment of potential competition. However, because Georgia has elected not to
opt-in, our ability to establish a new start-up branch in another state may be
limited. Many states that have elected to opt-in have done so on a reciprocal
basis, meaning that an out-of-state bank may establish a new start-up branch
only if their home state has also elected to opt-in. Consequently, until Georgia
changes its election, the only way we will be able to branch into states that
have elected to opt-in on a reciprocal basis will be through interstate merger.
PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation
Improvement Act of 1991 establishes a system of prompt corrective action to
resolve the problems of undercapitalized financial institutions. Under this
system, the federal banking regulators have established five capital categories
(well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) in which all institutions are
placed. Federal banking regulators are required to take various mandatory
supervisory actions and are authorized to take other discretionary actions with
respect to institutions in the three undercapitalized categories. The severity
of the action depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking regulator must
appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to various limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets or the
amount required to meet regulatory capital requirements. An undercapitalized
institution is also generally prohibited from increasing its average total
assets, making acquisitions, establishing any branches or engaging in any new
line of business, except under an accepted capital restoration plan or with FDIC
approval. The regulations also establish procedures for downgrading an
institution and a lower capital category based on supervisory factors other than
capital.
FDIC INSURANCE ASSESSMENTS. The FDIC has adopted a risk-based assessment
system for insured depository institutions that takes into account the risks
attributable to different categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (1) well capitalized; (2) adequately capitalized; and
(3) undercapitalized. These three categories are substantially similar to the
prompt corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
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to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 2.08 cents per $100 of
deposits for the second quarter of 2000.
The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC.
COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods. These facts are also considered in evaluating
mergers, acquisitions, and applications to open a branch or facility. Failure to
adequately meet these criteria could impose additional requirements and
limitations on Futurus Bank. Under the Gramm-Leach-Bliley Act, banks with
aggregate assets of not more than $250 million will be subject to a Community
Reinvestment Act examination only once every 60 months if the bank receives an
outstanding rating, once every 48 months if it receives a satisfactory rating
and as needed if the rating is less than satisfactory. Additionally, banks will
be required to publicly disclose the terms of various Community Reinvestment
Act-related agreements.
OTHER REGULATIONS. Interest and other charges collected or contracted for
by Futurus Bank are subject to state usury laws and federal laws concerning
interest rates. Futurus Bank's loan operations are also subject to federal laws
applicable to credit transactions, such as:
- The federal Truth-In-Lending Act, governing disclosures of credit terms to
consumer borrowers;
- The Home Mortgage Disclosure Act of 1975, requiring financial institutions
to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligation to
help meet the housing needs of the community it serves;
- The Equal Credit Opportunity Act, prohibiting discrimination on the basis
of race, creed or other prohibited factors in extending credit;
- The Fair Credit Reporting Act of 1978, governing the use and provision of
information to credit reporting agencies;
- The Fair Debt Collection Act, governing the manner in which consumer debts
may be collected by collection agencies; and
- The rules and regulations of the various federal agencies charged with the
responsibility of implementing these federal laws.
The deposit operations of Futurus Bank are subject to:
- The Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes procedures
for complying with administrative subpoenas of financial records; and
- The Electronic Funds Transfer Act and Regulation E issued by the Federal
Reserve to implement that act, which govern automatic deposits to and
withdrawals from deposit accounts and customers' rights and liabilities
arising from the use of automated teller machines and other electronic
banking services.
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CAPITAL ADEQUACY
Futurus Financial Services and Futurus Bank will be required to comply with
the capital adequacy standards established by the Federal Reserve, in the case
of Futurus Financial Services, and the Office of the Comptroller of the
Currency, in the case of Futurus Bank. The Federal Reserve has established a
risk-based and a leverage measure of capital adequacy for bank holding
companies. Futurus Bank is also subject to risk-based and leverage capital
requirements adopted by the Office of the Comptroller of the Currency, which are
substantially similar to those adopted by the Federal Reserve for bank holding
companies.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance-sheet exposure, and to
minimize disincentives for holding liquid assets. Assets and
off-balance-sheet items, such as letters of credit and unfunded loan
commitments, are assigned to broad risk categories, each with appropriate risks
weights. The resulting capital ratios represent capital as a percentage of total
risk-weighted assets and off-balance-sheet items.
The minimum guideline for the ratio of total capital to risk-weighted assets
is 8%. Total capital consists of two components, Tier 1 Capital and Tier 2
Capital. Tier 1 Capital generally consist of common stock, minority interests in
the equity accounts of consolidated subsidiaries, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual preferred stock,
less goodwill and other specified intangible assets. Tier 1 Capital must equal
at least 4% of risk-weighted assets. Tier 2 Capital generally consists of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves. The total amount of Tier 2 Capital is limited to 100% of Tier 1
Capital.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. The guidelines also provide that bank holding companies experiencing
internal growth, as will be the case for Futurus Financial Services, or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels. Furthermore, the Federal Reserve has
indicated that it will consider a bank holding company's Tier 1 Capital leverage
ratio, after deducting all intangibles and other indicators of capital strength
in evaluating proposals for expansion or new activities.
We are also subject to capital guidelines issued by our respective primary
regulators, which provide for minimum ratios of total capital to total assets.
Failure to meet capital guidelines could subject a bank or bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and other restrictions on its business. As
described above, significant additional restrictions can be imposed on
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "--Futurus Bank--Prompt Corrective Action" on page 56.
PAYMENT OF DIVIDENDS
Futurus Financial Services is a legal entity separate and distinct from
Futurus Bank. The principal sources of Futurus Financial Services' cash flow,
including cash flow to pay dividends to its shareholders, are dividends that
Futurus Bank pays to its sole shareholder, Futurus Financial Services. Statutory
and regulatory limitations apply to Futurus Bank's payment of dividends to
Futurus Financial Services as well as to Futurus Financial Services' payment of
dividends to its shareholders.
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Futurus Bank is required by federal law to obtain the prior approval of the
Office of the Comptroller of the Currency for payments of dividends if the total
of all dividends declared by our board of directors in any year will exceed
(1) the total of Futurus Bank's net profits for that year, plus (2) Futurus
Bank's retained net profits of the preceding two years, less any required
transfers to surplus.
The payment of dividends by Futurus Financial Services and Futurus Bank may
also be affected by other factors, such as the requirement to maintain adequate
capital above regulatory guidelines. If, in the opinion of the Office of the
Comptroller of the Currency, Futurus Bank were engaged in or about to engage in
an unsafe or unsound practice, the Office of the Comptroller of the Currency
could require, after notice and a hearing, that Futurus Bank stop or refrain
engaging in the practice. The federal banking agencies have indicated that
paying dividends that deplete a depository institution's capital base to an
inadequate level would be an unsafe and unsound banking practice. Under the
Federal Deposit Insurance Corporation Improvement Act of 1991, a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings. See "--Futurus Bank--Prompt Corrective Action" on page 56.
RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES
Futurus Financial Services and Futurus Bank are subject to the provisions of
Section 23A of the Federal Reserve Act. Section 23A places limits on the amount
of:
- a bank's loans or extensions of credit to affiliates;
- a bank's investment in affiliates;
- assets a bank may purchase from affiliates, except for real and personal
property exempted by the Federal Reserve;
- the amount of loans or extensions of credit to third parties
collateralized by the securities or obligations of affiliates; and
- a bank's guarantee, acceptance or letter of credit issued on behalf of an
affiliate.
The total amount of the above transactions is limited in amount, as to any
one affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus. In addition to the limitation
on the amount of these transactions, each of the above transactions must also
meet specified collateral requirements. Futurus Bank must also comply with other
provisions designed to avoid the taking of low-quality assets.
Futurus Financial Services and Futurus Bank are also subject to the
provisions of Section 23B of the Federal Reserve Act which, among other things,
prohibits an institution from engaging in the above transactions with affiliates
unless the transactions are on terms substantially the same, or at least as
favorable to the institution or its subsidiaries, as those prevailing at the
time for comparable transactions with nonaffiliated companies.
Futurus Bank is also subject to restrictions on extensions of credit to its
executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with third parties, and (2) must not involve more
than the normal risk of repayment or present other unfavorable features.
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PRIVACY
Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing personal financial information with
nonaffiliated third parties except for third parties that market the
institutions' own products and services. Additionally, financial institutions
generally may not disclose consumer account numbers to any nonaffiliated third
party for use in telemarketing, direct mail marketing or other marketing through
electronic mail to consumers.
PROPOSED LEGISLATION AND REGULATORY ACTION
New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. We cannot predict whether
or in what form any proposed regulation or statute will be adopted or the extent
to which our business may be affected by any new regulation or statute.
EFFECT OF GOVERNMENTAL MONETARY POLICES
Our earnings are affected by domestic economic conditions and the monetary
and fiscal policies of the United States government and its agencies. The
Federal Reserve's monetary policies have had, and are likely to continue to
have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb inflation or combat a recession. The monetary policies of the Federal
Reserve affect the levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of the discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject. We cannot predict the nature or
impact of future changes in monetary and fiscal policies.
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LEGAL MATTERS
Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia will pass upon the
validity of the shares of common stock offered by this prospectus for Futurus
Financial Services. Smith Helms Mulliss & Moore, LLP, Charlotte, North Carolina
is acting as counsel for the underwriter in connection with legal matters
relating to the shares of common stock offered by this prospectus.
EXPERTS
Futurus Financial Services' audited financial statements at December 31,
1999, and for the period from August 12, 1999 through December 31, 1999,
included in this prospectus have been included in reliance on the report of
Porter Keadle Moore, LLP, independent certified public accountants, given on the
authority of that firm as experts in accounting and auditing.
REPORTS TO SHAREHOLDERS
Upon the effective date of the Registration Statement on Form SB-2 that
registers the shares of common stock offered by this prospectus with the
Securities and Exchange Commission, Futurus Financial Services will be subject
to the reporting requirements of the Securities Exchange Act, which include
requirements to file annual reports on Form 10-KSB and quarterly reports on
Form 10-QSB with the Securities and Exchange Commission. This reporting
obligation will exist for at least one year and will continue for successive
fiscal years, except that these reporting obligations may be suspended for any
subsequent fiscal year if at the beginning of such year the common stock is held
of record by less than 300 persons.
At any time that Futurus Financial Services is not a reporting company, it
will furnish its shareholders with annual reports containing audited financial
information for each fiscal year on or before the date of the annual meeting of
shareholders as required by Rule 80-6-1-.05 of the Georgia Department of Banking
and Finance. Futurus Financial Services' fiscal year ends on December 31.
Additionally, Futurus Financial Services will also furnish such other reports as
it may determine to be appropriate or as otherwise may be required by law.
ADDITIONAL INFORMATION
Futurus Financial Services has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 under the Securities Act with
respect to the shares of common stock offered by this prospectus. This
prospectus does not contain all of the information contained in the Registration
Statement. For further information with respect to Futurus Financial Services
and the common stock, we refer you to the Registration Statement and the
exhibits to it. The Registration Statement may be examined and copied at the
public reference facilities maintained by the Securities and Exchange Commission
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the regional offices of the Securities and Exchange Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, 13th Floor, New York, New York 10048.
You may read and copy our registration statement, and any other materials filed
by us with the Securities and Exchange Commission, at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may also obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. The Securities and Exchange
Commission also maintains a Web site (http://www.sec.gov) that contains
registration statements, reports, proxy and information statements and other
information regarding registrants, such as Futurus Financial Services, that file
electronically with the Securities and Exchange Commission.
Futurus Financial Services and the organizers have filed various
applications with the FDIC, the Federal Reserve, the Georgia Department of
Banking and Finance and the Office of the Comptroller
61
<PAGE>
of the Currency. These applications and the information they contain are not
incorporated into this prospectus. You should rely only on information contained
in this prospectus and in the related Registration Statement in making an
investment decision. To the extent that other available information not
presented in this prospectus, including information available from Futurus
Financial Services and information in public files and records maintained by the
FDIC, the Federal Reserve, the Georgia Department of Banking and Finance and the
Office of the Comptroller of the Currency, is inconsistent with information
presented in this prospectus or provides additional information, that
information is superseded by the information presented in this prospectus and
should not be relied on. Projections appearing in the applications are based on
assumptions that the organizers believe are reasonable, but as to which they can
make no assurances. Futurus Financial Services specifically disaffirms those
projections for purposes of this prospectus and cautions you against relying on
them for purposes of making an investment decision.
62
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Certified Public Accountants.......... F-2
Balance Sheet as of December 31, 1999....................... F-3
Statement of Operations for the Period from August 12, 1999
(inception)
to December 31, 1999...................................... F-4
Statement of Changes in Stockholders' Deficit for the Period
from August 12, 1999
(inception) to December 31, 1999.......................... F-5
Statement of Cash Flows for the Period from August 12, 1999
(inception)
to December 31, 1999...................................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Futurus Financial Services, Inc.
We have audited the accompanying balance sheet of Futurus Financial
Services, Inc. (a development stage corporation) as of December 31, 1999, and
the related statements of operations, changes in stockholder's deficit and cash
flows for the period from August 12, 1999 (inception) to December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Futurus Financial
Services, Inc. as of December 31, 1999 and the results of its operations and its
cash flows from August 12, 1999 (inception) to December 31, 1999 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Futurus Financial Services, Inc. will continue as a going concern. As discussed
in note 1 to the financial statements, the Company is in the organization stage
and has not commenced operations. Also, as discussed in note 3, the Company's
future operations are dependent on obtaining capital through an initial stock
offering and obtaining the necessary final regulatory approvals. These factors
and the expense associated with development of a new banking institution raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in note 3. The
financial statements do not include any adjustments relating to the
recoverability of reported asset amounts or the amount of liabilities that might
result from the outcome of this uncertainty.
/s/ PORTER KEADLE MOORE, LLP
Atlanta, Georgia
January 4, 2000
F-2
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 6,559
Other assets................................................ 15,595
---------
$ 22,154
=========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Accounts payable and accrued expenses....................... $ 35,710
Note payable--line of credit................................ 170,000
---------
Total liabilities..................................... 205,710
---------
Stockholder's deficit:
Preferred stock, no par value, 2,000,000 shares
authorized;
no shares issued or outstanding......................... --
Common stock, no par value, 10,000,000 shares authorized;
1 share issued and outstanding.......................... 10
Deficit accumulated during the development stage.......... (183,566)
---------
Total stockholder's deficit........................... (183,556)
---------
$ 22,154
=========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Expenses:
Legal and consulting...................................... $ 90,795
Officer compensation...................................... 48,047
Regulatory fees........................................... 15,000
Other operating........................................... 29,724
--------
Net loss.............................................. $183,566
========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE
PREFERRED COMMON DEVELOPMENT
STOCK STOCK STAGE TOTAL
--------- -------- ----------- --------
<S> <C> <C> <C> <C>
Issuance of common stock to organizer.............. $ -- 10 -- 10
Net loss........................................... -- -- (183,566) (183,566)
-------- -------- -------- --------
Balance, December 31, 1999......................... $ -- 10 (183,566) (183,556)
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $ (183,566)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other assets................................ (15,595)
Increase in accounts payable and accrued expenses....... 35,710
----------
Net cash used in operating activities................. (163,451)
----------
Cash flows from financing activities:
Sale of organization share of common stock................ 10
Proceeds from note payable................................ 170,000
----------
Net cash provided by financing activities............. 170,010
----------
Net increase in cash........................................ 6,559
Cash at beginning of period................................. --
----------
Cash at end of period....................................... $ 6,559
==========
Supplemental disclosure of cash flow information:
Cash paid for interest...................................... $ 1,249
==========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Futurus Financial Services, Inc. (the Company) was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire 100%
of the outstanding common stock of Futurus Bank, N.A. (the Bank) (Proposed),
which will operate in northern Fulton county in the metropolitan Atlanta,
Georgia area. The organizers of the Bank filed a joint application to charter
the Bank with the Office of the Comptroller of Currency and the Federal Deposit
Insurance Corporation on October 15, 1999. Provided that the application is
timely approved and necessary capital is raised, it is expected that operations
will commence in the second quarter of 2000.
Operations through December 31, 1999 relate primarily to expenditures by the
organizers for incorporating and organizing the Company. All expenditures by the
organizers are considered expenditures of the Company.
The Company plans to raise approximately $11,000,000 through an offering of
its common stock at $10 per share, of which $8,500,000 will be used to
capitalize the Bank. The organizers and directors expect to subscribe for a
minimum of approximately $1,900,000 of the Company's stock.
In connection with the Company's formation and initial offering, warrants to
purchase shares of common stock at $10.00 per share will be issued to the
organizing stockholders. Organizing stockholders who purchase 20,000 or more
shares of common stock in the initial offering will receive warrants to purchase
one share of common stock for each share they purchase. Organizing stockholders
who purchase less than 20,000 shares in the initial offering will receive
warrants to purchase one share of common stock for every two shares they
purchase. The warrants are exercisable on each of the three succeeding
anniversaries of the date of opening of the Bank at the initial offering price
of $10.00 per share and expire ten years after the date of grant. The Company
also intends to reserve 110,000 shares for the issuance of options under an
employee incentive stock option plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank (consisting
principally of legal, accounting, consulting and incorporation fees) are being
expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of direct,
incremental costs of the offering, are being deferred and will be offset against
the proceeds of the stock sale as a charge to additional paid in capital.
PRE-OPENING EXPENSES
Costs incurred for overhead and other operating expenses are included in the
current period's operating results.
PROFORMA NET LOSS PER COMMON SHARE
Proforma net loss per common share is calculated by dividing net loss by the
minimum number of common shares (1,100,000), which would be outstanding should
the offering be successful, as prescribed
F-7
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
in Staff Accounting Bulletin Topic 1:B. The proforma net loss per share for the
period ended December 31, 1999 was $.17 per share.
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $183,566 for the period from August 12,
1999 (inception) to December 31, 1999. At December 31, 1999, liabilities
exceeded assets by $183,556.
At December 31, 1999, the Company is funded by a line of credit from a bank.
Management believes that the current level of expenditures is well within the
financial capabilities of the organizers and adequate to meet existing
obligations and fund current operations, but obtaining final regulatory
approvals and commencing banking operations is dependent on successfully
completing the stock offering.
To provide permanent funding for its operation, the Company is currently
offering 1,100,000 shares of its no par value common stock at $10 per share in
an initial public offering. Costs related to the organization and registration
of the Company's common stock will be paid from the gross proceeds of the
offering. The share issued, which is outstanding at December 31, 1999, will be
redeemed concurrently with the consummation of the offering.
(4) LINE OF CREDIT
Organization, offering and pre-opening costs incurred prior to the opening
for business will be funded under a $500,000 line of credit. The terms of the
existing line of credit, which is guaranteed by most of the organizers, include
a maturity of August 23, 2000 and interest, payable quarterly, calculated at
one-half percent below the prime interest rate.
(5) PREFERRED STOCK
Shares of preferred stock may be issued from time to time in one or more
series as established by resolution of the Board of Directors of the Company.
Each resolution shall include the number of shares issued, preferences, special
rights and limitations as determined by the Board.
(6) COMMITMENTS
The Company has entered into an employment agreement with its President and
Chief Executive Officer, providing for an initial term of three years commencing
August 20, 1999. The agreement provides for a base salary, an incentive bonus
based on the Company's performance, stock options, and other perquisites
commensurate with his employment.
The Company has entered into an agreement whereby it will receive marketing
services including logo development, branch design consultation and introductory
collateral. The Company has committed to pay a total of $50,000 for these
services, of which $20,000 has been paid as of December 31, 1999.
The Company has entered into an operating lease agreement for its temporary
corporate office. The lease agreement expires on August 31, 2000 and requires
minimum payments totaling $8,440 in 2000.
F-8
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(6) COMMITMENTS (CONTINUED)
In connection with its proposed issuance of common stock as described in
note 1, the Company plans to enter into an underwriting agreement with an
investment banker. The estimated fee to be paid to the investment banker upon
successful completion of the offering is $749,000.
(7) INCOME TAXES
The following summarizes the sources and expected tax consequences of future
taxable deductions which comprise the net deferred taxes at December 31, 1999:
<TABLE>
<S> <C>
Deferred tax assets:
Pre-opening expenses...................................... $ 68,809
Operating loss carryforwards.............................. 873
--------
Total gross deferred tax assets........................... 69,682
Less valuation allowance.................................. (69,682)
--------
Net deferred taxes........................................ $ --
========
</TABLE>
The future tax consequences of the differences between the financial
reporting and tax basis of the Company's assets and liabilities resulted in a
net deferred tax asset. A valuation allowance was established for the net
deferred tax asset, as the realization of these deferred tax assets is dependent
on future taxable income.
F-9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NO ONE HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS
NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Summary................................ 3
Risk Factors........................... 7
Caution Regarding Forward-Looking
Statements........................... 13
Use of Proceeds........................ 14
Capitalization......................... 16
Dividends.............................. 17
Management's Discussion and Analysis of
Financial Condition and Plan of
Operations........................... 18
Proposed Business of Futurus Financial
Services and Futurus Bank.............. 21
Management............................. 31
Executive Compensation................. 37
Related Party Transactions............. 43
Description of Capital Stock of Futurus
Financial Services................... 44
Selected Provisions of the Articles of
Incorporation and Bylaws............. 45
Shares Eligible for Future Sale........ 50
Underwriting........................... 51
Supervision and Regulation............. 53
Legal Matters.......................... 61
Experts................................ 61
Reports to Shareholders................ 61
Additional Information................. 61
Index to Financial Statements.......... F-1
</TABLE>
UNTIL 2000 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
1,100,000 SHARES
FUTURUS FINANCIAL
SERVICES, INC.
A PROPOSED BANK HOLDING COMPANY FOR
[LOGO]
FUTURUS BANK, N.A.
(IN ORGANIZATION)
COMMON STOCK
---------------------
PROSPECTUS
---------------------
WACHOVIA SECURITIES, INC.
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's bylaws provide that the Registrant shall have the power to
indemnify its directors, officers, employees and agents against expenses
(including attorneys' fees) and liabilities arising from actual or threatened
actions, suits or proceedings, whether or not settled, to which they become
subject by reason of having served in such role if such director, officer,
employee or agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to a criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Advances against expenses shall be made
so long as the person seeking indemnification agrees to refund the advances if
it is ultimately determined that he or she is not entitled to indemnification. A
determination of whether indemnification of a director, officer, employee or
agent is proper because he or she met the applicable standard of conduct shall
be made (1) by the board of directors of the Registrant, (2) in certain
circumstances, by independent legal counsel in a written opinion or (3) by the
affirmative vote of a majority of the shares entitled to vote, but shares owned
by or are under voting control of directors who are at the time parties to the
proceeding may not vote on the determination.
In addition, the Registrant's articles of incorporation, subject to
exceptions, eliminates the potential personal liability of a director for
monetary damages to the Registrant and to the shareholders of the Registrant for
breach of a duty as a director. There is no release of liability for (1) a
breach of duty involving appropriation of a business opportunity of the
Registrant, (2) an act or omission involving intentional misconduct or a knowing
violation of law, (3) a transaction from which the director derives an improper
material tangible personal benefit or (4) as to any payment of a dividend or
approval of a stock repurchase that is illegal under the Georgia Business
Corporation Code. The articles of incorporation do not eliminate or limit the
right of the Registrant or its shareholders to seek injunctive or other
equitable relief not involving monetary damages.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses, other than underwriting discounts and commissions,
of the sale of the Registrant's common stock, no par value, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee ....... $ 3,829
National Association of Securities Dealers, Inc. Filing Fee 1,950
Blue Sky Fees and Expenses ................................ 10,000
Legal Fees and Expenses ................................... 75,000
Accounting Fees and Expenses .............................. 2,500
Printing and Engraving Expenses ........................... 40,000
Miscellaneous ............................................. 1,721
--------
Total ............................................... $135,000
========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On December 31, 1999, the Registrant issued to Gregory A. Janicki, in a
private placement, one share of the Registrant's Common Stock, no par value, for
an aggregate price of $10.00 in connection with the organization of the Company.
The sale to Mr. Janicki was exempt from registration under the Securities Act
pursuant to Section 4(2) of the Act because it was a transaction by an issuer
that did not involve a public offering.
II-1
<PAGE>
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
1.1 Underwriting Agreement
3.1 Articles of Incorporation, as amended and restated
3.2 Bylaws*
4.1 Specimen Common Stock Certificate
4.2 See Exhibits 3.1 and 3.2 for provisions of the Articles of
Incorporation and Bylaws defining rights of holders of the
Common Stock
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy LLP
10.1 Lease Agreement by and between Futurus Financial Services,
Inc. and Pioneer Real Estate Development, Inc. dated March 9,
2000 and entered into on March 14, 2000 (permanent facility)
10.2 Lease Agreement by and between Futurus Financial Services,
Inc. and Daniel B. Cawart d/b/a Alpharetta Square Shopping
Center dated February 15, 2000 (temporary facility)
10.3 Promissory Note dated August 23, 1999 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.4 Form of Futurus Financial Services, Inc. Organizers' Warrant
Agreement*
10.5 Futurus Financial Services, Inc. 2000 Stock Incentive Plan*
10.6 Project Development and Construction Agreement dated September
28, 1999 and accepted October 2, 1999 by and between Futurus
Financial Services, Inc. and KDA Financial, Inc.*
10.7 Project Agreement dated November 30, 1999 by and between
Futurus Financial Services, Inc. and The Compass Group d/b/a
Stern Marketing Group*
10.8 Amended and Restated Employment Agreement dated as of August
20, 2000 by and between Futurus Bank, N.A. (In Organization),
Futurus Financial Services, Inc. and William M. Butler
10.9 Form of Employment Agreement by and between Futurus Bank, N.A.
(In Organization), Futurus Financial Services, Inc. and R.
Wesley Fuller
10.10 Form of Employment Agreement by and between Futurus Bank, N.A.
(In Organization), Futurus Financial Services, Inc. and
Suzanne T. Phipps
10.11 Promissory Note dated February 11, 2000 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty
10.12 Letter of Agreement dated March 14, 2000 by and between
Futurus Financial Services, Inc. and KDA Financial, Inc.
10.13 Project Agreement dated March 10, 2000 by and between Futurus
Financial Services, Inc. and The Compass Group d/b/a Stern
Marketing Group
23.1 Consent of Porter Keadle Moore, LLP dated February 7, 2000*
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained
in Exhibit 5.1)
23.3 Consent of Porter Keadle Moore, LLP dated April 6, 2000
24.1 Power of Attorney*
27.1 Financial Data Schedule (for SEC use only)*
- ---------------
* Previously filed.
II-2
<PAGE>
ITEM 28. UNDERTAKINGS.
The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes as follows:
(a) (1) To file, during any period in which it offers or
sells securities, a post-effective amendment to this
Registration Statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or
events which, individually or together,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in
the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and
price represent no more than a 20% change in
the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement;
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new
registration statement of the securities offered, and
the offering of the securities at that time to be the
initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities being registered
that remain unsold at the end of the offering.
The Registrant hereby undertakes as follows:
(b) (1) For determining any liability under the Securities
Act, to treat the information omitted from the form
of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant
under Rule 424(b)(1), or (4) or 497(h) under the
Securities Act as part of this Registration
Statement as of the time the Commission declared
it effective.
(2) For determining any liability under the Securities
Act, to treat each post-effective amendment that
contains a form of prospectus as a new registration
statement for the securities offered in the
Registration Statement, and that offering of the
securities at that time as the initial bona fide
offering of those securities.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form SB-2 and authorized this
Registration Statement Amendment to be signed on its behalf by the undersigned
in the City of Alpharetta, State of Georgia, on April 6, 2000.
FUTURUS FINANCIAL SERVICES, INC.
By: /S/ WILLIAM M. BUTLER
---------------------------
William M. Butler
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
President and Chief Executive
/s/ William M. Butler Officer, Director* April 6, 2000
- ------------------------------------------------
William M. Butler
/s/ C. Parke Day+ Secretary, Director April 6, 2000
- ------------------------------------------------
C. Parke Day
/s/ Nathan E. Hardwick, IV+ Director April 6, 2000
- ------------------------------------------------
Nathan E. Hardwick, IV
/s/ Michael S. Hug+ Director April 6, 2000
- ------------------------------------------------
Michael S. Hug
/s/ Deborah M. Janicki+ Director April 6, 2000
- ------------------------------------------------
Deborah M. Janicki
Chairman of the Board of
/s/ Gregory A. Janicki+ Directors April 6, 2000
- ------------------------------------------------
Gregory A. Janicki
/s/ Donald S. Shapleigh, Jr. + Director April 6, 2000
- ------------------------------------------------
Donald S. Shapleigh, Jr.
/s/ Richard W. Stimson+ Director April 6, 2000
- ------------------------------------------------
Richard W. Stimson
Treasurer, Director
- ------------------------------------------------
Danny L. Tesney
/s/ Joel P. Weinbach+ Director April 6, 2000
- ------------------------------------------------
Joel P. Weinbach
* Principal executive, financial and accounting officer.
+ By: /S/ WILLIAM M. BUTLER
- ------------------------------------------------
William M. Butler
Attorney-in-fact
</TABLE>
II-4
<PAGE>
Exhibit 1.1
FUTURUS FINANCIAL SERVICES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________________, 2000
WACHOVIA SECURITIES, INC.
As representative of the several
Underwriters named in Schedule I hereto,
c/o Wachovia Securities, Inc.
IJL Financial Center
201 North Tryon Street
Charlotte, North Carolina 28202
Ladies and Gentlemen:
Futurus Financial Services, Inc., a Georgia corporation (the "Company")
and proposed holding company for Futurus Bank, N.A., a national banking
association (the "Bank"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 1,100,000 shares of common stock, no par value
(the "Common Stock"), of the Company (the "Firm Shares"), and, at the election
of the Underwriters, subject to the terms and conditions stated herein, to sell
to the Underwriters up to 165,000 additional shares of Common Stock (the
"Optional Shares") solely to cover overallotments, if any (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 hereof are collectively called the "Shares").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with each of the Underwriters
that:
(a) A registration statement on Form SB-2
(File No. 333-_____) with respect to the Shares, has been filed by the
Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act").
The registration statement and any amendments thereto, including any
post-effective amendments, have been declared effective by the
Commission in such form and copies of each of those items have been
delivered by the Company to you. No other document with respect to the
registration statement or any post effective amendment thereto has been
filed with the Commission; and no stop order suspending the
effectiveness of the registration statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission. Any preliminary prospectus included in the registration
statement or filed with the Commission pursuant
<PAGE>
to Rule 424 of the Rules and Regulations of the Commission under the
Securities Act (the "Rules and Regulations"), is herein called a
"Preliminary Prospectus." The various parts of such registration
statement, including the prospectus, Part II, all financial schedules
and exhibits thereto, and including the information contained in the
form of final prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act, and deemed by virtue of Rule 430A
under the Securities Act to be part of the registration statement at
the time it was declared effective, as amended at the time such part
became effective, are herein called collectively the "Registration
Statement," and the final prospectus, in the form first filed pursuant
to Rule 424(b) or as included in the Registration Statement at the time
it is declared effective if no Rule 424(b) filing is required, is
herein called the "Prospectus."
(b) No order preventing or suspending the use of any
Prospectus, including any Preliminary Prospectus, has been issued and
no proceeding for that purpose has been instituted or threatened by the
Commission or the securities authority of any state or other
jurisdiction. No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or threatened or, to
the knowledge of the Company, contemplated by the Commission or the
securities authority of any state or other jurisdiction.
(c) Each Preliminary Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto complied when so filed in all material respects with the
requirements applicable to it under the Securities Act and the Rules
and Regulations and none of such documents 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; and any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act, and the Rules and
Regulations and will 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Wachovia Securities, Inc. (the "Representative") expressly for
use therein. When the Registration Statement or any amendment thereto
was declared effective, and at each Time of Delivery (as hereinafter
defined), it (i) contained all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and the Rules and
Regulations and (ii) did not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment
or supplement thereto is filed with the Commission pursuant to
Rule 424(b) (or, if the Prospectus or such amendment or supplement is
not required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective) and at each Time of Delivery,
the Prospectus, as amended or supplemented at any such time (i)
contained or
<PAGE>
will contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the
requirements of, the Securities Act and the Rules and Regulations and
(ii) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading.
(d) The descriptions in the Registration Statement and
the Prospectus of statutes, rules, regulations, legal and governmental
proceedings or contracts and other documents that are required to be so
described are accurate and fairly present the information required to
be shown; and there are no statutes, rules, regulations or legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectus that are not described as required and no
contracts or documents of a character that are required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described and filed
as required.
(e) The Company has been duly incorporated, is validly
existing as a corporation under the laws of the State of Georgia and
has full power and authority to own or lease its properties and conduct
its business as described in the Prospectus. The Bank is a national
banking association in organization under the laws of the United States
of America and, upon the issuance of a charter by the Office of the
Comptroller of the Currency (the "OCC"), will have full power and
authority to own or lease its properties and conduct its business as
described in the Prospectus. The Company has full power and authority
to enter into this Agreement and to perform its obligations hereunder.
Neither the Company nor the Bank is required to be qualified to
transact business as a foreign corporation under the laws of any other
jurisdiction.
(f) The capitalization of the Company is as disclosed
under the caption "Capitalization" in the Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description of the capital stock under the caption "Description of
Capital Stock of Futurus Financial Services" contained in the
Prospectus. None of the issued shares of capital stock of the Company
has been issued or is owned or held in violation of any preemptive or
similar rights, and no person or entity (including any holder of
outstanding shares of capital stock of the Company or its subsidiary)
has any preemptive or other rights to subscribe for any of the Shares.
None of the shares of capital stock of the Bank has been issued.
(g) Upon the issuance of a charter by the OCC and the
payment for the capital stock of the Bank, all of the issued shares of
the Bank will be duly authorized and validly issued, fully paid, and,
except as may be applicable under the National Bank Act, nonassessable
and will be owned beneficially by the Company free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever. The Company has made application
<PAGE>
(i) to the Board of Governors of the Federal
Reserve System for approval to become a bank holding company
and to acquire all of the shares of the Bank;
(ii) to the OCC, for approval to charter a
national bank; and
(iii) to the Federal Deposit Insurance Corporation
for approval for Federal Deposit Insurance for Bank deposits
(each a "Regulatory Approval" and collectively, the
"Regulatory Approvals").
The Company and the Bank have obtained or have filed for all
other material licenses, consents and approvals, and have satisfied or
have taken all action required at this time to satisfy all material
eligibility and other similar requirements imposed by federal and state
regulatory bodies, administrative agencies or other governmental
bodies, agencies or officials, in each case applicable to the conduct
of the business in which they are engaged or are contemplated to be
engaged as described in the Registration Statement. With respect to the
Regulatory Approvals, as well as all other material licenses, consents
and approvals, and any other similar requirements that the Company or
the Bank does not have at this time, (i) all applications therefor are
complete, accurate, and have been filed with the appropriate regulatory
authorities, (ii) the Company has received preliminary notice from the
OCC that such application for Regulatory Approval will be approved, and
(iii) the Company knows of no reason why all final Regulatory Approvals
will not be received prior to the time required. Other than the Bank,
the Company does not own, directly or indirectly, any capital stock or
other equity securities of any corporation or any ownership interest in
any partnership, joint venture or other association.
(h) Except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or the Bank
convertible into or exchangeable for any capital stock of the Company
or the Bank, (ii) warrants, rights or options to subscribe for or
purchase from the Company or the Bank any such capital stock or any
such convertible or exchangeable securities or obligations, or
(iii) obligations of the Company or the Bank to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(i) Since the date as of which information is given in
the Prospectus, neither the Company nor the Bank has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus.
(j) Since the date as of which information is given in
the Prospectus, (i) neither the Company nor the Bank has incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material
to the Company and the Bank, (ii) the Company has not purchased any of
its outstanding capital stock or declared, paid or otherwise made any
dividend or distribution
<PAGE>
of any kind on its capital stock, (iii) there has not been any change
in the capital stock, long-term debt or short-term debt of the Company
or the Bank (except with respect to such changes in the balance due
under the Company's line of credit described in the Prospectus), and
(iv) there has not been any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
financial position, general affairs, management, business or prospects
of the Company and the Bank, in each case other than as disclosed in or
contemplated by the Prospectus.
(k) The consolidated financial statements of the Company,
together with related notes and schedules as set forth in the
Registration Statement, conform to the requirements of the Securities
Act and the Rules and Regulations. Such financial statements fairly
present the consolidated financial position of the Company at the
respective dates indicated in accordance with generally accepted
accounting principles applied on a consistent basis for the periods
indicated. The Company and the Bank have no material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement. Porter
Keadle Moore, LLP whose report is included in the Registration
Statement, are independent certified public accountants as required by
the Securities Act and the Rules and Regulations.
(l) The Shares to be sold by the Company hereunder have
been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus; and all corporate action required to be
taken for the authorization, issuance and sale of the Shares has been
validly taken. The Underwriters will receive good and marketable title
to the Shares to be issued and delivered hereunder, free and clear of
all liens, encumbrances, claims, security interests, restrictions,
shareholders' agreements and voting trusts whatsoever. The certificates
evidencing the Shares will be in due and proper form and will comply
with all applicable legal requirements.
(m) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(n) Neither the Company nor the Bank is, or (with or
without the giving of notice or passage of time or both) would be:
(i) in violation of its Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments; or (ii) in default
under any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or the Bank is a
party or to which any of their respective properties or assets are
subject, except, in the case of clause (ii) above, where such default
would not have a material adverse effect on either the Company or the
<PAGE>
Bank.
(o) The issue and sale of the Shares and the performance
of this Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or the Bank is a party or
to which any of their respective properties or assets is subject, nor
will such action conflict with or violate any provision of the Articles
of Incorporation, Articles of Association, Bylaws or other governing
instruments of the Company or the Bank, or any statute, rule or
regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or the
Bank or any of their respective properties or assets.
(p) The Company and the Bank have good and marketable
title in fee simple to all real property, if any, and good title to all
personal property owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects, except such as are disclosed in the Prospectus or such as
do not materially and adversely interfere with the operations of the
Company and the Bank; and any real property and buildings held under
lease by the Company or the Bank are held under valid, subsisting and
enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the operations
of the Company or the Bank.
(q) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body or third party is required for
the issue and sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except (i) the
registration of the Shares under the Securities Act and such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") and under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the Underwriters, and
(ii) as required in connection with the Regulatory Approvals.
(r) Other than as disclosed in the Prospectus, there is
no litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or, to the knowledge of any director or executive
officer of the Company, threatened (or any reasonable basis therefor)
in which the Company or the Bank is a party or of which any of their
respective properties or assets are the subject which, if determined
adversely to the Company or the Bank, would individually or in the
aggregate have a material adverse effect on the financial position,
general affairs, management, business or prospects of the Company and
the Bank.
(s) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms subject, as to enforcement, to
<PAGE>
applicable bankruptcy, insolvency, reorganization and moratorium laws
and other laws relating to or affecting the enforcement of creditors'
rights generally and to general equitable principles, and except as the
enforceability of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the public
policy underlying such laws.
(t) Neither the Company nor any of its officers,
directors or affiliates has (i) taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares or (ii) since the filing of the Registration
Statement (A) sold, bid for, purchased or paid anyone any compensation
for soliciting purchases of, the Shares or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company.
(u) None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer, agent, employee or
other person acting on behalf of the Company or the Bank has (i) used
or authorized the use of, any corporate or other funds for unlawful
payments, or contributions, (ii) made unlawful expenditures relating to
political activity to government officials, or (iii) established or
maintained any unlawful or unrecorded funds in violation of any
federal, state, or local law or regulation, including Section 30A of
the Exchange Act. None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer of the Company or the
Bank has accepted or received any unlawful contributions or payments.
(v) The Company has obtained for the benefit of the
Company and the Underwriters from each of its directors and executive
officers a written agreement (the "Lockup Agreements") that for a
period of 180 days from the date of the Prospectus such director or
officer will not, without your prior written consent, offer, pledge,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, or exercisable or
exchangeable for, shares of Common Stock.
(w) The Bank, upon the issuance of a charter by the OCC,
will not be prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distributions on the
Bank's capital stock, from repaying to the Company any loans or
advances to the Bank or from transferring the Bank's property or assets
to the Company, except under federal regulations as disclosed in the
Prospectus.
(x) The Company and the Bank have filed all material
foreign, federal, state and local tax returns that are required to be
filed by them and have paid all taxes shown as due on such returns as
well as all other taxes, assessments and government charges that are
due and payable; and no deficiency with respect to any such return has
been assessed
<PAGE>
or proposed in any material respects. All tax liabilities have been
adequately provided for in the financial statements of the Company.
(y) The Company is not, nor will it become as a result of
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
2. PURCHASE AND SALE OF SHARES.
(a) Subject to the terms and conditions herein set forth,
(i) the Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agree, severally and not jointly, to
purchase from the Company the number of Firm Shares set opposite the
name of such Underwriter in Schedule I hereto, at the following
purchase prices: (A) with respect to the Firm Shares not purchased by
the Company's directors and executive officers, as described in (B)
below, at a purchase price of $9.25 per share, and (B) with respect to
the Firm Shares purchased by the Company's directors and executive
officers, but only up to a maximum of 330,000 Firm Shares, at a
purchase price of $9.65 per share, (ii) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Company agrees to issue and to sell to
each of the Underwriters, and each of the Underwriters agree, severally
and not jointly, to purchase from the Company, at a purchase price of
$9.25 per share, that portion of the number of Optional Shares as to
which such election shall have been exercised (to be adjusted by you so
as to eliminate fractional shares) determined by multiplying such
number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares that such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number
of the Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
(b) Company hereby grants to the Underwriters the
right to purchase at their election in whole
or in part from time to time up to 165,000
Optional Shares, at the purchase price of $9.25
per share for the sole purpose of covering
over-allotments in the sale of Firm Shares. Any
such election to purchase Optional Shares may be
exercised by written notice from you to the
Company, given from time to time within a period
of 30 calendar days after the date of this
Agreement and setting forth the aggregate number
of Optional Shares to be purchased and the date on
which the Optional Shares are to be delivered, as
determined by you but in no event (i) earlier than
the First Time of Delivery (as hereinafter
defined) or (ii) unless you and the Company
otherwise agree in writing, earlier than two or
later than ten business days after the date of
such notice. In the event you elect to purchase
all or a portion of the Optional Shares, the
Company agrees to furnish or cause to be furnished
to you the certificates, letters and opinions, and
to satisfy all conditions set forth in Section 7
<PAGE>
hereof at each Subsequent Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the release of the Shares,
the several Underwriters propose to offer the Shares for sale upon the terms and
conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form
for the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as the Representative may request
upon at least 48 hours prior notice to the Company shall be delivered by or on
behalf of the Company to you for your account against payment by you of the
purchase price therefor by wire transfer of immediately available funds to an
account designated by the company. The closing of the sale and purchase of the
Shares shall be held at the offices of Smith Helms Mulliss & Moore, L.L.P.,
Atlanta, Georgia. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, at 10:00 a.m., Atlanta, Georgia time, on the 3rd (or
if the Firm Shares are priced, as contemplated by Rule 15c6-1(c) under the
Exchange Act, after 4:30 p.m., Washington, D.C. time, the 4th) full business day
after the execution of this Agreement or at such other legally permissible time
and date as you and the Company may agree upon in writing, and, with respect to
the Optional Shares, at 10:00 a.m., Atlanta, Georgia time, on the date specified
by you in the written notice given by you of the Underwriters' election to
purchase all or part of such optional shares, or at such other time and date as
you and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery," such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called a "Subsequent Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." The Company will make such
certificates available for checking and packaging at least 24 hours prior to
each Time of Delivery at your office at the address set forth above or such
other location designated by you to the Company. If the Representative so
elects, delivery of the Firm Shares and the Optional Shares, if any, may be made
by credit through full fast transfer to the accounts at the Depositary Trust
Company designated by the Representative.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriters:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to and in
accordance with Rule 430A and subparagraph (1) (or, if applicable and
if consented to by you, subparagraph (4)) of Rule 424(b) not later than
the earlier of (i) the second business day following the execution and
delivery of this Agreement or (ii) the date on which the Prospectus is
first used after the Registration Statement is declared effective. The
Company will advise you promptly of any such filing pursuant to Rules
430A or 424(b).
