Exhibit 1
600,000 Shares
BAY BANCSHARES, INC.
Common Stock
UNDERWRITING AGREEMENT
November ___, 1997
▇▇▇▇▇▇ & ▇▇▇▇▇▇ INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Bay Bancshares, Inc., a Texas corporation (the "Company"), proposes,
subject to the terms and conditions of this Underwriting Agreement (the
"Agreement"), to issue and sell 600,000 shares (the "Firm Shares") of common
stock, par value $1.00 per share (the "Common Stock"), of the Company to ▇▇▇▇▇▇
& ▇▇▇▇▇▇ Incorporated (the "Underwriter"). The Company has agreed to sell to
the Underwriter at the Underwriter's option and, upon the terms and conditions
set forth in Section 2 hereof, up to 90,000 additional shares (the "Additional
Shares") of Common Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares."
The Company and the Underwriter hereby agree to the following matters with
respect to the purchase and sale of the Shares:
SECTION 1. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Underwriter that:
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Act"), a registration statement on
Form S-1 (No. 36185), including a preliminary prospectus, and certain
amendments thereto, relating to the Shares. The Company will next file with
the Commission a final prospectus in accordance with Rules 430A and 424(b)
under the Act. As filed, the final prospectus shall include all Rule 430A
Information (as defined below). There have been or will promptly be delivered
to the Underwriter three signed copies of such registration statement and
amendments, three copies of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms of
prospectus. The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended; provided, however, that such term
shall also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes
effective as provided by Rule 430A provided that if the Company files a
registration statement under the Act to register a portion of the Shares and
relies on Rule 462(b) for such registration statement to become effective
upon filing with the Commission (the "Rule 462 Registration Statement"), then
any reference to "Registration Statement" herein shall be deemed to be to
both the registration statement referred to above (No. 36185) and the Rule
462 Registration Statement, as each such registration statement may be
amended pursuant to the Act. The term "Prospectus" as used in this Agreement
shall mean: (X) the prospectus relating to the Shares in the form in which it
is first filed with the Commission pursuant to Rule 424(b) under the Act; or
(Y) if no filing pursuant to Rule 424(b) under the Act is required, the form
of final prospectus included in the Registration Statement at the time the
Registration Statement becomes effective. The term "Rule 430A Information"
as used in this Agreement shall mean information with respect to the Shares
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A under the Act. The
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder are hereinafter collectively referred to as the
"Exchange Act."
(ii) The Registration Statement has been declared effective by
the Commission under the Act. The Commission has not issued any order
preventing or suspending the effectiveness of the Registration Statement and
no proceedings for such purpose have been instituted or are pending, or to
the best knowledge of the Company, are contemplated or threatened by the
Commission. Each preliminary prospectus and the Prospectus when filed
complied in all material respects when so filed with the requirements of the
Act.
(iii) The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date on which
Option Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a material
fact and did not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
and, on the Effective Date the Prospectus did not and, on the Closing Date
and any later date on which Option Stock is to be purchased, will not contain
any untrue statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that none of the
representations and warranties in this subparagraph (iii) shall apply to
statements in, or omission from, the Registration Statement or the Prospectus
made in reliance upon and in conformity with information concerning the
Underwriter set forth herein or otherwise furnished in writing to the Company
by or on behalf of the Underwriter expressly for use in the Registration
Statement or the Prospectus.
(iv) There are no contracts or other documents of a character
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required.
(v) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP; ▇▇▇▇▇▇▇▇▇▇▇▇▇ & Company; and
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., who have expressed their opinion with
respect to certain of the financial
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statements of Texas Bank, Texas National Bank of Baytown ("Texas National"),
First Bank of Deer Park ("First Bank") (collectively, the "Acquired Banks")
and the Company included in the Registration Statement, are independent
public accountants within the meaning of the Act.
(vi) The consolidated financial statements, together with the
notes thereto, of the Company and the Acquired Banks included in the
Registration Statement comply in all material respects with the Act and
present fairly in all material respects the consolidated financial position
of the Company and the Acquired Banks, respectively, as of the dates
indicated (including, without limitation, the allowance for possible loan
losses), and the consolidated results of operations, cash flows and changes
in financial position of the Company and the Acquired Banks for the
respective periods covered thereby are in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except to the extent disclosed therein.