(b) The Company will not file with the Commission the
Prospectus or any amendment or supplement to the Prospectus or any
amendment to the Registration Statement unless you have received a
reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its
<PAGE>
best efforts to cause any such amendment to the Registration Statement
to be declared effective as promptly as possible. Upon the request of
the Representative or counsel for the Representative, the Company will
promptly prepare and file with the Commission, in accordance with the
Rules and Regulations, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Shares by the
Underwriters and will use its best efforts to cause any such amendment
to the Registration Statement to be declared effective as promptly as
possible. If required, the Company will file any amendment or
supplement to the Prospectus with the Commission in the manner and
within the time period required by Rule 424(b) under the Securities
Act. The Company will advise the Representative, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and
will provide evidence to the Representative of each such filing or
effectiveness.
(c) The Company will advise you promptly after receiving
notice or obtaining knowledge of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any part thereof or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, or (iii) any
request made by the Commission or any securities authority of any other
jurisdiction for amending the Registration Statement, for amending or
supplementing the Prospectus or for additional information. The Company
will use its best efforts to prevent the issuance of any such stop
order and, if any such stop order is issued, to obtain the withdrawal
thereof as promptly as possible.
(d) If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any events
shall have occurred as a result of which, in the judgment of the
Company or the opinion of the Underwriters, the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if for any reason it is necessary during such
same period to amend or supplement the Prospectus to comply with the
Securities Act or the Rules and Regulations or any law, the Company
will promptly notify you and upon your request (but at the Company's
expense) prepare and file with the Commission and any state or other
governmental securities commissions in jurisdictions where the Shares
have been sold by the Underwriters, an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such
compliance and will furnish without charge to each Underwriter and to
any dealer in securities, as many copies of such amended or
supplemented Prospectus as you may from time to time reasonably
request. Neither your consent to, nor the Underwriter's delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 7.
<PAGE>
(e) The Company promptly from time to time will take such
action as you may reasonably request to qualify the Shares for offering
and sale under the securities or blue sky laws of such jurisdictions as
you may request and will continue such qualifications in effect for as
long as may be necessary to complete the distribution of the Shares,
provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction. In the event that the
qualification of the Shares in any jurisdiction is suspended, the
Company shall so advise the Representative promptly in writing.
(f) The Company will deliver to, or upon the order of,
the Representative, from time to time, as many copies of the
Preliminary Prospectus as the Representative may reasonably request.
The Company will deliver to, or upon the order of, the Representative,
during the period when delivery of a Prospectus is required under the
Securities Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Representative may
reasonably request. The Company will deliver to the Representative at
or before the Time of Delivery, four signed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representative such number of copies
of the Registration Statement (including such number of copies of the
exhibits filed therewith that may be reasonably requested), and of all
amendments thereto, as the Representative may reasonably request.
(g) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act
and the Rules and Regulations and the Company agrees to keep the Common
Stock registered pursuant to the Exchange Act for at least five years
after the date hereof. The Company shall also file with foreign, state
and other governmental securities commissions in jurisdictions where
the Shares have been sold by the Underwriters such reports as are
required to be filed by the securities acts and the regulations of
those jurisdictions.
(h) As soon as practicable, but in any event not later
than the last day of the thirteenth month after the effective date of
the Registration Statement, the Company will make generally available
to its security holders an earnings statement (which need not be
audited) in reasonable detail covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, complying with Section 11(a) of the Securities
Act and the Rules and Regulations and will advise you in writing when
such statement has been so made available.
(i) The Company will, for a period of three years from
the Time of Delivery, deliver to the Representative copies of annual
reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with the NASD or
any securities exchange pursuant to the requirements of such exchange
or with the Commission pursuant to the Securities Act or the Exchange
Act. The Company will
<PAGE>
deliver to the Representative similar reports with respect to
significant subsidiaries, as that term is defined in the Rules and
Regulations, which are not consolidated in the Company's financial
statements.
(j) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without your prior written consent,
offer, pledge, issue, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of (or announce any offer, pledge, sale,
grant of an option to purchase or other disposition), directly or
indirectly, any shares of Common Stock or securities convertible into,
exercisable or exchangeable for, shares of Common Stock, except as
provided in Section 2 and except as described in the Prospectus.
(k) Neither the Company nor any of its officers,
directors or affiliates will (i) take, directly or indirectly, prior to
the closing of the purchase and sale of the Shares, any action designed
to cause or to result in, or that might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Shares, (ii) sell, bid for, purchase or pay anyone any compensation for
soliciting purchases of, the Shares or (iii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(l) The Company will apply the net proceeds from the
offering in the manner set forth under the heading "Use of Proceeds" in
the Prospectus, including the payment of the full amount required for
the capitalization of the Bank, and will timely report such use of
proceeds pursuant to Item 701 of Regulation S-B and S-K in its periodic
reports filed pursuant to Section 13(a) and 15(d) of the Exchange Act
in accordance with Rule 463 of the Securities Act or any successor
provision.
(m) Following the Time of Delivery, the Company will
diligently take all steps appropriate to obtain all Regulatory
Approvals and cause the Bank to be opened for the conduct of business
as described in the Prospectus.
(n) If at any time during the 90-day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your reasonable opinion the market price of the Common Stock
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from you advising
the Company to the effect set forth above, the Company agrees to
forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(o) The Company will cause the Shares to be quoted on the
Nasdaq OTC Bulletin Board (or another exchange acceptable to the
Representative) at each Time of
<PAGE>
Delivery and for at least five years from the date hereof.
6. EXPENSES. The Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including without limitation all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus, the Prospectus and any amendments and
supplements thereto, this Agreement and any blue sky memoranda; (ii) the
delivery of copies of the foregoing documents to the Underwriters; (iii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares; (iv) the preparation, issuance and
delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws, including
filing fees and fees and disbursements of counsel for the Underwriters relating
thereto; (vi) any expenses of listing the Shares on the Nasdaq OTC Bulletin
Board; (vii) any expenses for travel, lodging and meals incurred by the Company
and any of its officers, directors and employees in connection with any meetings
with prospective investors in the Shares. It is understood, however, that,
except as provided in this Section, Section 8 and Section 10 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel (other than those related to qualification of the Shares under
state securities or blue sky laws).
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder to purchase and pay for the Shares to be delivered
at each Time of Delivery shall be subject, in their discretion, to the accuracy
of the representations and warranties of the Company contained herein as of the
date hereof and as of such Time of Delivery, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) The Registration Statement as amended to date shall
have become effective prior to the execution of this Agreement or at
such later date and/or time as shall have been consented to by you in
writing. If required, the Prospectus and any amendment or supplement
thereto shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing and in accordance with Section 5(a) of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted, threatened or, to the knowledge of
the Company and the Representative, contemplated by the Commission;
and all requests for additional information on the part of the
Commission shall have been complied with to your satisfaction.
(b) Smith Helms Mulliss & Moore, L.L.P., counsel for the
Underwriters, shall have furnished to you such opinion or opinions,
dated such Time of Delivery, with
<PAGE>
respect to such matters as you may reasonably require and which are
customary, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters and such firm may rely, as to matters of Georgia law, upon
the opinion of Powell, Goldstein, Frazer & Murphy LLP.
(c) You shall have received an opinion, dated such Time
of Delivery, of Powell, Goldstein, Frazer & Murphy LLP, counsel for the
Company in form and substance satisfactory to you and your counsel, to
the effect that:
(i) The Company is a corporation in existence
and in good standing under the laws of the State of Georgia
and has the corporate power and authority to own or lease its
properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into
this Agreement and perform its obligations hereunder. The
Company is not qualified to transact business as a foreign
corporation under the laws of any other jurisdiction.
(ii) The Company has applied for registration as
a "bank holding company" under the Bank Holding Company Act to
acquire the stock of the Bank. The organizers of the Bank have
filed for and received preliminary conditional approval from
the OCC for the Bank to become a national bank under the laws
of the United States, and they have filed an application to
obtain deposit insurance from the FDIC.
(iii) The Bank is a national banking association
in organization under the laws of the United States of America
and, upon the issuance of articles of association by the OCC
will have the corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement and the Prospectus.
(iv) The Company's authorized, issued and
outstanding capital stock is as disclosed under the caption
"Capitalization" in the Prospectus. None of the issued shares
have been issued in violation of or subject to any preemptive
rights provided for by law, agreement or the Company's
Articles of Incorporation or Bylaws.
(v) Upon the issuance of articles of
association by the OCC, the shares of capital stock of the
Bank will be issued only to the Company free and clear of any
liens, claims or encumbrances of any kind, and the Bank will
become a wholly owned subsidiary of the Company.
(vi) The Shares to be sold by the Company have
been duly authorized and, when issued and delivered against
payment therefor as provided herein, will be validly issued
and fully paid and nonassessable and will conform to the
description of the Common Stock contained in the Prospectus.
The Underwriters will receive the Shares to be issued and
delivered by the Company pursuant to this
<PAGE>
Agreement, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders' agreements and
voting trusts whatsoever.
(vii) To the knowledge of such counsel, the
Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments
to issue or sell any capital stock, and there are no
preemptive rights or other rights to subscribe for or purchase
any capital stock of the Company, or any restriction upon the
transfer of, the Shares pursuant to the Company's Articles of
Incorporation or Bylaws or any agreement or other instrument
to which the Company is a party or by which it may be bound,
except as described in the Prospectus. To the knowledge of
such counsel, neither the filing of the Registration Statement
nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights for or relating to the
registration of any Common Stock or any other securities of
the Company.
(viii) The issue and sale of the Shares being
issued at such Time of Delivery and the performance of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the
giving of notice or the passage of time or both) result in a
breach or violation of any of the terms or provisions of, or
constitute a default under any document or agreement which is
an Exhibit to the Registration Statement, or violate any
provision of the Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments of the
Company or the Bank or any statute, rule or regulation or, to
such counsel's knowledge, except for such conflicts, breaches,
violations or defaults as would not individually, or in the
aggregate, materially and adversely affect the business,
financial condition or results of operations of the Company
and the Bank, taken as a whole, any order, judgment or decree
of any court or governmental agency or body having
jurisdiction over the Company or the Bank or any of their
respective properties or assets.
(ix) No consent, approval, authorization or order
from, or registration, qualification or filing with, any
governmental agency or body or third party is required for the
issue and sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except (a) the
registration of the Shares under the Securities Act and such
as may be required by the NASD and under state securities or
blue sky laws in connection with the offer, sale and
distribution of the Shares by the Underwriters, and (b) as
required in connection with the Regulatory Approvals.
(x) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and binding agreement of the Company enforceable against
the Company in accordance with its terms subject, as to
enforcement, to applicable bankruptcy, insolvency,
reorganization and
<PAGE>
moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general
equitable principles, and except as the enforceability of
rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws and further
subject to 12 U.S.C. Section 1818(b)(6)(D) and similar bank
regulatory powers and to the application of the public policy
underlying such laws.
(xi) The Company and the Bank have obtained or
have filed for all licenses, consents and approvals, and have
satisfied or have taken all action required at this time to
satisfy all eligibility and other similar requirements imposed
by federal and state regulatory bodies, administrative
agencies or other governmental bodies, agencies or officials,
in each case necessary for the conduct of the banking business
in which they are engaged or are contemplated to be engaged as
described in the Prospectus (except where the failure to have
any such licenses, consents, and approvals, or to have
satisfied or taken such action to satisfy the requirements,
individually or in the aggregate, would not have a material
adverse effect on the business, properties, operations, or
financial condition of the Company or its subsidiaries, taken
as a whole). With respect to any such necessary licenses,
consents and approvals, and any such necessary eligibility and
other similar requirements that the Company or the Bank does
not have at this time, (i) all applications therefor are, to
such counsel's knowledge, complete and accurate, and have been
filed with the appropriate regulatory authorities, and
(ii) counsel knows of no reason why the same will not be
received or satisfied prior to the time the same are required
to conduct business as described in the Prospectus.
(xii) To such counsel's knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or the Bank is a party, or
to which property of the Company or the Bank is subject,
before or brought by any court or governmental agency or body
that is required to be disclosed in the Registration Statement
and the Prospectus and has not been properly disclosed
therein. In rendering the opinion set forth in this paragraph,
such counsel shall not be required to search the dockets of
any courts or governmental authority.
(xiii) To the knowledge of such counsel, neither
the Company nor the Bank is in violation of any law,
ordinance, administrative or governmental rule or regulation
applicable to the Company or the Bank, or any decree of any
court or governmental agency or body having jurisdiction over
the Company or the Bank, except where such violation does not
and will not have a material adverse effect on the Company and
the Bank as a whole.
(xiv) The Registration Statement and the
Prospectus and each amendment or supplement thereto (other
than the financial statements and schedules and other
financial information included therein, as to which such
<PAGE>
counsel need express no opinion), as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations. The descriptions in the "Supervision
and Regulation" section of the Registration Statement and the
Prospectus of statutes, rules and regulations are accurate and
fairly present the information required to be shown; and such
counsel does not know of any statutes, rules, regulations or
legal or governmental proceedings required to be described in
the Registration Statement or Prospectus that are not
described as required or of any contracts or documents of a
character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required.
(xv) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act; any required filing of the Prospectus
pursuant to Rule 430A and Rule 424(b) has been made in the
manner and within the time period required by such rules; and
to such counsel's knowledge no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and, to such counsel's knowledge, no
proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
(xvi) The Company is not, and will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company," or a company
"controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940.
In addition, such opinion shall also contain a
statement that such counsel has participated in conferences
with officers and representatives of the Company,
representatives of the independent public accountants for the
Company and representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel is
not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus
(other than as specifically provided above), and any
amendments or supplements thereto, on the basis of the
foregoing, no facts have come to the attention of such counsel
that would lead such counsel to believe that either the
Registration Statement at the time it became effective
(including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant
to Rule 430A(b) or Rule 434, if applicable) or any amendment
thereof made prior to the Closing Date as of the date of such
amendment, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the
Closing Date as of the date of
<PAGE>
such amendment or supplement) and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial and statistical data
included or incorporated by reference therein).
In rendering any such opinion, such counsel may rely,
as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company
and public officials.
(d) You shall have received from Porter Keadle Moore,
LLP, letters dated, respectively, the date of this Agreement and the
effective date of the most recently filed post-effective amendment to
the Registration Statement and also at each Time of Delivery, in form
and substance satisfactory to you, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement
and the Prospectus.
(e) You shall have received at each Time of Delivery a
certificate or certificates of the President and Chief Executive
Officer and the Chief Financial Officer of the Company to the effect
that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the First Time of Delivery or the
Subsequent Time of Delivery, as the case may be, and the
Company has complied with all the agreements and covenants and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Time of Delivery and as to such
other matters as you may reasonably request;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been initiated or are
pending, or to their knowledge, contemplated under the
Securities Act;
(iii) all filings required by Rule 424 and
Rule 430A of the Rules and Regulations have been made;
(iv) they have carefully examined the
Registration Statement and the Prospectus, and any amendments
or supplements thereto, and in his or her opinion, such
documents do not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were
made; and
<PAGE>
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth.
(f) Since the date of the latest audited financial
statements included in the Prospectus, neither the Company nor the Bank
shall have sustained (i) any loss or interference with their respective
businesses from fire, explosion, flood, hurricane or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as disclosed in
or contemplated by the Prospectus, or (ii) any change, or any
development involving a prospective change (including without
limitation a change in management or control of the Company), in or
affecting the position (financial or otherwise), results of operations,
net worth or business prospects of the Company and the Bank, otherwise
than as disclosed in or contemplated by the Prospectus (including any
amendment), the effect of which, in either such case, is in your
judgment so material and adverse as to make it unpracticable or
inadvisable to proceed with the purchase, sale and delivery of the
Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) Subsequent to the date hereof there shall not have
occurred any of the following: (i) any suspension or limitation in
trading in securities generally on the New York Stock Exchange or the
over-the-counter market (other than normal market breaks or cooling
periods), or any setting of minimum prices for trading on such
exchange, or if trading in any securities of the Company has been
suspended by the Commission, or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been
required, by the Nasdaq OTC Bulletin Board or the NASD or by order of
the Commission or any other governmental authority; (ii) a moratorium
on commercial banking activities in New York declared by either federal
or state authorities; (iii) any major outbreak or major escalation of
hostilities involving the United States, declaration by the United
States of a national emergency (other than with respect to natural
disasters) or war or any other national or international calamity or
emergency or any material adverse change in general economic, political
or financial conditions if the effect of any such event specified in
this clause (iii) in your judgment makes it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the
Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement.
(h) The Shares shall be approved for quotation on the
Nasdaq OTC Bulletin Board when issued.
(i) The Company shall have furnished the Representative
with evidence of its receipt of the preliminary conditional approval of
the OCC and the applications for each of the Regulatory Approvals.
<PAGE>
(j) The Representative shall have received the Lockup
Agreements as described in Section 1(v).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the Company in
Section 1 of this Agreement; (ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or (B) any application or other document, or
any amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"); or (iii) the omission or alleged
omission to state in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or any Application, a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating, defending against or appearing as
a third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter expressly for
inclusion in the Prospectus beneath the heading "Underwriting". The Company will
not, without the prior written consent of each Underwriter, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding (or related cause of action or portion thereof) in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter from all liability arising out of such claim, action, suit or
proceeding or related cause of action or portion thereof.
(b) Each Underwriter agrees to indemnify and hold
harmless the Company and its officers, directors, agents, representatives and
affiliates against any losses, claims, damages or liabilities to which the
Company or its officers, directors, agents, representatives and affiliates may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
any Application or arise out of or are based upon the omission or alleged
<PAGE>
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
through the Representative expressly for inclusion in the Prospectus beneath the
heading "Underwriting"; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) and (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party); provided, however, that if the defendants in any such action included
both the indemnified party and the indemnifying party, and the indemnified party
shall have reasonably concluded that there may be one or more legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party and such indemnified party shall have the right to select
separate counsel to defend such action on behalf of such indemnified party.
After such notice from the indemnifying party to such indemnified party of its
election so to assume the defense of any action and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense of the action,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
which separate counsel shall be designated by the Representative in the case of
indemnity arising under paragraph (a) of this Section 8) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. Nothing in this Section 8(c)
shall preclude an indemnified party from participating at its own expense in the
defense of any such action so assumed by the indemnifying party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of
<PAGE>
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriter on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriter on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
the Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to any
liability which the Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the
Securities Act.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in
its
<PAGE>
obligation to purchase Shares at a Time of Delivery, you may in your discretion
arrange for you or another party, or other parties to purchase such shares on
the terms contained herein. If within 36 hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, the Company
shall be entitled to a further period of 36 hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such Shares, or
the Company notifies you that it has so arranged for the purchase of such
Shares, you or the Company shall have the right to postpone a Time of Delivery
for a period of not more than 7 days in order to effect whatever change is made
necessary thereby in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in your opinion
may thereby be made necessary. The cost of preparing, printing and filing any
such amendments shall be paid for by the Underwriters. The term "Underwriters"
as used in this Agreement shall include any person substituted under this
Section with effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the
number of Shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. TERMINATION. (a) This Agreement may be terminated with
respect to the Firm Shares or any Optional Shares in the sole discretion of
the Representative by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that
(i) any condition to the obligations of the Underwriters set forth in Section
7 hereof has not been satisfied, or (ii) the Company shall have failed,
refused or been unable to deliver the Shares or to perform all obligations
and satisfy all conditions on its part to be performed or satisfied hereunder
at or prior to such Time of Delivery, in either case other than by reason of
a default by any of the Underwriters. If this Agreement is terminated
pursuant to this Section 10(a), the Company will reimburse the Underwriters
upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by it in connection with the
proposed purchase and sale of the Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in Section 9(a), the aggregate number of such Shares
which remain unpurchased exceeds one-eleventh of the aggregate number of Shares
to be purchased at such Time of Delivery, or if the Company shall
<PAGE>
not exercise the right described in Section 9(b) to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to a Subsequent Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) thereupon will terminate, without liability on the part of any
nondefaulting Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements,
representations, warranties and other statements of the Company, its officers
and the Underwriter, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriter or any controlling person
referred to in Section 8(e) or made by or on behalf of the Company, or any
officer or director or controlling person of the Company referred to in
Section 8(e), and shall survive delivery of and payment for the Shares. The
respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 8 and 13 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and,
if sent to the Representative, shall be mailed, delivered or faxed and confirmed
in writing to Wachovia Securities, Inc., IJL Financial Center, 201 North Tryon
Street, Charlotte, North Carolina 28202, Attention: Investment Banking
Department (with a copy to Ronald W. Goff at Wachovia Securities, Inc.,
Resurgens Plaza, 945 E. Paces Ferry Road, Atlanta, Georgia 30326, and Boyd C.
Campbell, Jr. at Smith Helms Mulliss & Moore L.L.P., 201 North Tryon Street,
Charlotte, North Carolina 28202), and if sent to the Company, shall be mailed,
delivered or faxed and confirmed in writing to the Company at 1580 Warsaw Road,
Roswell, Georgia 30076, Attention: President and Chief Executive Officer (with a
copy to Kathryn L. Knudson at Powell, Goldstein, Frazer & Murphy, LLP, 191
Peachtree Street, N.E., 16th Floor, Atlanta, Georgia 30303).
13. RIGHT OF FIRST REFUSAL. The Company grants to the
Representative an unconditional right of first refusal to serve as exclusive or
lead advisor to the Company on all corporate finance transactions undertaken or
considered by the Company for three years from the effective date of the
Prospectus. The Representative shall not be entitled to more than one payment or
fee in exchange for the waiver or termination of this right of first refusal,
and any payment or fee to waive or terminate the right of first refusal shall be
paid in cash and will not exceed the greater of (a) one percent (1%) of the
aggregate purchase price of the Shares purchased pursuant to this Agreement, and
(b) five percent (5%) of the underwriting discount or commission paid in
connection with the future financing (including any overallotment option that
may be exercised).
14. REPRESENTATIVE. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you will be binding upon all the Underwriters.
<PAGE>
15. BINDING EFFECT. This Agreement shall be binding upon, and
inure solely to the benefit of, each Underwriter and the Company and to the
extent provided in Sections 8 and 10 hereof, the officers and directors and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriters shall be deemed a successor or assign by reason
merely of such purchase.
16. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina without
giving effect to any provisions regarding conflicts of laws.
17. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereof by Wachovia Securities, Inc., this letter will constitute
a binding agreement among the Underwriters and the Company.
Very truly yours,
FUTURUS FINANCIAL SERVICES, INC.
By:
------------------------------------------
Name: William M. Butler
Title: President and Chief Executive Officer
WACHOVIA SECURITIES, INC.
By:
Name: ____________________________________
Title: ____________________________________
<PAGE>
SCHEDULE I
FUTURUS FINANCIAL SERVICES, INC.
1,100,000 SHARES
COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER OF TO BE PURCHASED
FIRM SHARES TO IF MAXIMUM
UNDERWRITER BE PURCHASED OPTION EXERCISED
- ----------- ------------ ----------------
<S> <C> <C>
Wachovia Securities, Inc.
Total
</TABLE>
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FUTURUS FINANCIAL SERVICES, INC.
In accordance with Section 14-2-1007 of the Georgia Business
Corporation Code, as amended, the undersigned corporation adopts the following
Amended and Restated Articles of Incorporation:
ARTICLE 1. NAME
The name of the Corporation is: "FUTURUS FINANCIAL SERVICES, INC."
ARTICLE 2. CAPITAL STOCK
(a) The total number of shares of capital stock which the Corporation
is authorized to issue is twelve million (12,000,000) shares, divided into ten
million (10,000,000) shares of common stock, no par value (the "Common Stock"),
and two million (2,000,000) shares of preferred stock, no par value (the
"Preferred Stock").
(b) The Board of Directors of the Corporation is authorized, subject to
limitations prescribed by law and the provisions of this Article, to provide for
the issuance of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of Georgia to establish
from time to time the number of shares to be included in each such series, and
to fix the designation, powers, preferences, and relative rights of the shares
of each such series and the qualifications, or restrictions thereof. The
authority of the Board of Directors with respect to each series shall include,
but not be limited to, determination of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so,
from which date or dates, and the relative rights of
priority, if any, of payments of dividends on shares
of that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and,
if so, the terms of such voting rights;
(iv) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such
conversion, including provisions for adjustment of
the conversion rate in such events as the Board of
Directors shall determine;
<PAGE>
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption rates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking fund;
(vii) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, and the relative
rights of priority, if any, of payment of shares of
that series; and
(viii) Any other relative rights, preferences and
limitations of that series.
ARTICLE 3. REGISTERED OFFICE; REGISTERED AGENT
The name and address of the initial Registered Agent and the Registered
Office of the Corporation are:
Kathryn L. Knudson
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
ARTICLE 4. INCORPORATOR
The name and address of the incorporator are:
Kathryn L. Knudson
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
ARTICLE 5. PRINCIPAL OFFICE
The mailing address of the initial principal office of the corporation
is:
-2-
<PAGE>
1580 Warsaw Road
Roswell, Georgia 30076
ARTICLE 6. BOARD OF DIRECTORS
(a) The Board of Directors shall be divided into three (3) classes,
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director in Class I shall be elected to an initial term of one
(1) year, each director in Class II shall be elected to an initial term of two
(2) years, each director in Class III shall be elected to an initial term of
three (3) years, and each director shall serve until the election and
qualification of his or her successor or until his or her earlier resignation,
death or removal from office. Upon the expiration of the initial terms of office
for each Class of directors, the directors of each Class shall be elected for
terms of three (3) years, to serve until the election and qualification of their
successors or until their earlier resignation, death or removal from office.
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 6 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
ARTICLE 7. BYLAWS; NUMBER OF DIRECTORS
(a) Except as provided in paragraph (b) of this Article 7, the Board of
Directors shall have the right to adopt, amend or repeal the bylaws of the
Corporation by the affirmative vote of a majority of all directors then in
office, and the shareholders shall have such right by the affirmative vote of a
majority of the issued and outstanding shares of the Corporation entitled to
vote in an election of directors.
(b) Notwithstanding paragraph (a) of this Article 7, any amendment of
the bylaws of the Corporation establishing or changing the number of directors
shall require the affirmative vote of two-thirds (2/3) of all directors then in
office or the affirmative vote of the holders of two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
ARTICLE 8. REMOVAL OF DIRECTORS
(a) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed without cause only by the affirmative vote of the holders of at
least two-thirds (2/3) of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
-3-
<PAGE>
(b) At any shareholders' meeting with respect to which notice of such
purpose has been given, the entire Board of Directors or any individual director
may be removed with cause only by the affirmative vote of the holders of at
least a majority of the issued and outstanding shares of the Corporation
entitled to vote in an election of directors.
(c) For purposes of this Article 8, a director of the Corporation may
be removed for cause if (i) the director has been convicted of a felony; (ii)
any bank regulatory authority having jurisdiction over the Corporation requests
or demands the removal; or (iii) at least two-thirds (2/3) of the directors of
the Corporation then in office, excluding the director to be removed, determine
that the director's conduct has been inimical to the best interests of the
Corporation.
(d) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 8 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote in an election of
directors, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
ARTICLE 9. LIABILITY OF DIRECTORS
(a) A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages, for breach of any duty as
a director, except for liability for:
(i) any appropriation, in violation of his or her duties,
of any business opportunity of the Corporation;
(ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code dealing with
unlawful distributions of corporate assets to
shareholders; or
(iv) any transaction from which the director derived an
improper material tangible personal benefit.
(b) Any repeal or modification of this Article by the shareholders of
the Corporation shall be prospective only and shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 9 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote
-4-
<PAGE>
thereon, at any regular or special meeting of the shareholders, and notice of
the proposed change must be contained in the notice of the meeting.
ARTICLE 10. SHAREHOLDER ACTION BY WRITTEN CONSENT
Any action required or permitted by the provisions of the Georgia
Business Corporation Code (the "Code") to be taken at a shareholders' meeting
may be taken without a meeting in accordance with Section 14-2-704 of the Code
if the action is taken by persons who would be entitled to vote at a meeting
shares having voting power to cast not less than the minimum number of votes
that would be necessary to authorize or take the action at a meeting at which
all shareholders entitled to vote were present and voted. Notice of such action
without a meeting by less than unanimous written consent shall be given within
ten (10) days of the taking of such action to those shareholders of record on
the date when the written consent is first executed and whose shares were not
represented on the written consent.
ARTICLE 11. INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by the
provisions of the Georgia Business Corporation Code, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under the Code from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by the Code. Any
indemnification effected under this provision shall not be deemed exclusive of
rights to which those indemnified may be entitled under any Bylaw, vote of
shareholders or disinterested directors, or otherwise, both as to action in
their official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
ARTICLE 12. CERTAIN BUSINESS TRANSACTIONS
(a) In any case in which the Georgia Business Corporation Code or other
applicable law requires shareholder approval of any merger or share exchange of
the Corporation with or into any other corporation, or any sale, lease, exchange
or other disposition of substantially all of the assets of the Corporation to
any other corporation, person or other entity, shall require either:
(i) the affirmative vote of two-thirds (2/3) of the
directors of the Corporation then in office and the
affirmative vote of a majority of the issued and
outstanding shares of the corporation entitled to
vote; or
(ii) the affirmative vote of a majority of the directors
of the Corporation then in office and the affirmative
vote of the holders of at least two-thirds (2/3) of
the issued and outstanding shares of the Corporation
entitled to vote.
-5-
<PAGE>
(b) The Board of Directors shall have the power to determine for the
purposes of this Article 12, on the basis of information known to the
Corporation, whether any sale, lease or exchange or other disposition of part of
the assets of the Corporation involves substantially all of the assets of the
Corporation.
(c) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 12 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote thereon, at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
ARTICLE 13. FACTORS CONSIDERED IN BUSINESS TRANSACTION
(a) The Board of Directors, when evaluating any offer of another party
(i) to make a tender offer or exchange offer for any equity security of the
Corporation, (ii) to merge or consolidate any other corporation with the
Corporation, or (iii) to purchase or otherwise acquire all or substantially all
of the assets of the Corporation, shall, in determining what is in the best
interests of the Corporation and its shareholders, give due consideration to all
relevant factors, including without limitation: (A) the short-term and long-term
social and economic effects on the employees, customers, shareholders and other
constituents of the Corporation and its subsidiaries, and on the communities
within which the Corporation and its subsidiaries operate (it being understood
that any subsidiary bank of the Corporation is charged with providing support to
and being involved in the communities it serves); and (B) the consideration
being offered by the other party in relation to the then-current value of the
Corporation in a freely negotiated transaction and in relation to the Board of
Directors' then-estimate of the future value of the Corporation as an
independent entity.
(b) Unless two-thirds (2/3) of the directors then in office shall
approve the proposed change, this Article 13 may be amended or rescinded only by
the affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation entitled to vote thereon, at any
regular or special meeting of the shareholders, and notice of the proposed
change must be contained in the notice of the meeting.
ARTICLE 14. ACQUISITION OF CONTROL
(a) The acquisition of the Corporation's voting securities (an
"Acquisition") is subject to the requirements of the Change in Bank Control Act
of 1978 (12 U.S.C. 1817(j)(13)) and the rules and regulations of the Board of
Governors of the Federal Reserve System (the "Reserve Bank"), promulgated
thereunder (12 C.F.R. Subpart E (the "Rules")).
(b) When a notice is required to be filed with the Reserve Bank under
the Rules, the same notice shall be filed with the Corporation at the same time
that it is filed with the Reserve Bank. If desired, the notificant may omit from
the copy of the notice filed with the Corporation the financial information
required to be included in the notice filed with Reserve Bank.
-6-
<PAGE>
(c) The notice shall be addressed to the Corporation, at its main
office address, attention: President.
(d) The Board of Directors of the Corporation, by the affirmative vote
of at least two-thirds (2/3) of the directors then in office, shall have 60 days
to disapprove an Acquisition if it finds, in its sole discretion, that the
Acquisition would not be in the best interests of the Corporation and its
shareholders. In determining what is in the best interests of the Corporation
and its shareholders, the Board of Directors shall give due consideration to all
relevant factors, including without limitation: (i) the short-term and long-term
social and economic effects on the employees, customers, shareholders and other
constituents of the Corporation and its subsidiaries, and on the communities
within which the Corporation and its subsidiaries operate (it being understood
that any subsidiary bank of the Corporation is charged with providing support to
and being involved in the communities it serves); and (ii) the impact of the
acquisition, as perceived by the Board of Directors', on the Board of Directors'
ability to effectively manage the Corporation and achieve the Corporation's
strategic objectives. If the Corporation fails to act within the 60-day period,
the Acquisition shall be deemed to be approved.
(e) If the Corporation disapproves an Acquisition and the Acquisition
is nevertheless consummated, the shares held by the acquiror that exceed 10% of
the applicable class of the Corporation's outstanding voting securities shall
not be entitled to any voting rights.
(f) This Article 14 may be amended or rescinded only by the affirmative
vote of two-thirds (2/3) of the directors then in office or by the holders of at
least two-thirds (2/3) of the issued and outstanding shares of the Corporation
entitled to vote thereon, at any regular or special meeting of the shareholders,
and notice of the proposed change must be contained in the notice of the
meeting.
(g) This Article 14 shall be void and of no further force and effect on
and after April 1, 2005.
ARTICLE 15. SAVINGS CLAUSE
Should any provision of these Articles of Incorporation, or any clause
hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of these Articles of Incorporation shall
remain valid and fully enforceable.
[Remainder of This Page Intentionally Left Blank]
-7-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation, this ____ day of February, 2000.
_______________________________________
Gregory A. Janicki
Chairman of the Board of Directors, and
Sole Shareholder
-8-
<PAGE>
EXHIBIT 4.1
- -------------------- ----------------
NUMBER SHARES
*** ***
- -------------------- ----------------
SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
CUSIP _______________
FUTURUS FINANCIAL SERVICES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA
THIS CERTIFIES that ____________________________________________________________
Is the owner of ________________________________________________________________
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK (NO PAR VALUE) OF
FUTURUS FINANCIAL SERVICES, INC.
Transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney on surrender of this certificate properly endorsed.
This certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
[SEAL]
______________________________ ________________________________
Secretary President
Countersigned and Registered:
SUNTRUST BANK, ATLANTA
TRANSFER AGENT AND REGISTRAR
By: __________________________
Authorized Signature
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were
written out in full according to applicable law or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT --.....Custodian.....
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gift to Minor
survivorship and not as tenants Act ............
in common (State)
</TABLE>
Additional abbreviations may also be
used though not in the above list.
FOR VALUE RECEIVED, ___________________ HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------
--------------------------------------
--------------------------------------
_______________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
________________________________________________________________ SHARES
OF THE COMMON STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO
HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ____________________________
ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED
CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
__________________________
(DATE)
_______________________________________________________________________
(SIGNATURE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.)
KEEP THIS CERTIFICATE IN A SAFE PLACE, IF IT IS LOST,
STOLEN, MUTILATED OR DESTROYED, THE CORPORATION WILL
REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE
<PAGE>
EXHIBIT 5.1
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
191 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303
(404) 572-6600
April 6, 2000
Futurus Financial Services, Inc.
1580 Warsaw Road
Roswell, Georgia 30076
RE: REGISTRATION OF 1,265,000 SHARES OF COMMON STOCK AND WARRANTS TO
PURCHASE 200,000 SHARES OF COMMON STOCK
Ladies and Gentlemen:
We have acted as counsel to Futurus Financial Services, Inc. (the
"Company"), a Georgia corporation, in connection with the registration under the
Securities Act of 1933, as amended, pursuant to the Company's Registration
Statement on Form SB-2 (the "Registration Statement"), of up to 1,265,000 shares
(the "Shares") of common stock, no par value (the "Common Stock"), of the
Company and warrants (the "Warrants") to purchase up to 200,000 shares of Common
Stock.
In this capacity, we have examined (1) the Registration Statement in
the form filed by the Company with the Securities and Exchange Commission (the
"Commission") on February 11, 2000, as amended by Pre-Effective Amendment No. 1
thereto, which is to be filed with the Commission on the date hereof, (2) the
proposed form of Underwriting Agreement (the "Underwriting Agreement") between
the Company and Wachovia Securities, Inc. to be used in effecting the sale of
the Shares, (3) originals or copies, certified or otherwise identified to our
satisfaction, of corporate records, agreements, documents and other instruments
of the Company relating to the authorization and issuance of the Shares and the
Warrants, and (4) such other matters as we have deemed relevant and necessary as
a basis for the opinion hereinafter set forth.
In conducting our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents.
Based upon the foregoing, and in reliance thereon, and subject to the
limitations and qualifications set forth herein, we are of the opinion that the
Shares, when issued and delivered against payment therefor in accordance with
the terms of the Underwriting Agreement, and the
<PAGE>
Futurus Financial Services, Inc.
April 6, 2000
Page 2
Warrants, when issued and delivered to the organizers, will be legally and
validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
<PAGE>
EXHIBIT 10.1
LEASE
THIS LEASE (hereinafter referred to as the "Lease"), made and entered
into as of this ___ day of March, 2000 by and between PIONEER REAL ESTATE
DEVELOPMENT, INC., a Georgia corporation (hereinafter referred to as
"Lessor," and FUTURUS FINANCIAL SERVICES, INC., a Georgia corporation
(hereinafter referred to as "Lessee");
W I T N E S S E T H T H A T
WHEREAS, Lessor is the owner of certain real property (the "Real
Property") lying and being in Land Lot 1120, 2nd District, City of
Alpharetta, Fulton County, Georgia, which property is more particularly
described in the legal description attached hereto as EXHIBIT "A" and
incorporated by reference herein (hereinafter, said real property, together
with all improvements now or hereafter erected thereon, and all furnishings,
fixtures, equipment, and other personal property placed or installed thereon
by Lessor, is collectively referred to as the "Premises"); and
WHEREAS, Lessee desires to lease to Lessee and Lessee desires to
lease from Lessor the Premises under the terms and conditions contained herein.
NOW, THEREFORE, for and in consideration of the terms and conditions
hereinafter set forth, the parties hereto do hereby agree as follows:
ARTICLE I
GRANT AND TERM OF LEASE - IMPROVEMENTS ON THE PREMISES
1.01 GRANT OF LEASE. For the rent and upon the terms and conditions
hereinafter stated, Lessor does hereby lease and rent unto Lessee and Lessee
does hereby lease and take from Lessor the Premises.
1.02 LESSEE'S INSPECTION, PLAN APPROVAL AND INITIAL CONSTRUCTION.
Lessee shall have sixty (60) days following the date of execution and delivery
of this Lease by Lessor (the "Contingency Period") to inspect the Premises and
conduct its due diligence activities and to obtain approval from all appropriate
governmental agencies overseeing banks. Concurrently with this inspection
Lessee, at Lessee's sole cost and expense, shall have prepared, in consultation
with Lessor's Architect and Engineer, preliminary site plan, grading and utility
plans, landscaping plan and building elevations (the "Preliminary Plans") for
delivery to Lessor within thirty (30) days of the date hereof for review by
Lessor. Lessor shall have the right to review and approve the Preliminary Plans,
such approval not to be unreasonably withheld. Once approved by Lessor the
Preliminary Plans shall be attached hereto as EXHIBIT "B" and made a part hereof
and used by Lessee to create final permit and construction plans for the project
pursuant to Section 6.02 hereinbelow.
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Lessee shall obtain all necessary permits and approvals for
the project, at its sole cost and expense, on or before the expiration of the
Contingency Period. In the event Lessee fails to obtain all necessary permits
and approvals for the project (with the exception of the sewer/septic permit(s)
for the project) prior to the expiration of the Contingency Period or in the
event that Lessee determines in its sole discretion that the Premises are not
suitable for Lessee's purposes, then Lessee may terminate this Lease by giving
written notice to Lessor given prior to the expiration of the Contingency Period
and this Lease shall become null and void and neither party shall have any
further obligation to each other except those obligations that survive any
termination of this Lease. Lessee shall have the right to extend the Contingency
Period for an additional thirty (30) days to obtain the sewer/septic permit(s)
and banking approval for the project by written notice to Lessor prior to the
expiration of the initial Contingency Period. In the event Lessee fails to
obtain the sewer/septic permit(s) or regulatory approval on or before the
expiration of the Contingency Period, as the same may be extended, despite
Lessee's diligent good faith efforts, then Lessee may terminate this Lease by
giving written notice to Lessor on or before the expiration of the Contingency
Period, as the same may be extended, and this Lease shall become null and void
and neither party shall have any further obligation to each other except those
obligations that survive any termination of this Lease.