(vii) The pro forma financial statements and other pro forma
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with generally accepted accounting
principles and the Commission's rules and guidelines with respect to pro
forma financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate under the
circumstances.
(viii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Texas, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
in any such case in which the failure to so qualify or be in good standing
would not have a material adverse effect upon the business of the Company,
and no proceeding of which the Company has knowledge has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.
(ix) The Company does not own any capital stock of, or other
securities evidencing an equity interest in, any corporation, partnership or
other entity, other than Bayshore National Bank (the "Bank"). All of the
outstanding capital stock of the Bank is owned by the Company and there are
no persons or entities which have the right to acquire capital stock of the
Bank.
(x) The Bank and, to the best of the Company's knowledge,
Texas National, have been duly organized and are validly existing as national
associations in good standing under the laws of the United States, with full
corporate power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the
Prospectus. The Bank and Texas National are duly qualified to do business
and are in good
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standing in each jurisdiction in which the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except in any such case in which the failure to so
qualify or be in good standing would not have a material adverse effect upon
their respective businesses, and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority
or qualification.
(xi) To the best of the Company's knowledge, Texas Bank and
First Bank have been duly organized and are validly existing as Texas
corporations in good standing under the laws of the State of Texas, with full
corporate power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the
Prospectus. Texas Bank and First Bank are duly qualified to do business as
foreign corporations and are in good standing in each jurisdiction in which
the ownership or leasing of their respective properties or the conduct of
their respective businesses requires such qualification, except in any such
case in which the failure to so qualify or be in good standing would not have
a material adverse effect upon their respective businesses, and no proceeding
of which the Company has knowledge has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(xii) The Company has an authorized and outstanding
capitalization as set forth in the Prospectus under the actual column under
the caption "Capitalization" and the Shares conform in all material respects
to the description thereof contained in the Prospectus. All of the issued
and outstanding shares of Common Stock have been duly authorized, validly
issued and are fully paid and non-assessable and are free of preemptive or
other similar rights and except as set forth in the Prospectus, there are no
options, agreements, contracts or other rights in existence to acquire from
the Company any shares of Common Stock.
(xiii) The Shares to be sold by the Company pursuant to this
Agreement and the Pricing Agreement have been duly authorized and, when
issued and paid for in accordance with this Agreement and the Pricing
Agreement, will be validly issued, fully paid and non-assessable; the holders
of the Shares will not be subject to personal liability by reason of being
such holders; except as set forth in the Prospectus, there are no holders of
securities of the Company having rights, contractual or otherwise, to
registration thereof or preemptive rights to purchase Common Stock; all
corporate actions required to be taken for the authorization, issuance, and
sale of the Shares have been validly and sufficiently taken.
(xiv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated or contemplated therein, there has not been (A) any material adverse
change in the condition (financial or otherwise), earnings, affairs or
business of the Company and the Bank, taken as a whole, or of any of the
Acquired Banks, whether or not arising in the ordinary course of business,
(B) any material transaction entered into, or any material liability or
obligation incurred, by the Company or its subsidiaries or any of the
Acquired Banks other than in the ordinary course of business, (C) any change
in the capital stock or material increase in the short-term debt or long-term
debt of the
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Company or any of the Acquired Banks, or (D) any dividend or distribution of
any kind declared, paid or made by the Company or any of the Acquired Banks
on their respective capital stock.
(xv) The Company and the Bank and, to the best of the Company's
knowledge, the Acquired Banks, have good and marketable title to all properties
and assets reflected as owned in the financial statements hereinabove described
(or described elsewhere in the Prospectus), free and clear of all liens,
charges, encumbrances or restrictions of any kind, except such as are referred
to in such financial statements or the Prospectus or which are not material to
the Company and the Bank or the Acquired Banks as the case may be; all of the
leases and subleases material to their respective businesses or under which the
Company, the Bank or the Acquired Banks hold properties are in full force and
effect; and the Company has received no notice of any material claim of any sort
which has been asserted by anyone adverse to the rights of the Company, the Bank
or any of the Acquired Banks as owner or as lessee or sublessee under any of the
leases or subleases mentioned above, or affecting or questioning the rights of
the Company, the Bank or any of the Acquired Banks to the continued possession
of the leased or subleased premises under any such lease or sublease.
(xvi) The Company and the Bank and, to the best of the
Company's knowledge, the Acquired Banks, are not in default in the observance
of any provision of their respective articles of incorporation, articles of
association, or bylaws, in each case as amended, or in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which any of them is a party or by which any of them or any of
their properties may be bound, the effect of which could be materially
adverse to the condition (financial or otherwise), earnings, affairs or
business of the Company, the Bank or any of the Acquired Banks.
(xvii) The execution, delivery and performance of this
Agreement, the issuance and delivery of the Shares, the consummation of the
transactions contemplated herein and in the Registration Statement have been
duly authorized by all necessary corporate action and will not result in any
violation of the articles of incorporation or bylaws of the Company, and will
not conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge, encumbrance or restriction of any kind upon any property or
assets of the Company under any material contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Company
is a party or by which the Company or its properties is bound, or any
existing applicable law, rule, regulation, or any judgment, order or decree
of any government, governmental instrumentality or court, domestic or
foreign, known to the Company and having jurisdiction over the Company or its
properties. No approval, authorization or consent of any court, regulatory
body, administrative agency or other governmental body having jurisdiction
over the Company is required in connection with the sale of the Shares to the
Underwriter, except such as may be required under the Act, state securities
or Blue Sky laws or from the clearance of the offering with the National
Association of Securities Dealers, Inc. (the "NASD").
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(xviii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, or any arbitrator or
arbitration panel, now pending or, to the knowledge of the Company, threatened
against or affecting the Company, the Bank or, to the best of the Company's
knowledge, the Acquired Banks, which could reasonably be expected to result in
any material adverse change to the condition (financial or otherwise), earnings,
affairs or business of the Company or the Acquired Banks; and there is no
decree, judgment or order of any kind known to the Company in existence against
or restraining the Company or the Bank or, to the best of the Company's
knowledge, the Acquired Banks, or their officers, employees or directors, from
taking any actions of any kind in connection with their respective businesses.
(xix) The Company and the Bank and, to the best of the
Company's knowledge, the Acquired Banks, own or possess or have obtained all
material governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to lease or own, as the case may be, and to
operate their properties and to carry on their businesses as presently
conducted, and the Company has received no notice of proceedings related to
revocation or modification of any such licenses, permits, consents, orders,
approvals or authorizations which individually or in the aggregate, if the
subject of an unfavorable ruling or finding, would be materially adverse to
the condition (financial or otherwise), earnings, affairs or business of the
Company, the Bank or any of the Acquired Banks, taken as a whole.
(xx) The conduct of the business of the Company and its
subsidiaries and, to the best of the Company's knowledge, the Acquired Banks is
in compliance with all applicable federal, state and local laws and regulations
that regulate or are concerned in any way with the business of the Company, the
Bank and the Acquired Banks, where the effect of the failure to comply would be
materially adverse to the condition (financial or otherwise), earnings, affairs
or business of the Company, the Bank or any of the Acquired Banks, taken as a
whole.
(xxi) The Company and the Bank and, to the best of the
Company's knowledge, the Acquired Banks, own or possess, or can acquire on
reasonable terms, all right, title and interest in or to, or have duly
licensed from third parties, all patents, trademarks, service marks,
copyrights, trade names, trade secrets and other proprietary rights ("Trade
Rights") material to the business now or proposed to be conducted by them,
and the Company has received no notice of, and has no knowledge of,
infringement of or conflict with asserted rights of others with respect to
any such Trade Rights which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would be materially adverse to
the condition (financial or otherwise), earnings, affairs or business of the
Company, the Bank or any of the Acquired Banks, taken as a whole.
(xxii) The Company and, to the best of the Company's
knowledge, the Acquired Banks, have filed all tax returns required to be
filed and have paid all taxes which were payable pursuant to said returns or
any assessments with respect thereto, other than any tax returns being
contested in good faith or which are not material to the Company or any of
the Acquired Banks and there is no tax deficiency that has been, or to the
knowledge of the Company
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might be, asserted against the Company or any of the Acquired Banks or any of
their respective properties or assets that would or could reasonably be
expected to have a material adverse affect upon the condition (financial or
otherwise) or results of operations of the Company or any of the Acquired
Banks, taken as a whole.
(xxiii) This Agreement has been duly executed and delivered by
the Company.
(xxiv) The Company has filed a registration statement pursuant
to Section 12(g) of the Exchange Act to register its Common Stock thereunder,
has filed an application to list the Shares for quotation on The Nasdaq
National Market and has received notification that the Shares have been
authorized for quotation on The Nasdaq National Market, subject to notice of
issuance or sale, as the case may be.