In the event Lessee does not terminate this Lease pursuant to
the preceding paragraph of this Section 1.02, Lessee shall commence construction
of the improvements to be located at the Premises in accordance with Article VI
below. From and after the date hereof, Lessee shall secure a general contractor
for construction of the Improvements (as defined in Article VI below). Such
general contractor shall be reputable, licensed, insured and as part of the
construction contract, such contractor shall obtain a payment and performance
bond reasonably acceptable to Lessor, naming Lessor, and Lessor's lender, as
obligees pursuant to a dual obligee rider (the general contractor as approved by
Lessor is herein referred to as the "Contractor"). The Contractor shall perform
and construct the Improvements, as hereinafter defined, pursuant to the Final
Plans, as hereinafter defined. Lessee agrees to allow Lessor or Lessor's
consultant to observe and inspect the construction of the Improvements Work by
monitoring the course of construction, the scheduling of subcontractors, the
progress and condition of such construction, and other related matters, but in
no event is Lessor responsible for managing the project or for correcting
defects in construction. Lessor shall notify Lessee in writing of any concerns
or problems arising during the course of construction of the Improvements.
Lessee shall provide Lessor with copies of all building, grading and other
permits required for construction of the Improvements, and testing and
inspection reports, the certificate of occupancy and any other documentation
reasonably requested by Lessor. Lessee shall be responsible for the schedule and
conduct of the construction and for all development and construction costs of
the Improvements.
1.03 TERM AND RENEWAL TERMS. The initial term of the Lease shall
commence on the date hereof and continue until midnight on the last day of the
144th month following the Rent Commencement Date (as defined in Article VI
below) unless this Lease shall be terminated sooner.
Lessee shall have the right to renew the term of this Lease for two (2)
additional five (5) year periods by delivering written notice thereof to Lessor
no later than the one hundred eightieth (180th) calendar day preceding the date
of expiration of the original term or extended term hereof, as the case may be,
and so long as (x) Lessee is not in default hereunder beyond applicable cure
periods as of the date of delivery of such written notice and (y) Lessee is not
in default hereunder
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beyond applicable notice and cure periods as of the date of commencement of such
renewal term. In the event of such renewal, the terms and provisions set forth
herein shall remain in full force and effect in accordance with their terms, and
the Base Rent payable by Lessee to Lessor shall be increased as provided in
Section 3.01 hereinbelow. All other rental and additional rental, including
without limitation, sums due pursuant to Section 4.01 hereinbelow, shall
continue to be due and payable as provided herein, and all other terms,
covenants and conditions contained herein shall remain in full force and effect
for each such entire renewal term.
ARTICLE II
COVENANTS OF QUIET ENJOYMENT
2.01 COVENANTS OF QUIET ENJOYMENT. Lessee paying the rent hereby
reserved, and performing and observing several covenants by it to be kept and
performed, may peacefully hold and enjoy the Premises with exclusive control and
possession thereof during the full term of this Lease, subject to those matters
described on EXHIBIT "C" attached hereto and made a part hereof and to any
mortgage, security deed or similar security device securing construction or
permanent financing obtained by Lessor (the "Permitted Exceptions").
ARTICLE III
RENT'S
3.01 BASE RENT. The annual Base Rent hereunder shall be calculated and
payable as follows:
The Base Rent shall be based on a formula which provides Lessor with a
return of 11.5% per annum on its Contributed Construction Costs (as hereinafter
defined) and a return of 10% per annum on the land valued at $1,200,000. The
term "Contributed Construction Costs," as used herein, shall mean funds that
Lessor will place in escrow pursuant to the terms hereof to be used towards
construction costs of the Improvements. Lessor's Contributed Construction Costs
are contemplated to be sixty ($60) dollars per square foot for the 7500 square
foot building but in no event shall Lessor's Contributed Construction Costs
exceed $450,000. Upon Substantial Completion of the Improvements, Lessor and
Lessee shall execute an amendment to this Lease specifying the initial Base Rent
hereunder as described in Section 6.03 hereinbelow. The Base Rent shall increase
by two percent (2%) per year over the previous year's base rent of the original
and any renewal term hereunder.
By way of example and not limitation, if Lessor's Contributed
Construction Costs are $450,000 Base Rent would be as follows:
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<TABLE>
<CAPTION>
YEAR ANNUAL BASE- RENT MONTHLY BASE RENT
---- ----------------- -----------------
<S> <C> <C> <C>
1 171,750.00 14,312.50
2 175,185.00 14,598.75
3 178,688.70 14,890.73
4 182,262.47 15,188.54
5 185,907.72 15,492.31
6 189,625.88 15,802.16
7 193,418.40 16,118.20
8 197,286.76 16,440.56
9 201,232.50 16,769.37
10 205,257.15 17,104.76
11 209,362.29 17,446.86
12 213,549.54 17,795.79
13 217,820.53 18,151.71
14 222,176.94 18,514.74
15 226,620.48 18,885.04
16 231,152.89 19,262.74
17 235,775.94 19,648.00
18 240,491.46 20,040.96
19 245,301.29 20,441.77
20 250,207.32 20,850.61
21 255,211.47 21,267.62
22 260,315.69 21,692.97
</TABLE>
Lessee shall pay to Lessor at 724 Peachoid Road Gaffney, South
Carolina, 29341, or to such other address as Lessor may from time to time
designate by written notice to Lessee, commencing on the earlier to occur of (i)
the date Lessee occupies the Premises, (ii) the date the Improvements are
Substantially Complete (as defined in Section 6.03 hereinbelow) or (iii)
November 1, 2000 (herein, such earlier date is referred to as the "Rent
Commencement Date"), and thereafter promptly on the first (1st) day of each
month, in advance, during the term of this Lease, in lawful money of the United
States of America, without offset or deduction, and without any prior notice and
demand, Base Rent calculated as provided above. In the event Lessee fails to pay
any installment of Base Rent, or other charge or imposition hereunder within ten
(10) calendar days after such installment or charge is due, in addition to all
of Lessor's other rights and remedies hereunder or at law and to help defray the
additional cost to Lessor for processing such late payment, Lessee shall pay to
Lessor on demand a late charge in an amount equal to five percent (5%) of such
installment. The provision for such late charge shall not be construed as
liquidated damages or as limiting Lessor's remedies in any manner. In the event
that the Commencement Date or the expiration date hereof occurs during the
middle of any month, the rent for that portion of the month shall be prorated on
a daily basis.
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ARTICLE IV
TAXES, ASSESSMENTS, UTILITIES, ACCESS AND MAINTENANCE
4.01 TAXES, ASSESSMENTS. Lessee, as a part of the consideration for the
Premises, shall timely pay, and indemnify and save harmless Lessor from, all
taxes, assessments, license fees, excises, personal property taxes charged
against trade fixtures, furnishings and equipment or any other personal property
at the Premises, taxes on Lessor's right to receive rental or on the receipt of
rental or income from the Premises (excluding Federal or State income or estate
taxes), taxes or charges for fire protection, road maintenance, refuse or
similar service, or other imposts and charges that during the term of this lease
shall be fixed, charged, levied, assessed or otherwise imposed upon the Premises
or roadways and access ways to the Premises, as presently improved or as the
same may be hereafter improved by Lessee under the terms of this Lease, or upon
Lessor as owner of the Premises, including any assessments or charges under any
declaration, reciprocal easement agreement or similar encumbrance affecting the
Premises and a pro rata share (based upon acreage of benefited property) of the
cost of maintaining roadways providing access to the Premises (herein, all of
such taxes, assessments and charges are collectively referred to as the
"Impositions"), with the exception that Impositions for the first and last years
of the term of this Lease shall be prorated as of the date of commencement and
of termination of this Lease. Lessor will promptly notify Lessee of any of such
Impositions. Lessor will attach to said notice, if applicable, a copy of the
bill or assessment related thereto. Lessee shall pay the sum so specified to
Lessor within fifteen (15) days following the date of Lessor's notice.
4.02 CONTEST OF IMPOSITIONS. If Lessee, in good faith, shall desire to
contest the validity or amount of any Imposition herein agreed to be paid by
Lessee, Lessee shall notify Lessor in writing of its intention to contest the
same, and Lessee may, at its sole cost and expense (in its own name), dispute
and contest the same and in such case such item need not be paid until adjudged
to be valid. Unless so contested by Lessee, all such Impositions shall be paid
by Lessee within the time provided by law, and, if contested, any such contested
item shall be paid before the issuance of execution on final judgment; provided,
however, that in the event Lessor in its sole judgment determines that the
failure to pay or discharge any such obligation during any such contest would
adversely affect or impair Lessor's title to the Premises, or its ground
lessor's or lender's interest therein, Lessee shall deposit with the Lender as
security for the payment and discharge of such contested item an amount equal
thereto, plus interest and penalties, and Lessor is hereby authorized to use
such funds to pay such obligation if necessary to preserve or protect Lessor's
title to the Premises, or such ground lessor's or lender's interest therein.
4.03 UTILITIES. Lessee shall furnish, at its own expense, all utilities
of every type and nature required by it in the use of the Premises and shall pay
or cause to be paid, all bills for water, sewerage, heat, gas, electricity and
other utilities, if any, used on, in connection with, or chargeable against the
Premises during the term of this Lease. Lessor shall not be liable in any way to
Lessee or any other party occupying any part of the Premises for any failure or
defect in any utility services furnished to the Premises by reason of any
requirement, act or omission of the public utility company serving the Premises
with such utility service, by reason of necessary repairs or improvements or any
other cause whatsoever.
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4.04 ACCESS FOR LESSOR. Lessor, and Lessor's employees, contractors,
subcontractors and agents, shall have the full, perpetual right to enter the
Premises at all reasonable times during business hours after endeavoring to
provide at least 24 hours prior notice to Lessee to make repairs, conduct
maintenance or otherwise inspect the Premises so long as such entry does not
unreasonably interfere with Lessee's business operations thereby.
4.05 DEFAULT IN PAYMENT. In case of any default by Lessee in the
payment of any Impositions (unless the same are being contested pursuant to
Section 4.02 hereof), or premiums of insurance, or the payment of any amounts
provided by this Lease to be paid by Lessee (other than the amounts made payable
as rent), or in procuring insurance as provided in this Lease, Lessor may, on
behalf of Lessee, make such payment or payments or procure any such insurance,
and Lessee covenants thereupon on demand to reimburse and pay Lessor any amount
so paid or expended. Any amounts payable hereunder by Lessee to Lessor and not
paid when due, including, without limitation, Base Rent and additional rent,
shall bear interest at the rate equal to the lesser of (i) eighteen percent
(18%) per annum or (ii) the highest rate permissible under law (the "Default
Rate"). If it becomes necessary to bring suit for collection of the Base Rent or
of any sums herein stipulated to be paid, or in case the same has to be
collected upon demand of any attorney, Lessee agrees to pay such reasonable
attorney's fees as are actually incurred by Lessor for outside counsel.
4.06 MAINTENANCE. Lessor and Lessee agree that this Lease constitutes a
net lease and accordingly, Lessor shall not be required to make any
improvements, repairs or replacements of any nature, kind or character to the
Premises during the term of this Lease. Lessee shall, at its sole cost, keep and
maintain all portions of the Premises neat and clean and in good order,
conditions, maintenance and repair, including, but not limited to the roof,
foundation, walls, floors, driveways providing access to the Premises, utility
lines serving the Premises, improvements and replacements of each of the
foregoing, hearings ventilating, and air conditioning plumbing and electrical
systems, downspouts, storefronts, sprinkler systems, sidewalks, equipment, and
any and all other repairs or maintenance necessary for any portion or part of
the interior or exterior of the Premises. Lessee shall provide or pay for pest,
bug and termite control service or otherwise keep the Premises free from pests,
termites and wood-boring infestation. Lessee shall be responsible for
maintaining the exterior landscaping of the Premises in a good and sightly
condition. Lessee shall, at its sole cost and expense, also repair any damage
necessitated by the negligent acts or omissions or Lessee, its agents,
employees, servants, subtenants, licensees, concessionaires, invitees or
customers. Lessee shall replace any and all plate, window and other glass
(structural or otherwise) in, on or about the Premises, which may be broken or
destroyed, with glass of the same or similar quality. Before undertaking repairs
to the Premises (other than minor interior non-structural and emergency
repairs), Lessee shall first obtain Lessor's approval of the plans and
specifications therefor, which approval is not to be unreasonably withheld.
Lessee shall, at its sole cost and expense, keep the Premises free of ice and
snow and other debris. Lessee shall maintain a preventive maintenance contract
providing for the regular inspection and maintenance of the heating and air
conditioning system by a licensed heating and air conditioning contractor.
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ARTICLE V
CONDEMNATION
5.01 If the whole of the Premises, or such substantial portion thereof
as will make the Premises unusable for the purposes herein leased, be condemned
by any legally constituted authority for any public use or purpose, then this
Lease shall terminate as of the time when possession thereof is taken by public
authorities, and rental shall be accounted for between Lessor and Lessee as of
that date. In the event the portion condemned is such that the remaining portion
can, after restoration and repair, be made usable for Lessee's purposes, then
this Lease shall not terminate, and subject to Lessor's receipt of condemnation
awards, Lessor shall make such award available to Lessee pursuant to
construction disbursements procedures reasonably satisfactory to Lessor and
Lessee for the purpose of restoring the Premises to an architectural whole.
Rental shall abate by reason of such condemnation by an amount allocable to the
portion of the building structure which was so taken or sold.
5.02 Any termination or obligation to repair, however, shall be without
prejudice to the rights of either Lessor or Lessee, or both, to recover from the
condemnor compensation and damages caused by such condemnation. Lessor and
Lessee acknowledge that Lessee shall have the right to apply for and collect the
value of its trade fixtures and special equipment at such time owned by it in
the Premises and any other compensable damages resulting from such condemnation
not affecting Lessor's settlement with the condemning authority; provided,
however, that Lessee shall have no claim against Lessor or against the condemnor
for the value of any unexpired portion of the term of this Lease or otherwise.
Neither Lessee nor Lessor shall have any rights in any award made to the other
by any condemnation authority.
ARTICLE VI
CONSTRUCTION OF IMPROVEMENTS ON PREMISES
6.01 CONSTRUCTION OF IMPROVEMENTS. From and after the date satisfaction
of the contingencies contained in Section 1.02 above, Lessee shall construct a
retail banking facility and related parking and amenities in accordance with the
site plan attached hereto as Exhibit "A-1," including without limitation, the
access ways shown thereon (the "Improvements") in accordance with the Final
Plans and the terms and conditions hereof. The Improvements, including any
signage, shall be of sound structural design and constructed of good materials
in a good and workmanlike manner, in accordance with the requirements of all
applicable laws, ordinances and regulations of duly constituted authorities
having jurisdiction thereof and in material accordance with plans and
specifications approved by Lessor pursuant to Section 6.02 below. Lessee shall
be totally responsible for complying with all aspects of the Americans With
Disabilities Act, as amended.
6.02 PLANS AND SPECIFICATIONS. The Improvements shall be constructed
substantially in accordance with detailed plans and specifications to be
prepared by Lessee at its expense and submitted to Lessor for written approval
prior within sixty (60) days of the date hereof, which shall be consistent with
the Preliminary Plans attached hereto as EXHIBIT "B". Lessee shall not commence
any construction activities prior to obtaining Lessor's written approval of such
plans and
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specifications. In the event Lessor fails to respond to Lessee by ten (10) days
after such plans and specifications are submitted by Lessee, the plans and
specifications submitted shall be deemed approved for purposes of this Lease.
Lessor shall not unreasonably withhold its approval to any submitted plans and
specifications so long as the contemplated Improvements are consistent with the
site plan attached hereto and are in compliance with applicable codes and zoning
ordinances (such plans and specifications as approved by Lessor are herein
referred to as the "Final Plans") and shall be attached hereto as EXHIBIT "D".
6.03 COMMENCEMENT/COMPLETION OF CONSTRUCTION. Lessee agrees to begin
construction as soon as practicable following the satisfaction of the
contingencies contained in Section 1.02 and to diligently prosecute construction
thereafter so that the same are Substantially Completed on or before November 1,
2000, which date may be extended for up to thirty (30) calendar days if
necessitated by Force Majeure (but such extension shall not extend the Rent
Commencement Date). Prior to commencement, Lessee shall deliver to Lessor copies
of the construction contract for such work, for Lessor's approval not to be
unreasonably withheld or delayed. The Improvements shall be deemed to be
"Substantially Complete" on the earliest of the date on which either: (1) the
Improvements are complete substantially in accordance with the Final-Plans
(except for "punch-list" items, such as minor details of construction,
decoration or mechanical adjustments which do not materially interfere with
Lessee's use and occupancy of the Premises), or (2) Lessee has obtained a final
certificate of occupancy. On the date the Improvements are Substantially
Complete, Lessee shall execute and deliver to Lessor a Commencement Date
Memorandum to be prepared at such time by Lessor acknowledging (i) the
Commencement Date, (ii) Lessee's acceptance of the Premises and (iii) Base Rent
hereunder. For purposes of this Lease, the term "Force Majeure" shall mean and
include the following: any delay caused by any action, inaction, order, ruling,
moratorium, regulation, statute, condition or other decision of any governmental
agency having jurisdiction over any portion of the Premises, over the
construction anticipated to occur thereon or over any uses thereof, or by fire,
flood, inclement weather, strikes, lockouts or other labor or industrial
disturbance whether or not on the part of agents or employees of either party
hereto engaged in the construction of the Premises), civil disturbance, order of
any government, court or regulatory body claiming jurisdiction or otherwise, act
of public enemy, war, riot, sabotage, blockade, embargo, failure or inability to
secure materials, supplies or labor through ordinary sources by reason of
shortages or priority, discovery of hazardous or toxic materials, earthquake, or
other natural disaster, or any cause whatsoever beyond the reasonable control
(excluding financial inability) of the, party whose performance is required, or
any of its contractors or other representatives, whether or not similar to any
of the causes hereinabove stated.
6.04 LIENS. In all contracts for construction and development of the
Premises, including professional service contracts relating thereto, Lessee
shall obtain the agreement of the other party that the other party has no lien
rights against the fee simple interest of Lessor in the land which is the
Premises. Such party shall acknowledge and agree that its lien rights relate
only to the leasehold estate of Lessee and Lessee's rights in this Lease. Lessee
shall deliver copies of such contracts to Lessor upon request of Lessor. All of
Lessee's contractors and subcontractors are put upon notice of the fact that
Lessee shall never, under any circumstances, have the power to subject the
interest of Lessor in the Premises to any mechanics' or materialmen's lien or
liens of any kind. All persons who may hereafter during the term of this Lease,
including any extensions thereof, furnish work, labor, services or materials to
the Premises upon the request or order of Lessee or any
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person claiming under, by or through or under Lessee, must look for claims or
compensation wholly to the interest of Lessee and not to that of Lessor.
6.05 ALTERATIONS. Lessee shall not make or cause to be made any
structural or other material alterations, additions or improvements
("Alterations") to the Premises without first submitting plans and
specifications therefor and obtaining Lessor's consent thereto which consent is
not to be unreasonably withheld or delayed. All alterations shall be designed
and constructed in accordance with all applicable governmental laws, statutes,
rules, ordinances and regulations.
6.06 PAYMENT AND PERFORMANCE OR COMPLETION BOND. Unless waived in
writing by Lessor, prior to commencing any repairs, alterations or new
improvements on the leased Premises, which are anticipated in cost in excess of
$50,000.00, including, without limitation, construction of the Improvements,
Lessee, or the contractor or contractors performing such repairs, alterations or
improvements on Lessee's behalf, shall post a payment and performance or
completion bond in form reasonably satisfactory to Lessor, to assure that the
repairs, Alterations or improvements will be completed and paid for and that no
laborer's or mechanic's liens will attach, containing a dual obligee rider
naming Lessor and if requested, Lessor's lender, as beneficiaries thereof.
6.07 OWNERSHIP OF IMPROVEMENTS. Except as otherwise provided herein,
all right, title and interest to the Improvements and the furniture, fixtures
and equipment being installed or placed at the Premises by Lessee shall belong
to Lessee; provided, however that upon the default of Lessee hereunder or the
expiration or termination of the term of this Lease, such right, title and
interest shall automatically and without the necessity of any further
documentation become the absolute property of Lessor (except that in the event
of expiration of the term, Lessee shall retain title to its movable furniture,
safety deposit boxes and ATM machine so long as any removal thereof does not
damage the building structure and Lessee repairs any damage caused by such
removal and restores the structure to an aesthetic appearance), and Lessee
hereby transfers and assign to Lessor such property, effective as of such date.
The bank vault shall under all circumstances remain with the Premises. No
further assignment shall be required for such change in ownership and the
foregoing assignment shall be self-operative. Lessee hereby agrees that it shall
not encumber or secure the purchase or use by Lessee of any fixtures and
equipment to be installed at the Premises, including, without limitation,
electrical systems, HVAC systems, and cooking, cleaning and refrigeration
equipment, with any security interest, title retention device, lease or other
interest.
ARTICLE VII
USE OF PREMISES - PROVISIONS OF GENERAL APPLICATION
7.01 USE OF PREMISES. The use of the Premises is intended for retail
banking and related purposes during the term of this Lease; any uses of the
Premises other than for retail banking related purposes shall only be with the
prior written consent of Lessor which consent shall be at Lessor's sole
discretion. Lessee shall use the Premises only in full compliance with (i) all
ordinances, statutes, rules and regulations of any applicable governmental
authorities, Board of Fire Underwriters, or any other entity having jurisdiction
over the Premises; and (ii) any covenants, conditions and restrictions,
affecting the real property. Lessee shall not make any use or suffer any part of
the Premises to be used in such a manner as to construct a nuisance or for any
improper, offensive, or unlawful purposes. Under no circumstances shall the
Premises be used for any
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purpose that creates a public or private nuisance; that emits noise or
objectionable, loud music; that is a liquor store; that is an adult bookstore or
establishment selling, exhibiting or distributing pornographic or obscene
materials or a massage parlor or a so-called "head shop" or nude dancing or
lingerie exhibiting establishment. Lessee shall at all times keep or cause the
Premises to be kept in neat and orderly condition and free from accumulations of
debris, refuse, materials, ashes and rubbish. Lessee will obey and comply with
all lawful requirements, rules, regulations and ordinances of all legally
constituted authorities, existing at any time during the continuance of this
Lease, in any way affecting the Premises or the use of the Premises or any
construction being done on the Premises or in any way affecting this Lease.
Lessee will, at all times and at its expense, keep any and all buildings or
improvements hereafter placed on the Premises in good order, condition and
repair. In the event, at any time during the term of this Lease, any addition,
alteration, change, repair or other work of any nature, structural or otherwise,
is required or ordered or becomes necessary on account of any governmental
regulation now in effect or hereafter adopted, passed or promulgated, or on
account of any other reason with respect to any buildings or improvements
hereafter placed on the Premises, the entire expense thereof, regardless of when
the same shall be incurred or become due, shall be the liability of Lessee and,
in no event, shall the Lessor be called upon to contribute thereto or do or pay
for any work of any nature whatsoever. Lessor, and its authorized
representatives may enter the Premises at reasonable times to inspect said
Premises in order to determine whether or not Lessee is complying with its
obligations under this Lease.
ARTICLE VIII
INSURANCE - INDEMNITY
8.01 RISKS TO BE INSURED. At all times during the term or this Lease,
including the period of construction or reconstruction of the Improvements or
any other improvements on the Premises, Lessee at Lessee's sole expense shall
maintain insurance as outlined below with insurance companies reasonably
acceptable to Lessor: (a) fire and extended coverage insurance and such other
hazard insurance as Lessor may from time to time require with respect to any
buildings and improvements now or hereafter located and constructed on the
Premises (including without limitation, the Improvements) in amounts not less
than 100% of the then full insurable value (actual replacement value without
deduction for depreciation) of all buildings and improvements located on the
Premises; (b) comprehensive public liability and property damage insurance
applicable to the Premises and any buildings and improvements located thereon,
in amounts reasonably approved by Lessor, but in any event in amounts not less
than $2,000,000.00 for injury or death to one person or damage to property,
protecting Lessee and Lessor against liability, damage, claim or demand in any
way arising out of or in connection with the ownership, condition, use or
operation of the Premises or any buildings and improvements located thereon
(with the liquor liability exclusion removed at any time that Lessee serves
alcoholic beverages at the Premises or Lessee shall otherwise carry liquor
liability coverage in an amount not less than $2,000,000); (c) statutory
worker's compensation insurance and employer's liability insurance governing all
employees; (d) business interruption or rent insurance against loss of business
or rents in an amount not less than the aggregate amount of the annual Base Rent
and Impositions so as to insure that such items are paid to Lessor during the
period of restoration; (e) during the period of construction of the
Improvements, builder's all risk replacement cost insurance on a non-reporting
completed value basis; and (f) such other insurance with respect to the Premises
in such amounts
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and against such insurable hazards as Lessor from time to time may reasonably
require. During any construction, repair, restoration or replacement of
buildings or other improvements on the Premises, Lessee will obtain and keep in
effect standard builders risk coverage with all risk coverage in the amount of
one hundred percent (100%) of the value of the improvements. Lessee will cause
all contractors and subcontractors to obtain and keep in effect worker's
compensation insurance to the full extent required by law and automobile and
public liability insurance as described in (b) and (c) previously in this
Section 8.01. Lessor shall have the right to review the insurance coverage
carried pursuant to this Section 8.01 not more often than once every three years
for the purpose of evaluating whether the coverage carried pursuant to this
Section 8.01 is consistent with that being carried for projects with similar
improvements in the Atlanta Statistical Metropolitan Area. Following such
review, Lessor shall notify Lessee of any adjustments in coverage (increases or
decreases) required to conform the insurance coverage with such other projects.
If Lessor fails to conduct such review within a given three year period, Lessee
shall have the right to request that Lessor undertake such review for the
purpose of adjusting the coverage then maintained.
8.02 POLICY PROVISIONS. All insurance maintained by Lessee pursuant to
the terms of the Lease shall (a) name Lessor and Lessee, as insured as their
respective interests may appear, as insureds, if requested by Lessor, (b)
provide that any losses shall be payable notwithstanding any act or negligence
of Lessor or Lessee, (c) provide that no cancellation, material alteration or
non-renewal thereof shall be effective until at least thirty (30) days after
receipt by Lessor or Lessee of written notice thereof, and (d) be reasonably
satisfactory to Lessor in all other respects. Each such policy shall contain a
deductible no greater than $1,000. Each insurance company issuing policies for
builder's risk, extended coverage, hazard or casualty insurance hereunder is
hereby authorized and directed that, all losses be paid to Lessor or Lessor's
lender, as their interests may appear, to be held by Lessor or such lender, in
accordance with the terms hereof. In the event any insurance company fails to
disburse directly and solely to Lessor or such lender but disburses instead
either solely to Lessee or to Lessee and Lessor jointly, Lessee agrees
immediately to endorse and transfer such proceeds to Lessor, to be used by
Lessor in accordance with Article IX hereinbelow. Upon the failure of Lessee to
endorse and transfer such proceeds as aforesaid, Lessor may execute such
endorsements or transfers for and in the name of Lessee and Lessee hereby
irrevocably appoints Lessor as Lessee's agent and attorney-in-fact so to do.
8.03 DELIVERY OF POLICIES; INSURANCE CERTIFICATES. Upon the execution
of this Lease and thereafter not less than thirty (30) days prior to the
expiration dates of the expiring policies previously delivered pursuant to this
Section, Lessee will deliver to Lessor certificates evidencing all insurance
coverage which Lessee is required to maintain pursuant to this Lease. Upon
request, Lessee shall deliver to Lessor copies of such policies.
8.04 INDEMNIFICATION BY LESSEE. Lessee will protect, indemnify and hold
harmless Lessor from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted
against Lessor by reason of (a) any accident, injury to or death of persons or
loss of or damage to property occurring on or about the Premises or any part
thereof or the improvements located thereon, (b) the occupancy or use of the
Premises by Lessee, its agents, employees, servants, subtenants, licensees or
concessionaires, (c) any use, nonuse or condition of the Premises or any part
thereof or the improvements located thereon, (d) any action by a third
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party based on any failure on the part of Lessee to perform or comply with any
of the terms of this Lease, or (e) any action of a third party based on
performance of any labor or services or the furnishings of any materials or
other property in respect of the Premises or any part thereof or the
improvements located thereon; unless such action, suit or proceeding arises out
of the sole negligence of Lessor or the act or omission of Lessor prior to
Lessee's taking possession of the Premises pursuant to this Lease. In case any
action, suit or proceeding is brought against Lessor by reason of any such
occurrence, Lessee, upon Lessor's request, will at Lessee's expenses resist and
defend such action, suit or proceedings, or cause the same to be resisted and
defended by counsel designated by Lessee and approved by Lessor, which approval
will not be unreasonably withheld.
8.05 WAIVER OF SUBROGATION. Lessor and Lessee each hereby waives any
claim which may arise in its favor against the other party hereto arising out of
this Lease (or any renewal or extension thereof), for any loss or damage to any
of its property located within, upon, or constituting a part of the Premises.
Lessor and Lessee each agree to have its own insurance company properly endorse
the property and casualty coverage insurance policies covering the Premises, or
anything located therein (i) to waive any subrogation claims against the other
party, and (ii) to prevent the invalidation of said insurance coverage by reason
of this mutual waiver. Lessor and Lessee hereby acknowledge and agree that it is
their intent to shift the risk for losses to property to their respective
insurers and that each is or shall be adequately insured to cover such risks.
8.06 FAILURE BY LESSEE TO PROVIDE INSURANCE. In the event Lessee fails
to provide and maintain the insurance policies required pursuant to this Article
VIII, in addition to all other remedies provided herein, Lessor shall have the
right to procure such insurance on Lessee's behalf and at Lessee's sole cost and
expense, and Lessee shall pay to Lessor the cost thereof, as additional rental
hereunder, within fifteen (15) days of Lessee's receipt of an invoice therefor
from Lessor.
8.07 SHORTFALLS IN INSURANCE. Notwithstanding anything contained
hereinabove to the contrary, in the event that the insurance maintained by
Lessee is insufficient to repair in its entirety the Premises, Lessee shall
complete such repair at its sole expense.
ARTICLE IX
DAMAGE OR DESTRUCTION OF IMPROVEMENTS
9.01 RESTORATION. If any buildings or improvements erected on the
Premises by Lessee shall be damaged or destroyed from any cause, subject to the
provisions of Section 9.03, Lessee, shall promptly commence and complete
(subject to Force Majeure) the restoration, replacement or rebuilding of said
buildings and improvements as nearly as possible to its value, condition and
character immediately prior to such damage or destruction. Lessee shall pay all
expenses in connection with said restoration, replacement or rebuilding so that
such buildings and improvements shall be free and clear from all liens and
claims for labor, materials, fees or other expenses. Lessor shall make insurance
proceeds available to Lessee for such purposes in accordance with Section 9.02
below.
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9.02 INSURANCE PROCEEDS. In the event any buildings or other
improvements are damaged or destroyed from any cause, any loss of up to Fifty
Thousand and No/100 Dollars ($50,000.00) under any policy of insurance required
to be obtained for protection against such damage or destruction shall be
payable to Lessee for restoration purposes; and any loss thereunder which in the
aggregate exceed Fifty Thousand and No/100 Dollars ($50,000.00) shall be made
payable in its entirety to Lessor or Lessor's lender and shall be held and
disbursed as follows:
All monies so received by Lessor shall be available to the Lessee for
the purpose of defraying the cost of rebuilding or repairing, as the
case may be, the buildings and improvements so injured or destroyed.
Any such repair, restoration or replacement shall be in accordance with
the provisions of Article VI and said proceeds shall be paid by Lessor
from time to time in accordance with certificates from the architect or
engineer supervising such restoration, repairing or rebuilding showing
the amount due to designated persons for labor, material and other
proper items of costs incurred in connection with the work of repair,
reconstruction or replacement in accordance with disbursement
procedures required by Lessor's lender or otherwise consistent with
disbursement procedures for construction loans.
If and when Lessee shall have completed the repairing or reconstruction or
replacement of the buildings and improvements as contemplated as Section 9.01
hereinabove, any funds remaining from the insurance proceeds shall be paid to
Lessee.
9.03 MAJOR DAMAGE. In the event any buildings or other improvements on
the Premises are damaged or destroyed from any cause (i) to the extent of more
than 50% of the cost of replacement thereof and (ii) less than one (1) year
remains unexpired on the original term at the time of such damage, then in any
such event, Lessor or Lessee may terminate this Lease by notice given within
thirty (30) days of the date of such damage, and on the date specified in such
notice, this Lease shall terminate. In such event, insurance proceeds for the
Improvements shall be paid to Lessor.
9.04 NO RENT ABATEMENT. If the Premises are destroyed or damaged,
unless this Lease is terminated as provided herein, Lessee shall not be entitled
to any rent reduction, or reimbursement from Lessor as a result of any damage,
destruction, repair, or restoration of or to the Premises.
ARTICLE X
ASSIGNMENT
10.01 TRANSFER AND ASSIGNMENT. Lessee shall not, without the prior
written consent of Lessor, assign this Lease or any interest hereunder, or
sublet the Premises or any part thereof, or permit the use of the Premises by
any party other than Lessee. Lessor's consent shall not be unreasonably
withheld, provided however that the assignee or sublessee of Lessee shall be of
an equal or better financial position than Lessee. Consent by Lessor to any
assignment or sublease shall not destroy this provision and all later
assignments or subleases shall be made likewise only on the prior written
consent of Lessor (on the same basis as aforesaid). If Lessee is a corporation,
partnership, joint venture or other entity, any transfer, sale or other
disposition of the stock or interest of Lessee which may or does cause a change
in control of Lessee shall be deemed an
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assignment of this Lease. Each assignee of Lessee shall become directly liable
to Lessor for all obligations of Lessee hereunder. No sublease or assignment by
Lessee shall relieve Lessee of any liability hereunder. To the extent Lessee
receives rents or other payments from any such sublessee or assignee in excess
of the rental payable to Lessor hereunder, Lessee shall immediately pay half of
such excess amount to Lessor as additional rent hereunder, and Lessee shall and
does hereby authorize Lessor directly to collect any and all such sums from such
assignee or sublessee, as the case may be.
ARTICLE XI
SUBORDINATION
11.01 This Lease and all of the rights of Lessee hereunder are subject
and subordinate at all times to any Deed to Secure Debt granted by Lessor, its
successors or assigns, which now or hereafter affects the Premises, and to all
renewals, modifications, consolidations, replacements and extensions thereof
(hereinafter, a "Deed to Secure Debt"). This clause shall be self-operative and
no further instrument of subordination shall be required by any holder of a Deed
to Secure Debt. In confirmation of such subordination, Lessee shall execute
promptly any certificate that Lessor may reasonably request related thereto.
11.02 If Lessor elects to have this Lease superior to any applicable
Deed to Secure Debt and its election is signified in some recorded instrument,
then this Lease shall be superior to such Deed to Secure Debt, notwithstanding
any other provision hereof.
11.03 Lessee agrees that if it sends any notice to Lessor concerning
Lessor's obligations hereunder, Lessee will also send a copy of any such notice
to the holder of any Deed to Secure Debt (so long as Lessee has been previously
notified in writing of the name and address of such holder), and in the event
any notice specifies some default on the part of Lessor, Lessee agrees to afford
the holder of any Deed to Secure Debt a reasonable time to effect a cure of such
default for and on behalf of Lessor, if the Lessor fails to cure the default.
Lessee agrees to execute such documents with respect thereto as may be
reasonably required by such holder.
11.04 Lessee shall, in the event any proceedings are brought for the
foreclosure of or in the event of the exercise of power of sale under any Deed
to Secure Debt made by Lessor covering the Premises, attorn to the Lessor at any
such sale and recognize the Lessor as Lessor hereunder.
11.05 This Lease shall be superior to, and have priority over, any
mortgage, deed to secure debt, security deed or similar security instrument
placed upon the Premises by Lessee.
11.06 Lessor agrees to use best efforts to obtain the agreement of the
holder of any Deed to Secure Debt made by Lessor, that in the event of a
foreclosure hereunder, that such holder of such security deed shall not name in
such foreclosure action or otherwise disturb the possession or right to
possession of Lessee hereunder, except for default by Lessee as set forth
hereinafter.
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ARTICLE XII
DEFAULT
12.01 Lessee shall be in default of this Lease if: (i) Lessee shall
default in the payment of rent and other sums and charges herein reserved,
including, without limitations Base Rent or Impositions, when due, and shall
fail to make such payment within three (3) calendar days of the date of written
notice from Lessor; (ii) Lessee files a petition in bankruptcy under any section
or provision of the bankruptcy law; (iii) Any involuntary petition in bankruptcy
filed against Lessee is not withdrawn or dismissed within sixty (60) calendar
days from the filing thereof; (iv) lessee is adjudicated bankrupt; (v) An order
appointing a receiver or trustee for Lessee's property shall remain in force for
thirty (30) calendar days after the entry of such order; (vi) Lessee makes an
assignment for the benefit of creditors; (vii) Any levy or attachment upon
Lessee's effects is not satisfied or dissolved within thirty (30) calendar days
after such levy or attachment; (viii) Lessee, whether voluntarily or
involuntarily, takes advantage of any debtor relief proceedings under any
present or future law, whereby the rent or any part thereof is, or is proposed
to be, reduced or payment thereof deferred; (ix) Lessee vacates or abandons the
Premises for a period in excess of thirty (30) days; or (x) Lessee defaults
under any other covenant, agreement, or condition to be performed or kept by the
Lessee under the terms and provisions of this Lease and shall fail to cure such
default within thirty (30) calendar days of the date of written notice from
Lessor.
12.02 Upon the occurrence of any default, or at any time thereafter
while such default or defaults shall continue, Lessor shall have the option to
elect to do any one or more of the following: (i) cure such default or defaults
at the expense of Lessee and without prejudice to any other remedies which
Lessor might otherwise have, collecting any payment made or expenses incurred by
Lessor in curing such default (with interest at the Default Rate) as additional
rent from Lessee with the next installment of rent falling due thereafter or
(ii) re-enter the Premises with or without process of law, by force or
otherwise, without notice, and dispossess Lessee and anyone claiming under
Lessee, by summary proceedings or otherwise, and remove their effects, and take
complete possession of the Premises. In such event, Lessee, for itself and all
others occupying the Premises under Lessee, hereby covenants peacefully to yield
up and surrender the Premises to Lessor. Either before or after such reentering,
dispossessing, removing and taking possession, Lessor may:
(1) declare this Lease forfeited and the term ended whereupon Lessor
shall be entitled to recover from Lessee the rental and all other sums due and
owing by Lessee up to the date of termination, plus the costs of curing all of
Lessee's defaults existing at or prior to the date of termination, plus
liquidated damages for failure of Lessee to observe and perform the covenants of
this Lease equal to the deficiency, if any, between Base Rent (and all other
charges, that otherwise would have become due hereunder) and the rental (less
Lessor's costs and expenses including brokers' commissions related thereto)
obtained by Lessor for the balance of the term remaining under this Lease from
any reletting of the Premises. In the event of termination of this Lease, Lessee
waives any and all rights to redeem the Premises given by any statute now in
effect or hereafter enacted. No receipt of money by Lessor from Lessee after the
termination of this Lease or after service of any notice or after the
commencement of any suit or after final judgment for possession of the Premises
shall reinstate, continue or extend the term of this Lease or affect any such
termination, notice, suit or judgment; or
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(2) declare this Lease forfeited and the term ended whereupon Lessor
shall be entitled to recover from Lessee the rental and all other sums due and
owing by Lessee up to the date of termination, plus the costs of curing all of
Lessee's defaults existing at or prior to the date of termination, plus
liquidated damages for failure of Lessee to observe and perform the covenants of
this Lease equal to the all Base Rent, Impositions and additional rental which
shall become due for the remainder of the term of this Lease, discounted to
present value using a percentage rate equal to the prime rate publicly
designated at such time by SunTrust Bank, Atlanta, or if Lessor has re-leased
the Premises, the deficiency, if any, between Lessee's rental (and all other
charges that otherwise would have become due hereunder) and the rental (less
Lessor's costs and expenses including brokers' commissions and costs of
alteration or renovation related thereto) obtained by Lessor for the balance of
the term remaining under this Lease from any reletting of the Premises
discounted to present value using a percentage rate equal to the prime rate
publicly designated at such time by SunTrust Bank, Atlanta provided, that,
Lessor shall deduct from such liquidated amount due the amount of rental Lessor
could reasonably obtain for the balance of the term hereof with consideration
given for market conditions at such time. Lessor and Lessee acknowledge that it
is impossible more precisely to estimate the damages to be suffered by Lessor
upon Lessee's default, and the parties expressly acknowledging that if Lessor
elects such remedy, such sum is intended not as a penalty, but as fully
liquidated damages pursuant to O.C.G.A. Section 13.6-7. In the event of
termination of this Lease, Lessee waives any and all rights to redeem the
Premises given by any statute now in effect or hereafter enacted. No receipt of
money by Lessor from Lessee after the termination of this Lease or after service
of any notice or after the commencement of any suit or after final judgment for
possession of the Premises shall reinstate, continue or extend the term of this
Lease or affect any such termination, notice, suit or judgment; or
(3) continue this Lease in full force and effect, but with the right at
any time thereafter to elect option (1) or (2) immediately hereinabove,
whereupon Lessor shall use its reasonable efforts to rent the Premises on the
best terms available for the remainder of the term hereof, or for such longer or
shorter periods as Lessor shall deem advisable. Lessee shall remain liable for
payment of all rentals and other charges and costs imposed on Lessee herein, in
the amounts, at the times and upon the conditions as herein provided, but Lessor
shall credit against such liability of Lessee all amounts received by Lessor
from such reletting after first reimbursing itself for all costs incurred in
curing Lessee's defaults, preparing and refinishing the Premises for reletting,
and reletting the Premises; or
(4) direct and receive from the Title Company (as defined below) the
Funds (as defined below), or any portion thereof remaining, as damages for
Lessee's default hereunder. Upon receipt by the Title Company of written notice
from Lessor of such default, setting forth the nature of such default, the Title
Company shall disburse to Lessor the Funds, or portion thereof remaining. Lessor
and Lessee acknowledge that such payment shall not constitute a penalty but is
in fact a reasonable estimate of the damages Lessor shall suffer and incur by
reason of Lessee's default and shall compensate Lessor for the costs required to
provide tenant improvements at the Premises for any subsequent tenant.
12.03 No re-entry by Lessor or any action brought by Lessor to oust
Lessee from the Premises shall operate to terminate this Lease unless Lessor
shall give written notice of termination to Lessee, in which event Lessee's
liability shall be as herein provided.
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ARTICLE XIII
ESTOPPEL CERTIFICATES
13.01 ESTOPPEL CERTIFICATE. Lessee will execute, acknowledge and
deliver to Lessor, within ten (10) days of request, a certificate certifying (a)
that this Lease is unmodified and in full force and effect (or, if there have
been modifications, that the Lease is in full force and effect, as modified, and
stating the modifications), (b) the dates, if any, to which the rent payable
hereunder has been paid, (c) whether or not there are then existing any offsets
or defenses against the enforcement of any term hereof on the part of Lessee to
be performed or complied with (and, if so, specifying the same), (d) that no
notice has been received by Lessee of any default which has not been cured, and
(e) such other information as Lessor may reasonably request. Any such
certificate may be relied upon by any prospective Lessor, mortgagee, or grantee
under a security deed or deed to secure debt of the leased premises or any part
thereof. If Lessee fails to deliver such estoppel certificate within 10 days of
request therefor, Lessee shall and does hereby irrevocably appoint Lessor as
Lessee's attorney in fact to execute and deliver such certificate.
ARTICLE XIV
HAZAROUS MATERIALS
14.01 Lessee agrees that it will not place, hold, or dispose of any
Hazardous Material (as hereinafter defined) on, under or at the Premises or the
Building and that it will not use the Premises or any other portion of the
Building as a treatment, storage, or disposal (whether permanent or temporary)
site for any Hazardous Material. Lessee further agrees that it will not cause or
allow any asbestos to be incorporated into any improvements or alterations which
it makes or causes to be made to the Premises. Lessee hereby agree to indemnify
Lessor against all losses, liabilities, damages, costs (including without
limitation, court costs attorneys' fees), and claims of any kind whatsoever
(including, without limitation, claims asserted or arising under the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, any so-called "Superfund" or "Superlien"
law, or any other Federal, state, local or other statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to or imposing liability
or standards of conduct concerning any Hazardous Material), which are paid,
incurred or suffered by, or asserted against Lessor as a direct or indirect
result of (i) any breach by Lessee of the foregoing covenants or (ii) to the
extent caused or allowed by Lessee or any agent, employee, invitee, or licensee
of Lessee, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, or release from, onto, or into the Premises, the
atmosphere, or any watercourse, body of water, or groundwater, of any Hazardous
Material. Promptly upon the written request of Lessor from time to time at any
time Lessor reasonably suspects the presence of any Hazardous Materials at, on,
under or within the Premises, Lessee shall provide Lessor, at Lessee's expense,
with an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable to Lessor, to assess with a
reasonable degree of certainty the presence or absence of any Hazardous
Materials at, upon, under or within the Premises and the potential costs in
connection with abatement, cleanup or removal of any Hazardous Materials found
on, under, at or with the Premises. In the event of any discharge of Hazardous
Materials or the threat of a discharge of any Hazardous Materials affecting the
Premises, whether or not the same originates or emanates from the Premises or
any contiguous real estate,
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and/or if Lessee shall fail to comply with any of the requirements of the
Hazardous Materials Laws, Lessor may at its election after providing Lessee with
thirty (30) days prior written notice and opportunity to remedy such discharge
or threat of discharge or failure of compliance (provided that if such remedy
cannot be effected during such thirty day period due to the nature thereof,
Lessee shall have a reasonable time thereafter in which to effect such remedy so
long as Lessee commences such remedy during such thirty day period and
diligently and in good faith pursues such remedy thereafter), but without the
obligation so to do, give such notices and/or cause such work to be performed at
the Premises and/or take any and all other actions as Lessor shall deem
necessary or advisable in order to abate the discharge of any Hazardous
Material, remove the Hazardous Material, or cure Lessee's noncompliance, and any
amounts paid as a result thereof shall be reimbursed by Lessee to Lessor within
fifteen (15) days of written demand therefor accompanied by invoices evidencing
such expenses. Notwithstanding anything to the contrary herein, nothing shall
give Lessor the right to influence or direct hazardous waste disposal decisions
or treatments, such being the sole responsibility of Lessee. The provisions of
and undertakings and indemnification set out in this Section 14.01 shall survive
the early termination or expiration of this Lease, and shall continue to be the
personal liability, obligation and indemnification of Lessee, binding upon
Lessee forever. The provisions of the preceding sentence shall govern and
control over any inconsistent provision of this Lease. For purposes of this
Lease, "Hazardous Material" means and includes any hazardous substance or any
pollutant or contaminant defined as such in (or for purposes of) the
Comprehensive Environment Response, Compensation, and Liability Act, any
so-called "Superfund" or "Superlien" law, the Toxic Substances Control Act, or
any other Federal, state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect, or any other
hazardous, toxic or dangerous, waste, substance or material.
ARTICLE XV
ADDITIONAL PROVISIONS
15.01 NOTICE TO LESSOR AND LESSEE. Any and all notices, elections,
demands, requests, and responses thereto permitted or required to be given under
this Lease shall be in writing, signed by or on behalf of the party giving the
same, and shall be deemed to have been properly given or served and shall be
effective upon being personally delivered or upon being deposited in the United
States Mail, postage prepaid, certified mail, return receipt requested, to the
other party at the address of such other party set forth below or at such other
address as such other party may designate by notice specifically designated as a
notice of change of address and given in accordance herewith; provided, however,
that the time period in which a response to any such notice, election, demand or
request must be given shall commence on the date of receipt thereof; and
provided further that no notice of change of address shall be effective until
the date of receipt thereof. Personal delivery to a party or to any officer,
partner, agent or employee of such party at said address shall constitute
receipt. Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice has been received shall also constitute
receipt. Any such notice, demand, or request shall be addressed as follows:
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(a) Lessor: 742 Peachoid-Road
Gaffney, South Carolina 29341
(b) Lessee: 281 South Main Street
Suite 105A
Alpharetta, Georgia 30004
(c) The holder of the Deed to Secure Debt (as hereinabove defined)
at such address as may be furnished to Lessee by Lessor.
15.02 NO WASTE. The Lessee will neither commit nor permit waste upon
the Premises, except as hereinabove expressly permitted.
15.03 TERMINATION. The words "terminate" or "termination" as used
herein shall refer to the end of this Lease whether due to the expiration of the
term hereof or the earlier ending of this Lease in accordance with the terms and
provisions hereof. If Lessee remains in possession of the Premises after
expiration of the term hereof, with Lessor's acquiescence and without any
express agreement of parties, Lessee shall be a tenant-at-will with rental
payable to Lessor at 200% of the rental rate in effect at the end of the Lease;
and there shall be no renewal of this Lease by operation of law. At the
termination of this Lease, Lessee shall surrender the Premises and keys thereof
to Lessor in the same condition as at the date of issuance of a certificate of
occupancy for the Improvements following Lessee's construction thereof, normal
wear and tear only excepted.
15.04 TIME OF ESSENCE - LAWS OF GEORGIA. Time is of the essence of this
Lease Agreement. All terms and provisions of this Lease shall be construed and
adjudicated in accordance with the laws of the State of Georgia.
15.05 ENTIRE AGREEMENT - NO WAIVER. This Lease contains the entire
agreement of the parties and no representations, inducements, promises or
agreements, oral or otherwise between the parties not embodied herein, shall be
of any force or effect. No failure by Lessor to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial rent
during the continuance of any such breach, shall constitute a waiver of any such
breach or of any such term and no custom or practice of the parties at variance
with the terms hereof shall constitute a waiver of Lessor's right to demand
exact compliance with the terms hereof.
15.06 LESSOR'S LIEN. In addition to any statutory lien for rent in
Lessor's favor, Lessor shall have and Lessee hereby grants to Lessor a
continuing security interest for all rentals and other sums of money becoming
due hereunder from Lessee, upon all goods, wares, equipment, fixtures,
furniture, inventory, accounts, contract rights, chattel paper and other
personal property of Lessee situated on the Premises, and such property shall
not be removed therefrom without the consent of Lessor until all arrearages in
rent as well as any and all other sums of money then due to Lessor hereunder all
first have been paid and discharged. In the event of a default under this Lease,
Lessor shall have, in addition to any other remedies provided herein or by law,
all rights and remedies under the Uniform Commercial Code. Lessee hereby agrees
to execute such financing statements and other instruments necessary or
desirable in Lessor's discretion to perfect the security interest
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hereby created. Lessor may approve Lessee to lease various items of equipment
with Lessor's approval not to be unreasonably withheld.
15.07 SECURITY DEPOSIT. [Intentionally omitted]
15.08 LESSOR'S LIABILITY. Upon the bona fide sale of the Premises by
Lessor and the assumption of Lessor's obligations hereunder by the Lessor
thereof, all obligations of the then-current Lessor under this Lease shall
terminate. Notwithstanding anything to the contrary contained in this Lease,
Lessee agrees and understands that Lessee shall look solely to the estate and
property of Lessor in the Premises for the enforcement of any judgment (or other
judicial decree) requiring the payment of money by Lessor to Lessee by reason of
any default or breach by Lessor in the performance of its obligations under this
Lease, including indemnities and warranties hereunder, it being intended hereby
that no other assets of Lessor or of any officers, directors, employees,
partners or venturers of Lessor or the entities comprising Lessor shall be
subject to levy, execution, attachment or any other legal process for the
enforcement or satisfaction of the remedies pursued by Lessee in the event of
such default or breach.
15.09 REMEDIES CUMULATIVE. All rights, powers, and remedies of Lessor
provided for in this Lease or not or hereafter existing at law or in equity or
by statute or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power or remedy provided for in this Lease or now
or hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Lessor of any one more of the rights,
powers or remedies provided for in this Lease or now or hereafter existing at
law or in equity or by statute or otherwise shall not preclude the simultaneous
or later exercise by Lessor or any or all such other rights, powers or remedies.
Receipt by Lessor of the Funds or any portion thereof remaining pursuant to
Section 12.02(4) shall not preclude the exercise by Lessor of other remedies
provided herein or at law or in equity or by statute.
15.10 ACCEPTANCE OF SURRENDER. No surrender to Lessor of this Lease or
of the Premises or any part thereof or of any interest therein by Lessee shall
be valid or effective unless agreed to and accepted in writing by Lessor, and no
act by any representative of Lessor, other than such a written agreement and
acceptance by Lessor, shall constitute an acceptance thereof.
15.11 BINDING EFFECT. Whenever reference is made herein to "Lessor" or
"Lessee," such reference shall be constructed to include and bind the heirs,
executors, legal representatives, successors and permitted assigns of the Lessor
and Lessee, as the case may be.
15.12 CAPTIONS AND HEADINGS. The captions and heading throughout this
Lease are for convenience and reference only, and the words contained therein
shall in no way be held or deemed to define, limit, describe, explain, modify,
amplify or add to the interpretation, construction, or meaning of any provision
of, or the scope of interest of, this Lease nor in any way effect this Lease.
15.13 MISCELLANEOUS. If any term of this Lease or any application
thereof shall be invalid or unenforceable, the remainder of this Lease and any
other application of such term shall not be affected thereby. This Lease may be
changed, waived, discharged or terminated only by an instrument in writing
signed by Lessor and Lessee.
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15.14 COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
15.15 ENTRY. Lessor may card the Premises "For Rent" one hundred eighty
(180) days before the termination of this Lease or "For Sale" at any time.
Lessor may also enter the Premises at any time for the purposes of inspecting
the Premises and monitoring the course of construction, repairs or maintenance.
15.16 REAL ESTATE BROKER. Lessor and Lessee hereby warrant to the other
that neither has engaged the services of any broker, agent or finder except The
Myrick Company ("Broker"), which shall be paid a commission for such services by
Lessee in the amount of the first months' rental hereunder and five percent (5%)
of all other rental paid hereunder, as and when paid. Lessee shall provide
Lessor with a waiver signed by Broker waiving any and all claims against Lessor
and the real estate. Except for such commission payable by Lessee to Broker,
Lessor and Lessee hereby indemnify and hold each other harmless from any claim,
demand, liability, or cause of action for any brokerage commission, fee, or
other similar compensation or cost arising out of the acts of the other party
hereto in connection with this Lease or the interest created hereby or any
sublease or assignment entered into by Lessee.
15.17 NO OPTION TO PURCHASE. This Lease does not constitute an option
to purchase the property by Lessee.
ARTICLE XVI
ADDITIONAL PROVISIONS REGARDING FUNDS FOR CONSTRUCTION
16.01 ESTABLISHMENT OF ESCROW. Upon expiration of the Contingency
Period, Lessee will provide written notice to Lessor of its waiver of the right
to terminate this Lease pursuant to Section 1.02 and of its intent to commence
construction of the Improvements. This notice shall also stipulate the amount of
Contributed Construction Costs, in any event not to exceed $450,000, that are to
be paid by Lessor toward the cost of constructing the Improvements. A copy of
Lessee's construction contract (the "Construction Contract") shall be attached
to such notice. Lessee shall at the time of delivery of such notice place on
deposit with Chicago Title Insurance Company ("Escrow Agent") pursuant to an
escrow agreement reasonably satisfactory to Lessor, Lessee and Escrow Agent, the
amount required for construction of the Improvements, less the Contributed
Construction Costs, as reflected in the Guaranteed Maximum Price set forth in
the Construction Contract. Lessor shall place the Contributed Construction Costs
with Escrow Agent pursuant to such escrow agreement on or before September 1,
2000. Lessee covenants and agrees to use such funds solely for payment of costs
and expenses related to the construction of the Improvements.
16.02 RELEASE OF ESCROW FUNDS. Upon completion of each portion of the
construction of the Improvements as evidenced by a draw request from the general
contractor which has been approved and certified by the contractor and the
project architect pursuant to standard AIA construction contract forms, Lessee
shall submit a written request for release of funds to Lessor and Escrow Agent,
accompanied by such draw request ("Draw Request"). Funds shall be released in
accordance with the following procedures:
21
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As of the date of each Draw Request, the project architect, or such
other construction engineer approved by both Lessor and Lessee, shall have
delivered to Escrow Agent and Lessor or Lessee, Lessee, as appropriate, a
certification stating (a) the amount of labor and materials that have been
incorporated into the Improvements, (b) that sufficient amounts remain in escrow
for Completion of the Improvements, (c) the portion of the Improvements which
are completed comply with the Final Plans, and (d) the portion of the
Improvement which are completed complies with applicable rules, regulations and
ordinances applicable to such Improvements.
CERTIFICATION FROM GENERAL CONTRACTOR. As of the date of each Draw
Request, Lessee shall have delivered to Escrow Agent and Lessor a letter
certifying that the prior disbursement(s) was applied toward payment under the
applicable contract, as referenced under the Draw Request in full satisfaction
of such amount, subject to any retainage requirements in the governing contract.
LIEN WAIVERS. Escrow Agent and Lessor or Lessee, as appropriate, shall
have received waivers or subordinations of lien rights through the date of the
Draw Request satisfactory to Lessor's title insurer that all contractors and
materialmen, performing work on or providing materials to the Property have been
paid in full, in the form attached hereto as Schedule 2 and by contractors,
subcontractors and materialmen in connection theretofore have been constructed.
Upon the Final Draw attached hereto as Schedule 3.
TITLE. Within five (5) days of receipt by Lessor of notice that Lessee
has submitted a Draw Request, Lessor, by written notice, may request Lessee to
obtain, at Lessee's costs, a title endorsement to Lessor's owner's title
insurance policy indicating that the Premises is free of liens created by
Lessee's contractor. Lessee shall pay the cost of such title endorsement.
HOLDBACK. All Draw Requests, except for the final advance, may request
an advance for not more than ninety percent (90%) of the total work completed as
of the date of the Draw Request.
FREQUENCY OF DISBURSEMENTS. Escrow Agent shall make disbursements no
more frequently than once a month and each Draw Request shall be submitted to
Escrow Agent at least five (5) days prior to the date of the requested advance.
FINAL ADVANCE. Upon completion of each item of the Improvements, as
certified by Lessor and Lessee, as required hereunder, Escrow Agent shall
disburse the total amount of all cost and expenses escrowed for such item that
shall be completed.
ADEQUATE REMAINING FUNDS. The funds remaining in the escrow account
held by Escrow Agent together with the Contributed Construction Costs must
always be sufficient to cover all costs reasonably anticipated to be incurred to
complete the Improvements as determined by Lessee's and Lessor's engineers as
provided hereinabove. Lessee shall not be entitled to any disbursement to the
extent that the remaining funds in escrow shall be insufficient to cover the
costs reasonably anticipated to be incurred to complete the Improvements
required by the Construction Contract. Lessee further agrees to fund any excess
costs over the Escrow Amount which are required to complete the Improvements.
22
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16.03 INTEREST ON CONTRIBUTED CONSTRUCTION COSTS. The Contributed
Construction Costs placed in escrow shall be placed in an interest bearing
account and all accrued interest shall belong to Lessor.
ARTICLE XVII
OFFER AND ACCEPTANCE
17.01 OFFER AND ACCEPTANCE. This Lease shall be regarded as an offer by
Lessor to Lessee and is open for acceptance by Lessee until 5:00 P.M., March 17,
2000, by which time written acceptance of such offer must have been actually
received by Lessor. In the event Lessor's offer is not so accepted by said time
and date, this Lease shall be null, void and of no further force or effect, and
neither Lessor nor Lessee shall have any further rights or obligations
hereunder.
[Executions on following page]
23
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals,
by and through their duly authorized representatives as of the date and year
first above written.
LESSOR:
PIONEER REAL ESTATE DEVELOPMENT, INC.
A Georgia Corporation
Date MARCH 9, 2000 By: /s/ JAMES O. HAMRICK
--------------- -------------------------------
Name: JAMES O. HAMRICK
------------------------------
Title: PRESIDENT
-----------------------------
[AFFIX CORPORATE SEAL]
LESSEE:
FUTURUS FINANCIAL SERVICES, INC.
A Georgia Corporation
Date MARCH 14, 2000 By: /s/ WILLIAM M. BUTLER
---------------- -------------------------------
Name: WILLIAM M. BUTLER
------------------------------
Title: PRESIDENT AND CEO
-----------------------------
[AFFIX CORPORATE SEAL]
24
<PAGE>
EXHIBIT "A"
SITE LEGAL DESCRIPTION
FUTURUS FINANCIAL SERVICES INC.
ALL THAT CERTAIN TRACT OR PARCEL of land lying and being in Land Lot
1120 of the Second District of the Second Section in the City of Alpharetta,
County of Fulton, Georgia, being more particularly described as follows:
TO FIND THE POINT OF BEGINNING, commence at a 5/8" rebar set at the
Northernmost mitered corner at the intersection of the Southerly right of way
line of Windward Parkway (having a variable right-of-way), and the Westerly
right-of-way line of Westfield Drive (having a variable right-of-way); said
point being the TRUE POINT OF BEGINNING.
FROM THE POINT OF BEGINNING THUS ESTABLISHED, thence along the Westerly
right-of-way line of Westfield Drive South 04 degrees 09 minutes 30 seconds East
for a distance of 32.63 feet to a 5/8" rebar set; thence South 52 degrees 53
minutes 50 seconds West for a distance of 203.00 feet to a 5/8" rebar set;
thence South 86 degrees 42 minutes 36 seconds West for a distance of 35.08 feet
to a 5/8" rebar set; thence leaving said right-of-way North 38 degrees 17
minutes 46 seconds West for a distance of 215.00 feet to a 5/8" rebar set;
thence North 51 degrees 42 minutes 14 seconds East for a distance of 250.00 feet
to a 5/8" rebar set on the Southerly right of way line of Windward Parkway
(having a variable right-of-way); thence along said right-of-way South 38
degrees 17 minute 46 seconds East for a distance of 212.34 feet to a 5/8" rebar
set; said point being the TRUE POINT OF BEGINNING.
TOGETHER with and subject to covenants, easement and restrictions of
record.
SAID property contains 1.348 acres and is more fully shown on a
Boundary and Topographic survey for Futurus Financial Services, Inc. prepared by
Geosurvey, Ltd. Land Surveyors and Mappers, dated January 24, 2000 bearing their
job number 990535, which certain survey is incorporated herein by this reference
and made a part hereof.
25
<PAGE>
EXHIBIT 10.2
ALPHARETTA SQUARE
SHOPPING CENTER LEASE
THIS LEASE (the "Lease") made and entered into as of the _____ day of
_____________, 2000, by and between Daniel B. Cowart DBA ALPHARETTA SQUARE
SHOPPING CENTER ("Lessor"), and FUTURUS FINANCIAL SERVICES, INC._______________,
("Lessee"),
WITNESSETH:
ARTICLE I
REFERENCE PROVISIONS, DEMISED PREMISES AND TERMS
Section 1.1. Reference Provisions. Where used in this Lease, the
designated terms hereinafter set forth shall have the meanings ascribed thereto
by the provisions of this Section 1.1:
(a) "SHOPPING CENTER" - that certain real property (the "Site") more
particularly described in Exhibit "A" attached hereto and by this reference
incorporated herein together with all improvements now located or hereafter
erected thereon, less any deletions pursuant to this Lease, plus such additions
as Lessor may from time to time designate as comprising part of the Shopping
Center. The site plan attached hereto as Exhibit "B" and by this reference
incorporated herein is a schematic plan only intended to show the general layout
of the Shopping Center. Lessor reserves the right to alter, vary, add to or omit
in whole or in part the structures, common areas, and/or land areas shown on
this plan. This plan is subject to change and modification by governmental
authorities having jurisdiction. All measurements and distances are approximate.
Lessor does not covenant or represent that any occupant indicated hereon is or
will remain a lessee in either the space marked or in any other space in the
Shopping Center and nothing set forth in this plan is a representation,
agreement or easement right except as specifically set forth in the Lease.
(b) "DEMISED PREMISES" - that certain space located in a building
erected on the Site containing approximately 1,500 square feet and being shown
and outlined in red on the site plan ("Site Plan") attached hereto as Exhibit
"B" and by this reference incorporated herein and being known as Shop No. 105A
(c) "LESSEE'S TRADE NAME"- FUTURUS BANK, N.A.
(d) "TERM" - the period of time commencing as of the date hereof and
ending unless extended or sooner terminated as herein provided, at 12:00 o'clock
(midnight) on the 15th day of February, 2000 and ending on the 31st day of July,
2000, (as hereinbelow defined).
(e) "LEASE YEAR" - each period (during the Term) of twelve (12)
calendar months which begins on the Rental Commencement Date (as hereinbelow
defined) or on any annual anniversary thereof, plus said shorter period (if any)
which begins as aforesaid and ends on the date of the termination of this Lease.
(f) "MINIMUM RENT" - the Minimum Rent shall be payable monthly in
advance beginning on the "Rental Commencement Date" (as hereinbelow defined).
The Minimum Rent shall be:
$14.00/psf = $1,750.00/mo., and $21,000.00/year
Month-to-Month after first six months at a rate of $14.40, or
$1,800.00 per month.
<PAGE>
(h) "LESSEE'S SHARE OF REAL ESTATE TAXES" - as specified in
Section 2.6.
(i) "LESSEE'S SHARE OF COMMON AREA COSTS" - as specified in
Section 2.7.
(j) "LESSEE'S SHARE OF INSURANCE PREMIUMS" - as specified in
Section 2.9.
(k) "USE" - Lessee shall use the Demised Premises solely for the
purpose of a banking facility, subject to restrictions by virtue of exclusives
of other tenants set forth in the Rider attached to this Lease, and for no other
purposes whatsoever.
(l) "COMMON AREA" - All areas and facilities in the Shopping Center
designated for the general use, in common, of occupants of the Shopping Center,
including the Lessee hereunder, its officers, agents, employees and customers.
Common Areas shall include, to the extent provided, the parking areas,
sidewalks, roadways, loading platforms, restrooms, ramps and landscaped areas.
(m) "SECURITY DEPOSIT" - the amount of $ 3,500 of which $ 1,750 shall
be applied against the first due installment of Minimum Rent and $1,750 shall be
repaid, without interest, to Lessee after the termination of this Lease and any
renewal thereof, provided Lessee shall comply with all terms of this Lease, and
otherwise, the entire Security Deposit held by Lessor shall be applied as
provided in Sections 10.2 and 11.3 hereof.
(n) "CONSTRUCTION OBLIGATIONS" - as specified in Article III.
(o) "ADDRESSES FOR NOTICES" -
TO LESSOR: DANIEL B. COWART dba
ALPHARETTA SQUARE SHOPPING CENTER
c/o AFCO Realty Services, LLC
Attn: Terri Y. Richards
4200 Northside Parkway, Bldg. 12
Atlanta, GA. 30327-3049
TO LESSEE: Mr. William M. Butler
P. O. BOX 1145
Alpharetta, GA 30009
(770)643-2512
(p) "LIST OF EXHIBITS" -
Rider - Special Provisions
Exhibit "A" - Legal Description
Exhibit "B" - Site Plan
<PAGE>
Section 1.2. Granting of the Demised Premises. Lessor hereby leases to
Lessee, and Lessee hereby rents from Lessor, the Demised Premises. Provided
Lessee is not in default hereunder, Lessee shall be entitled to use the Common
Areas in common with Lessor and the other tenants of the Shopping Center
throughout the Term of this Lease.
Lessor may make limited relocations of the Demised Premises and may
increase, reduce or change the number, dimensions or location of the
improvements comprising the Shopping Center or any of them in any manner
whatsoever as Lessor shall deem proper; provided, however, that Lessor may not
substantially alter the location of the Demised Premises as shown on the Site
Plan without the prior written consent of Lessee.
It is expressly understood and agreed that nothing herein contained
shall be construed as a grant or rental of or a conveyance of: any rights in the
roof or exterior of the building or buildings of which the Demised Premises
constitute a part; the air space (occupied or not) above a horizontal elevation
plane coterminous with the bottom edge of the structural steel framework
supporting the roof of the Demised Premises; the Common Area (except as herein
before specifically provided to the contrary); the air space (occupied or not)
below a horizontal elevation plane coterminous with the finished floor level of
the Demised Premises; or of the land upon which the Demised Premises are
located.
Section 1.3 Floor Area. The term "Floor Area" as used in this Lease
shall mean the number of square feet of floor space within the Demised Premises
as set forth in Section 1.1 (b) and any area outside the Demised Premises which
is exclusively appropriated for use by Lessee; subject, however, to the
limitations of Section 1.2 hereof.
Section 1.4 Acceptance of Demised Premises. By acceptance of possession
of the Demised Premises for performance of Lessee's work in the Demised
Premises, Lessee shall be deemed to have accepted the Demised Premises, to have
acknowledged that the same are in the condition called for hereunder and to have
agreed that all of the obligations imposed upon Lessor pursuant to Exhibit "C"
of this Lease have been fully performed. Lessee agrees that promptly following
the delivery of possession of the Demised Premises to Lessee, Lessee shall
execute the Demised Premises Acceptance Letter in the form attached hereto as
Exhibit "D".
Section 1.5 Quiet Enjoyment. Lessee, upon paying the rents herein
reserved and performing and observing all other terms, covenants and conditions
of this Lease on Lessee's part to be performed and observed, shall peaceably and
quietly have, hold and enjoy the Demised Premises during the Term, subject,
nevertheless, to the terms of this Lease and to any mortgages, ground or
underlying leases, agreements and encumbrances to which this Lease is or may be
subordinated.
Section 1.6 Rental Commencement Date. Except as herein provided to the
contrary, the phrase "Rental Commencement Date" shall mean
Section 1.7 Failure to do Business. The parties covenant and agree that
because of the difficulty or impossibility of determining Lessor's damages by
way of loss of the anticipated Percentage Rent from Lessee or by way of loss of
value of the Shopping Center because of diminished salability or mortgageability
or adverse publicity or appearance by Lessee's actions, should Lessee (a) fail
to open for business in the Demised Premises fully fixtured, stocked and staffed
on the Rental Commencement Date, (b) vacate, abandon or desert the Demised
Premises, (c) cease operating or conducting its business in the Demised Premises
(except during any period the Demised Premises are rendered untenantable by
reason of fire, casualty or permitted repairs or alterations), or (d) fail or
refuse to maintain the business hours on the days or nights or a part thereof as
provided in Section 4.2 (a) hereof, then in any of such events (hereinafter
collectively referred to as "failure to do business"), Lessor shall have the
right, at its option, and as
<PAGE>
liquidated damages due to the difficulty of ascertaining actual damages, to
collect not only Minimum Rent, Percentage Rent and other rents, charges and sums
herein reserved, but also an amount payable as additional rent equal to one
hundred percent (100%) of the Minimum Rent reserved for the period of Lessee's
failure to do business, computed at a daily rate for each and every day or a
part thereof during such period; and Lessor and Lessee agree that such
additional rent shall be deemed to be their best estimate of the damages which
will be suffered by Lessor as a result of Lessee's failure to do business and
such amount shall be payable as liquidated damages in lieu of any Percentage
Rent that might have been earned by Lessor during such period. Lessor shall also
have the right to treat such failure to do business as a default under Section
10.1 of this Lease.
ARTICLE II
RENT AND OTHER CHARGES
Section 2.1 Minimum Rent. Lessee shall pay Lessor without previous
demand therefor and without any setoff or deduction whatsoever, except as
expressly provided in this Lease, the Minimum Rent provided in Section 1.1(f),
payable in equal monthly installments, in advance, on the first day of each and
every calendar month throughout the Term. The Minimum Rent shall commence to
accrue on the Rental Commencement Date. The first full rental payment date
hereunder shall be the first day of the first calendar month following the
Rental Commencement Date and on that date Lessee shall pay to Lessor the Minimum
Rent set forth in Section 1.1(f) for the month beginning on such date plus a
proportionate amount thereof for the period, if any, beginning on the Rental
commencement Date and ending on the day preceding such first rental payment date
hereunder.
Section 2.6. Taxes. Commencing with the Rental Commencement Date and
thereafter during the Term hereof, Lessee shall pay promptly when due all taxes
imposed upon Lessee's rent and business operation and upon all personal property
of Lessee, and shall also pay to Lessor, as additional rent, Lessee's share of
"Real Estate Taxes" (as hereinafter defined) as specified in this Section 2.6.
Lessee's share of "Real Estate Taxes" shall be computed by multiplying the total
amount of such taxes by a fraction, the numerator of which shall be the total
number of square feet of Floor Area, and the denominator of which shall be the
total number of square feet of floor space leasable in the Shopping Center.
Lessor shall furnish Lessee copies of all tax bills affecting Lessee's share of
Real Estate Taxes and a statement of the calculation of same upon demand.
<PAGE>
For purposes of this Lease, the phrase "Real Estate Taxes" shall mean
and include any and all governmental levies, fees, charges, taxes or assessments
of every kind and nature whatsoever which during the Term are levied, assessed,
become due and payable or are imposed against the Shopping Center or any portion
thereof or against Lessor by reason of its ownership and operation of the
Shopping Center and its receipt of rents therefrom, extraordinary as well as
ordinary, foreseen and unforeseen, including, without limitation, ad valorem
taxes, rent taxes, water and sewer rents, all other governmental exactions
arising in connection with the use, occupancy or possession of, or growing due
and payable out of or for the Shopping Center or any part thereof and expenses
directly incurred by Lessor in contesting the validity of, in seeking a
reduction in, or in seeking to prevent an increase in any such tax(es);
provided, however, that the phrase "Real Estate Taxes" shall not be deemed to
include any inheritance, estate, succession, transfer, gift, franchise,
corporation, general income or profit tax or capital levy or special assessment
against the Shopping Center for permanent public improvements except as may be
hereinafter specifically enumerated.
Lessor shall estimate Real Estate Taxes on the basis of periods of
twelve (12) consecutive calendar months designated by Lessor, and Lessee shall
pay one-twelfth (1/12) of such estimate in equal monthly installments, together
with the payment of Minimum Rent. In the event the aggregate of Lessee's
installments during any such period (or part thereof) shall be less than the
amount of taxes due from Lessee, such deficiency shall be paid to Lessor within
ten (10) days after demand therefor. For any period within the Term which is
less than a full year, Lessee's share of Real Estate Taxes shall be
appropriately prorated. Subject to adjustment herein contemplated, Lessee shall
pay Lessor in advance on the first date of each calendar month as an initial
estimate of Lessee's share of Real Estate Taxes the amount equal to 1/12 of an
amount computed by multiplying the annual rate of approximately ninety cents
($0.90) times the total square feet of Floor Area of the Demised Premises.
Section 2.7. Common Area Charges. Commencing with the Rental
Commencement Date and thereafter during the Term hereof, Lessee will pay to
Lessor, as additional rent, an annual amount, without deduction or setoff, equal
to such proportion of "Lessor's Operating Cost of the Common Areas" as the Floor
Area of the Demised Premises bears to total floor space leasable in the Shopping
Center.
For the purposes of this Section 2.7, "Lessor's Operating Cost of the
Common Areas" is defined as including all of Lessor's costs and expenses of
operating and maintaining the Common Areas in the Shopping Center, and shall be
deemed to include, without limitation, landscaping, sanitary control, cleaning,
utilities, snow removal, resurfacing, painting, fire protection, security,
traffic control, repairs, policing and Lessor's overhead expenses for
administering same in an amount not to exceed fifteen percent (15%) of the total
of such costs.
The annual charge shall be computed on the basis of periods of twelve
(12) consecutive calendar months as designated by Lessor, and shall be paid by
Lessee in equal installments in advance on the first day of each calendar month
in an amount reasonably estimated by Lessor. For any period within the Term
which is less than a full year, the annual charge shall be appropriately
prorated. Within sixty (60) days after the end of each such twelve (12) month
period, Lessor will furnish to Lessee a statement showing in reasonable detail
the amount of Lessor's operating costs for the preceding period, any necessary
adjustments shall thereupon be made, and the monthly payments to be made by
Lessee for the ensuing year shall be estimated accordingly. Changes in
applicable Floor Areas shall result in corresponding pro rata adjustments.
Subject to adjustment as herein contemplated, Lessee shall pay Lessor in advance
on the first day of each calendar month as an initial estimate of Lessee's share
of Common Area charges the amount equal to 1/12 of an amount computed by
multiplying the annual rate of approximately eighty cents ($0.80) times the
total square feet of Floor Area of the Demised Premises.
<PAGE>
Section 2.8. Utility Charges. Lessee shall pay promptly, as and when
the same become due and payable, all water rents, rates and charges, all sewer
rents and all charges for electricity, gas heat, steam, hot and/or chilled
water, air conditioning, ventilating, lighting systems, and other utilities
supplied to the Demised Premises, and any sewer fees, assessments, capacity
charges, tap fees, and hook up charges for the Shopping Center. If any such
utilities or charges are not separately metered or assessed or are only
partially separated metered or assessed and are used in common with other
tenants in the Shopping Center, Lessee will pay to Lessor a proportionate share
of such charges for utilities used in common based on square footage of floor
space leased to each lessee using such common facilities, in addition to
Lessee's payments of the separately metered charges.
Lessor may install re-registering meters and collect any and all
utility charges as aforesaid from Lessee, making returns to the proper public
utility company or governmental unit, provided that Lessee shall not be charged
more than the rates it would be charged for the same services if furnished
direct to the Demised Premises by such companies or governmental units. At the
option of Lessor, any utility or related service which Lessor may at any time
elect to provide to the Demised Premises may be furnished by Lessor or any agent
employed by or independent contractor selected by Lessor, and Lessee shall
accept the same therefrom to the exclusion of all other suppliers so long as the
rates charged by the Lessor or by the supplier of such utility or related
service are competitive. If utilities are metered, but an accurate meter reading
is not possible, Lessee shall pay pursuant to the formula based on square
footage.
Lessor shall have no liability to Lessee for disruption of any utility
service, and in no event shall such disruption constitute constructive eviction
or entitle Lessee to an abatement of rents or other charges.
Section 2.9. Insurance Costs. Lessee hereby agrees to pay to Lessor, as
additional rent, an annual amount, without deduction or setoff, equal to such
proportion of "Lessor's Insurance Costs" as the Floor Area of the Demised
Premises bears to the total floor space leasable in the Shopping Center.
For the purposes of this Section 2.9, "Lessor's Insurance Costs" is
defined as including the costs to Lessor of insurance obtained by Lessor in
connection with the Shopping Center, including without limitation, any liability
insurance or personal injury, death and property damage insurance, fire, theft,
or other casualty insurance, Worker's Compensation Insurance covering personnel,
fidelity bonds for personnel, and insurance against liability for defamation and
claims of false arrest occurring in or about the Common Areas.
The annual charge for Lessor's Insurance Costs shall be computed on the
basis of periods of twelve (12) consecutive calendar months as designated by
Lessor, and shall be paid by Lessee in equal installments in advance on the
first day of each calendar month in an amount reasonably estimated by Lessor.
For any period within the Term which is less than a full year, the annual charge
shall be appropriately prorated. Within sixty (60) days after the end of each
twelve (12) month period, Lessor will furnish the Lessee a statement showing in
reasonable detail the amount of Lessor's Insurance Costs for the preceding
period, any necessary adjustments shall thereupon be made, and the monthly
payments to be made by Lessee for the ensuing year shall be estimated
accordingly. Changes in applicable Floor Areas shall result in corresponding pro
rata adjustments. Subject to adjustment as herein contemplated, Lessee shall pay
Lessor in advance on the first day of each calendar month as an initial estimate
of Lessee's Share of Insurance Costs the amount equal to 1/12 of an amount
computed by multiplying the annual rate of approximately ten cents ($0.10) times
the total square feet of Floor Area of the Demised Premises.
Lessee further agrees to pay on demand any increase in premiums that
may be charged on insurance carried by Lessor resulting from Lessee's use or
occupancy of the Demised Premises or any other part of the Shopping Center.
<PAGE>
Section 2.10. Additional Rent. In addition to the Minimum Rent and
Percentage Rent, all other payments to be made by Lessee hereunder shall be
deemed for purposes of securing the collection thereof to be additional rent
hereunder, whether or not the same be designated as such, and Lessor shall have
the same rights and remedies upon Lessee's failure to pay the same as for the
nonpayment of Minimum Rent. Lessor, at its election, shall have the right (but
not the obligation) to pay for or perform any act which requires the expenditure
of any sum of money by reason of the failure or the neglect of Lessee to perform
any of the provisions herein, and in the event Lessor shall at its election pay
such sums or perform such acts requiring the expenditure of monies, Lessee
agrees to reimburse and pay Lessor, upon demand, such sum, which shall be deemed
for the purpose of securing the collection thereof to be additional rent
hereunder.
ARTICLE III
CONSTRUCTION OF DEMISED PREMISES
The Demised Premises shall be accepted "as-is".
ARTICLE IV
USE OF DEMISED PREMISES
Section 4.1. Use of Demised Premises. Subject to and in accordance with
all rules, regulations, laws, ordinances, statutes and requirements of all
governmental authorities, the Fire Insurance Rating Organization, The Board of
Fire Insurance Underwriters and Lessor's insurance carrier, Lessee shall use the
Demised Premises solely for the purposes contemplated by Section 1.1(k) and for
no other purposes.
During the Term, Lessee shall keep the Demised Premises open for
business during normal hours of operation of the Shopping Center and, after the
opening of the Demised Premises, shall continue to actively and diligently
operate its business therein in a high-grade and reputable manner throughout the
Term.
Section 4.2. Additional Covenants of Lessee. Lessee's use of the
Demised Premises and the Common Areas shall be subject at all times during the
Term to reasonable rules and regulations adopted by Lessor not in conflict with
any of the express provisions hereof governing the use of the parking areas,
walks, driveways, passageways, signs, exteriors of building, lighting and other
matters affecting other tenants in, and the general management and appearance,
of the Shopping Center. Lessee agrees to comply with all such rules and
regulations upon notice to Lessee from Lessor. Lessee expressly agrees as
follows:
(a) Lessee shall conduct its business in the Demised Premises at least
six (6) days per week, Monday through Saturday, a minimum of forty (40) hours
per week. Lessee shall not close the business in excess of 24 hours during the
days set forth above without the express written approval of Lessor. A vacation
or abandonment of premises or cessation of operations by any other lessee(s) in
the Shopping Center shall not in any way release Lessee from Lessee's
obligations under this Lease, such obligations being independent covenants of
this Lease.
(b) All garbage and refuse shall be kept inside the Demised Premises in
the kind of container specified by Lessor, and shall be placed outside of the
Demised Premises prepared for collection in the manner and at the times and
places specified by Lessor. If Lessor shall provide or designate a service for
picking up refuse and garbage, Lessee shall use same at Lessee's cost. Lessee
shall pay the cost of removal of any of Lessee's refuse and garbage and maintain
all loading areas in a clean manner satisfactory to the Lessor. If any part of
the Lessee's business shall consist of the preparation and/or sale of food,
including without limitation the operation of a restaurant, snack shop or food
market, Lessee shall place all garbage and refuse in plastic bags before
depositing same in exterior containers at Lessee's expense. If Lessee does
<PAGE>
not place all garbage and refuse in containers, Lessor shall have the right to
have said garbage removed at Lessee's expense and shall charge Lessee two (2)
times actual expenses incurred by Lessor for said removal.
(c) No radio or television aerial or other devise shall be erected on
the roof or exterior walls of the Demised Premises or the building in which the
Demised Premises are located without first obtaining in each instance the
Lessor's consent in writing. Any aerial or devise installed without such written
consent shall be subject to removal at Lessee's expense without notice at any
time. If the Lessor elects to so remove such aerial or devise, Lessor will
charge Lessee two (2) times actual expenses incurred by Lessor for such removal.
(d) No loud speakers, televisions, phonographs, radios, tape players,
disc players or other devises shall be used in a manner so as to be heard or
seen outside of the Demised Premises without the prior written consent of
Lessor.
(e) The plumbing facilities shall not be used for any other purpose
than that for which they are constructed; no foreign substance of any kind shall
be thrown therein, and the expense of any breakage, stoppage, or damage
resulting from a violation of this provision shall be borne by Lessee. Lessee
agrees to reimburse Lessor an amount equal to two (2) times the cost incurred by
Lessor as a result of any such breakage, stoppage or damage.
(f) Lessee at its expense shall contract for pest extermination
services covering the Demised Premises, to be rendered not less frequently than
semiannually pursuant to the schedule set forth in Exhibit "F". Lessee shall
deliver to Lessor certificates evidencing such services, without the prior
request of Lessor.
(g) Lessee shall not burn any trash or garbage or any kind in the
Demised Premises or within the Shopping Center.
(h) Lessee shall keep any display windows or signs in or on the Demised
Premises well lighted during the hours that the lights in the parking lot are in
operation.
(i) Lessee shall keep and maintain the Demised Premises (including,
without limitation, exterior and interior portions of all windows, doors and all
other glass) in a neat and clean condition.