(xxv) The Company, its subsidiaries and, to the best of the
Company's knowledge, the Acquired Banks, are not and do not intend to conduct
their business in a manner in which any of them would become an "investment
company" as defined in Section 3(a) of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxvi) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times either exempt from the
registration requirements of the Act and the registration requirements of all
applicable state securities or blue sky laws, were duly registered or were
duly registered in accordance with the provisions thereof.
(xxvii) The Company has not taken and will not take, 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.
(xxviii) Except as disclosed in the Registration Statement and
the Prospectus, no transaction has occurred between or among the Company or
its subsidiaries, on the one hand, and any of the Company's officers or
directors or any affiliate or affiliates of any such officer or director, on
the other hand, that is required to be so disclosed, including, but not
limited to, any outstanding loans, advances or guaranties of indebtedness by
the Company or its subsidiaries to or for the benefit of any affiliates of
the Company, or any of the officers or directors of the Company, or any
family member of any of them.
(xxix) The Company, the Bank and, to the best of the
Company's knowledge, the Acquired Banks, have not, directly or indirectly, at
any time (A) made any contributions to any candidate for foreign political
office, or if made, failed to disclose fully any such contribution made in
violation of law, or (B) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments or contributions required or
allowed by applicable law. The Company's and, to the best of the Company's
knowledge, the Acquired Banks', internal
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accounting controls and procedures are sufficient to cause the Company and
the Acquired Banks to comply in all material respects with the Foreign
Corrupt Practices Act of 1977, as amended.
(xxx) The Company, the Bank and, to the best of the
Company's knowledge, the Acquired Banks, do no business with the government
of Cuba or with any person or entity located in Cuba, which would require
compliance with Florida Statute Section 517.075.
(xxxi) The Company, its subsidiaries and, to the best of the
Company's knowledge, the Acquired Banks, are in compliance with all
applicable federal and state laws and regulations that regulate the business
of banking, including, without limitation, the National Bank Act, the Federal
Deposit Insurance Act, the Bank Holding Company Act, the Federal Reserve Act
and all other applicable laws and regulations where the failure to comply
would have a material and adverse effect on the financial condition, earnings
or business of the Company or any of the Acquired Banks.
SECTION 2. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and agreements
of the Company herein contained but subject to the terms and conditions set
forth herein, (i) the Company hereby agrees to issue and sell to the
Underwriter and the Underwriter agrees to purchase the Firm Shares. The
purchase price per share to be paid by the Underwriter to the Company shall
be $_________ except for shares the purchaser of which was introduced to the
Underwriter by the Company and who is listed on Exhibit A hereto as agreed by
the Company and the Underwriter for which the price shall be $________ per
share.
(b) In addition, the Company, on the basis of the representations,
warranties and agreements of the Company set forth herein but subject to the
terms and conditions set forth herein, hereby grants to the Underwriter an
option to purchase up to an aggregate of 90,000 additional Shares, a purchase
price per share of ____________, for use solely in covering any over
allotments made by the Underwriter in the sale and distribution of the Firm
Shares. The option granted hereunder may be exercised at any time (but not
more than once), in whole or in part, within 30 days after the date of the
Prospectus upon written notice by the Underwriter to the Company setting
forth the aggregate number of Additional Shares as to which the Underwriter
is exercising the option, the names and denominations in which the
certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may
not be earlier than the First Closing Date), being herein referred to as the
"Second Closing Date," shall be determined by the Underwriter, but if at any
time other than the First Closing Date, shall not be earlier than three nor
later than ten full business days after delivery of such notice of exercise.
SECTION 3. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery to the Underwriter of the Firm Shares shall be made
against payment therefor at 9:00 a.m., San Francisco, California, time, on the
fourth full business day
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following the date of this Agreement (the "Closing Date") at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The place of the closing and the Closing Date
may be varied by agreement between the Underwriter and the Company.
(b) Delivery to the Underwriter of any Additional Shares to be
purchased by the Underwriter shall be made in San Francisco, California,
against payment therefor at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated at
such time on such date (the "Option Closing Date"), which may be the same as
the Closing Date, but shall in no event be earlier than the Closing Date,
specified in the notice referred to in Section 2(b) hereof. The place of the
closing and the Option Closing Date may be varied by agreement between the
Underwriter and the Company.