(j) Lessee at its expense shall participate in any reasonable window
cleaning program that may be established by Lessor for all or substantially all
other stores in the Shopping Center.
(k) Lessee shall take no action which would violate Lessor's labor
contracts, if any, affecting the Shopping Center, nor create any work stoppage,
picketing, labor disruption or dispute, or any interference with the business of
Lessor or any other lessee or occupant in the Shopping Center or with the rights
and privileges of any customer or other person(s) lawfully in and upon said
Shopping Center, nor shall Lessee cause any impairment or reduction of the good
will of the Shopping Center.
(l) Lessee shall pay before delinquency all license or permit fees and
charges of a similar nature for the conduct of any business in the Demised
Premises.
(m) Lessee shall store and/or stock in the Demised Premises only such
merchandise as Lessee is permitted to offer for sale in the Demised Premises
pursuant to this Lease.
(n) Lessee shall not conduct or permit any fire, bankruptcy, auction or
"going out of business" sale (whether real or fictitious) in the Demised
Premises, without prior written consent of Lessor, or utilize any unethical
method of business operation. No "sidewalk sales" will be permitted at any time.
<PAGE>
(o) Lessee shall not perform or permit any act nor carry on or permit
any practice which may damage, mar or deface the Demised Premises or any other
part of the Shopping Center.
(p) Lessee shall not use any fork-lift truck, tow truck or any other
powered machine for handling freight in the Shopping Center except in such
manner and in those areas in the Shopping Center as may be approved by Lessor in
writing.
(q) Lessee shall not place a load on any floor in the Demised Premises
or in the Shopping Center exceeding the floor load which such floor was designed
to carry, nor shall Lessee install, operate or maintain in the Demised Premises
any heavy item or equipment in such manner as to achieve an improper
distribution of weight.
(r) Lessee shall not install, operate or maintain in the Demised
Premises or in any other area of the Shopping Center any electrical equipment
which does not bear underwriter's approval, or which would overload the
electrical system or any part thereof beyond its capacity for proper and safe
operation as determined by Lessor.
(s) Lessee shall not suffer, allow or permit any vibration, noise,
light, odor or other effect to emanate from the Demised Premises, or from any
machine or other installation therein, or otherwise suffer, allow or permit the
same to constitute a nuisance or otherwise interfere with the safety, comfort
and convenience of Lessor or any of the other occupants of the Shopping Center
or their customers, agents, or invitees or any others lawfully in or upon the
Shopping Center. Upon notice by Lessor to Lessee that any of the aforesaid is
occurring, Lessee agrees to forthwith remove or control the same.
(t) Lessee shall not use or occupy the Demised Premises in any manner
or for any purpose which would injure the reputation or impair the present or
future value of the Demised Premises, the Shopping Center or the neighborhood in
which the Shopping Center is located.
(u) Lessee shall not store, display, sell or distribute any alcoholic
beverages or any dangerous materials (including, without limitation, fireworks)
unless specifically permitted in this Lease.
Section 4.3. Signs, Awnings and Canopies. Lessor may erect and maintain
such suitable signs as it, in its sole discretion, may deem appropriate to
advertise the Shopping Center. Lessee may erect and maintain only such signs as
Lessor may approve. Lessee shall submit to Lessor detailed drawings of its sign
<PAGE>
for review and approval by Lessor prior to the installation thereof. Lessee
shall also provide Lessor with a copy of the permit for installation of its sign
prior to installation thereof. The electrical connection for such sign shall be
made only by a licensed electrician at Lessee's cost.
Lessee shall keep insured and maintain such sign in good condition,
repair and operating order at all times. If any damage is done to Lessee's sign,
Lessee shall commence to repair same within five (5) days or Lessor may at its
option repair same at Lessee's expense, and Lessor may charge Lessee two (2)
times the actual expense incurred by Lessor for such repair.
Lessee shall not place or permit to be placed or maintained on any
door, exterior wall or window of the Demised Premises any sign, awning, or
canopy or advertising matter or other thing of any kind, and shall not place or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Demised Premises nor place any structure, sign,
obstruction or advertising device upon the Common Areas without first obtaining
Lessor's written consent. Lessee further agrees to maintain any such signs,
awnings, canopies, decorations, lettering, advertising matter or other things as
may be approved by Lessor in good condition, operating order and repair at all
times. All signs of Lessee visible from the Common Areas of the Shopping Center
shall be in good taste and shall conform to the standards of design, motif and
decor from time to time established by Lessor for the Shopping Center. If Lessee
shall do any of the foregoing acts in contravention of this provision, then, in
addition to and not in limitation of the Lessor's rights and remedies provided
under Section 10.1 and Section 10.2 of this Lease, Lessor shall have the right
to remove such sign, awning, canopy, advertising matter or device, decoration,
lettering, structure, sign obstruction, or any other thing and restore the
Demised Premises and/or the Common Areas to the condition thereof prior to such
act, with two (2) times the amount of all costs, incidental and otherwise, of
such removal and restoration to be paid by Lessee to Lessor as an additional
charge.
ARTICLE V
INSURANCE REQUIRED OF LESSEE
Section 5.1. Insurance Required of Lessee. Lessee shall obtain
and maintain in full force during the Term the following insurance coverage with
respect to the Demised Premises:
(a) Comprehensive Public Liability Insurance, with contractual
liability endorsement, on an occurrence basis with minimum limits of liability
of not less than One Million Dollars ($1,000,000.00) for bodily injury and/or
property damage.
<PAGE>
(b) Fire and Lightning, Extended Coverage, Vandalism and Malicious
Mischief, and Flood (if required by Lessor/any mortgagee/governmental authority)
Insurance in an amount adequate to cover the full replacement value of all
personal property, decorations, trade fixtures, furnishings, equipment,
alterations, leasehold improvements and betterments, and all other contents
located or placed therein.
(d) Business Interruption Insurance covering those risks referred to in
subparagraphs (b) and (c) above.
(e) Plate glass insurance covering the plate glass in the Demised
Premises.
(f) Worker's Compensation Insurance covering all persons employed,
directly or indirectly, in connection with any finish work performed by Lessee
or any repair or alteration authorized by this Lease or consented to by Lessor,
and all employees and agents of Lessee with respect to whom death or bodily
injury claims could be asserted against Lessor or Lessee, as required by laws of
the State where the Demised Premises are located or of the United States.
All of the aforesaid insurance except the Worker's Compensation
Insurance required by Subparagraph (f) above shall be written in the name of
Lessee and shall name Lessor, and designee(s) of Lessor as additional insureds,
and shall be written by one or more responsible insurance companies satisfactory
to Lessor and in form satisfactory to Lessor; all such insurance may be carried
under a blanket policy covering the Demised Premises and any other of Lessee's
stores (provided such blanket policies meet the requirements of this Section
5.1); all such insurance shall contain endorsements that: Such insurance may not
be canceled or amended with respect to Lessor, its designees or the Demised
Premises except upon thirty (30) days prior written notice to Lessor and any
such designees by the insurance company; Lessee shall be solely responsible for
payment of premiums and Lessor or its designees shall not be required to pay any
premium for such insurance; in the event of payment of any loss covered by such
policy, Lessor or its designees shall be paid first by the insurance company for
Lessor's loss. The minimum limits of the comprehensive public liability policy
hereinafter set forth shall in no way limit or diminish Lessee's liability
hereunder. Lessee shall deliver to Lessor at least fifteen (15) days prior to
the time such insurance is first required to be carried by Lessee, and
thereafter at least fifteen (15) days prior to the expiration of such policy,
either a duplicate original or a certificate of insurance on all policies
procured by Lessee in compliance with its obligations hereunder, together with
evidence satisfactory to Lessor of the payment of the premiums therefor. If
Lessee fails to obtain and provide any or all of the aforesaid insurance, then
Lessor may, but shall not be required to, purchase such insurance on behalf of
Lessee and add the cost of such insurance as additional rent payable with the
next due installment of Minimum Rent.
All liability insurance policies required to be obtained and maintained
by Lessee hereunder shall contain endorsements deleting from such policies the
"Care, Custody and Control", the "Alterations and Extraordinary Repairs" and the
"Contract Liability" exclusions and all other exclusions of similar import or
effect.
The minimum limits of the comprehensive public liability policy of
insurance herein before set forth shall be subject to increase at any time, and
from time to time, after the commencement of the fifth (5th) Lease Year if
Lessor shall deem same necessary for adequate protection. Within thirty (30)
days after demand therefor by Lessor, Lessee shall furnish Lessor with evidence
of Tenant's compliance with such demand.
<PAGE>
Lessee agrees, at its own expense, to comply with all rules and
regulations of the Fire Insurance Rating Organization having jurisdiction of the
Demised Premises and to comply with all requirements imposed by Lessor's
insurance carrier, if any. If gas is used in the Demised Premises, Lessee shall
install at its expense both manual and automatic gas cut-off devices.
Section 5.2. Waiver. Lessor and Lessee hereby grant to each other on
behalf of any insurer providing insurance to either Lessor or Lessee as required
by this Lease covering the Demised Premises, improvements therein or contents
thereof, a waiver of any right of subrogation any such insurer of one party may
acquire against the other by virtue of payment of any loss under such insurance.
Such waivers shall stand mutually terminated as of the date either Lessor or
Lessee ceases to be empowered to grant same.
ARTICLE VI
REPAIRS AND MAINTENANCE
Section 6.1. Repairs by Lessor. Within a reasonable period after
receipt of written notice from Lessee of the need therefor, Lessor shall make
necessary structural repairs to the exterior walls (excluding the exterior of
and the frames surrounding all windows, doors, plate glass, store fronts and
signs) of the Demised Premises; necessary repairs to plumbing, pipes and
conduits located outside the Demised Premises or in the Common Areas; and
necessary repairs to sidewalks, parking areas and curbs. Lessor shall not be
required to make any repairs where such repairs are made necessary by any act or
omission or negligence of Lessee, any subtenant or concessionaire of Lessee, or
their respective employees, agents, invitees, licensees, visitors or
contractors, or by fire or other casualty or condemnation (except as provided in
Article VIII).
Section 6.2. Repairs and Maintenance by Lessee. Except as provided
herein to the contrary, Lessee covenants and agrees to keep and maintain in good
order, condition and repair throughout the Term the Demised Premises and every
part thereof, including, without limitation: Fixtures and equipment therein; the
exterior and interior portions of all doors, windows and glass; electrical
wiring and conduits; plumbing and sewage facilities within the Demised Premises,
including free flow of sewer lines therein; fixtures, heating, air conditioning
(including exterior mechanical equipment and electrical equipment); and interior
walls, floors and ceilings, including compliance with applicable building codes
relative to fire extinguishers. Any and all such repairs, alterations,
replacements and modifications, ordinary and extraordinary, foreseen and
unforeseen, shall be at Lessee's sole expense and shall be made using materials
and labor of kind and quality equal to the original work. Lessee agrees to keep
in force a standard maintenance agreement on all heating and air conditioning
equipment and provide a copy of said maintenance agreement to the Lessor as
provided in Exhibit "F", which maintenance agreement shall require a semiannual
inspection of such equipment. Lessee further agrees to furnish Lessor
semiannually with written certifications by the company performing said
inspections that such equipment is in good repair. All parts of the interior of
the Demised Premises shall be painted or otherwise decorated by the Lessee
periodically. Lessee will surrender the Demised Premises at the expiration or
earlier termination of this Lease in as good condition as when received, or in
such better condition as the Demised Premises may be put during the Term,
excepting only deterioration caused by ordinary wear and tear or fire and other
casualty resulting in termination by Lessor as provided in Article VIII hereof.
If (i) Lessee does not repair the Demised Premises properly as required
hereunder and to the reasonable satisfaction of Lessor, or (ii) Lessor, in the
exercise of its sole discretion, determines that emergency repairs are
necessary, or (iii) repairs or replacements to the Shopping Center or the
Demised Premises are made necessary by any act or omission or negligence of
Lessee, its agents, employees, subtenants, assignees, concessionaires,
contractors, invitees, licensees or visitors, then in any such event
<PAGE>
Lessor may make such repairs without liability to Lessee for any loss or damage
that may accrue to Lessee's merchandise, fixtures, or other property or to
Lessee's business by reason thereof, and Lessee shall pay to Lessor upon demand
the total cost of such repairs plus interest in the amount of sixteen percent
(16%) per annum from the date such cost is incurred by Lessor until repaid by
Lessee.
Before undertaking any alterations, additions, improvements or
construction (including, without limitation, the initial construction of the
Demised Premises) Lessee shall obtain at its expense a public liability
insurance policy (in addition to all other insurance required to be carried by
Lessee hereunder) insuring Lessee and the Lessor and its assigns as named
insured against any liability which may arise on account of such proposed
alterations, additions, improvements or construction on an occurrence basis with
the minimum limits set forth in Section 5.1 and Lessee shall require its
contractors to obtain and maintain comprehensive public liability, Worker's
Compensation and damage insurance in the same amount as set out in Section
5.1(a) and (b). Said comprehensive public liability insurance shall include
"completed operations coverage".
Section 6.3. Hazardous Waste. Lessee agrees that Lessee, its agents,
servants, employees, licensees, and contractors, shall not use, manufacture,
store or dispose of any flammable explosives, radioactive materials, hazardous
wastes or materials, toxic wastes or materials or other similar substances
(collectively "Hazardous Materials") on, under or about the Demised Premises.
Without limiting the above, Lessee shall indemnify and hold harmless Lessor from
and against any and all claims, losses, liabilities, damages, costs and
expenses, including, without limitation, attorney's fees and costs, arising out
of or in any way connected with the use, manufacture, storage, or disposal of
Hazardous Materials by Lessee, its agents, servants, employees, licensees or
contractors, on, under or about the Demised Premises, including without
limitation, the cost of any required or necessary repair, clean-up or
detoxification in connection therewith. The indemnity obligations of Lessee
under this Section 6.3 shall survive any termination of this Lease.
Section 6.4. Inspection. Lessor or its representatives shall have the
right to enter the Demised Premises during any business day, and in emergency at
all times, during the Term.
Section 6.5. Obstructions. Lessee agrees to keep its loading
facilities, if any, and the Common Areas immediately adjoining the Demised
Premises free from trash, litter or obstructions, and, in addition, if the
Demised Premises open onto an outside area, to keep said sidewalk area
immediately adjoining the Demised Premises free from ice and snow.
ARTICLE VII
ADDITIONS AND ALTERATIONS
Section 7.1. By Lessor. Lessor hereby reserves the right at any time
and from time to time, provided access to the Demised Premises is not materially
and adversely affected, to make alterations or additions to the building in
which the Demised Premises are contained, and to construct other buildings
adjoining the same. Lessor also reserves the right to construct other buildings
or improvements in the Shopping Center, provided, however, that such
constructions or additions shall not unreasonably interfere with the operations
of Lessee's business hereunder except when such work is necessitated by
emergency or required by structural need.
If an excavation shall be made upon land adjacent to the Demised
Premises, Lessee shall permit the person authorized to cause such excavation
license to enter upon the Demised Premises for the purpose of doing such work as
such person deems necessary to preserve the wall of the building of which the
Demised Premises form a part from damage and to support the same by proper
foundations and Lessee shall not be entitled to any claim for damages or
indemnification against Lessor.
<PAGE>
Section 7.2. By Lessee. Provided that Lessee shall not be in default
Lessee may from time to time, at its own expense and upon compliance with the
requirements of the last paragraph of Section 6.2 hereof, alter, renovate or
improve the interior of the Demised Premises provided the same be performed (i)
in a good workmanlike manner, (ii) in accordance with accepted building
practices and applicable laws, including, but not limited to, building codes and
zoning ordinances, and (iii) so as not to weaken or impair the strength or
lessen the value of the building in which the Demised Premises are located. No
changes, alterations or improvements affecting the exterior of the Demised
Premises shall be made by Lessee. Prior to commencement of all such work, Lessee
shall obtain Lessor's prior written approval of the plans and specifications
therefor and shall cause Lessor's requirements for bonding, insurance and other
contractor requirements to be satisfied. Any work done by Lessee under the
provisions of this Section 7.2 shall be conducted so as not to interfere with
the use by the other tenants of their premises in the Shopping Center.
ARTICLE VIII
DAMAGE, DESTRUCTION OR CONDEMNATION
OF THE DEMISED PREMISES
Section 8.1. Damage or Destruction. If all or any part of the Demised
Premises shall be damaged or destroyed by fire or other casualty, this Lease
shall continue in full force and effect, unless terminated as hereinafter
provided, and Lessor shall repair, restore or rebuild the Demised Premises to
their condition at the time of the occurrence of the loss; provided, however,
Lessor shall not be obligated to commence such repair, restoration or rebuilding
until insurance proceeds are received by Lessor, and Lessor's obligation
hereunder shall be limited to the proceeds actually received by Lessor under any
insurance policy or policies, if any, which have not been required to be applied
towards the reduction of any indebtedness secured by a mortgage or deed to
secure debt covering the Shopping Center or any portion thereof.
Lessee agrees to notify Lessor in writing not less than thirty (30)
days prior to the date Lessee opens for business in the Demised Premises of the
actual cost of all permanent leasehold improvements and betterments installed or
to be installed by Lessee in the Demised Premises (whether same have been paid
for entirely or partially by Lessee), but exclusive of Lessee's personal
property, movable trade fixtures and contents. Similar notifications shall be
given to Lessor not less than thirty (30) days prior to the commencement of any
proposed alterations, additions or improvements to the Demised Premises by
Lessee subsequent to the initial construction of the Demised Premises. If Lessee
fails to comply with the foregoing provisions, any loss or damage Lessor shall
sustain by reason thereof shall be borne by Lessee and shall be paid immediately
by Lessee upon receipt of a bill therefor and evidence of such loss, and in
addition to any other rights or remedies reserved by Lessor under this Lease,
Lessor's obligations under this Article VIII to repair, replace and/or rebuild
the Demised Premises shall be deemed inapplicable and in lieu thereof Lessor
may, at its election, either restore or require Lessee to restore the Demised
Premises to the condition which existed prior to such loss, and in either case
Lessee shall pay the cost of such restoration.
Lessee covenants and agrees to reopen for business in the Demised
Premises within thirty (30) days after notice from Lessor that the Demised
Premises are ready for re-occupancy.
No damage or destruction to the Demised Premises shall allow Lessee to
surrender possession of the Demised Premises or affect Lessee's liability for
the payment of rents or charges or any other covenant herein contained, except
as may be specifically provided in this Lease.
Notwithstanding anything to the contrary contained in this Section 8.1
or elsewhere in this Lease, Lessor, at its option, may terminate this Lease on
thirty (30) days' notice to Lessee if:
<PAGE>
(a) The Demised Premises or the building in which the Demised Premises
are located shall be damaged or destroyed as a result of an occurrence which is
not covered by Lessor's insurance; or
(b) The Demised Premises shall be damaged or destroyed during the last
three (3) years of the Term or any renewals thereof; or
(c) Any or all of the buildings or Common Areas of the Shopping Center
are damaged (whether or not the Demised Premises are damaged) to such an extent
that, in the sole judgment of Lessor, the Shopping Center cannot be operated as
an economically viable unit.
If the Demised Premises shall be damaged or destroyed and in the event
that Lessor has elected to continue this Lease, Lessor and Lessee shall commence
their respective obligations under this Article as soon as is reasonably
possible and prosecute the same to completion with all due diligence.
In the event of any termination of this Lease under the provisions of
Section 8.1, this lease shall terminate at the end of the calendar month in
which such notice of termination is given.
The Minimum Rent shall be abated proportionately with the degree to
which Lessee's use of the Demised Premises is impaired during the period of any
damage, repair or restoration provided for in this Article VIII; provided
further that in the event Lessor elects to repair any damage as herein
contemplated, any abatement of Minimum Rent shall end fifteen (15) days after
notice by Lessor to Lessee that the Demised Premises have been repaired. Lessee
shall continue the operation of its business in the Demised Premises during any
such period to the extent reasonably practicable from the standpoint of prudent
business management, and any obligation to Lessee under the Lease to pay
Percentage Rent and any other charges except Minimum Rent shall remain in full
force and nothing in this Section shall be construed to abate Percentage Rent
and any other charges except Minimum Rent. Except for the abatement of Minimum
Rent hereinabove provided, Lessee shall not be entitled to any compensation or
damage for loss in the use of the whole or any part of the Demised Premises
and/or any inconvenience or annoyance occasioned by any damage, destruction,
repair or restoration.
Unless this Lease is terminated by Lessor, Lessee shall repair, restore
and refixture all parts of the Demised Premises not insured under any insurance
policies insuring Lessor in a manner and to a condition equal to that existing
prior to its destruction or damage, including without limitation, all exterior
signs, trade fixtures, equipment, display cases, furniture, furnishings and
other installations of personality of Lessee. The proceeds of all insurance
carried by Lessee on its property and improvements shall be held in trust by
Lessee for the purpose of said repair and replacement. Lessee shall give to
Lessor prompt written notice of any damage to or destruction of any portion of
the Demised Premises resulting from fire or other casualty.
Section 8.2. Condemnation. In the event that the whole of the Demised
Premises shall be taken under the power of eminent domain, this Lease shall
thereupon terminate as of the date possession shall be so taken.
Anything in this Lease to the contrary notwithstanding, in the event
more than fifteen percent (15%) of the Demised Premises or more than twenty five
percent (25%) of the then existing paved parking spaces of the Shopping Center
or more than forty percent (40%) of the buildings in the Shopping Center
exclusive of the Demised Premises shall be taken, or conveyance made in lieu
thereof, either party shall have the right to cancel and terminate this Lease as
of the date of such taking upon giving notice to the other of such election
within thirty (30) days after the date of such taking.
In the event of such cancellation, the parties shall thereupon be
released from any further liability under this Lease, except for obligations
existing on the effective date of such termination; provided,
<PAGE>
however, that if more than twenty five percent (25%) of the then existing paved
parking spaces shall be appropriated or taken, Lessor may at its option nullify
and vacate Lessee's right to cancel this Lease as hereinbefore provided by
giving Lessee notice within thirty (30) days after the date of such taking that
it will provide substitute parking on or adjacent to the Shopping Center
sufficient to cause the total number of paved parking spaces remaining after
such substitution to be equal to the lesser of (i) the number of spaces required
by local Code, or (ii) at least seventy-five percent (75%) of the number of
spaces prior to such taking, in which event the lease shall remain in full force
and effect.
If a portion of the Demised Premises is taken, and if this Lease shall
not be terminated as provided in the preceding paragraph, then the provisions of
this Lease shall remain in full force and effect, except that the Minimum Rent
shall be reduced in the same proportion that the amount of Floor Area remaining
after such taking bears to the total Floor Area immediately prior to such
taking, and Lessor shall, upon receipt of the award in condemnation, make all
necessary repairs or alterations to the building in which the Demised Premises
are located so as to constitute the portion of the building not taken a complete
architectural unit, but Lessor shall not be required to spend for such work an
amount in excess of the net amount received by Lessor as damages for the part of
the building within which the Demised Premises are located. "Amount received by
Lessor" shall mean that part of the award in condemnation which is free and
clear to Lessor of any collection by mortgagees for the value of the diminished
fee. Lessee at its own cost and expense, shall restore and refixture such part
of the Demised Premises as is not taken to as near its former condition as the
circumstances will permit, including, without limitation, all exterior signs,
trade fixtures, equipment, display cases, furniture, furnishings and other
installations of personality of Lessee.
All compensation awarded or paid upon such total or partial taking of
the Demised Premises or the building within which the Demised Premises are
located shall belong to and be the property of Lessor without any participation
by Lessee. Lessee shall, however, be entitled to claim, prove and receive in
such condemnation proceedings such award as may be allowed for relocation costs,
fixtures and other equipment installed by it but only to the extent that the
same shall not reduce Lessor's award and only if such award shall be in addition
to the award for the land and building (or portion thereof) containing the
Demised Premises. To the extent that the Lessee has a claim in condemnation
proceedings, as aforesaid, Lessee may claim from condemnors, but not from
Lessor, such compensation as may be recoverable by Lessee.
It is mutually agreed that (i) any reduction in the parking lot area,
number of parking spaces in the Shopping Center, or the imposition of any
restriction on the number of motor vehicles that may enter the Shopping Center
by action or order of any governmental authority, quasi-governmental authority,
or by any court having jurisdiction in the premises (other than by actual
exercise of the power of eminent domain such that title passes to the condemning
agency) shall not constitute such taking or condemnation under this Lease that
would entitle Lessee to terminate the Lease, (ii) any such environmental
condemnation or compliance by Lessor with any order, rule or regulation of such
authority, with any judicial decree, or any such existing or future law shall
not constitute a default under this Lease by Lessor so as to entitle Lessee to
terminate this Lease and this Lease shall remain in full force and effect, and
(iii) as between Lessor and Lessee, Lessor may, but shall not be obligated to,
comply with any such order, rule, regulation, judicial decree or law.
ARTICLE IX
MORTGAGE FINANCING
If any lending institution with which Lessor has negotiated or may
negotiate interim or long-term financing for the Shopping Center or part thereof
does not approve the credit rating of Lessee, or if such lending institution
shall require change(s) in this Lease as a condition or one of the conditions of
its approval of this Lease for such financing; and if within fifteen (15) days
after notice from Lessor (i) Lessee fails or refuses to supply or execute
guarantees which are stated by Lessor as necessary to secure the approval of
<PAGE>
Lessee's credit by any such lending institution, or (ii) if Lessee fails or
refuses to execute with Lessor the amendment or amendments to this Lease
accomplishing the change(s) which is/are state by Lessor to be needed in
connection with approval of this Lease for purposes of such financing, or (iii)
if for any reason, such financing in an amount satisfactory to Lessor cannot be
obtained, Lessor shall have the right to cancel this Lease at any time prior to
the Rental Commencement Date. In the event of cancellation by Lessor hereunder,
this Lease shall be and become null and void and both parties shall
automatically be released as of the date of Lessor's cancellation notice from
any and all liability or obligation under this Lease, and Lessor shall retain
the security, if any, paid by Lessee as reimbursement for expenses incurred by
Lessor in negotiating or attempting to negotiate the required amendments to this
Lease with Lessee. Notwithstanding anything contained herein to the contrary,
Lessee shall not be required to agree, and Lessor shall not have any right of
cancellation from Lessee's refusal to agree, to any modification of the
provisions of this Lease relating to the amount of Minimum Rent and Percentage
Rent reserved, the size or location of the Demised Premises, the duration or
commencement date of the Term, or the value of the improvements to be made by
Lessor to the Demised Premises prior to tender of possession.
Lessee shall, upon the request of Lessor, execute and deliver such
instruments as may be required by Lessor to make this Lease either superior or
subordinate to any mortgages now or hereafter placed upon Lessor's interest in
the Shopping Center or the Demised Premises or future additions thereto. Lessee
hereby attorns to any purchaser at a foreclosure sale or sale in lieu of
foreclosure, and agrees to execute all agreements required by any such purchaser
affirming such attornment.
Upon request of any mortgagee of record, Lessee shall give such
mortgagee copies of all notices given by Lessee to Lessor hereunder, and Lessee
shall allow such mortgagee a reasonable length of time (in any event, not less
than sixty (60) days from the date of such notice) in which to cure any default
by Lessor hereunder. Any such notice shall be sent to such department and
address as such mortgagee shall direct Lessee in writing.
ARTICLE X
DEFAULT
Section 10.1 Default by Lessee. If Lessee shall vacate or abandon the
Demised Premises at any time during the Term, or if after ten (10) days written
notice of non-payment when due, Lessee fails to pay any Minimum Rent, Percentage
rent or other payment hereunder, or after fifteen (15) days written notice of
non-performance fails to perform any other of the terms of this Lease to be
observed or performed by Lessee, or, if such term or obligation (other than
non-payment of monetary obligations) hereof cannot be performed within fifteen
(15) days if Lessee fails within said fifteen (15) day period to commence and
thereafter to diligently and continually pursue its obligation hereunder, or if
Lessee shall become bankrupt or insolvent, or file any debtor proceedings or
take or have taken against Lessee in any court pursuant to any statute either of
the United States or of any state a petition in bankruptcy or for reorganization
or for the appointment of a receiver or trustee of all or a portion of Lessee's
property, or if Lessee makes an assignment for the benefit of creditors, or
petitions for or enters into an arrangement or suffers this Lease to be taken
under any writ of execution or attachment, or if this Lease shall pass to or
devolve upon, by law or otherwise, one other than Lessee except as herein
provided, then, in any one or more of such events, upon Lessor's service of a
written five (5) day notice of cancellation upon Lessee specifying the nature of
such default and Lessee's failure within said five (5) day period to comply with
or remedy such default, then this Lease and the Term shall, at the option of
Lessor, terminate and come to an end on the date specified in such notice of
cancellation, and Lessee shall quit and surrender the Demised Premises to Lessor
as if the Term ended by the expiration of the time affixed herein, but Lessee
shall remain liable as hereinafter provided.
<PAGE>
Section 10.2. Lessor's Rights on Default. If Lessee shall not have
cured its default in the manner provided in Section 10.1 hereof, Lessor shall be
entitled to apply the security deposit to Lessee's obligations hereunder without
thereby diminishing or affecting any of Lessee's obligations hereunder for the
payment of Minimum Rent or Percentage Rent or any other charges, and Lessor may
immediately, or any time thereafter, re-enter the Demised Premises and remove
all persons and all or any property therefrom, by any suitable action or
proceeding at law, or by force or otherwise, without being liable for any
prosecution therefor or damage resulting therefrom, and repossess and enjoy the
Demised Premises, together with all additions, alterations and improvements and
Lessor may, at its option, repair, alter, remodel and change the character of
the Demised Premises as it may deem fit, and at any time relet the Demised
Premises or any part or parts thereof, as the agent of Lessee or otherwise. The
exercise by Lessor of any right granted in the sentence immediately preceding
shall not relieve Lessee from the obligation to make all payments of Minimum
Rent, Percentage Rent or other charges, and to fulfill all other covenants
required by this Lease, at the time and in the manner provided herein, and if
Lessor so desires all current and future monetary obligations of Lessee
hereunder shall become immediately due and payable. Lessee throughout the
remainder of the Term hereof shall pay Lessor, no later than the last day of
each month during the Term, the then current excess, if any, of the sum of the
unpaid rentals and costs to Lessor resulting from such default by Lessee over
the proceeds, if any, received by Lessor from reletting, if any. Lessor shall
not be required to relet the Demised Premises or exercise any other right
granted to Lessor hereunder, nor shall Lessor be under any obligation to
minimize Lessee's loss as a result of Lessee's default. If Lessor attempts to
relet the Demised Premises, Lessor shall be the sole judge as to whether or not
a proposed lessee is suitable and acceptable.
This Section 10.2 Shall apply to any renewal or extension of this
Lease; and if Lessee shall default hereunder prior to the date fixed as the
commencement of any renewal or extension of this Lease, Lessor may cancel such
renewal or extension agreement by two (2) days prior written notice to Lessee.
In the event of a breach by Lessee of any of the covenants or
provisions hereof, Lessor shall have, in addition to any other remedies which it
may have, the right to invoke any remedy allowed by law or in equity to enforce
Lessor's rights or any of them, as if re-entry and other remedies were not
herein provided.
Section 10.3. Non-Waiver Provisions. The failure of Lessor to insist
upon strict performance of any of the terms, conditions and covenants herein
shall not be deemed to be a waiver of any rights or remedies that Lessor may
have and shall not be deemed a waiver of any subsequent breach or default in the
terms, conditions and covenants herein contained except as may be expressly
waived in writing. No payment by Lessee or receipt by Lessor of a lesser amount
than the rent and charges hereby reserved shall be deemed other than on account
of the earliest rents and charges then unpaid (unless Lessor elects otherwise),
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment by Lessee be deemed an accord and satisfactory, and Lessor
may accept such check or payment without prejudice to Lessor's right to recover
the balance of such rents and charges due or Lessor may pursue any other remedy
in this Lease provided or by law permitted, and no waiver by Lessor in favor of
any other lessee or occupancy of the Shopping Center shall constitute a waiver
in favor of the Lessee herein.
The maintenance of any action or proceeding to recover possession of
the Demised Premises, or any installment or installments of Minimum Rent,
Percentage Rent or any other monies that may be due or become due from Lessee to
Lessor, shall not preclude Lessor from thereafter instituting and maintaining
subsequent actions or proceedings for the recovery of possession of the Demised
Premises or of any other monies that may be due or become due from Lessee. Any
entry or re-entry by Lessor shall not be deemed to absolve or discharge Lessee
from liability hereunder.
Section 10.4. Inability to Perform. Lessor and/or Lessee shall be
excused for the period of any delay and shall not be deemed in default with
respect to the performance of any of the terms, covenants and
<PAGE>
conditions of this Lease when prevented from so doing, by cause or causes beyond
the Lessor's and/or Lessee's control, which shall include, without limitation,
all labor disputes, governmental regulations or controls, fire or other
casualty, inability to obtain any material or services, acts of God, or any
other cause, not within the reasonable control of the Lessor and/or Lessee. This
Section 10.4 shall not apply to or modify Lessee's obligations under this Lease
to make prompt payment to Lessor of Minimum Rent, Percentage Rent and other
charges due hereunder.
Section 10.5. Default by Lessor. Lessor shall in no event be in default
in the performance of any of its obligations contained in this Lease unless and
until Lessor shall have failed to perform such obligation within thirty (30)
days, or such additional time as is reasonably required to correct any such
default, after notice by Lessee to Lessor properly specifying wherein Lessor has
failed to perform any such obligation.
Section 10.6. Expenses. If either party hereto shall at any time be in
default hereunder, and if the other party hereto shall deem it necessary to
engage attorneys to enforce such other party's rights hereunder, the
determination of such necessity to be in the sole discretion of such other
party, the defaulting party will reimburse such other party for the reasonable
expenses incurred thereby, including, but not limited to, court costs and
reasonable attorney's fees.
ARTICLE XI
OTHER PROVISIONS
Section 11.1. Definition and Liability of Lessor. The term "Lessor" as
used in this Lease shall mean only the owner or mortgagee in possession for the
time being of the building in which the Demised Premises are located or the
owner of a leasehold interest in said building or the land thereunder so that in
the event of sale of said building or leasehold interest or an assignment of
this Lease or a demise of said building or land, Lessor shall be and is hereby
entirely freed and relieved of all obligations of Lessor subsequently accruing.
It is specifically understood and agreed that there shall be no
personal liability of Lessor in respect to any of the covenants, conditions or
provisions of this Lease; in the event of a breach or default by Lessor of any
of its obligations under this Lease, Lessee shall look solely to the equity of
the Lessor in the Shopping Center for the satisfaction of Lessee's remedies.
Section 11.2. Relationship of the Parties. Nothing contained in this
Lease shall be deemed or construed as creating the relationship of principal and
agent or a partnership or joint venture between the parties hereto, it being
understood and agreed that neither the method of computing rents nor any other
provision contained herein nor any acts of the parties hereto shall be deemed to
create any relationship between the parties other than that of Lessor and
Lessee.
Section 11.3. Security Deposit. Lessee has deposited with Lessor as
security for the performance by Lessee of the terms of this Lease the Security
Deposit set forth in Section 1.1(m) hereof. Lessor may use, apply or retain
(without liability for interest) during the Term the whole or any part of the
Security Deposit to the extent required for the payment of any rents or other
sums as to which Lessee may be in default hereunder or for any sums which Lessor
may expend or any damage Lessor may suffer by reason of Lessee's default in
respect of any of the terms of this Lease, including, but not limited to, any
deficiency or damage incurred in reletting the Demised Premises. The covenants
in this Section 11.3 are personal covenants between Lessor and Lessee and not
covenants running with the land, and in no event will Lessor's mortgagee(s) or
any purchaser at a foreclosure sale or sale in lieu of foreclosure be liable to
Lessee for the return of the Security Deposit.
<PAGE>
The Security Deposit will be held in the AFCO Realty Services, LLC
Escrow Money Market Account, #325-171-2206, at Bank of America. All interest
earned on said security deposit shall be retained by AFCO Realty Services, LLC,
and shall not be payable to either the Lessee nor Lessor. Lessee shall not
assign nor encumber its interest in the Security Deposit, and neither Lessor nor
its successors and assigns shall be bound by any attempted assignment or
encumbrance.
Provided Lessee shall comply with all the terms of this Lease, the
Security Deposit shall be applied by Lessor as provided in Section 1.1(m)
hereof. In the event of a sale of the Shopping Center or assignment of this
Lease by Lessor to any person other than a mortgagee, Lessor shall have the
right to transfer the Security Deposit to its vendee or assignee, subject to the
provisions of this Lease, and thereupon Lessor shall be released from any
liability with respect to the Security Deposit, and such vendee or assignee
shall be solely responsible to Lessee therefor.
Section 11.4. Indemnity. Lessee, during the Term, any extension or
renewal thereof, and any period in which Lessee occupies or uses the Demised
Premises, shall indemnify and save harmless Lessor, its agents, servants and
employees, and Lessor's lessor, if any, from and against any and all claims and
demands whether for injuries to persons or loss of life, or damage to property,
related to or arising in any manner whatsoever out of the use and occupancy of
the Demised Premises by Lessee, or occasioned wholly or in part by any act or
omission of Lessee, its agents, contractors, employees, servants, lessees,
concessionaires, invitees, licensees and customers. In the event Lessor shall,
without fault on its part, be made a party to any litigation commenced by or
against Lessee, then Lessee shall protect and hold Lessor harmless and shall pay
all costs, expenses and attorney's fees incurred or paid by Lessor in connection
with such litigation.
Section 11.5. Damage to Property or Persons. Except with respect to the
gross negligence or the willful and wanton acts of Lessor, its agents and
employees: Lessor shall not be liable for any loss of or damage to property of
Lessee or of others located in the Demised Premises or the Shopping Center, by
theft or otherwise, nor for any loss or damage whatsoever to any property which
Lessee could remove at the end of the Term as provided in Section 11.7 hereof;
Lessor shall not be liable for any injury or damage to persons or property or to
the interior of the Demised Premises resulting from fire, explosion, falling
plaster, steam, gas, electricity, water, rain or snow or leaks from any part of
the Demised Premises or from the pipes, appliances or plumbing works or from
thereof, street or subsurface or from any other place or by dampness or by any
other cause of whatsoever nature; Lessor shall not be liable for any such injury
or damage caused by other tenants or any person(s) either in the Demised
Premises or elsewhere in the Shopping Center, or by occupants of property
adjacent to the Shopping Center, or by the public, or by operations in the
construction of any private, public, or quasi-public work; Lessor shall not be
liable for any latent defect in construction except for a period of one (1) year
from the date the general contractor constructing the Shopping Center
substantially completes the initial construction of the Demised Premises (the
parties agree that any liability of Lessor under the preceding clause shall be
limited to cost of repair only); and Lessor shall not be responsible for damage
or loss of property of Lessee kept or stored on the Demised Premises.
Section 11.6. Assignment or Subletting. Lessee shall not assign this
Lease or sublet all or any part of the Demised Premises without the prior
written consent of Lessor (which consent may be granted or withheld by Lessor in
its sole discretion) and upon such terms and conditions as may be mutually
agreed upon by the parties. Any assignment or sublease by Lessee shall be only
for the purposes specified in Section 1.1(k) hereof and for no other purpose,
and in no event shall any assignment or sublease of the Demised Premises release
or relieve Lessee from any of its obligations under this Lease.
In the event Lessee shall assign its interest in this Lease or sublet
the Demised Premises for rentals in excess of those rentals reserved hereunder,
Lessee shall pay all of such excess rent to Lessor as additional rent.
<PAGE>
Any proposed assignee or subtenant of Lessee shall assume Lessee's
obligations hereunder and deliver to Lessor an assumption in form satisfactory
to Lessor within ten (10) days after the effective date of the assignment.
Any request by Lessee for approval to sublet, transfer or assign
Lessee's interest in this Lease, shall be accompanied by a processing and
administration fee in the amount of $250.00.
If Lessee is a corporation or partnership, then if at any time during
the Term or any extension or renewal thereof the person or persons who, on the
date of this Lease, owns or own a majority of such corporation's voting shares
or such partnership's partnership interests, as the case may be, ceases or cease
to own a majority of such shares or partnership interests, as the case may for,
for any reason (including, but not limited to, if Lessee is a corporation,
merger, consolidation, liquidation or other reorganization involving another
corporation) and regardless of whether such sales occur at one time or at
intervals, so as to result in a change in the present ownership or control of
Lessee by the person or persons now owning a majority of such voting shares or
partnership interests (except as the result of transfer by inheritance), Lessee
shall so notify Lessor within ten (10) days from the date of such transfer. In
such event and regardless of whether Lessee has given such notice, Lessor shall
have the right, at its option, to terminate this Lease upon ten (10) days notice
to Lessee. This paragraph shall not be applicable to any corporation, all of the
outstanding voting stock of which is listed on a national securities exchange.
Section 11.7. Surrender of Premises. At the expiration of the tenancy
hereby created, Lessee shall surrender the Demised Premises in good condition
and repair, reasonable wear and tear excepted, and Lessee shall surrender all
keys for the Demised Premises to Lessor at the place then fixed for payment of
rent and shall inform Lessor of all combinations on locks, safes and vaults, if
any, in the Demised Premises. Lessee's obligation to observe or perform this
covenant shall survive the expiration or other termination in this Lease.
Prior to the expiration or sooner termination of this Lease, Lessee
shall remove any and all trade fixtures, equipment and other unattached items
which Lessee may have installed in the Demised Premises, including, but not
limited to, counters, shelving, showcases, chairs and unattached movable
machinery purchased or provided by Lessee and which are susceptible to being
moved without damage to the building of which the Demised Premises are a part.
Lessee shall repair any damage to the Demised Premises caused by its removal of
such fixtures and movables. In the event Lessee does not make such repairs,
Lessee shall be liable for and agrees to pay Lessor's costs and expenses in
making such repairs, together with a sum equal to twenty percent (20%) of such
costs and expenses to cover Lessor's overhead in making such repairs for Lessee.
Lessee shall not remove any plumbing or electrical fixtures or equipment,
heating or air conditioning equipment, floor coverings (including but not
limited to wall-to-wall carpeting), walls or ceilings, all of which shall be
deemed to constitute a part of the interest and estate of Lessor, nor shall
Lessee remove any fixtures or machinery that were furnished or paid for by
Lessor whether initially installed or replaced. The Demised Premises shall be
left in a broom-clean condition. If Lessee shall fail to remove its trade
fixtures or other property as provided in this Section 11.7, such fixtures and
other property not removed by Lessee shall be deemed abandoned by Lessee and at
the option of Lessor shall become the property of Lessor, or at Lessor's option
may be removed by Lessor at Lessee's expense, or sold or otherwise disposed of,
in which event the proceeds of such sale or other disposition shall belong to
Lessor.
Section 11.8. Holdover by Lessee. In the event that Lessee shall hold
the Demised Premises after any termination of this Lease pursuant to the
provisions hereof, or any expiration of the Term (or extension thereof), such
holding over shall be deemed to have created a tenancy from month to month
terminable on thirty (30) day's written notice by either party to the other,
upon a monthly rental basis, and otherwise subject to all the terms and
provisions of this Lease, except as contemplated to the contrary in this Section
11.8. Such monthly rental shall be computed on the basis of one-sixth (1/6) of
the sum of all rents payable
<PAGE>
by Lessee to Lessor during the last twelve (12) months of the Term (including,
but not limited to, Minimum Rent and Percentage Rent) and all other additional
charges provided by this Lease.
If Lessee fails to surrender the Demised Premises upon the termination
of this Lease, in addition to any other liabilities to Lessor accruing
therefrom, Lessee shall indemnify Lessor and hold Lessor harmless from loss or
liability resulting from such failure, including, without limitation, any claims
made by any succeeding lessee founded on such failure.
Section 11.9. Lien of Lessor for Rent, Taxes and Other Sums. Lessor
shall have and Lessee hereby grants, a security interest in any furnishings,
equipment, fixtures, inventory, accounts receivable, or other personal property
of any kind belonging to Lessee, or the equity of Lessee herein, located on or
derived from activities conducted in or upon the Demised Premises. The security
interest is granted for the purpose of securing the payment of Minimum Rent,
Percentage Rent, other charges, assessments, penalties and damages herein
covenanted to be paid by Lessee, and for the purpose of securing the performance
of all other obligations of the Lessee hereunder. Upon Lessee's default or
breach of any covenants of this Lease, Lessor shall have all remedies available
under the laws of the State where the Demised Premises are located, including,
but not limited to, the right to take possession of the above-mentioned property
and dispose of it by sale in a commercially reasonable manner. Lessee hereby
agrees to sign a Financing Statement at Lessor's request for the purpose of
serving notice to third parties of the security interest herein granted.
Section 11.10. Liens. Lessee shall discharge any lien filed against the
Shopping Center or any part thereof for work done or materials furnished at
Lessee's request with respect to the Demised Premises within ten (10) days after
such lien is filed. If Lessee fails to keep this covenant, in addition to any
other remedies available to Lessor under this Lease or otherwise, Lessor may at
its option discharge such lien, in which event Lessee agrees to pay Lessor a sum
equal to the amount of the lien thus discharged by Lessor plus all costs and
expenses, including, without limitation, attorney's fees and court costs,
incurred by Lessor in discharging such lien.
Section 11.11. Late Payments. Should Lessee fail to pay when due any
installment of Minimum Rent, Percentage Rent or any other sum payable to Lessor
under the terms of this Lease, then interest at the highest lawful rate of
interest per annum permitted in the State wherein the Shopping Center is
situated, but not to exceed the rate of sixteen percent (16%) per annum, shall
accrue from and after the date on which any such sum shall be due and payable,
and such interest together with a late charge of $50.00 to cover the extra
expense involved in handling such delinquency shall be paid by Lessee to Lessor
at the time of payment of the delinquent sum.
Section 11.12. Consents. Where the consent or approval of Lessor shall
be required under the terms of this Lease, such consent or approval may be
granted in Lessor's sole discretion, unless otherwise expressly provided for
herein. With respect to any provision of this Lease which either expressly
provides or is held to provide that Lessor shall not unreasonably withhold or
unreasonably delay any consent or approval, Lessee shall not be entitled to make
any claim for, and Lessee hereby expressly waives any claim for, damages
incurred by Lessee by reason of Lessor's failure to comply therewith, it being
understood and agreed that Lessee's sole remedy therefor shall be an action for
specific performance.
Section 11.13. Waiver of Right of Redemption. Lessee hereby expressly
waives any and all rights of redemption conferred by statute or otherwise.
Section 11.14. Notices. Whenever notice or any other communication
shall or may be given to either of the parties by the other, each such notice or
communication shall be sent by registered or certified mail with return receipt
requested to the respective addresses of the parties as contained herein or to
such
<PAGE>
other address as either party may from time to time designate in writing to the
other. Any notice or communication under this Lease shall be deemed to have been
given at the time it is placed in the mails with sufficient postage prepaid. A
copy of any such notice or communication shall also be sent to: Alpharetta
Square c/o AFCO Realty Services, LLC., 4200 Northside Parkway, Bldg. 12,
Atlanta, Georgia 30327-3049.
Section 11.15. Recording and Short Form Lease. Lessee agrees not to
record this Lease without the express written consent of Lessor and further
agrees to execute, acknowledge and deliver at any time after the date of this
Lease, at the request of Lessor, a "short form lease" suitable for recording.
All recording costs, fees or charges due and payable upon the recording of such
"short form lease" (including, without limitation, any and all taxes due or
collectible upon such recording) shall be payable in full by the party recording
same.
Section 11.16. Entire and Binding Agreement. This Lease contains all of
the agreements between the parties hereto, and it may not be modified in any
manner other than by agreement in writing signed by all parties hereto or their
successors in interest. All prior conversations or writings between the parties
hereto or their representatives with respect to the Demised Premises are merged
herein and extinguished. Lessee acknowledges that it has not relied on any
estimations, representations or statements of opinion or fact by Lessor or its
agents or employees in entering into this Lease other than as may be expressly
provided herein. The terms, covenants and conditions contained herein shall
inure to the benefit of and be binding upon the Lessor and Lessee and their
respective successors and assigns, except as may be otherwise expressly provided
in this Lease.
Section 11.17. Provisions Severable. If any term or provision of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
Section 11.18. Captions. The captions contained herein are for
convenience and reference only and shall not be deemed a part of this Lease or
construed as in any manner limiting or amplifying the terms and provisions of
this Lease to which they relate.
Section 11.19. Rider. A Rider, consisting of ____ pages,
Sections ____ through ____ inclusive is attached hereto and made a part hereof.
Section 11.20. Estoppel Certificates. Within ten (10) days after any
request therefor by Lessor, Lessee shall execute, acknowledge and deliver to
Lessor a written certificate acceptable to Lessor certifying, if the same be
true, as to such matters relating to this Lease, the Demised Premises or the
Lessee as Lessor shall reasonably request, or, if the same be not true, stating
the manner in and the extent to which the same be not true.
Section 11.22. Broker Notification. AFCO Realty Services, LLC "Broker"
is a licensed real estate broker operating under the laws of the State of
Georgia.
Section 11.23. Broker. AFCO Realty Services, LLC has acted as agent for
the Lessor in this transaction and is to be paid a commission by the Lessor.
Broker has not acted as agent in this transaction for the Lessee and Lessee does
not owe, and is not responsible for paying a commission to Broker in
<PAGE>
connection with this transaction. Agent has rendered Lessor and Lessee a
valuable service by assisting in the creation of the Lessor-Lessee relationship
hereunder. The commission to be paid in conjunction with the creation of the
relationship by this Lease has been negotiated between Lessor and Agent and
Lessor hereby agrees to pay Agent as compensation for Agent's services in
procuring this Lease and creating agreement is described under a separate
agreement.
Section 11.24. Compliance with the Americans with Disabilities Act.
Notwithstanding any other provision of this Lease to be contrary, Lessee shall
comply with The Americans with Disabilities Act, and all regulations and orders
promulgated pursuant thereto, as well as any related state, county and local
laws, regulations and building codes (collectively the "ADA"). Lessee shall make
all alterations to the Premises required by the ADA and shall use and occupy the
Premises at all times in compliance therewith. Lessee agrees to indemnify,
defend and hold Lessor harmless from and against any claims, losses or causes of
action arising out of Lessee's failure to comply with the ADA as required above.
Any alterations made by Lessee during the term of this Lease shall be in
compliance with the ADA and all other requirements of this Lease. At Lessor's
sole option, Lessor may (but shall not be obligated to) make any alterations to
the Premises deemed necessary by Lessor to comply with the ADA and Lessee shall
reimburse Lessor for such costs, upon demand, as additional rent. No approval by
Lessor of alterations made by Lessee shall constitute a warranty by Lessor that
such alterations comply with the ADA. In addition, Lessor does not warrant that
the Premises, the Building, the parking lot, common areas or improvements
provided by Lessor during the term of this Lease comply with the ADA. To the
extent that Lessor is required to place and keep the Building, parking lot or
common areas in compliance with the ADA, then Lessor shall be entitled to
include its expenses of compliance as additional rent and Lessee shall be
responsible for its proportionate share thereof pursuant to this Lease.
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have signed this lease as of the day and
year first above written.
Signed, sealed and delivered Daniel B. Cowart dba
this_______day of ________, ALPHARETTA SQUARE SHOPPING CENTER
19__, in the presence of: (Lessor)
/s/ MELANIE LY By: /s/ DANIEL B. COWART
- -------------------------------- -------------------------------
Unofficial Witness
- --------------------------------
Notary Public,
_____________County, State of
[NOTARY SEAL]
Signed, sealed and delivered (Lessee) FUTURUS FINANCIAL SVCS., INC.
this_______day of ________,
2000, in the presence of:
By: William M. Butler
Unofficial Witness
Its: President
/s/ TERRI Y. RICHARDS By: /s/ WILLIAM M. BUTLER
- -------------------------------- --------------------------------
Unofficial Witness
Its:
[CORPORATE SEAL]
Notary Public,
_______County, State of Georgia
[NOTARY SEAL]
Signed, sealed and delivered AFCO Realty Services, LLC
this______day of _______, (Agent)
2000, in the presence of:
By: /s/ J. WILLIAM BUTLER
--------------------------------
Unofficial Witness J. William Butler
Its: President
<PAGE>
ALPHARETTA SQUARE SHOPPING CENTER
RIDER
1. Lessee acknowledges that other tenants have been granted, and will be granted
from time to time, the exclusive right to operate certain businesses in the
Shopping Center, and agrees that Lessee's operation shall be limited to the
Specific Use Clause described in Article I, Section 1(k) of this lease, and that
Lessee shall in no event operate a business or sell items in the Demised
Premises outside its use clause.
2. Lessee's sole remedy for Lessor's breach of the foregoing covenant shall be
an action for injunctive relief. Lessee waives its right to seek damages or to
terminate this Lease as a result of such breach.
3. At such time as Lessor acquires the agreement of fifty percent (50%) of the
tenants at Alpharetta Square to convert the signage on each space to backlighted
channel letters on a raceway, Lessee will pay for such signage on Lessee's
space.
<PAGE>
EXHIBIT "A"
ALPHARETTA SQUARE SHOPPING CENTER
LEGAL DESCRIPTION
ALL THAT TRACT or parcel of land lying and being in Land Lots 693 and 694 of the
1st District, 2nd Section, Fulton County, Georgia and being more particularly
described as follows:
BEGIN at an iron pin placed at the point of intersection of the westerly
right-of-way line of Roswell Street (40' right-of-way) and the northwesterly
right-of-way line of State Highway #9 (aka Alpharetta Road) (80' right-of-way);
running thence along said right-of-way line of State Hwy. #9 south 62 degrees 21
minutes 31 seconds west a distance of 431.68 feet to an iron pin found (1" o.t.)
thence leaving said right-of-way line and running north 25 degrees 05 minutes 24
seconds west a distance of 188.93 feet to an iron pin found (3/4" R.R.); running
thence north 07 degrees 38 minutes 49 seconds west a distance of 145.15 feet to
an iron pin found (3/4" o.t.); running thence south 69 degrees 23 minutes 05
seconds west a distance of 55.66 feet to an iron pin placed; running thence
south 28 degrees, 00 minutes, 19 seconds west a distance of 69.59 feet to an
iron pin found (3/4" o.t.), running thence south 03 degrees, 05 minutes, 21
seconds west a distance of 64.97 feet to an iron pin found (3/4" o.t.); running
thence south 89 degrees, 05 minutes, 15 seconds west a distance of 52.62 feet to
an iron pin found (1/2" R. R.) located on the westerly land lot line of Land Lot
693; running thence along said land lot line north 01 degree, 38 minutes, 18
seconds east a distance of 266.62 feet to an iron pin found (1/4" sq. R. R.)
which iron pin found is located at the corner common to Land Lots 647, 694, 693
and 648; thence running along the western land lot line of Land Lot 694 north 00
degrees, 53 minutes, 08 seconds east a distance of 577.69 feet to an iron pin
found (iron); running thence south 77 degrees, 59 minutes, 25 seconds east a
distance of 356.79 feet to a fence corner; running thence south 00 degrees, 07
minutes, 18 seconds east a distance of 95.55 feet to an iron pin found (iron);
running thence south 68 degrees, 37 minutes, 38 seconds east a distance of
571.75 feet to an iron pin found (1/2" R. R.); said iron pin found being located
on the westerly right-of-way line of Roswell Street (40' right-of-way); running
thence along said right-of-way line south 32 degrees, 13 minutes, 41 seconds
west, a distance of 516.49 feet to an iron pin placed, said iron pin placed
being the POINT OF BEGINNING. Said tract containing 12.505 acres, as shown on
the plat of survey prepared for Alpharetta Square, Inc. by A. W. Browning,
Georgia Registered Land Surveyor #490, dated May 20, 1986.
<PAGE>
EXHIBIT "B"
ALPHARETTA SQUARE SHOPPING CENTER
[SITE PLAN SHOWN HERE]
<PAGE>
EXHIBIT 10.8
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of this 20th
day of August, 1999, by and among FUTURUS BANK, National Association (Proposed)
(the "Bank"), a proposed national bank; FUTURUS FINANCIAL SERVICES, INC., a bank
holding company incorporated under the laws of the State of Georgia (the
"Company"), and William M. Butler, a resident of the State of Georgia (the
"Executive").
RECITALS:
WHEREAS, the parties hereto desire to amend and restate the Employment
Agreement dated August 10, 1999, for the purpose of complying with regulatory
guidelines regarding the incentive stock option granted to the Executive by the
Company and to reconcile certain other provisions within the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Employer and Employee agree to amend the Agreement as
follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the Bank, is
controlled by or is under common control with the Bank.
1.3 "AREA" shall mean the geographic area within a radius of eighteen (18)
miles of the Bank's main office, to be located at _____ Windward Parkway,
Alpharetta, Georgia 30004. It is the express intent of the parties that the Area
as defined herein is the area where the Executive performs or performed services
on behalf of the Bank under this Agreement as of, or within a reasonable time
prior to, the termination of the Executive's employment hereunder.
1.4 "BEGINNING DATE" shall mean August 20, 1999.
1.5 "BUSINESS OF THE BANK" shall mean the business conducted by the Bank,
which is the business of commercial banking.
1.6 "CAUSE" shall mean:
1.6.1 With respect to termination by the Bank:
<PAGE>
(a) A material breach of the terms of this Agreement by the
Executive, including, without limitation, failure by the Executive
to perform his duties and responsibilities in the manner and to the
extent required under this Agreement, which remains uncured after
the expiration of thirty (30) days following the delivery of
written notice of such breach to the Executive by the Bank. Such
notice shall (i) specifically identify the duties that the Board of
Directors of the Bank believes the Executive has failed to perform,
(ii) state the facts upon which the Board of Directors made such
determination, and (iii) be approved by a resolution passed by
two-thirds (2/3) of the directors then in office;
(b) Conduct by the Executive that amounts to fraud, dishonesty
or willful misconduct in the performance of his duties and
responsibilities hereunder;
(c) Arrest for, charged in relation to (by criminal
information, indictment or otherwise), or conviction of the
Executive during the term of this Agreement of a crime involving
breach of trust or moral turpitude;
(d) Conduct by the Executive that amounts to gross and willful
insubordination or inattention to his duties and responsibilities
hereunder; or
(e) Conduct by the Executive that results in removal from his
position as an officer or Executive of the Bank pursuant to a
written order by any regulatory agency with authority or
jurisdiction over the Bank.
(f) Receipt by the Bank of written notice from the Office of
the Comptroller of the Currency "OCC") that the OCC has criticized
the Executive's performance or his area of responsibility, AND has
either (i) rated the Bank a "4" or "5" under the Uniform Financial
Rating System or (ii) has determined that the Bank is in a
"troubled condition" as defined under Section 914 of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989;
1.6.2 With respect to termination by the Executive, a material
diminution in the powers, responsibilities or duties of the Executive hereunder
or a material breach of the terms of this Agreement by the Bank, which remains
uncured after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Bank by the Executive.
1.7 "CHANGE OF CONTROL" means any one of the following events:
(a) the acquisition by any person or persons acting in concert
of the then outstanding voting securities of either the Bank or the
Company, if, after the transaction, the acquiring person (or
persons) owns, controls or holds with power to vote fifty percent
(50%) or more of any class of voting securities of either the Bank
or the Company, as the case may be;
(b) within any twelve-month period (beginning on or after the
Beginning Date) the persons who were directors of either the Bank
or the Company immediately before the beginning of such
twelve-month period (the "Incumbent Directors") shall cease to
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<PAGE>
constitute at least a majority of such board of directors; provided
that any director who was not a director as of (the Beginning Date)
shall be deemed to be an Incumbent Director if that director were
elected to such board of directors by, or on the recommendation of
or with the approval of, at least two-thirds of the directors who
then qualified as Incumbent Directors; and provided further that no
director whose initial assumption of office is in connection with
an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934) relating to the election of directors shall
be deemed to be an Incumbent Director;
(c) a reorganization, merger or consolidation, with respect to
which persons who were the stockholders of the Bank or the Company,
as the case may be, immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to
vote in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities; or
(d) the sale, transfer or assignment of all or substantially
all of the assets of the Company and its subsidiaries to any third
party.
1.8 "COMPANY INFORMATION" means Confidential Information and Trade
Secrets.
1.9 "CONFIDENTIAL INFORMATION" means data and information relating to
the business of the Bank or the Company (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of which the
Executive became aware as a consequence of or through the Executive's
relationship to the Bank and which has value to the Bank and is not generally
known to its competitors. Confidential Information shall not include any data or
information that has been voluntarily disclosed to the public by the Bank
(except where such public disclosure has been made by the Executive without
authorization) or that has been independently developed and disclosed by others,
or that otherwise enters the public domain through lawful means.
1.10 "INITIAL TERM" shall mean that period of time commencing on the
Beginning Date and running until the earlier of the close of business on the
last business day immediately preceding the third anniversary of the Beginning
Date or any termination of employment of the Executive under this Agreement as
provided for in Section 3.
1.11 "PERMANENT DISABILITY" shall mean the total inability of the
Executive to perform his duties under this Agreement for the duration of the
short-term disability period under the Bank's policy then in effect as certified
by a physician chosen by the Bank and reasonably acceptable to the Executive.
1.12 "TERM" shall mean the Initial Term and all subsequent renewal
periods.
1.13 "TRADE SECRETS" means Bank or Company information including, but
not limited to, technical or nontechnical data, formulas, patterns,
compilations, programs, devices, methods,
3
<PAGE>
techniques, drawings, processes, financial data, financial plans, product plans
or lists of actual or potential customers or suppliers which:
(a) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from
its disclosure or use; and
(b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
2. DUTIES.
2.1 POSITION. The Executive is employed initially as the President and
Chief Executive Officer of the Bank and, subject to the direction of the Board
of Directors of the Bank or its designee(s), shall perform and discharge well
and faithfully the duties which may be assigned to him from time to time by the
Bank in connection with the conduct of its business. The duties and
responsibilities of the Executive are set forth on EXHIBIT A attached hereto.
2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Executive pursuant to Section 2.1 hereof, the
Executive shall:
(a) devote substantially all of his time, energy and skill
during regular business hours to the performance of the duties of
his employment (reasonable vacations and reasonable absences due to
illness excepted) and faithfully and industriously perform such
duties;
(b) diligently follow and implement all reasonable and lawful
management policies and decisions communicated to him by the Board
of Directors of the Bank; and
(c) timely prepare and forward to the Board of Directors of
the Bank all reports and accounting as may be requested of the
Executive.
2.3 PERMITTED ACTIVITIES. The Executive shall devote his entire business
time, attention and energies to the Business of the Bank and shall not during
the Term be engaged (during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; but this shall not be construed as preventing the
Executive from:
(a) investing his personal assets in businesses which (subject
to clause (b) below) are not in competition with the Business of
the Bank and which will not require any services on the part of the
Executive in their operation or affairs and in which his
participation is solely that of an investor;
(b) purchasing securities in any corporation whose securities
are regularly traded provided that such purchase shall not result
in him collectively owning
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<PAGE>
beneficially at any time five percent (5%) or more of the equity
securities of any business in competition with the Business of the
Bank; and
(c) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or
books or teaching so long as the Board of Directors of the Bank
approves of such activities prior to the Executive's engaging in
them.
3. TERM AND TERMINATION.
3.1 TERM.This Agreement shall remain in effect for the Initial Term. At
the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of its
intent not to extend this Agreement with such written notice to be given not
less than sixty (60) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
3.2 TERMINATION. During the Term, the employment of the Executive under
this Agreement may be terminated only as follows:
3.2.1 By the Bank in the event that the Bank fails to receive its
regulatory charter, or the Company fails to raise the necessary
capital required to open the Bank, neither of which are caused by
actions taken by the Executive, and should the Bank's Board of
Directors decide to forgo future efforts to open the Bank in which
event the Bank shall be required to continue to pay the Executive his
Base Salary as defined in Section 4.1 for twelve (12) months following
the termination.
3.2.2 By the Bank:
(a) FOR CAUSE, upon written notice to the Executive pursuant to
Section 1.6.1 hereof, where the notice has been approved by a
resolution passed by two-thirds of the directors of the Bank then
in office in which event the Bank shall have no further obligation
to the Executive except for the payment of any amounts due and
owing under Section 4 on the effective date of termination;
(b) WITHOUT CAUSE at any time, provided that the Bank shall give
the Executive thirty (30) days' prior written notice of its intent
to terminate, in which event the Bank shall be required to
continue to pay the Executive his Base Salary as defined in
Section 4.1 for twelve (12) months following the termination; or
(c) UPON THE PERMANENT DISABILITY of Executive at any time,
provided that the Bank shall give the Executive thirty (30) days'
prior written notice of its intent to terminate, in which event
the Bank shall be required to pay the Executive his then existing
Base Salary as defined in Section 4.1 for twelve (12) months
following the
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<PAGE>
termination or until the Executive begins receiving payments under
the Bank's long-term disability policy, whichever occurs first.
3.2.3 By the Executive:
(a) FOR CAUSE, in which event the Bank shall be required to pay
the Executive his then existing Base Salary as defined in Section
4.1 for twelve (12) months following the termination; or
(b) WITHOUT CAUSE OR UPON THE PERMANENT DISABILITY of the
Executive, provided that the Executive shall give the Bank sixty
(60) days' prior written notice of his intent to terminate, in
which event the Bank shall have no further obligation to the
Executive except future payment of any amounts due and owing on
the effective date of the termination. If the Executive terminates
this Agreement Without Cause on or before the first anniversary of
the Beginning Date, the Executive will be required to reimburse
the Bank the full amount of any initiation fees associated with
memberships in a country club paid by the Bank pursuant to Section
4.6. If the Executive terminates this Agreement Without Cause on
or before the second anniversary of the Beginning Date, the
Executive will be required to reimburse the Bank 50% of the amount
of any initiation fees associated with memberships in a country
club paid by the Bank pursuant to Section 4.6. If the Executive
terminates this Agreement Without Cause after the second
anniversary of the Beginning Date but on or before the end of the
Initial Term of the Agreement, the Executive will be required to
reimburse the Bank 25% of the amount of any initiation fees
associated with memberships in a country club paid by the Bank
pursuant to Section 4.6.
3.2.4 At any time upon mutual, written agreement of the parties, in
which event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination unless otherwise set
forth in the written agreement.
3.2.5 Notwithstanding anything in this Agreement to the contrary, the
Term shall end automatically upon the Executive's death, in which
event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination.
3.3 CHANGE OF CONTROL. If, during the Term of this Agreement and within
one (1) year immediately following a Change of Control or within six (6) months
immediately prior to a Change of Control, the Executive's employment with the
Bank under this Agreement is terminated by the Bank (or its successors) other
than for cause, the Executive, or in the event of his subsequent death, his
designated beneficiaries or his estate, as the case may be, shall receive, as
liquidated damages, in lieu of all other claims, a severance payment equal to
one (1) times the Executives then current Base Salary during the immediately
preceding twelve (12) months, to be paid in full on the last day of the month
following the date of termination. In no event shall the payment(s) described in
this Section 3.3 exceed the amount permitted by Section 280G of the Internal
Revenue Code (as amended). Therefore, if the aggregate present value (determined
as of
6
<PAGE>
the date of the Change of Control in accordance with the provisions of Section
280G of the Internal Revenue Code (as amended) or any successor thereof and the
regulations and rulings thereunder ("Section 280G")) of both the severance
payment and all other payments to the Executive in the nature of compensation
which are contingent on a change in ownership or effective control of the Bank
or the Company or in the ownership of a substantial portion of the assets of the
Bank or the Company (the "Aggregate Severance") would result in a parachute
payment (as determined under Section 280G) then the Aggregate Severance shall
not be greater than an amount equal to 2.99 multiplied by Executive's base
amount (as determined under Section 280G) for the base period (as determined
under Section 280G). In the event the Aggregate Severance is required to be
reduced pursuant to this Section 3.3, the Executive shall be entitled to
determine which portions of the Aggregate Severance are to be reduced so that
the Aggregate Severance satisfies the limit set forth in the preceding sentence.
The Executive's average annual compensation shall be based on the most recent
five taxable years ending before the Change of Control (or the period during
which the Executive was employed by the Bank if the Executive has been employed
by the Bank for less than five years).
3.4 EFFECT OF TERMINATION. Termination of the employment of the Executive
pursuant to Section 3.2 or Section 3.3 shall be without prejudice to any right
or claim which may have previously accrued to either the Bank or the Executive
hereunder and shall not terminate, alter, supersede or otherwise affect the
terms and covenants and the rights and duties prescribed in this Agreement.
4. COMPENSATION. The Executive shall receive the following salary and benefits
described in Exhibit B, attached hereto and made a part hereof:
4.1 BASE SALARY. During the Initial Term, the Executive shall be compensated
at a base rate of $120,000 annually (the "Base Salary"). The Executive's Base
Salary shall be reviewed by the Board of Directors of the Bank at least
annually, and the Executive shall be entitled to receive annually an increase in
such amount, if any, as may be determined by the Board of Directors. Base Salary
shall be payable in accordance with the Bank's normal payroll practices.
4.2 INCENTIVE COMPENSATION. The Executive shall be entitled to annual bonus
compensation, if any, in accordance with the terms specified in EXHIBIT B
attached hereto.
4.3 STOCK OPTIONS.
(a) As of the date the Company's initial public offering is closed, the
Company will have established a stock option plan and will grant to the
Executive an incentive stock option to purchase, at a per share purchase
price equal to the Company's initial stock offering price, 25,000 shares of
the Company's common stock. The option will become vested and exercisable in
20% increments, commencing on the first anniversary of the option grant date
and continuing for the next four successive anniversaries until the option is
fully vested and exercisable. The option shall expire generally upon the
earlier of ninety (90) days following termination of employment or upon the
tenth anniversary of the option grant date.
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(b) Notwithstanding any other provision of this Agreement, if the Bank's
capital falls below the minimum requirements determined by the primary
federal or state regulator of the Company or the Bank (the "Regulator"), the
Regulator may direct the Company to require the Executive to exercise or
forfeit his incentive stock option granted under Section 4.3(a) herein. The
Company will notify the Executive within 45 days from the date the Regulator
notifies the Company or Bank in writing that the Executive must exercise or
forfeit his incentive stock options. The Company will cancel the incentive
stock options if not exercised within 21 days of the Company's notification
to the Executive. The Company agrees to comply with any Regulator's request
that the Company invoke its right to require the Executive to exercise or
forfeit his incentive stock options under the circumstances stated above."
(c) In addition to the incentive stock option granted under Section
4.3(a) herein, the Executive will be granted a warrant to purchase shares of
the Company's common stock on the same basis as the organizers of the Bank.
(d) The Executive will be eligible to receive additional stock options in
the discretion of the Board of Directors of the Bank and the Company.
(e) In the event a Change of Control occurs after the third anniversary
of the Executive's beginning employment date with the Company, all options
granted to the Executive shall become one hundred percent (100%) vested and
exercisable.
(f) In the event of the Executive's Permanent Disability or death, all of
the options granted to the Executive that would have vested during the
calendar year in which the Executive is determined to have a Permanent
Disability or dies, shall become one hundred percent (100%) vested and
exercisable as of the date the Executive is determined to have a Permanent
Disability or as of the Executive's death, as applicable.
(g) The options granted to the Executive shall be nontransferable other
than by will or the laws of descent and distribution and shall be exercisable
during the lifetime of the Executive only by the Executive (or in the event
of his Disability, by his personal representative) and after his death, only
by his legatee or the executor of his estate.
4.4 HEALTH INSURANCE.
(a) The Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive for the Executive's current health insurance
covering the Executive and the members of his immediate family:
(i) until such time as the Company adopts a health insurance plan for
employees of the Company and the Bank; or
(ii) until the Company and the Bank abandon their organizational
efforts or for twelve (12) months after the Beginning Date, whichever is
later.
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(b) In the event of termination by the Executive FOR CAUSE (Section
3.2.3(a)) or following a CHANGE OF CONTROL (Section 3.3), the Bank shall
reimburse Executive for the cost of premium payments paid by the Executive to
continue his then existing health insurance as provided by the Bank for a
period of six (6) months following the date of termination of employment.
(c) In the event of termination by the Bank WITHOUT CAUSE (Section
3.2.2(b)), the Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive to continue his then existing health insurance
as provided by the Bank or the Company for a period of twelve (12) months
following the date of termination of employment.
4.5 AUTOMOBILE. The Bank will provide the Executive with an automobile
allowance or an automobile with a monthly lease payment, based on a 36-month
lease, not to exceed $500 per month (inclusive of any taxes). The make and model
of the automobile shall be determined by the Bank. The Bank will pay expenses
associated with the operation, maintenance, repair and insurance for the
automobile.
4.6 BUSINESS EXPENSES; MEMBERSHIPS; STONIER GRADUATE STUDIES; SECURITY
SYSTEM. The Bank specifically agrees to reimburse the Executive for:
(a) reasonable business (including travel) expenses incurred by him in
the performance of his duties hereunder, as approved from time to time by the
Board of Directors of the Bank;
(b) the dues and business related expenditures, including initiation
fees, associated with membership in a single country club and a single civic
association both as selected by the Executive and in professional
associations which are commensurate with his position; provided, however,
that the Executive shall, as a condition of reimbursement, submit
verification of the nature and amount of such expenses in accordance with
reimbursement policies from time to time adopted by the Bank and in
sufficient detail to comply with rules and regulations promulgated by the
Internal Revenue Service;
(c) the dues and business related expenditures, including the remaining
initiation fees, associated with membership in the Marietta Country Club;
(d) the fees and reasonable expenses incurred by the Executive to
continue his graduate studies at the Stonier Graduate School of Banking, the
Executive having estimated that he has two years of studies remaining at an
estimated annual cost of $2,700, plus his travel and meal expenses; and
(d) the reasonable expenses to install and operate a security system in
the Executive's home, for an installation cost not to exceed $2,500 and a
monthly monitoring fee not to exceed $40, payable to the Executive when the
Bank opens for business.
4.7 BENEFITS. In addition to the benefits specifically described in this
Agreement, the Executive shall be entitled to such benefits as may be available
from time to time to executives of the Bank similarly situated to the Bank. All
such benefits shall be awarded and administered in
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accordance with the Bank's standard policies and practices. Such benefits may
include, by way of example only, profit-sharing plans, retirement or investment
funds, dental, health, life and disability insurance benefits and such other
benefits as the Bank deems appropriate.
4.8 WITHHOLDING. The Bank may deduct from each payment of compensation
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.
5. COMPANY INFORMATION.
5.1 OWNERSHIP OF COMPANY INFORMATION. All Company Information received or
developed by the Executive while employed by the Bank will remain the sole and
exclusive property of the Company or the Bank, as applicable.
5.2 OBLIGATIONS OF THE EXECUTIVE. The Executive agrees:
(a) to hold Company Information in strictest confidence;
(b) not to use, duplicate, reproduce, distribute, disclose or
otherwise disseminate Company Information or any physical embodiments of
Company Information; and
(c) in no event may take any action causing or fail to take
any action necessary in order to prevent any Company Information from
losing its character or ceasing to qualify as Confidential Information or
a Trade Secret.
In the event that the Executive is required by law to disclose any Company
Information, the Executive will not make such disclosure unless (and then only
to the extent that) the Executive has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written notice
is given to the Company when the Executive becomes aware that such disclosure
has been requested and is required by law. The Bank will pay the legal counsel's
fees, provided that the Bank has approved the legal counsel to be used. This
Section 5 shall survive for a period of eighteen (18) months following
termination of this Agreement for any reason with respect to Confidential
Information, and shall survive termination of this Agreement for any reason for
so long as is permitted by the then-current Georgia Trade Secrets Act of 1990,
O.C.G.A. Sections 10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Bank, and in
any event upon termination of his employment with the Bank, the Executive will
promptly deliver to the Bank all property belonging to the Bank, including,
without limitation, all Company Information then in his possession or control.
6. NON-COMPETITION. The Executive agrees that during his employment by the Bank
hereunder and, in the event of his termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
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- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he will not (except on behalf
of or with the prior written consent of the Bank), within the Area, either
directly or indirectly, on his own behalf or in the service or on behalf of
others, as an executive employee or in any other capacity which involves duties
and responsibilities similar to those undertaken for the Bank (including as an
organizer or proposed executive officer of a new financial institution), or
engage in any business which is the same as or essentially the same as the
Business of the Bank.
7. NON-SOLICITATION OF CUSTOMERS. The Executive agrees that during his
employment by the Bank hereunder and, in the event of his termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he will not (except on behalf
of or with the prior written consent of the Bank), within the Area, on his own
behalf or in the service or on behalf of others, solicit, divert or appropriate
or attempt to solicit, divert or appropriate, any business from any of the
Bank's customers, including actively sought prospective customers, with whom the
Executive has or had material contact during the last two (2) years of his
employment, for purposes of providing products or services that are competitive
with those provided by the Bank.
8. NON-SOLICITATION OF EMPLOYEES. The Executive agrees that during his
employment by the Bank hereunder and, in the event of his termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he will not, within the Area,
on his own behalf or in the service or on behalf of others, solicit, recruit or
hire away or attempt to solicit, recruit or hire away, any employee of the Bank
or its Affiliates, whether or not:
- such employee is a full-time employee or a temporary employee of the
Bank or its Affiliates
- such employment is pursuant to written agreement, and
- such employment is for a determined period or is at will.
9. REMEDIES. The Executive agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Bank, and that irreparable loss and damage will be suffered by
the Bank should he breach any of the covenants. Therefore, the Executive agrees
and consents that, in addition to all the remedies provided by law or in equity,
the Bank shall be entitled to a temporary restraining order and temporary and
permanent injunctions to
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prevent a breach or contemplated breach of any of the covenants. The Bank and
the Executive agree that all remedies available to the Bank or the Executive, as
applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in this
Agreement is separate, distinct and severable from the other provisions of this
Agreement and that the invalidity or unenforceability of any Agreement provision
shall not affect the validity or enforceability of any other provision of this
Agreement. Further, if any provision of this Agreement is ruled invalid or
unenforceable by a court of competent jurisdiction because of a conflict between
the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with and valid and enforceable under
the law or public policy.
11. NO SET-OFF BY THE EXECUTIVE. The existence of any claim, demand, action or
cause of action by the Executive against the Bank, or any Affiliate of the Bank,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Bank of any of its rights hereunder.
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand or overnight courier, in which event the notice shall be deemed effective
when delivered. All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:
(i) If to the Bank, to it at:
---------------------------
---------------------------
---------------------------
(ii) If to the Executive, to him at:
---------------------------
---------------------------
---------------------------
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party to this Agreement.
14. WAIVER. A waiver by one party to this Agreement of any breach of this
Agreement by the other party to this Agreement shall not be effective unless in
writing, and no waiver shall operate or be construed as a waiver of the same or
another breach on a subsequent occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may
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be entered only in the State Court of Fulton County or the federal court for the
Northern District of Georgia. The Bank and the Executive agree to share equally
the fees and expenses associated with the arbitration proceedings.
16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys' fees,
incurred by the prevailing party in connection with such litigation, and the
other party shall pay such costs and expenses to the prevailing party promptly
upon demand by the prevailing party.
17. APPLICABLE LAW. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Georgia.
18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in this Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Bank or the
Executive unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.
21. SURVIVAL. The obligations of the Executive pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Executive hereunder
for the period designated under each of those respective sections.
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IN WITNESS WHEREOF, the Bank and the Executive have executed and delivered
this Agreement as of the date first shown above.
THE BANK:
FUTURUS, NATIONAL ASSOCIATION
By:
-------------------------------
Print Name:
------------------------
Title:
----------------------------
THE COMPANY:
FUTURUS FINANCIAL SERVICES, INC.
By:
-------------------------------
Print Name:
------------------------
Title:
----------------------------
THE EXECUTIVE:
----------------------------------
WILLIAM M. BUTLER
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EXHIBIT A
INITIAL DUTIES OF THE EXECUTIVE
The initial duties of the Executive shall include, in addition to any other
duties assigned the Executive by the Board of Directors of the Bank or its
designee, the following:
- Foster a corporate culture that promotes ethical practices,
encourages individual integrity, fulfills social
responsibility, and is conducive to attracting, retaining and
motivating a diverse group of top-quality employees at all
levels.
- Work with the Board of Directors to develop a long-term
strategy for the Bank that creates shareholder value.
- Develop and recommend to the Board annual business plans and
budgets that support the Bank's long-term strategy.
- Manage the day-to-day business affairs of the Bank
appropriately.
- Use best efforts to achieve the Bank's financial and operating
goals and objectives.
- Use best efforts to improve the quality and value of the
products and services provided by the Bank.
- Use best efforts to ensure that the Bank maintains a
satisfactory competitive position within its industry.
- Develop an effective management team and an active plan for
its development and succession, and make recommendations to
the Board regarding hiring, firing and compensation.
- Implement major corporate policies.
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EXHIBIT B
ANNUAL BONUS COMPENSATION
1. BONUS. Beginning not later than one year after the opening of the Bank and in
addition to Executive's Base Salary, the Executive shall be eligible to receive
performance bonuses contingent upon the following:
(a) The overall condition of the Bank must be "satisfactory" in the
opinion of the OCC as set forth in the most current OCC Report of Supervisory
Activity provided to the Board of Directors of the Bank and the Uniform
Financial Institution Rating of the Bank shall not be less than "2"; and
(b) The Bank shall be "adequately capitalized" as defined under
regulations promulgated by the OCC pursuant to the Federal Deposit Insurance
Corporation Improvement Act of 1991.
2. BONUS SCHEDULE. Beginning one year after the opening of the Bank and assuming
the Bank has become and remains cumulatively profitable as of its most recent
fiscal year-end, in addition to the Executive's then existing Base Salary, the
Executive shall be eligible to receive the following annual performance bonuses:
(a) The Executive is eligible for an amount equal to 15% of his Base
Salary if Bank successfully reaches 100% of Bank's annual "plan" as
determined by the Bank's Board of Directors. ADDITIONALLY, the Executive is
eligible for an amount equal to 10% of his Base Salary if the Bank
successfully exceeds 110% of the Bank's "plan" as determined by the Bank's
Board of Directors.
(b) In addition to Section (2)(a) above, the Executive is eligible for
an amount equal to 15% of the Bank's pre-tax profits in an amount up to, but
not to exceed 25% of the Executive's annual base salary.
(c) The Executive is eligible for additional compensation at the
discretion of the Bank's Board of Directors.
(d) Notwithstanding the foregoing, the performance bonuses contemplated
by this Exhibit B shall not become due and payable until the Board of
Directors of the Bank has determined, according to reasonable safety and
soundness standards, that the overall financial condition of the Bank,
including asset quality, will not be adversely affected by the payment of the
performance bonuses.
<PAGE>
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of this ____ day of _____________,
2000, by and among FUTURUS BANK, National Association (Proposed) (the "Bank"), a
proposed national bank; FUTURUS FINANCIAL SERVICES, INC., a corporation
organized under the laws of the State of Georgia (the "Company"), and R. Wesley
Fuller, a resident of the State of Georgia (the "Executive").
RECITALS:
The Bank desires to employ the Executive as Executive Vice President
and Chief Financial Officer of the Bank, and the Executive desires to accept
such employment.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Employer and Executive hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the Bank, is
controlled by or is under common control with the Bank.
1.3 "AREA" shall mean the geographic area within a radius of eighteen (18)
miles of the Bank's main office, to be located at _____ Windward Parkway,
Alpharetta, Georgia 30004. It is the express intent of the parties that the Area
as defined herein is the area where the Executive performs or performed services
on behalf of the Bank under this Agreement as of, or within a reasonable time
prior to, the termination of the Executive's employment hereunder.
1.4 "BEGINNING DATE" shall mean _____________, 2000.
1.5 "BUSINESS OF THE BANK" shall mean the business conducted by the Bank,
which is the business of commercial banking.
1.6 "CAUSE" shall mean:
1.6.1 With respect to termination by the Bank:
(a) A material breach of the terms of this Agreement by the
Executive, including, without limitation, failure by the Executive to
perform his or her duties and responsibilities in the manner and to the
extent required under this Agreement, which
<PAGE>
remains uncured after the expiration of thirty (30) days following the
delivery of written notice of such breach to the Executive by the Bank.
(b) Conduct by the Executive that amounts to fraud, dishonesty or
willful misconduct in the performance of his or her duties and
responsibilities hereunder;
(c) Arrest for, charged in relation to (by criminal information,
indictment or otherwise), or conviction of the Executive during the term
of this Agreement of a crime involving breach of trust or moral
turpitude;
(d) Conduct by the Executive that amounts to gross and willful
insubordination or inattention to his or her duties and responsibilities
hereunder; or
(e) Conduct by the Executive that results in removal from his or her
position as an officer or Executive of the Bank pursuant to a written
order by any regulatory agency with authority or jurisdiction over the
Bank.