(c) [CERTIFICATES FOR THE FIRM SHARES AND FOR THE ADDITIONAL SHARES
SHALL BE REGISTERED IN SUCH NAMES AND IN SUCH DENOMINATIONS AS THE UNDERWRITER
SHALL REQUEST UPON AT LEAST 48 HOURS PRIOR NOTICE TO THE COMPANY PRECEDING THE
CLOSING DATE OR THE OPTION CLOSING DATE, AS THE CASE MAY BE. SUCH CERTIFICATES
SHALL BE MADE AVAILABLE TO THE UNDERWRITER AT THE OFFICE OF THE DEPOSITORY TRUST
COMPANY, NEW YORK, NEW YORK, FOR INSPECTION AND PACKAGING NOT LATER THAN AT
LEAST 24 HOURS PRIOR TO THE CLOSING DATE OR THE OPTION CLOSING DATE, AS THE CASE
MAY BE. THE CERTIFICATES EVIDENCING THE FIRM SHARES AND THE ADDITIONAL SHARES
SHALL BE DELIVERED TO THE UNDERWRITER ON THE CLOSING DATE OR THE OPTION CLOSING
DATE, AS THE CASE MAY BE, WITH ANY TRANSFER TAXES THEREON DULY PAID BY THE
COMPANY FOR THE UNDERWRITER, AGAINST PAYMENT OF THE PURCHASE PRICE THEREFOR BY
CERTIFIED OR OFFICIAL COMPANY CHECK OR CHECKS PAYABLE IN CHICAGO CLEARING HOUSE
(NEXT DAY) FUNDS TO THE ORDER OF THE COMPANY, OR, AT THE OPTION OF THE COMPANY,
BY WIRE TRANSFER IN FEDERAL (SAME DAY) FUNDS FOR WHICH THE COMPANY WILL PAY ONE
DAY'S INTEREST AT THE BROKER CALL RATE AS REPORTED IN THE WALL STREET JOURNAL ON
THE BUSINESS DAY IMMEDIATELY PRIOR TO THE CLOSING DATE OR THE OPTION CLOSING
DATE, AS THE CASE MAY BE, SUBJECT TO CHANGE BY WRITTEN AGREEMENT OF THE COMPANY
AND THE UNDERWRITER.]
SECTION 4. AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the Underwriter that:
(a) The Company will advise the Underwriter promptly and, if
requested by the Underwriter, will confirm such advice in writing, (i) when any
post-effective amendment to the Registration Statement is filed or becomes
effective, and of the filing of any final prospectus or supplement or amendment
to the Prospectus, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or Prospectus or any Preliminary
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction, or the initiation or contemplation of any proceeding
for such purposes, and (iv) within the period of time referred to in paragraph
(f) below, of the happening of any event which makes any statement made in the
Registration Statement or Prospectus (as then amended or supplemented) untrue in
any material respect or which requires the making of any additions to or changes
in the Registration Statement or
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Prospectus (as then amended or supplemented) in order to make the statements
therein not misleading or the necessity to amend or supplement the Prospectus
to comply with the Act or any other law. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment. If the Company
elects not to rely on Rule 434, the Company will provide the Underwriter with
copies of the form of Prospectus in such numbers as the Underwriter may
reasonably request and file or transmit for filing with the Commission such
Prospectus in accordance with Rule 424(b) of the Act, by the close of
business in San Francisco on the business day immediately succeeding the date
hereof.
(b) The Company will prepare and file with the Commission, in
accordance with Rule 430A and Rule 424(b) under the Act, copies of an amended
Prospectus, or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus) containing all
information so omitted.
(c) The Company will, prior to the earlier of the Option Closing
Date or termination or expiration of the related option, not incur any
material liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business, except
as contemplated in the Prospectus.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which the
Underwriter shall not previously have been advised or to which the
Underwriter shall promptly after being so advised reasonably object in
writing.
(e) On the effective date of the Registration Statement and
thereafter from time to time during such period as in the opinion of counsel for
the Underwriter a prospectus relating to the Shares is required by law to be
delivered in connection with offers or sales of the Shares by the Underwriter or
a dealer, the Company will deliver to the Underwriter and each dealer, without
charge, as many copies of the Registration Statement and the Prospectus (and of
any amendment or supplement to such documents) as they may reasonably request.