(f) Receipt by the Bank of written notice from the Office of the
Comptroller of the Currency "OCC") that the OCC has criticized the
Executive's performance or his or her area of responsibility, AND has
either (i) rated the Bank a "4" or "5" under the Uniform Financial Rating
System or (ii) has determined that the Bank is in a "troubled condition"
as defined under Section 914 of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989;
1.6.2 With respect to termination by the Executive, a material
diminution in the powers, responsibilities or duties of the Executive hereunder
or a material breach of the terms of this Agreement by the Bank, which remains
uncured after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Bank by the Executive.
1.7 "CHANGE OF CONTROL" means any one of the following events:
(a) the acquisition by any person or persons acting in concert of the
then outstanding voting securities of either the Bank or the Company, if,
after the transaction, the acquiring person (or persons) owns, controls
or holds with power to vote fifty percent (50%) or more of any class of
voting securities of either the Bank or the Company, as the case may be;
(b) within any twelve-month period (beginning on or after the
Beginning Date) the persons who were directors of either the Bank or the
Company immediately before the beginning of such twelve-month period (the
"Incumbent Directors") shall cease to constitute at least a majority of
such board of directors; provided that any director who was not a
director as of (the Beginning Date) shall be deemed to be an Incumbent
Director if that director were elected to such board of directors by, or
on the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors; and provided
further that no director whose initial assumption of office is in
connection with an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities
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Exchange Act of 1934) relating to the election of directors shall be
deemed to be an Incumbent Director;
(c) a reorganization, merger or consolidation, with respect to which
persons who were the stockholders of the Bank or the Company, as the case
may be, immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than fifty percent (50%) of the
combined voting power entitled to vote in the election of directors of
the reorganized, merged or consolidated company's then outstanding voting
securities; or
(d) the sale, transfer or assignment of all or substantially all of
the assets of the Company and its subsidiaries to any third party.
1.8 "COMPANY INFORMATION" means Confidential Information and Trade Secrets.
1.9 "CONFIDENTIAL INFORMATION" means data and information relating to the
business of the Bank or the Company (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of which the
Executive became aware as a consequence of or through the Executive's
relationship to the Bank and which has value to the Bank and is not generally
known to its competitors. Confidential Information shall not include any data or
information that has been voluntarily disclosed to the public by the Bank
(except where such public disclosure has been made by the Executive without
authorization) or that has been independently developed and disclosed by others,
or that otherwise enters the public domain through lawful means.
1.10 "INITIAL TERM" shall mean that period of time commencing on the
Beginning Date and running until the earlier of the close of business on the
last business day immediately preceding the third anniversary of the Beginning
Date or any termination of employment of the Executive under this Agreement as
provided for in Section 3.
1.11 "PERMANENT DISABILITY" shall mean the total inability of the Executive
to perform his or her duties under this Agreement for the duration of the
short-term disability period under the Bank's policy then in effect as certified
by a physician chosen by the Bank and reasonably acceptable to the Executive.
1.12 "TERM" shall mean the Initial Term and all subsequent renewal periods.
1.13 "TRADE SECRETS" means Bank or Company information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans or lists of actual or potential customers or
suppliers which:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or
use; and
(b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
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2. DUTIES.
2.1 POSITION. The Executive is employed initially as a Executive Vice
President and Chief Financial Officer of the Bank and, subject to the direction
of the Chief Executive Officer of the Bank or his designee(s), shall perform and
discharge well and faithfully the duties which may be assigned to him or her
from time to time by the Bank in connection with the conduct of its business.
The duties and responsibilities of the Executive are set forth on EXHIBIT A
attached hereto.
2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Executive pursuant to Section 2.1 hereof, the
Executive shall:
(a) devote substantially all of his or her time, energy and skill
during regular business hours to the performance of the duties of his
or her employment (reasonable vacations and reasonable absences due to
illness excepted) and faithfully and industriously perform such
duties;
(b) diligently follow and implement all reasonable and lawful
management policies and decisions communicated to him or her by the
Chief Executive Officer of the Bank; and
(c) timely prepare and forward to the Chief Executive Officer of
the Bank all reports and accounting as may be requested of the
Executive.
2.3 PERMITTED ACTIVITIES. The Executive shall devote his or her entire
business time, attention and energies to the Business of the Bank and shall not
during the Term be engaged (during normal business hours) in any other business
or professional activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage; but this shall not be construed as
preventing the Executive from:
(a) investing his or her personal assets in businesses which
(subject to clause (b) below) are not in competition with the Business
of the Bank and which will not require any services on the part of the
Executive in their operation or affairs and in which his or her
participation is solely that of an investor;
(b) purchasing securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in him
or her collectively owning beneficially at any time five percent (5%)
or more of the equity securities of any business in competition with
the Business of the Bank; and
(c) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books
or teaching so long as the Chief Executive Officer of the Bank
approves of such activities prior to the Executive's engaging in them.
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3. TERM AND TERMINATION.
3.1 TERM.This Agreement shall remain in effect for the Initial Term. At
the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of its
intent not to extend this Agreement with such written notice to be given not
less than sixty (60) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
3.2 TERMINATION. During the Term, the employment of the Executive under
this Agreement may be terminated only as follows:
3.2.1 By the Bank in the event that the Bank fails to receive its
regulatory charter, or the Company fails to raise the necessary
capital required to open the Bank, neither of which are caused by
actions taken by the Executive, and should the Bank's Board of
Directors decide to forgo future efforts to open the Bank in which
event the Bank shall be required to continue to pay the Executive his
or her Base Salary as defined in Section 4.1 for twelve (12) months
following the termination or until the Executive finds other
employment, whichever period is shorter.
3.2.2 By the Bank:
(a) FOR CAUSE, upon written notice to the Executive pursuant to
Section 1.6.1 hereof, in which event the Bank shall have no
further obligation to the Executive except for the payment of any
amounts due and owing under Section 4 on the effective date of
termination;
(b) WITHOUT CAUSE at any time, provided that the Bank shall
give the Executive thirty (30) days' prior written notice of its
intent to terminate, in which event the Bank shall be required to
continue to pay the Executive his or her Base Salary as defined in
Section 4.1 for twelve (12) months following the termination; or
(c) UPON THE PERMANENT DISABILITY of Executive at any time,
provided that the Bank shall give the Executive thirty (30) days'
prior written notice of its intent to terminate, in which event
the Bank shall be required to pay the Executive his or her then
existing Base Salary as defined in Section 4.1 for twelve (12)
months following the termination or until the Executive begins
receiving payments under the Bank's long-term disability policy,
whichever occurs first.
3.2.3 By the Executive:
(a) FOR CAUSE, in which event the Bank shall be required to pay
the Executive his or her then existing Base Salary as defined in
Section 4.1 for twelve (12) months following the termination; or
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(b) WITHOUT CAUSE OR UPON THE PERMANENT DISABILITY of the
Executive, provided that the Executive shall give the Bank sixty
(60) days' prior written notice of his or her intent to terminate,
in which event the Bank shall have no further obligation to the
Executive except future payment of any amounts due and owing on
the effective date of the termination.
3.2.4 At any time upon mutual, written agreement of the parties, in
which event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination unless otherwise set
forth in the written agreement.
3.2.5 Notwithstanding anything in this Agreement to the contrary, the
Term shall end automatically upon the Executive's death, in which
event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination.
3.3 CHANGE OF CONTROL. If, during the Term of this Agreement and within one
(1) year immediately following a Change of Control or within six (6) months
immediately prior to a Change of Control, the Executive's employment with the
Bank under this Agreement is terminated by the Bank (or its successors) other
than for Cause, the Executive, or in the event of his or her subsequent death,
his or her designated beneficiaries or his or her estate, as the case may be,
shall receive, as liquidated damages, in lieu of all other claims, a severance
payment equal to one (1) times the Executive's then current Base Salary during
the immediately preceding twelve (12) months, to be paid in full on the last day
of the month following the date of termination. In no event shall the payment(s)
described in this Section 3.3 exceed the amount permitted by Section 280G of the
Internal Revenue Code (as amended). Therefore, if the aggregate present value
(determined as of the date of the Change of Control in accordance with the
provisions of Section 280G of the Internal Revenue Code (as amended) or any
successor thereof and the regulations and rulings thereunder ("Section 280G"))
of both the severance payment and all other payments to the Executive in the
nature of compensation which are contingent on a change in ownership or
effective control of the Bank or the Company or in the ownership of a
substantial portion of the assets of the Bank or the Company (the "Aggregate
Severance") would result in a parachute payment (as determined under Section
280G) then the Aggregate Severance shall not be greater than an amount equal to
2.99 multiplied by Executive's base amount (as determined under Section 280G)
for the base period (as determined under Section 280G). In the event the
Aggregate Severance is required to be reduced pursuant to this Section 3.3, the
Executive shall be entitled to determine which portions of the Aggregate
Severance are to be reduced so that the Aggregate Severance satisfies the limit
set forth in the preceding sentence. The Executive's average annual compensation
shall be based on the most recent five taxable years ending before the Change of
Control (or the period during which the Executive was employed by the Bank if
the Executive has been employed by the Bank for less than five years).
3.4 EFFECT OF TERMINATION. Termination of the employment of the Executive
pursuant to Section 3.2 or Section 3.3 shall be without prejudice to any right
or claim which may have previously accrued to either the Bank or the Executive
hereunder and shall not terminate, alter,
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supersede or otherwise affect the terms and covenants and the rights and duties
prescribed in this Agreement.
4. COMPENSATION. The Executive shall receive the following salary and benefits
described in Exhibit B, attached hereto and made a part hereof:
4.1 BASE SALARY. During the Initial Term, the Executive shall be compensated
at a base rate of $95,000 annually (the "Base Salary"). The Executive's Base
Salary shall be reviewed by the Chief Executive Officer of the Bank at least
annually, and the Executive shall be entitled to receive annually an increase in
such amount, if any, as may be determined by the Chief Executive Officer. Base
Salary shall be payable in accordance with the Bank's normal payroll practices.
4.2 INCENTIVE COMPENSATION. The Executive shall be entitled to annual bonus
compensation, if any, in accordance with the terms specified in EXHIBIT B
attached hereto.
4.3 STOCK OPTIONS.
(a) As of the date the Company's initial public offering is closed, the
Company will have established a stock option plan and will grant to the
Executive an incentive stock option to purchase, at a per share purchase
price equal to the Company's initial stock offering price, 10,000 shares of
the Company's common stock. The option will become vested and exercisable in
20% increments, commencing on the first anniversary of the option grant date
and continuing for the next four successive anniversaries until the option is
fully vested and exercisable. The option shall expire generally upon the
earlier of ninety (90) days following termination of employment or upon the
tenth anniversary of the option grant date.
(b) If the Bank successfully exceeds 110% of the Bank's "Plan" as
determined by the Bank's Board of Directors for fiscal year 2001, the Company
will grant the Executive a stock option to purchase, at a per share price
equal to $10.00 per share, 5,000 shares of the Company's common stock. The
option will become vested and exercisable in 20% increments, commencing on
the first anniversary of the option grant date and continuing for the next
four successive anniversaries until the option is fully vested and
exercisable. The option shall expire generally upon the earlier of ninety
(90) days following termination of employment or upon the tenth anniversary
of the option grant date. The option will be an incentive stock option if the
fair market value of the Company's common stock is equal to or less than
$10.00 per share on the date of grant. The option will be a non-qualified
stock option if the fair market value of the Company's common stock is
greater than $10.00 per share on the date of grant.
(c) Notwithstanding any other provision of this Agreement, if the Bank's
capital falls below the minimum requirements determined by the primary
federal or state regulator of the Company or the Bank (the "Regulator"), the
Regulator may direct the Company to require the Executive to exercise or
forfeit his or her incentive stock option granted under Section 4.3(a)
herein. The Company will notify the Executive within 45 days from the date
the Regulator notifies the Company or Bank in writing that the Executive must
exercise or forfeit his or her incentive stock options. The Company will
cancel the incentive stock options if not exercised within 21 days of the
Company's notification to the Executive. The
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Company agrees to comply with any Regulator's request that the Company invoke
its right to require the Executive to exercise or forfeit his or her
incentive stock options under the circumstances stated above."
(d) The Executive will be eligible to receive additional stock options in
the discretion of the Board of Directors of the Bank and the Company.
(e) In the event a Change of Control occurs after the third anniversary
of the Executive's beginning employment date with the Company, all options
granted to the Executive shall become one hundred percent (100%) vested and
exercisable.
(f) In the event of the Executive's Permanent Disability or death, all of
the options granted to the Executive that would have vested during the
calendar year in which the Executive is determined to have a Permanent
Disability or dies, shall become one hundred percent (100%) vested and
exercisable as of the date the Executive is determined to have a Permanent
Disability or as of the Executive's death, as applicable.
(g) The options granted to the Executive shall be nontransferable other
than by will or the laws of descent and distribution and shall be exercisable
during the lifetime of the Executive only by the Executive (or in the event
of his Disability, by his personal representative) and after his death, only
by his legatee or the executor of his estate.
4.4 HEALTH INSURANCE.
(a) The Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive for the Executive's current health insurance
covering the Executive and the members of his or her immediate family:
(i) until such time as the Company adopts a health insurance plan for
employees of the Company and the Bank; or
(ii) until the Company and the Bank abandon their organizational
efforts or for twelve (12) months after the Beginning Date, whichever is
later.
(b) In the event of termination by the Executive FOR CAUSE (Section
3.2.3(a)) or following a CHANGE OF CONTROL (Section 3.3), the Bank shall
reimburse Executive for the cost of premium payments paid by the Executive to
continue his or her then existing health insurance as provided by the Bank
for a period of six (6) months following the date of termination of
employment.
(c) In the event of termination by the Bank WITHOUT CAUSE (Section
3.2.2(b)), the Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive to continue his or her then existing health
insurance as provided by the Bank or the Company for a period of twelve (12)
months following the date of termination of employment.
4.5 AUTOMOBILE. The Bank will provide the Executive with an automobile
allowance of $400 per month.
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4.6 BUSINESS EXPENSES. The Bank specifically agrees to reimburse the
Executive for:
(a) reasonable business expenses incurred by him or her in the
performance of his or her duties hereunder, as approved from time to time by
the Chief Executive Officer of the Bank; and
(b) the dues and business related expenditures, including initiation
fees, associated with membership in a single civic association as selected by
the Executive and in professional associations which are commensurate with
his or her position; provided, however, that the Executive shall, as a
condition of reimbursement, submit verification of the nature and amount of
such expenses in accordance with reimbursement policies from time to time
adopted by the Bank and in sufficient detail to comply with rules and
regulations promulgated by the Internal Revenue Service.
4.7 BENEFITS. In addition to the benefits specifically described in this
Agreement, the Executive shall be entitled to such benefits as may be available
from time to time to other executives of the Bank who are similarly situated to
the Executive. All such benefits shall be awarded and administered in accordance
with the Bank's standard policies and practices. Such benefits may include, by
way of example only, profit-sharing plans, retirement or investment funds,
dental, health, life and disability insurance benefits and such other benefits
as the Bank deems appropriate.
4.8 WITHHOLDING. The Bank may deduct from each payment of compensation
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.
5. COMPANY INFORMATION.
5.1 OWNERSHIP OF COMPANY INFORMATION. All Company Information received or
developed by the Executive while employed by the Bank will remain the sole and
exclusive property of the Company or the Bank, as applicable.
5.2 OBLIGATIONS OF THE EXECUTIVE. The Executive agrees:
(a) to hold Company Information in strictest confidence;
(b) not to use, duplicate, reproduce, distribute, disclose or
otherwise disseminate Company Information or any physical embodiments of
Company Information; and
(c) in no event may take any action causing or fail to take any
action necessary in order to prevent any Company Information from losing its
character or ceasing to qualify as Confidential Information or a Trade
Secret.
In the event that the Executive is required by law to disclose any Company
Information, the Executive will not make such disclosure unless (and then only
to the extent that) the Executive has been advised by independent legal counsel
that such disclosure is required by law and then only
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after prior written notice is given to the Company when the Executive becomes
aware that such disclosure has been requested and is required by law. The Bank
will pay the legal counsel's fees, provided that the Bank has approved the legal
counsel to be used. This Section 5 shall survive for a period of eighteen (18)
months following termination of this Agreement for any reason with respect to
Confidential Information, and shall survive termination of this Agreement for
any reason for so long as is permitted by the then-current Georgia Trade Secrets
Act of 1990, O.C.G.A. Sections 10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Bank, and in
any event upon termination of his or her employment with the Bank, the Executive
will promptly deliver to the Bank all property belonging to the Bank, including,
without limitation, all Company Information then in his or her possession or
control.
6. NON-COMPETITION. The Executive agrees that during his or her employment by
the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not (except on
behalf of or with the prior written consent of the Bank), within the Area,
either directly or indirectly, on his or her own behalf or in the service or on
behalf of others, as an executive employee or in any other capacity which
involves duties and responsibilities similar to those undertaken for the Bank
(including as an organizer or proposed executive officer of a new financial
institution), or engage in any business which is the same as or essentially the
same as the Business of the Bank.
7. NON-SOLICITATION OF CUSTOMERS. The Executive agrees that during his or her
employment by the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not (except on
behalf of or with the prior written consent of the Bank), within the Area, on
his or her own behalf or in the service or on behalf of others, solicit, divert
or appropriate or attempt to solicit, divert or appropriate, any business from
any of the Bank's customers, including actively sought prospective customers,
with whom the Executive has or had material contact during the last two (2)
years of his or her employment, for purposes of providing products or services
that are competitive with those provided by the Bank.
8. NON-SOLICITATION OF EMPLOYEES. The Executive agrees that during his or her
employment by the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
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- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not, within the
Area, on his or her own behalf or in the service or on behalf of others,
solicit, recruit or hire away or attempt to solicit, recruit or hire away, any
employee of the Bank or its Affiliates, whether or not:
- such employee is a full-time employee or a temporary employee of the
Bank or its Affiliates
- such employment is pursuant to written agreement, and
- such employment is for a determined period or is at will.
9. REMEDIES. The Executive agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Bank, and that irreparable loss and damage will be suffered by
the Bank should he or she breach any of the covenants. Therefore, the Executive
agrees and consents that, in addition to all the remedies provided by law or in
equity, the Bank shall be entitled to a temporary restraining order and
temporary and permanent injunctions to prevent a breach or contemplated breach
of any of the covenants. The Bank and the Executive agree that all remedies
available to the Bank or the Executive, as applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in this
Agreement is separate, distinct and severable from the other provisions of this
Agreement and that the invalidity or unenforceability of any Agreement provision
shall not affect the validity or enforceability of any other provision of this
Agreement. Further, if any provision of this Agreement is ruled invalid or
unenforceable by a court of competent jurisdiction because of a conflict between
the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with and valid and enforceable under
the law or public policy.
11. NO SET-OFF BY THE EXECUTIVE. The existence of any claim, demand, action or
cause of action by the Executive against the Bank, or any Affiliate of the Bank,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Bank of any of its rights hereunder.
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand or overnight courier, in which event the notice shall be deemed effective
when delivered. All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:
(i) If to the Bank, to it at:
-----------------------
-----------------------
-----------------------
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(ii) If to the Executive, to him or her at:
-----------------------
-----------------------
-----------------------
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party to this Agreement.
14. WAIVER. A waiver by one party to this Agreement of any breach of this
Agreement by the other party to this Agreement shall not be effective unless in
writing, and no waiver shall operate or be construed as a waiver of the same or
another breach on a subsequent occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Fulton County or the federal court for the Northern
District of Georgia. The Bank and the Executive agree to share equally the fees
and expenses associated with the arbitration proceedings.
16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys' fees,
incurred by the prevailing party in connection with such litigation, and the
other party shall pay such costs and expenses to the prevailing party promptly
upon demand by the prevailing party.
17. APPLICABLE LAW. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Georgia.
18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in this Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Bank or the
Executive unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.
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21. SURVIVAL. The obligations of the Executive pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Executive hereunder
for the period designated under each of those respective sections.
IN WITNESS WHEREOF, the Bank and the Executive have executed and delivered
this Agreement as of the date first shown above.
THE BANK:
FUTURUS BANK, NATIONAL ASSOCIATION
By:
-----------------------
Print Name:
-----------------------
Title:
-----------------------
THE COMPANY:
FUTURUS FINANCIAL SERVICES, INC.
By:
-----------------------
Print Name:
-----------------------
Title:
-----------------------
THE EXECUTIVE:
-----------------------
R. WESLEY FULLER
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EXHIBIT A
INITIAL DUTIES OF THE EXECUTIVE
FUNCTION:
Has overall responsibility for the bank's fiscal record keeping. Maintains cash
accounts, oversees budget preparation, regulatory agency reporting, and
shareholder reporting. Prepares financial and other reports on a periodic basis
for the Board and Senior Management.
AREAS OF ACCOUNTABILITY:
OPERATIONS:
1. Responsible for due from and due to banking activities including balance
levels and incoming and outgoing wire transfers. Also, manages the bank's
daily reserve and cash position.
2. Responsible for the accounts payable function for the bank.
3. Keeps informed of new developments in technology and ideas affecting the
overall operating efficiency of the bank.
4. Establishes goals and objectives to ensure customer satisfaction, employee
productivity and efficient bank operations to include assisting with
customer issues.
5. Has overall responsibility for maintaining appropriate risk tolerance
levels to include final approval and override authority on requests made by
bank officers for payment of the NSF items, overdrafts, and cash items.
Also responsible for the identification of kite suspects and the review of
items drawn against uncollected funds.
6. Responsible for the overall leadership of the teller and customer service
employees to include hiring, development, performance reviews and
termination, if necessary. This would include training in the bank's
culture and policies and ongoing communication of any relative information.
7. Keeps informed of new and pending laws and regulations affecting the bank's
policies and procedures.
8. Responsible for all deposit operation functions to include item processing,
courier services, and data processing.
9. Supervises Human Resource Administration.
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COMPLIANCE:
1. Manages the audit function to ensure proper operational and functional
controls, and adherence to corporate policies and procedures.
2. Coordinates all regulatory examinations and audit and accounting work.
3. Establishes and implements all operating procedures to insure proper
internal controls.
4. Develops, implements, and maintains an effective compliance program to
insure that the bank is in full compliance with all applicable laws and
regulations.
5. Acts as the bank's Security Officer to insure compliance with the
requirements of the Bank Security Act.
6. Acts as the bank's BSA officer to insure compliance with the requirements
of the Bank Secrecy Act.
FINANCIAL REPORTS AND PLANNING:
1. Responsible for the preparation of financial statements, including balance
sheets, profit and loss statements and statements of sources and uses of
funds as required by external auditors, SEC, OCC, and other regulatory
agencies.
2. Manages the accounting practices of the bank, keeping proper ledger records
in order to determine an accurate financial picture.
3. Responsible for the preparation of financial reports, which monitor
Asset/Liability management and interest rate risk. These monthly reports
should include at a minimum the bank's liquidity position and liquidity
ratios, net interest margin, deposit and loan volume trends and interest
rates, and an inventory of securities.
4. Along with the CEO, manages the bank's investment portfolio to maximize
yield and insure adequate liquidity. This includes proper pledging of
securities for public funds.
5. Develops, implements, and controls the profit plan including the tax
planning for the year in order to maximize cash management and funds
available for investment. Also, analyzes results compared to the profit
plan to identify potential problems and develops possible revenue producing
strategies.
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EXHIBIT B
ANNUAL BONUS COMPENSATION
1. BONUS. Beginning not later than one year after the opening of the Bank and in
addition to Executive's Base Salary, the Executive shall be eligible to receive
performance bonuses contingent upon the following:
(a) The overall condition of the Bank must be "satisfactory" in the
opinion of the OCC as set forth in the most current OCC Report of Supervisory
Activity provided to the Board of Directors of the Bank and the Uniform
Financial Institution Rating of the Bank shall not be less than "2"; and
(b) The Bank shall be "adequately capitalized" as defined under
regulations promulgated by the OCC pursuant to the Federal Deposit Insurance
Corporation Improvement Act of 1991.
2. BONUS SCHEDULE. Beginning one year after the opening of the Bank and assuming
the Bank has become and remains cumulatively profitable as of its most recent
fiscal year-end, in addition to the Executive's then existing Base Salary, the
Executive shall be eligible to receive the following annual performance bonuses:
(a) The Executive is eligible for an amount equal to 20% of his or her
Base Salary if Bank successfully reaches 100% of Bank's annual "plan" as
determined by the Bank's Board of Directors. ADDITIONALLY, the Executive is
eligible for an amount equal to 10% of his or her Base Salary if the Bank
successfully exceeds 110% of the Bank's "plan" as determined by the Bank's
Board of Directors.
(b) The Executive is eligible for additional compensation at the
discretion of the Bank's Board of Directors.
(c) Notwithstanding the foregoing, the performance bonuses contemplated
by this Exhibit B shall not become due and payable until the Board of
Directors of the Bank has determined, according to reasonable safety and
soundness standards, that the overall financial condition of the Bank,
including asset quality, will not be adversely affected by the payment of the
performance bonuses.
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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of this ____ day of _____________,
2000, by and among FUTURUS BANK, NATIONAL ASSOCIATION (Proposed) (the "Bank"), a
proposed national bank; FUTURUS FINANCIAL SERVICES, INC., a corporation
organized under the laws of the State of Georgia (the "Company"), and Suzanne T.
Phipps, a resident of the State of Georgia (the "Executive").
RECITALS:
The Bank desires to employ the Executive as a Senior Vice President of
the Bank, and the Executive desires to accept such employment.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Employer and Executive hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and their
variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity which controls the Bank, is
controlled by or is under common control with the Bank.
1.3 "AREA" shall mean the geographic area within a radius of eighteen (18)
miles of the Bank's main office, to be located at _____ Windward Parkway,
Alpharetta, Georgia 30004. It is the express intent of the parties that the Area
as defined herein is the area where the Executive performs or performed services
on behalf of the Bank under this Agreement as of, or within a reasonable time
prior to, the termination of the Executive's employment hereunder.
1.4 "BEGINNING DATE" shall mean , 2000.
1.5 "BUSINESS OF THE BANK" shall mean the business conducted by the Bank,
which is the business of commercial banking.
1.6 "CAUSE" shall mean:
1.6.1 With respect to termination by the Bank:
(a) A material breach of the terms of this Agreement by the
Executive, including, without limitation, failure by the Executive to
perform his or her duties and responsibilities in the manner and to the
extent required under this Agreement, which
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remains uncured after the expiration of thirty (30) days following the
delivery of written notice of such breach to the Executive by the Bank.
(b) Conduct by the Executive that amounts to fraud, dishonesty or
willful misconduct in the performance of his or her duties and
responsibilities hereunder;
(c) Arrest for, charged in relation to (by criminal information,
indictment or otherwise), or conviction of the Executive during the term
of this Agreement of a crime involving breach of trust or moral
turpitude;
(d) Conduct by the Executive that amounts to gross and willful
insubordination or inattention to his or her duties and responsibilities
hereunder; or
(e) Conduct by the Executive that results in removal from his or her
position as an officer or Executive of the Bank pursuant to a written
order by any regulatory agency with authority or jurisdiction over the
Bank.
(f) Receipt by the Bank of written notice from the Office of the
Comptroller of the Currency "OCC") that the OCC has criticized the
Executive's performance or his or her area of responsibility, AND has
either (i) rated the Bank a "4" or "5" under the Uniform Financial Rating
System or (ii) has determined that the Bank is in a "troubled condition"
as defined under Section 914 of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989;
1.6.2 With respect to termination by the Executive, a material
diminution in the powers, responsibilities or duties of the Executive hereunder
or a material breach of the terms of this Agreement by the Bank, which remains
uncured after the expiration of thirty (30) days following the delivery of
written notice of such breach to the Bank by the Executive.
1.7 "CHANGE OF CONTROL" means any one of the following events:
(a) the acquisition by any person or persons acting in concert of the
then outstanding voting securities of either the Bank or the Company, if,
after the transaction, the acquiring person (or persons) owns, controls
or holds with power to vote fifty percent (50%) or more of any class of
voting securities of either the Bank or the Company, as the case may be;
(b) within any twelve-month period (beginning on or after the
Beginning Date) the persons who were directors of either the Bank or the
Company immediately before the beginning of such twelve-month period (the
"Incumbent Directors") shall cease to constitute at least a majority of
such board of directors; provided that any director who was not a
director as of (the Beginning Date) shall be deemed to be an Incumbent
Director if that director were elected to such board of directors by, or
on the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors; and provided
further that no director whose initial assumption of office is in
connection with an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities
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Exchange Act of 1934) relating to the election of directors shall be
deemed to be an Incumbent Director;
(c) a reorganization, merger or consolidation, with respect to which
persons who were the stockholders of the Bank or the Company, as the case
may be, immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than fifty percent (50%) of the
combined voting power entitled to vote in the election of directors of
the reorganized, merged or consolidated company's then outstanding voting
securities; or
(d) the sale, transfer or assignment of all or substantially all of
the assets of the Company and its subsidiaries to any third party.
1.8 "COMPANY INFORMATION" means Confidential Information and Trade Secrets.
1.9 "CONFIDENTIAL INFORMATION" means data and information relating to the
business of the Bank or the Company (which does not rise to the status of a
Trade Secret) which is or has been disclosed to the Executive or of which the
Executive became aware as a consequence of or through the Executive's
relationship to the Bank and which has value to the Bank and is not generally
known to its competitors. Confidential Information shall not include any data or
information that has been voluntarily disclosed to the public by the Bank
(except where such public disclosure has been made by the Executive without
authorization) or that has been independently developed and disclosed by others,
or that otherwise enters the public domain through lawful means.
1.10 "INITIAL TERM" shall mean that period of time commencing on the
Beginning Date and running until the earlier of the close of business on the
last business day immediately preceding the third anniversary of the Beginning
Date or any termination of employment of the Executive under this Agreement as
provided for in Section 3.
1.11 "PERMANENT DISABILITY" shall mean the total inability of the Executive
to perform his or her duties under this Agreement for the duration of the
short-term disability period under the Bank's policy then in effect as certified
by a physician chosen by the Bank and reasonably acceptable to the Executive.
1.12 "TERM" shall mean the Initial Term and all subsequent renewal periods.
1.13 "TRADE SECRETS" means Bank or Company information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans or lists of actual or potential customers or
suppliers which:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or
use; and
(b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
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2. DUTIES.
2.1 POSITION. The Executive is employed initially as a Senior Vice
President of the Bank and, subject to the direction of the Chief Executive
Officer of the Bank or his designee(s), shall perform and discharge well and
faithfully the duties which may be assigned to him or her from time to time by
the Bank in connection with the conduct of its business. The duties and
responsibilities of the Executive are set forth on EXHIBIT A attached hereto.
2.2 FULL-TIME STATUS. In addition to the duties and responsibilities
specifically assigned to the Executive pursuant to Section 2.1 hereof, the
Executive shall:
(a) devote substantially all of his or her time, energy and skill
during regular business hours to the performance of the duties of his
or her employment (reasonable vacations and reasonable absences due to
illness excepted) and faithfully and industriously perform such
duties;
(b) diligently follow and implement all reasonable and lawful
management policies and decisions communicated to him or her by the
Chief Executive Officer of the Bank; and
(c) timely prepare and forward to the Chief Executive Officer of the
Bank all reports and accounting as may be requested of the Executive.
2.3 PERMITTED ACTIVITIES. The Executive shall devote his or her entire
business time, attention and energies to the Business of the Bank and shall not
during the Term be engaged (during normal business hours) in any other business
or professional activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage; but this shall not be construed as
preventing the Executive from:
(a) investing his or her personal assets in businesses which
(subject to clause (b) below) are not in competition with the Business
of the Bank and which will not require any services on the part of the
Executive in their operation or affairs and in which his or her
participation is solely that of an investor;
(b) purchasing securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in him
or her collectively owning beneficially at any time five percent (5%)
or more of the equity securities of any business in competition with
the Business of the Bank; and
(c) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books
or teaching so long as the Chief Executive Officer of the Bank
approves of such activities prior to the Executive's engaging in them.
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3. TERM AND TERMINATION.
3.1 TERM.This Agreement shall remain in effect for the Initial Term. At
the end of the Initial Term and at the end of each twelve-month extension
thereof, this Agreement shall automatically be extended for a successive
twelve-month period unless either party gives written notice to the other of its
intent not to extend this Agreement with such written notice to be given not
less than sixty (60) days prior to the end of the Initial Term or such
twelve-month period. In the event such notice of non-extension is properly
given, this Agreement shall terminate at the end of the remaining term then in
effect.
3.2 TERMINATION. During the Term, the employment of the Executive under
this Agreement may be terminated only as follows:
3.2.1 By the Bank in the event that the Bank fails to receive its
regulatory charter, or the Company fails to raise the necessary
capital required to open the Bank, neither of which are caused by
actions taken by the Executive, and should the Bank's Board of
Directors decide to forgo future efforts to open the Bank in which
event the Bank shall be required to continue to pay the Executive his
or her Base Salary as defined in Section 4.1 for twelve (12) months
following the termination or until the Executive finds other
employment, whichever period is shorter.
3.2.2 By the Bank:
(a) FOR CAUSE, upon written notice to the Executive pursuant to
Section 1.6.1 hereof, in which event the Bank shall have no
further obligation to the Executive except for the payment of any
amounts due and owing under Section 4 on the effective date of
termination;
(b) WITHOUT CAUSE at any time, provided that the Bank shall give
the Executive thirty (30) days' prior written notice of its intent
to terminate, in which event the Bank shall be required to
continue to pay the Executive his or her Base Salary as defined in
Section 4.1 for twelve (12) months following the termination; or
(c) UPON THE PERMANENT DISABILITY of Executive at any time,
provided that the Bank shall give the Executive thirty (30) days'
prior written notice of its intent to terminate, in which event
the Bank shall be required to pay the Executive his or her then
existing Base Salary as defined in Section 4.1 for twelve (12)
months following the termination or until the Executive begins
receiving payments under the Bank's long-term disability policy,
whichever occurs first.
3.2.3 By the Executive:
(a) FOR CAUSE, in which event the Bank shall be required to pay
the Executive his or her then existing Base Salary as defined in
Section 4.1 for twelve (12) months following the termination; or
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<PAGE>
(b) WITHOUT CAUSE OR UPON THE PERMANENT DISABILITY of the
Executive, provided that the Executive shall give the Bank sixty
(60) days' prior written notice of his or her intent to terminate,
in which event the Bank shall have no further obligation to the
Executive except future payment of any amounts due and owing on
the effective date of the termination.
3.2.4 At any time upon mutual, written agreement of the parties, in
which event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination unless otherwise set
forth in the written agreement.
3.2.5 Notwithstanding anything in this Agreement to the contrary, the
Term shall end automatically upon the Executive's death, in which
event the Bank shall have no further obligation to the Executive
except for the payment of any amounts due and owing under this
Agreement on the effective date of termination.
3.3 CHANGE OF CONTROL. If, during the Term of this Agreement and within one
(1) year immediately following a Change of Control or within six (6) months
immediately prior to a Change of Control, the Executive's employment with the
Bank under this Agreement is terminated by the Bank (or its successors) other
than for Cause, the Executive, or in the event of his or her subsequent death,
his or her designated beneficiaries or his or her estate, as the case may be,
shall receive, as liquidated damages, in lieu of all other claims, a severance
payment equal to one (1) times the Executive's then current Base Salary during
the immediately preceding twelve (12) months, to be paid in full on the last day
of the month following the date of termination. In no event shall the payment(s)
described in this Section 3.3 exceed the amount permitted by Section 280G of the
Internal Revenue Code (as amended). Therefore, if the aggregate present value
(determined as of the date of the Change of Control in accordance with the
provisions of Section 280G of the Internal Revenue Code (as amended) or any
successor thereof and the regulations and rulings thereunder ("Section 280G"))
of both the severance payment and all other payments to the Executive in the
nature of compensation which are contingent on a change in ownership or
effective control of the Bank or the Company or in the ownership of a
substantial portion of the assets of the Bank or the Company (the "Aggregate
Severance") would result in a parachute payment (as determined under Section
280G) then the Aggregate Severance shall not be greater than an amount equal to
2.99 multiplied by Executive's base amount (as determined under Section 280G)
for the base period (as determined under Section 280G). In the event the
Aggregate Severance is required to be reduced pursuant to this Section 3.3, the
Executive shall be entitled to determine which portions of the Aggregate
Severance are to be reduced so that the Aggregate Severance satisfies the limit
set forth in the preceding sentence. The Executive's average annual compensation
shall be based on the most recent five taxable years ending before the Change of
Control (or the period during which the Executive was employed by the Bank if
the Executive has been employed by the Bank for less than five years).
3.4 EFFECT OF TERMINATION. Termination of the employment of the Executive
pursuant to Section 3.2 or Section 3.3 shall be without prejudice to any right
or claim which may have previously accrued to either the Bank or the Executive
hereunder and shall not terminate, alter,
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<PAGE>
supersede or otherwise affect the terms and covenants and the rights and duties
prescribed in this Agreement.
4. COMPENSATION. The Executive shall receive the following salary and benefits
described in Exhibit B, attached hereto and made a part hereof:
4.1 BASE SALARY. During the Initial Term, the Executive shall be compensated
at a base rate of $77,000 annually (the "Base Salary"). The Executive's Base
Salary shall be reviewed by the Chief Executive Officer of the Bank at least
annually, and the Executive shall be entitled to receive annually an increase in
such amount, if any, as may be determined by the Board of Directors. Base Salary
shall be payable in accordance with the Bank's normal payroll practices.
4.2 INCENTIVE COMPENSATION. The Executive shall be entitled to annual bonus
compensation, if any, in accordance with the terms specified in EXHIBIT B
attached hereto.
4.3 STOCK OPTIONS.
(a) As of the date the Company's initial public offering is closed, the
Company will have established a stock option plan and will grant to the
Executive an incentive stock option to purchase, at a per share purchase
price equal to the Company's initial stock offering price, 5,000 shares of
the Company's common stock. The option will become vested and exercisable in
20% increments, commencing on the first anniversary of the option grant date
and continuing for the next four successive anniversaries until the option is
fully vested and exercisable. The option shall expire generally upon the
earlier of ninety (90) days following termination of employment or upon the
tenth anniversary of the option grant date.
(b) If the Bank successfully exceeds 110% of the Bank's "Plan" as
determined by the Bank's Board of Directors for fiscal year 2001, the Company
will grant the Executive a stock option to purchase, at a per share price
equal to $10.00 per share, 2,500 shares of the Company's common stock. The
option will become vested and exercisable in 20% increments, commencing on
the first anniversary of the option grant date and continuing for the next
four successive anniversaries until the option is fully vested and
exercisable. The option shall expire generally upon the earlier of ninety
(90) days following termination of employment or upon the tenth anniversary
of the option grant date. The option will be an incentive stock option if the
fair market value of the Company's common stock is equal to or less than
$10.00 per share on the date of grant. The option will be a non-qualified
stock option if the fair market value of the Company's common stock is
greater than $10.00 per share on the date of grant.
(c) Notwithstanding any other provision of this Agreement, if the Bank's
capital falls below the minimum requirements determined by the primary
federal or state regulator of the Company or the Bank (the "Regulator"), the
Regulator may direct the Company to require the Executive to exercise or
forfeit his or her incentive stock option granted under Section 4.3(a)
herein. The Company will notify the Executive within 45 days from the date
the Regulator notifies the Company or Bank in writing that the Executive must
exercise or forfeit his or her incentive stock options. The Company will
cancel the incentive stock options if not exercised within 21 days of the
Company's notification to the Executive. The
7
<PAGE>
Company agrees to comply with any Regulator's request that the Company invoke
its right to require the Executive to exercise or forfeit his or her
incentive stock options under the circumstances stated above."
(d) The Executive will be eligible to receive additional stock options in
the discretion of the Board of Directors of the Bank and the Company.
(e) In the event a Change of Control occurs after the third anniversary
of the Executive's beginning employment date with the Company, all options
granted to the Executive shall become one hundred percent (100%) vested and
exercisable.
(f) In the event of the Executive's Permanent Disability or death, all of
the options granted to the Executive that would have vested during the
calendar year in which the Executive is determined to have a Permanent
Disability or dies, shall become one hundred percent (100%) vested and
exercisable as of the date the Executive is determined to have a Permanent
Disability or as of the Executive's death, as applicable.
(g) The options granted to the Executive shall be nontransferable other
than by will or the laws of descent and distribution and shall be exercisable
during the lifetime of the Executive only by the Executive (or in the event
of her Disability, by her personal representative) and after her death, only
by her legatee or the executor of her estate.
4.4 HEALTH INSURANCE.
(a) The Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive for the Executive's current health insurance
covering the Executive and the members of his or her immediate family:
(i) until such time as the Company adopts a health insurance plan for
employees of the Company and the Bank; or
(ii) until the Company and the Bank abandon their organizational
efforts or for twelve (12) months after the Beginning Date, whichever is
later.
(b) In the event of termination by the Executive FOR CAUSE (Section
3.2.3(a)) or following a CHANGE OF CONTROL (Section 3.3), the Bank shall
reimburse Executive for the cost of premium payments paid by the Executive to
continue his or her then existing health insurance as provided by the Bank
for a period of six (6) months following the date of termination of
employment.
(c) In the event of termination by the Bank WITHOUT CAUSE (Section
3.2.2(b)), the Bank shall reimburse the Executive for the cost of premium
payments paid by the Executive to continue his or her then existing health
insurance as provided by the Bank or the Company for a period of twelve (12)
months following the date of termination of employment.
4.5 AUTOMOBILE. The Bank will provide the Executive with an automobile
allowance of $300 per month.
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4.6 BUSINESS EXPENSES. The Bank specifically agrees to reimburse the
Executive for:
(a) reasonable business expenses incurred by him or her in the
performance of his or her duties hereunder, as approved from time to time by
the Chief Executive Officer of the Bank; and
(b) the dues and business related expenditures, including initiation
fees, associated with membership in a single civic association as selected by
the Executive and in professional associations which are commensurate with
his or her position; provided, however, that the Executive shall, as a
condition of reimbursement, submit verification of the nature and amount of
such expenses in accordance with reimbursement policies from time to time
adopted by the Bank and in sufficient detail to comply with rules and
regulations promulgated by the Internal Revenue Service.
4.7 BENEFITS. In addition to the benefits specifically described in this
Agreement, the Executive shall be entitled to such benefits as may be available
from time to time to other executives of the Bank who are similarly situated to
the Executive. All such benefits shall be awarded and administered in accordance
with the Bank's standard policies and practices. Such benefits may include, by
way of example only, profit-sharing plans, retirement or investment funds,
dental, health, life and disability insurance benefits and such other benefits
as the Bank deems appropriate.
4.8 WITHHOLDING. The Bank may deduct from each payment of compensation
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.
5. COMPANY INFORMATION.
5.1 OWNERSHIP OF COMPANY INFORMATION. All Company Information received or
developed by the Executive while employed by the Bank will remain the sole and
exclusive property of the Company or the Bank, as applicable.
5.2 OBLIGATIONS OF THE EXECUTIVE. The Executive agrees:
(a) to hold Company Information in strictest confidence;
(b) not to use, duplicate, reproduce, distribute, disclose or otherwise
disseminate Company Information or any physical embodiments of Company
Information; and
(c) in no event may take any action causing or fail to take any action
necessary in order to prevent any Company Information from losing its
character or ceasing to qualify as Confidential Information or a Trade
Secret.
In the event that the Executive is required by law to disclose any Company
Information, the Executive will not make such disclosure unless (and then only
to the extent that) the Executive has been advised by independent legal counsel
that such disclosure is required by law and then only
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<PAGE>
after prior written notice is given to the Company when the Executive becomes
aware that such disclosure has been requested and is required by law. The Bank
will pay the legal counsel's fees, provided that the Bank has approved the legal
counsel to be used. This Section 5 shall survive for a period of eighteen (18)
months following termination of this Agreement for any reason with respect to
Confidential Information, and shall survive termination of this Agreement for
any reason for so long as is permitted by the then-current Georgia Trade Secrets
Act of 1990, O.C.G.A. Section 10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Bank, and in
any event upon termination of his or her employment with the Bank, the Executive
will promptly deliver to the Bank all property belonging to the Bank, including,
without limitation, all Company Information then in his or her possession or
control.
6. NON-COMPETITION. The Executive agrees that during his or her employment by
the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not (except on
behalf of or with the prior written consent of the Bank), within the Area,
either directly or indirectly, on his or her own behalf or in the service or on
behalf of others, as an executive employee or in any other capacity which
involves duties and responsibilities similar to those undertaken for the Bank
(including as an organizer or proposed executive officer of a new financial
institution), or engage in any business which is the same as or essentially the
same as the Business of the Bank.
7. NON-SOLICITATION OF CUSTOMERS. The Executive agrees that during his or her
employment by the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not (except on
behalf of or with the prior written consent of the Bank), within the Area, on
his or her own behalf or in the service or on behalf of others, solicit, divert
or appropriate or attempt to solicit, divert or appropriate, any business from
any of the Bank's customers, including actively sought prospective customers,
with whom the Executive has or had material contact during the last two (2)
years of his or her employment, for purposes of providing products or services
that are competitive with those provided by the Bank.
8. NON-SOLICITATION OF EMPLOYEES. The Executive agrees that during his or her
employment by the Bank hereunder and, in the event of his or her termination:
- by the Bank For Cause pursuant to Section 3.2.2(a),
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<PAGE>
- by the Executive Without Cause pursuant to Section 3.2.3(b), or
- in connection with a Change of Control pursuant to Section 3.3,
for a period of eighteen (18) months thereafter, he or she will not, within the
Area, on his or her own behalf or in the service or on behalf of others,
solicit, recruit or hire away or attempt to solicit, recruit or hire away, any
employee of the Bank or its Affiliates, whether or not:
- such employee is a full-time employee or a temporary employee of the Bank
or its Affiliates
- such employment is pursuant to written agreement, and
- such employment is for a determined period or is at will.
9. REMEDIES. The Executive agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Bank, and that irreparable loss and damage will be suffered by
the Bank should he or she breach any of the covenants. Therefore, the Executive
agrees and consents that, in addition to all the remedies provided by law or in
equity, the Bank shall be entitled to a temporary restraining order and
temporary and permanent injunctions to prevent a breach or contemplated breach
of any of the covenants. The Bank and the Executive agree that all remedies
available to the Bank or the Executive, as applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in this
Agreement is separate, distinct and severable from the other provisions of this
Agreement and that the invalidity or unenforceability of any Agreement provision
shall not affect the validity or enforceability of any other provision of this
Agreement. Further, if any provision of this Agreement is ruled invalid or
unenforceable by a court of competent jurisdiction because of a conflict between
the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with and valid and enforceable under
the law or public policy.
11. NO SET-OFF BY THE EXECUTIVE. The existence of any claim, demand, action or
cause of action by the Executive against the Bank, or any Affiliate of the Bank,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Bank of any of its rights hereunder.
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand or overnight courier, in which event the notice shall be deemed effective
when delivered. All notices and other communications under this Agreement shall
be given to the parties hereto at the following addresses:
(i) If to the Bank, to it at:
-----------------------
-----------------------
-----------------------
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(ii) If to the Executive, to him or her at:
-----------------------
-----------------------
-----------------------
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party to this Agreement.
14. WAIVER. A waiver by one party to this Agreement of any breach of this
Agreement by the other party to this Agreement shall not be effective unless in
writing, and no waiver shall operate or be construed as a waiver of the same or
another breach on a subsequent occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Fulton County or the federal court for the Northern
District of Georgia. The Bank and the Executive agree to share equally the fees
and expenses associated with the arbitration proceedings.
16. ATTORNEYS' FEES. In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys' fees,
incurred by the prevailing party in connection with such litigation, and the
other party shall pay such costs and expenses to the prevailing party promptly
upon demand by the prevailing party.
17. APPLICABLE LAW. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Georgia.
18. INTERPRETATION. Words importing any gender include all genders. Words
importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in this Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Bank or the
Executive unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.
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21. SURVIVAL. The obligations of the Executive pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Executive hereunder
for the period designated under each of those respective sections.
IN WITNESS WHEREOF, the Bank and the Executive have executed and delivered
this Agreement as of the date first shown above.
THE BANK:
FUTURUS BANK, NATIONAL ASSOCIATION
By:
-----------------------
Print Name:
-----------------------
Title:
-----------------------
THE COMPANY:
FUTURUS FINANCIAL SERVICES, INC.
By:
-----------------------
Print Name:
-----------------------
Title:
-----------------------
THE EXECUTIVE:
-----------------------
SUZANNE T. PHIPPS
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EXHIBIT A
INITIAL DUTIES OF THE EXECUTIVE
FUNCTION:
Has overall responsibility for the bank's commercial, consumer and real estate
loan portfolio and overall asset quality.
PRINCIPAL ACCOUNTABILITIES:
1. Responsible for the establishment and maintenance of all loan policies
paying particular attention to underwriting guidelines, loan
administration policies, credit information and collection procedures.
2. Originates and approves commercial business loans, real estate loans,
and consumer loans acting within the approved loan limits and
guidelines approved by the Board of Directors. Submits loans exceeding
executive's loan limits to the Loan Committee for approval.
3. Recommends to the President additional loan loss provisions to insure
compliance with the current loan classification standards.
4. Responsible for the review of new or renewed loans to identify
potential credit problems. Also, establishes and maintains an
appropriate loan quality rating system and develops strategy on any
deteriorating credit situations and makes recommendations for improving
the bank's position, if necessary.
5. Recommends to the President commercial business loan, real estate loan,
and consumer loan goals and the pricing of all loan products.
6. Along with the President and Chief Financial Officer/Chief Operations
Officer, monitors the bank's interest rate risk exposure, especially as
it relates to the loan portfolio volume and pricing.
7. Responsible for the bank's lending function, development of a
participation network, and establishment of appropriate production and
profitability goals.
8. Manages the loan operations function and the centralized loan
documentation function to ensure that all documentation is in order and
that liens are perfected.
9. Serves as the bank's CRA Officer and, as such, formulates and maintains
a program designed to ensure optimum compliance with the Community
Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA).
10. Conducts special projects, assists on committees, and performs other
activities as requested to contribute to the continued growth,
profitability, and viability of the bank.
<PAGE>
EXHIBIT B
ANNUAL BONUS COMPENSATION
1. BONUS. Beginning not later than one year after the opening of the Bank and in
addition to Executive's Base Salary, the Executive shall be eligible to receive
performance bonuses contingent upon the following:
(a) The overall condition of the Bank must be "satisfactory" in the
opinion of the OCC as set forth in the most current OCC Report of Supervisory
Activity provided to the Board of Directors of the Bank and the Uniform
Financial Institution Rating of the Bank shall not be less than "2"; and
(b) The Bank shall be "adequately capitalized" as defined under
regulations promulgated by the OCC pursuant to the Federal Deposit Insurance
Corporation Improvement Act of 1991.
2. BONUS SCHEDULE. Beginning one year after the opening of the Bank and assuming
the Bank has become and remains cumulatively profitable as of its most recent
fiscal year-end, in addition to the Executive's then existing Base Salary, the
Executive shall be eligible to receive the following annual performance bonuses:
(a) The Executive is eligible for an amount equal to 15% of his or her
Base Salary if Bank successfully reaches 100% of Bank's annual "plan" as
determined by the Bank's Board of Directors. ADDITIONALLY, the Executive is
eligible for an amount equal to 10% of his or her Base Salary if the Bank
successfully exceeds 110% of the Bank's "plan" as determined by the Bank's
Board of Directors.
(b) The Executive is eligible for additional compensation at the
discretion of the Bank's Board of Directors.
(c) Notwithstanding the foregoing, the performance bonuses contemplated
by this Exhibit B shall not become due and payable until the Board of
Directors of the Bank has determined, according to reasonable safety and
soundness standards, that the overall financial condition of the Bank,
including asset quality, will not be adversely affected by the payment of the
performance bonuses.
<PAGE>
EXHIBIT 10.11
PROMISSORY NOTE
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$500,000.00 08-23-1999 08-23-2000 JKG
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Reference in the shaded area are for lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Borrower: Futurus Financial Services, Inc. Lender: THE BANKERS BANK
1570 Holcomb Bridge Road, Suite 120 2410 PACES FERRY ROAD
Roswell, GA 30076 600 PACES SUMMIT
ATLANTA, GA 30339
</TABLE>
================================================================================
<TABLE>
<S> <C> <C>
Principal Amount: $500,000.00 Initial Rate: 8.250% Date of Note: February 11, 2000
</TABLE>
PROMISE TO PAY. FUTURUS FINANCIAL SERVICES, INC. ("BORROWER") PROMISES TO PAY
TO THE BANKERS BANK ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED
STATES OF AMERICA, THE PRINCIPAL AMOUNT OF FIVE HUNDRED THOUSAND & 00/100
DOLLARS ($500,000.00) OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH
INTEREST ON THE UNPAID OUTSTANDING PRINCIPAL BALANCE OF EACH ADVANCE.
INTEREST SHALL BE CALCULATED FROM THE DATE OF EACH ADVANCE UNTIL REPAYMENT OF
EACH ADVANCE.
PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON FEBRUARY 11, 20001. IN
ADDITION, BORROWER WILL PAY REGULAR QUARTERLY PAYMENTS OF ACCRUED UNPAID
INTEREST BEGINNING MAY 11, 2000, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE
ON THE SAME DAY OF EACH QUARTER AFTER THAT. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Prime rate as
published in the Money Rates section of the Wall Street Journal. (the
"Index"). If two or more rates exist, then the highest rate will prevail.
Lender will tell Borrower the current Index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each day. THE INDEX
CURRENTLY IS 8.750% PER ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE OF 0.500 PERCENTAGE POINTS
UNDER THE INDEX, RESULTING IN AN INITIAL ANNUAL RATE OF SIMPLE INTEREST OF
8.250%. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATECHARGE. If a payment is 15 DAYS OR MORE LATE, Borrower will be charged
$100.00.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b)Borrower breaks any promise
Borrower has made to Lender, or Borrower falls to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or
misleading in any material respect either now or at the time made or
furnished. (d) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (a) Any creditor tries to
take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with
Lender. (f) Any guarantor dies or any of the other events described in this
default section occurs with respect to any guarantor of this Note. (g) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is
impaired. (h) Lender in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this
Note 3.000 percentage points. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable law,
Lender's, costs of collection, including court costs and fifteen percent
(15%) of the principal plus accrued interest as attorneys' fees, if any sums
owing under this Note are collected by or through an attorney-at-law, whether
or not there is a lawsuit, and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER in THE STATE OF GEORGIA. SUBJECT TO THE
PROVISIONS ON ARBITRATION, THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of twenty dollars
($20.00) or five percent (5%) of the face amount of the check, whichever is
greater, if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's
accounts with Lender (whether checking, savings, or some other account),
including without limitation all accounts held jointly with someone else and
all accounts Borrower may open in the future, excluding however all IRA and
Keogh accounts, and all trust accounts for which the grant of a security
interest would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on
this Note against any and all such accounts.
<PAGE>
08-23-1999 PROMISSORY NOTE PAGE 2
LOAN NO (CONTINUED)
================================================================================
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note, as well as directions for payment from Borrower's accounts,
may be requested orally or in writing by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in
writing. The following party or parties are authorized to request advances
under the line of credit until Lender receives from Borrower at Lender's
address shown above written notice of revocation of their authority: GREG
JANICKI, ORGANIZER. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on
this Note or by Lender's internal records, including daily computer
print-outs. Lender will have no obligation to advance funds under this Note
if: (a) Borrower or any guarantor is in default under the terms of this Note
or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b) Borrower
or any guarantor ceases doing business or is insolvent; (c) any guarantor
seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
ARBITRATION. LENDER AND BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN NATURE,
ARISING FROM THIS NOTE OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT
AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, UPON REQUEST OF EITHER PARTY. No act to take or
dispose of any collateral securing this Note shall constitute a waiver of
this arbitration agreement or be prohibited by this arbitration agreement.
This includes, without limitation, obtaining injunctive relief or a temporary
restraining order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any collateral securing this Note,
including any claim to rescind, reform, or otherwise modify any agreement
relating to the collateral securing this Note, shall also be arbitrated,
provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of any party. Judgment upon any award rendered by
any arbitrator may be entered in any court having jurisdiction. Nothing in
this Note shall preclude any party from seeking equitable relief from a court
of competent jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable in an
action brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the
commencement of an action for these purposes. The Federal Arbitration Act
shall apply to the construction, interpretation, and enforcement of this
arbitration provision.
ACCRUAL METHOD. interest will be calculated on an Actual/360 basis.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties waive any right to require Lender to take action against any other
party who signs this Note as provided in O.C.G.A. Section 10-7-24 and agree
that Lender may renew or extend (repeatedly and for any length of time) this
loan, or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the party with
whom the modification is made.
IN WITNESS WHEREOF, THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF.
BORROWER:
Futurus Financial Services, Inc.
<TABLE>
<S> <C>
By: /s/ Greg Janicki (SEAL) By: /s/ William M. Butler (SEAL)
-------------------------------------- ----------------------------------------
Greg Janicki, Organizer William M. Butler, President/CEO
LENDER:
THE BANKERS BANK
By: /s/ Norma Manaffey
------------------------------------
Authorized Officer
</TABLE>
================================================================================
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver.
3.24a(c) 1999 CFI ProServices, Inc. All rights reserved. [GA-D20 E3.24
FUTURUS.LN C1.OVL]
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
JKG
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Borrower: Futurus Financial Services, Inc. Lender: THE BANKERS BANK
1570 Holcomb Bridge Road, Suite 120 2410 PACES FERRY ROAD
Roswell, GA 30076 600 PACES SUMMIT
ATLANTA, GA 30339
</TABLE>
Guarantor:
================================================================================
AMOUNT OF GUARANTY. The principal amount of this Guaranty is Ninety Three
Thousand Seven Hundred Fifty & 00/100 Dollars ($93,750.00).
GUARANTY. In consideration of the sum of Five Dollars ($5.00) and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged by Guarantor and to induce Lender to make loans or otherwise
extend credit to Borrower, or to renew or extend in whole or in part any
existing indebtedness of Borrower to Lender, or to make other financial
accommodations to Borrower, ____________________("Guarantor") absolutely and
unconditionally guarantees and promises to pay to THE BANKERS BANK ("Lender")
or its order, in legal tender of the United States of America, the
indebtedness (as that term is defined below) of Futurus Financial Services,
Inc. ("Borrower") to Lender on the terms and conditions set forth in this
Guaranty.
DEFINITIONS. The following words shall have the following meanings when used
in this Guaranty:
BORROWER. The word "Borrower" means Futurus Financial Services, Inc.
GUARANTOR. The word "Guarantor" means __________________________.
GUARANTY. The word "Guaranty" means this Guaranty made by Guarantor for
the benefit of Lender dated February 11, 2000.
INDEBTEDNESS. The word "Indebtedness" means the Note, including (a) all
principal, (b) all interest, (c) all late charges, (d) all loan fees
and loan charges, and (e) all collection costs and expenses relating to
the Note or to any collateral for the Note. Collection costs and
expenses include without limitation of all of Lender's attorneys' fees
and Lender's legal expenses, including court costs and fifteen percent
(15%) of the principal plus accrued interest as attorneys' fees, if any
sums owing under this Guaranty are collected by or through an
attorney-at-law, whether or not suit is instituted, and attorneys' fees
and legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services.
LENDER. The word "Lender" means THE BANKERS BANK, its successors and
assigns.
NOTE. The word "Note" means the promissory note or credit agreement
dated February 11, 2000, IN THE ORIGINAL PRINCIPAL AMOUNT OF
$700,000.00 from Borrower to Lender, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of,
and substitutions for the promissory note or agreement. Notice to
Guarantor: THE NOTE EVIDENCES A REVOLVING LINE OF CREDIT FROM LENDER TO
BORROWER.
RELATED DOCUMENTS. The word "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guarantees, security agreements,
security deeds, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing, executed
in connection with the Indebtedness.
MAXIMUM LIABILITY. THE MAXIMUM LIABILITY OF GUARANTOR UNDER THIS GUARANTY
SHALL NOT EXCEED AT ANY ONE TIME THE SUM OF THE PRINCIPAL AMOUNT OF
$131,250.00, PLUS ALL INTEREST THEREON, PLUS ALL OF LENDER'S COSTS, EXPENSES,
AND ATTORNEYS' FEES INCURRED IN CONNECTION WITH OR RELATING TO (a) THE
COLLECTION OF THE INDEBTEDNESS, (b) THE COLLECTION AND SALE OF ANY COLLATERAL
FOR THE INDEBTEDNESS OR THIS GUARANTY, OR (c) THE ENFORCEMENT OF THIS
GUARANTY. ATTORNEYS' FEES INCLUDE, WITHOUT LIMITATION, ATTORNEYS' FEES
WHETHER OR NOT THERE IS A LAWSUIT, AND IF THERE IS A LAWSUIT, ANY FEES AND
COSTS FOR TRIAL AND APPEALS.
The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender, either in the aggregate or at any one
time. If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all
guaranties shall be cumulative. This Guaranty shall not (unless specifically
provided below to the contrary) affect or invalidate any such other
guaranties. The liability of Guarantor will be the aggregate liability of
Guarantor under the terms of this Guaranty and any such other unterminated
guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times the
performance and prompt payment when due, whether at maturity or earlier by
reason of acceleration or otherwise, of all Indebtedness within the limits
set forth in the preceding section of this Guaranty. THIS GUARANTY COVERS A
REVOLVING LINE OF CREDIT AND GUARANTOR UNDERSTANDS AND AGREES THAT THIS
GUARANTEE SHALL BE OPEN AND CONTINUOUS UNTIL THE LINE OF CREDIT IS TERMINATED
AND THE INDEBTEDNESS IS PAID IN FULL, AS PROVIDED BELOW.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor
or to Borrower, and will continue in full force until all Indebtedness shall
have been fully and finally paid and satisfied and all other obligations of
Guarantor under this Guaranty shall have been performed in full. Release of
any other guarantor or termination of any other guaranty of the Indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation
received by Lender from any one or more Guarantors shall not affect the
liability of any remaining Guarantors under this Guaranty. THIS GUARANTY
COVERS A REVOLVING LINE OF CREDIT AND IT IS SPECIFICALLY ANTICIPATED THAT
FLUCTUATIONS WILL OCCUR IN THE AGGREGATE AMOUNT OF INDEBTEDNESS OWING FROM
BORROWER TO LENDER. GUARANTOR SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
FLUCTUATIONS IN THE AMOUNT OF INDEBTEDNESS, EVEN TO ZERO DOLLARS ($0.00),
SHALL NOT CONSTITUTE A TERMINATION OF THIS GUARANTY. GUARANTOR'S LIABILITY
UNDER THIS GUARANTY SHALL TERMINATE ONLY UPON (a) TERMINATION IN WRITING BY
BORROWER AND LENDER OF THE LINE OF CREDIT, (b) PAYMENT OF THE INDEBTEDNESS IN
FULL IN LEGAL TENDER, AND (c) PAYMENT IN FULL IN LEGAL TENDER OF ALL OTHER
OBLIGATIONS OF GUARANTOR UNDER THIS GUARANTY.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 2
LOAN NO (CONTINUED)
================================================================================
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without
notice or demand and without lessening Guarantor's liability under this
Guaranty, from time to time: (a) to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (b) to alter,
compromise, renew, extend, accelerate, or otherwise change one or more times
the time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of interest on
the Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (c) to take and hold security for the payment of this
Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail
or decide not to perfect, and release any such security, with or without the
substitution of new collateral; (d) to release, substitute, agree not to sue,
or deal with any one or more of Borrower's sureties, endorsers, or other
guarantors on any terms or in any manner Lender may choose; (e) to determine
how, when and what application of payments and credits shall be made on the
Indebtedness; (f) to apply such security and direct the order or manner of
sale thereof, including without limitation, any nonjudicial sale permitted by
the terms of the controlling security agreement or deed of trust, as Lender
in its discretion may determine; (g) to sell, transfer, assign, or grant
participations in all or any part of the Indebtedness; and (h) to assign or
transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants
to Lender that (a) no representations or agreements of any kind have been
made to Guarantor which would limit or qualify in any way the terms of this
Guaranty; (b) this Guaranty is executed at Borrower's request and not at the
request of Lender; (c) Guarantor has full power, right and authority to enter
into this Guaranty; (d) the provisions of this Guaranty do not conflict with
or result in a default under any agreement or other instrument binding upon
Guarantor and do not result in violation of any law, regulation, court decree
or order applicable to Guarantor; (e) Guarantor has not and will not, without
the prior written consent of Lender, sell, lease, assign, encumber,
hypothecate, transfer, or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein; (f) upon Lender's request,
Guarantor will provide to Lender financial and credit information in form
acceptable to Lender, and all such financial information which currently has
been, and all future financial information which will be provided to Lender
is and will be true and correct in all material respects and fairly present
the financial condition of Guarantor as of the dates the financial
information is provided; (g) no material adverse change has occurred in
Guarantor's financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor's financial condition; (h) no litigation, claim,
investigation, administrative proceeding or similar action (including those
for unpaid taxes) against Guarantor is pending or threatened; (i) Lender has
made no representation to Guarantor as to the creditworthiness of Borrower;
and (j) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice
of any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to give
notice of the terms, time, and place of any public or private sale of
personal property security held by Lender from Borrower or to comply with any
other applicable provisions of the Uniform Commercial Code; (f) to pursue any
other remedy within Lender's power; or (g) to commit any act or omission, of
any kind, or at any time, with respect to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in
favor of Lender and Borrower, and their respective successors, any claim or
right to payment Guarantor may now have or hereafter have or acquire against
Borrower, by subrogation or otherwise, so that at no time shall Guarantor be
or become a "creditor" of Borrower within the meaning of 11 U.S.C. Section
547(b), or any successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
the provisions of O.C.G.A. Section 10-7-24 concerning Guarantor's right to
require Lender to take action against Borrower or any "one action" or
"anti-deficiency" law or any other law which may prevent Lender from bringing
any action, including a claim for deficiency, against Guarantor, before or
after Lender's commencement or completion of any foreclosure action, either
judicially or by exercise of a power of sale; (b) any election of remedies by
Lender which destroys or otherwise adversely affects Guarantor's subrogation
rights or Guarantor's rights to proceed against Borrower for reimbursement,
including without limitation, any loss of rights Guarantor may suffer by
reason of any law limiting, qualifying, or discharging the Indebtedness; (c)
any disability or other defense of Borrower, of any other guarantor, or of
any other person, or by reason of the cessation of Borrower's liability from
any cause whatsoever, other than payment in full in legal tender, of the
Indebtedness; (d) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (e)
any statue of limitation, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness of Borrower
to Lender which is not barred by any applicable statute of limitations; or
(f) any defenses given to guarantors at law or in equity other than actual
payment and performance of the Indebtedness. If payment is made by Borrower,
whether voluntarily or otherwise, or by any third party, on the Indebtedness
and thereafter Lender is forced to remit the amount of that payment to
Borrower's trustee in bankruptcy or to any similar person under any federal
or state bankruptcy law or law for the relief of debtors, the Indebtedness
shall be considered unpaid for the purpose of enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether
such claim, demand or right may be asserted by the Borrower, the Guarantor,
or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable law
or public policy, such waiver shall be effective only to the extent permitted
by law or public policy.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 3
LOAN NO (CONTINUED)
================================================================================
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender
by law, Lender shall have, with respect to Guarantor's obligations to Lender
under this Guaranty and to the extent permitted by law, a contractual
possessory security interest in and a right of setoff against, and Guarantor
hereby assigns, conveys, delivers, pledges, and transfers to Lender all of
Guarantor's right, title and interest in and to, all deposits, moneys,
securities and other property of Guarantor now or hereafter in the possession
of or on deposit with Lender, whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding however all IRA, Keogh, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to Guarantor. No security interest or right of
setoff shall be deemed to have been waived by any act or conduct on the part
of Lender or by any neglect to exercise such right of setoff or to enforce
such security interest or by any delay in so doing. Every right of setoff and
security interest shall continue in full force and effect until such right of
setoff or security interest is specifically waived or released by an
instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter
created, shall be prior to any claim that Guarantor may now have or hereafter
acquire against Borrower, whether or not Borrower becomes insolvent.
Guarantor hereby expressly subordinates any claim Guarantor may have against
Borrower, upon any account whatsoever, to any claim that Lender may now or
hereafter have against Borrower. In the event of insolvency and consequent
liquidation of the assets of Borrower, through bankruptcy, by an assignment
for the benefit of creditors, by voluntary liquidation, or otherwise, the
assets of Borrower applicable to the payment of the claims of both Lender and
Guarantor shall be paid to Lender and shall be first applied by Lender to the
Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender
all claims which it may have or acquire against Borrower or against any
assignee or trustee in bankruptcy of Borrower; provided however, that such
assignment shall be effective only for the purpose of assuring to Lender full
payment in legal tender of the Indebtedness. If Lender so requests, any notes
or credit agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are subject
to this Guaranty and shall be delivered to Lender. Guarantor agrees, and
Lender hereby is authorized, in the name of Guarantor, from time to time to
execute and file financing statements and continuation statements and to
execute such other documents and to take such other actions as Lender deems
necessary or appropriate to perfect, preserve and enforce its rights under
this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Guaranty. No alteration of or amendment
to this Guaranty shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted
by Lender in the State of Georgia. Subject to the provisions on
arbitration, this Guaranty shall be governed by and construed in
accordance with the laws of the State of Georgia.
ARBITRATION. LENDER AND GUARANTOR AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN
NATURE, ARISING FROM THIS GUARANTY OR OTHERWISE, INCLUDING WITHOUT
LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO
THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF
EITHER PARTY. No act to take or dispose of any Collateral shall
constitute a waiver of this arbitration agreement or be prohibited by
this arbitration agreement. This includes, without limitation,
obtaining injunctive relief or a temporary restraining order; invoking
a power of sale under any deed of trust or mortgage; obtaining a writ
of attachment or imposition of a receiver; or exercising any rights
relating to personal property, including taking or disposing of such
property with or without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise of
any right, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall
have the right or the power to enjoin or restrain any act of any party.
Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this Guaranty shall preclude
any party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches, and
similar doctrines which would otherwise be applicable in an action
brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the
commencement of an action for these purposes. The Federal Arbitration
Act shall apply to the construction, interpretation, and enforcement of
this arbitration provision.
ATTORNEYS' FEES; EXPENSES: Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Guaranty. Lender may pay someone else to help enforce this Guaranty,
and Guarantor shall pay the costs and expenses of such enforcement.
Costs and expenses include all costs and expenses of collection,
including fifteen percent (15%) of the principal plus accrued interest
as attorneys' fees, if any sums owing under this Guaranty are collected
by or through an attorney-at-law, whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(and including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.
NOTICES. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile
(unless otherwise required by law), and shall be effective when
actually delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail, first
class postage prepaid, addressed to the party to whom the notice is to
be given at the address shown above or to such other addressee as
either party may designate to the other in writing. If there is more
than one Guarantor, notice to any Guarantor will constitute notice to
all Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address.
INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words "Borrower" and "Guarantor" respectively shall
mean all and any one or more of them. The words "Guarantor" "Borrower"
and "Lender" include the heirs, successors, assigns, and transferees of
each of them. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Guaranty. If a court of competent jurisdiction finds
any provision of this Guaranty to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision
invalid or unenforceable as to any other persons or circumstances, and
all provisions of this Guaranty in all other respects shall remain
valid and enforceable. If any one or more of Borrower or Guarantor are
corporations or partnerships, it is not necessary for Lender to inquire
into the powers of Borrower or Guarantor or of the officers, directors,
partners, or agents acting or purporting to act on their behalf, and
any Indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed under this Guaranty.
<PAGE>
08-23-1999 COMMERCIAL GUARANTY PAGE 4
LOAN NO (CONTINUED)
================================================================================
WAIVER. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Guaranty shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty.
No prior waiver by Lender, nor any course of dealing between Lender and
Guarantor, shall constitute a waiver of any of Lender's rights or of
any of Guarantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED FEBRUARY 11, 2000.
IN WITNESS WHEREOF, THIS GUARANTY HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF.
GUARANTOR:
X_______________________(SEAL)
Signed, Sealed and Delivered in the presence of:
X_______________________
Unofficial Witness
______________________________________
Notary Public _______________ County
(NOTARY SEAL)
My Commission expires: _______________________
LENDER:
THE BANKERS BANK
By: _______________________________
Authorized Officer
================================================================================
LASER PRO, REG. U.S. Pat. & T.M. Off., Ver. 3-24a(c) 1999 CFI ProServices, Inc.
All rights reserved. (GA-E320 E3.24 F3-24 FUTURUS, LN C1.OVL)
<PAGE>
EXHIBIT 10.12
March 14, 2000
Mr. William M. Butler, President/CEO
Futurus Financial Services, Inc.
1580 Warsaw Road
Roswell, Georgia 30076
Dear Bill:
Please accept this letter giving KDA Financial, Inc. ("KDA") the exclusive right
and authority to plan, design, equip, furnish and install the temporary
headquarters space for Futurus Financial Services, Inc. ("Owner") at the
Alpharetta Square Shopping Center, South Main Street, Alpharetta, Georgia. KDA,
through its agents and employees will render and provide the Scope of Work
described on the attached Construction Estimate dated March 6, 2000.
I. FEES:
The Total Construction Cost of $77,947 shall be due as follows:
50% ($38,973.50) shall be due at the agreement date, the
balance shall be due in two (2) equal payments, the first
being due 30 days after the acceptance and the second due upon
the completion of the work.
II. SCHEDULE:
The project work will begin upon the acceptance of this letter. The
Scope of Work should be completed within 30-40 days from Owner's
written authorization to proceed.
III. ACCEPTANCE:
This Agreement is subject to final acceptance by the President or
Secretary of KDA and the date of such acceptance will be the date of
this Agreement.
The undersigned officer of the Owner represents that he is authorized
to enter into this Contract on behalf of the Owner.
IV. CONFIDENTIALITY:
KDA agrees to exercise reasonable care in maintaining the
confidentiality of all information gained through this relationship.
<PAGE>
V. SCOPE OF AGREEMENT:
This Agreement represents the entire understanding between Owner and
KDA and supersedes all prior Agreements, understandings and
negotiations. This Agreement may be modified only in writing. Owner and
KDA understand, agree, and acknowledge that this Agreement has been
freely negotiated by the parties, and that in any controversy, dispute,
arbitration, or contest over the meaning, interpretation, validity or
enforceability of this Agreement; or any of its terms and conditions,
there will be no interference, presumption or conclusion drawn
whatsoever against either party by virtue of the party having drafted
this Agreement or any portion thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals to this
Agreement on the dates shown below, in triplicate.
APPROVED
FUTURUS FINANCIAL SERVICES, INC.
ROSWELL, GEORGIA
BY: /s/ William M. Butler
-------------------------------------------
William M. Butler, President/CEO
DATE: 3-14-00
-----------------------------------------
Corporate Seal:
Accepted at Marietta, Georgia this _____ day of ______________, 2000.
KDA FINANCIAL, INC.
MARIETTA, GEORGIA
BY:
---------------------------------------
Dennnis W. Hastings, President
DATE:
------------------------------------
Corporate Seal
Attachment
<PAGE>
EXHIBIT 10.13
PROJECT AGREEMENT
This Project Agreement ("Agreement") is made on this 10th day of March, 2000 by
and between The Compass Group dba Stern Marketing Group, a California
corporation ("SMG") with its principal place of business at 819 Bancroft Way,
Berkeley, California 94710, and Futurus Financial Services, Inc. ("Client") with
its principal place of business at 1580 Warsaw Road, Roswell, GA 90076. In
consideration of the mutual promises set forth herein, Client and SMG agree as
follows:
PROJECT NAME: RETAIL STORE DESIGN
PROJECT DESCRIPTION
1. SMG agrees to create, design, deliver, and produce in accordance with the
following specifications:
Direct the development of a retail store design for Client-selected prototype
site. Based on Client-approved space plan, provide concept development, detailed
design drawings, and consultation support services. Deliverables include:
Concept Development
* Develop and present one (1) interior design concept direction (showing
specified materials and finish selection) applicable to one
Client-selected retail location.
Design Application
* Based on application of the above interior design concept to the
prototype site, provide detailed design drawings in the form of 24" x
36" blueline prints to project architect to meet required timelines
during the development of the retail store interior. Specific drawings
include:
Finish Plans
* Floor Plan - shows configuration of walls and basic space
plan of building
* Reflected Ceiling Plan - shows ceiling configuration and
details, lighting placement and specifications (does not
include HVAC information)
* Power/Communication Plan - shows placement of electrical and
phone/computer lines
* Flooring Plan - shows floor pattern and placement, along
with specification of flooring material
* Furniture Plan - shows placement of custom
millwork/cabinetry as well as placement of specified, ready
to use furniture
* Paint/Finish Plan - shows placement details of wall finishes
Interior Elevations, Sections and Details
<PAGE>
* Two-dimensional view of major walls with placement of logo,
wall finishes and/or architectural details as required
Cabinetry and Furniture Plan
* Consists of top, front, side, section, and inside views of
up to four (4) freestanding cabinets with material and
finish specifications (CSC/tellerline combination counter is
counted as one unit)
* Provide consultation to Client on application and implementation of
retail space design concepts from design through installation for the
prototype store.
PROJECT FEE
2. As and for the total Project Fee, Client agrees to pay to SMG for the usage
rights granted herein, the sum of $45,000 .
Travel expenses outside the San Francisco Bay Area, deliveries, packing and
shipping, and/or any applicable federal, state, and/or local taxes will be
billed, at cost, with each progress billing. It is anticipated that the project,
with the exception of project research, reviews and approval meetings, will be
completed with much of the work being done via telephone, conference call,
facsimile, email, regular mail, and, as required, overnight courier service.
Fees exclude cost of design revisions, design production, pre-production costs,
project supplies, signage, fixtures, display materials, illustration,
photography, production mechanicals and/or production, and usage fees and/or
buyout fees. Electronic CAD files of the drawings will not be provided as part
of this project agreement. Such additional costs will be approved by Client
prior to delivery and billed with each progress billing.
For retail store design services, it is Client's responsibility to direct
architect to review all design drawings and specifications to meet any federal,
state, and/or local codes, building and/or developer requirements. Tellerline
operations, back office space design, electrical, HVAC, plumbing, security
system, exterior design and/or development, and building construction details is
the responsibility of architect.
Costs of any construction, construction supervision, land surveyors,
engineering, landscaping, fixtures, furnishings, models or prototypes are
outside the scope of this project and are not included.
Original concept presentation boards remain the property of SMG. Copies can be
made available for Client's use and billed to Client at cost. Client agrees to
allow photography and/or videotape to be taken at SMG's expense. Still
photography, videotapes and/or samples relating to project may be used by SMG
for promotional purposes.
<PAGE>
3. The sum of $11,250 or 25 % of the Project Fee is due from Client to SMG upon
project approval. The balance of the Project Fee, plus any additional costs, is
due and payable as follows:
$16,875 or 37.5% of the Project Fee due upon completion of plan drawings
$16,875 or 37.5% of the Project Fee due upon completion of elevation and
cabinetry drawings
4. Alterations or changes represent work performed or to be performed by SMG in
addition to the original project description stated in paragraph 1. Any such
alterations or changes shall be confirmed in writing by SMG, except that SMG's
invoices to Client may include, and Client shall be obligated to pay, additional
fees or expenses verbally authorized by Client to process work promptly. Client
shall offer SMG the first opportunity to make any such alterations or changes.
5. Client knows and understands that SMG will contract for certain project
support services, and in so doing, SMG has relied on the promises of Client as
set forth herein.
6. If Client terminates or cancels the project without cause, Client shall
immediately reimburse SMG for any and all project expenses as of the date of
termination or cancellation, and for the full Project Fee due as of the date of
termination or cancellation.
ESTIMATED PROJECT COMPLETION
7. SMG estimates that the following phases shall be completed at the following
estimated times:
<TABLE>
<S> <C>
Deliverable Estimated Completion Date
Store Design May 15, 2000 (all drawings complete)
</TABLE>
Completion dates are estimated by SMG and predicated in part on timely receipt
of all information and materials to be supplied by Client. If work is postponed
at the request of Client, SMG will provide to Client new estimated completion
dates within ten (10) working days of the resumption of the postponed work.
Every attempt will be made by SMG to meet the estimated completion dates, but
unforeseen or unavoidable delays not caused by SMG shall not constitute a breach
of this Agreement. A progress payment in the amount of one-half (1/2) of the
next scheduled Project Fee shall be made by Client for each such delay not
caused by SMG, which exceed forty-five (45) days.
TERMS AND CONDITIONS
8. Conditioned on Client's payment of the applicable portion of the Project Fee,
Client shall have the following rights in and to the creations, designs and
production materials of SMG:
<PAGE>
<TABLE>
<S> <C>
For Use As Futurus Financial Services, Inc. Marketing Support Services
For The Territory One (1) retail site location
For The Time Period Unlimited
</TABLE>
Each component of the deliverables for store design, fixture design, and
merchandising graphic design is owned and copyrighted by SMG and is for use only
by Client. Attribution or credit of these deliverables belongs solely to SMG.
The information, contained in these deliverables is intended for use only by
Client and only at Client's first retail location. Distribution or reproduction
of these deliverables or any portion of these deliverables without SMG's prior
written consent is strictly prohibited. Client's retail interior space may not
be photographed or videoed, except by Client for Client's sole use, without
SMG's prior written consent. There shall be no use in whole or in part of any of
these deliverables for any purpose other than that which is provided to Client
under the terms of the Project Agreement.
If Client wishes to make any additional usage of SMG's creations, designs, and
production materials, Client agrees to first seek written permission from SMG
and to make such payments to SMG as are agreed to between Client and SMG at that
time. If Client and SMG are unable to agree on such payments, there shall be no
additional usage.
9. SMG shall receive a credit, acknowledgment or indication of attribution with
usage, public relations, and/or promotion.
10. Any and all liabilities that occur during or as a result of the execution of
the project which are not the result of gross negligence by SMG shall be the
responsibility of Client. Client also agrees to indemnify and hold harmless SMG
against any and all claims, costs and expenses, including attorney's fees, due
to matter included in the project at the request of Client for which no
copyright permission or privacy release was requested or obtained, or for usage
which exceeds the uses allowed by any such permission or release.
11. Client and SMG, respectively, warrant that any signature to this Agreement
on their behalf is competent and authorized to execute this Agreement on their
behalf and on behalf of Client's and SMG's respective agents, employees, and
associates.
12. With the sole exception of the Mutual Nondisclosure Agreement dated NOVEMBER
18TH, 1999, which is incorporated by this reference, this Agreement contains the
entire agreement between the parties hereto. This Agreement may be modified, if
at all, only in writing executed by both parties, which refers expressly to this
Agreement. The waiver of a term or condition of this Agreement shall not
constitute or be interpreted as a future waiver of any such term or condition.
Except as expressly contained in the Mutual Nondisclosure Agreement and this
Agreement, each party hereby covenants, warrants and acknowledges to the other
party that it in no way relied on any other inducement, promise, representation
or inference made by any other party.
<PAGE>
13. This Agreement and all matters pertaining to the validity, construction,
enforcement, interpretation or effect of this Agreement shall be governed by and
construed under the laws of the State of California.
14. If any party to this Agreement institutes a lawsuit against any other party
to this Agreement to enforce or interpret any term of this Agreement, the
prevailing party in the dispute or lawsuit shall be entitled to collect its
reasonable attorneys' fees, costs and expenses as part of any dispositive
decision, order or judgment.
15. Because of the unique nature of the services to be rendered, this Agreement,
and any duties or obligations hereunder, shall not be assignable by Client or
SMG without the prior written consent of the other. Subject to this provision
regarding assignment, this Agreement shall be binding on the legal
representatives, successors, and assigns of Client.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
Futurus Financial Services, Inc.
By /s/ William M. Butler
----------------------------------------
William M. Butler
Title President and C.E.O.
The Compass Group
dba Stern Marketing Group
By /s/ Charlene Y. Stern
----------------------------------------
Charlene Y. Stern
Title President/Chief Executive Officer
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 4, 2000, accompanying the financial
statements of Futurus Financial Services, Inc. included in the Form SB-2
Registration Statement and Prospectus. We consent to the use of the
aforementioned report in this Form SB-2 Registration Statement and Prospectus,
as amended, and to the use of our name as it appears under the caption
"Experts."
PORTER KEADLE MOORE, LLP
Atlanta, Georgia
April 6, 2000