During such period, if any event occurs which in the judgment of the Company, or
in the opinion of counsel for the Underwriter, should be set forth in the
Prospectus in order to ensure that no part of the Prospectus includes an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances at the
time the Prospectus is delivered to a purchaser, not misleading, the Company
will forthwith prepare, submit to the Underwriter, file with the Commission and
deliver, without charge to the dealers (whose names and addresses will be
furnished by the Underwriter to the Company) to whom shares have been sold by
the Underwriter or to other dealers any amendments or supplements to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will comply with the standards set forth in this sentence. The
Company consents to the use of such Prospectus (and of any amendments or
supplements thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions described in the preliminary
Blue Sky memorandum in which the Shares are lawfully offered by the Underwriter
and by all
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dealers to whom Shares may be sold, both in connection with the offering or
sale of the Shares and for such period of time thereafter as the Prospectus
is required by law to be delivered in connection therewith. In case the
Underwriter is required to deliver a Prospectus (and any amendment or
supplement thereto) more than nine months after the first date upon which the
Shares are offered to the public, the Company will, upon request, but at the
expense of the Underwriter, promptly prepare and furnish the Underwriter with
reasonable quantities of a Prospectus complying with Section 10(a)(3) of the
Act.
(f) The Company will cooperate with the Underwriter and counsel for
the Underwriter in connection with the registration or qualification of the
Shares for offer and sale by the Underwriter and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriter may
designate, will continue such registrations or qualifications in effect so
long as reasonably required for the distribution of the Shares and will file
such consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided that in no event
shall the Company be obligated to (i) qualify to do business in any
jurisdiction where it is not now so qualified, (ii) file any general consent
to service of process, or (iii) take any action that would subject it to
income taxation in any jurisdiction where it is not so qualified.
(g) For a period of five years after the date hereof:
(i) the Company will furnish to the Underwriter (A) as soon as
available a copy of each report of the Company of general
interest mailed to any class of its security holders
(B) copies of all periodic reports and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K and any
amendment thereto or such other similar forms as may be
designated by the Commission, and (C) from time to time,
such other information concerning the Company as the
Underwriter may reasonably request;
(ii) if at any time during such five-year period the Company
shall cease filing with the Commission the periodic reports
and current reports on Forms 10-K, 10-Q and 8-K or other
similar forms referred to in clause (h)(i) above, the
Company will forward to its shareholders generally and the
Underwriter (A) as soon as practicable after the end of each
fiscal year copies of a balance sheet and statements of
income and retained earnings of the Company as of the end of
and for such fiscal year, certified by independent public
accountants, and (B) as soon as practicable after the end of
each quarterly fiscal period, except for the last quarterly
fiscal period in each fiscal year, a summary statement
(which need not be certified) of income and retained
earnings of the Company for such period, which shall also be
made publicly available; and
-11-
(iii) the Company will furnish to the Underwriter and to the
NASD, and by issuance of a press release, on the date
of declaration, notice of all dividends, including the
amount and medium of payment, the record date (which
shall be not less than ten days subsequent to the
declaration date) and the payment date (which shall be
not less than ten days subsequent to the record date).
(h) The Company will make generally available to its security
holders an earnings statement of the Company, which need not be audited,
covering a 12-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as
soon as practicable after the end of such period, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act and the rules and
regulations promulgated thereunder (including Rule 158).
(i) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than by notice given by the Underwriter's
termination of this Agreement pursuant to Section 9 hereof), or if this
Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Company to comply with the material terms or
fulfill any of the material conditions of this Agreement, the Company agrees
to reimburse the Underwriter for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriter) reasonably
incurred by them in connection herewith but without any further obligation of
the Company for lost profits or otherwise.
(j) The Company will not sell, contract to sell or otherwise
dispose of any Common Stock or rights to purchase Common Stock for a period
of 180 days after the date of the Prospectus without the prior written
consent of the Underwriter (other than the issuance of shares of Common Stock
pursuant to the Company's stock option plan(s) and certain other employment
benefit arrangements of the Company in an aggregate amount not to exceed 5%
of the Shares). The Company will also obtain similar agreements from each of
its executive officers and directors and all persons who own at least 5% of
the Common Stock after the consummation of the Offering.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it under this Agreement and the Pricing Agreement for
the purposes set forth in the Prospectus under the caption "Use of Proceeds."
SECTION 5. PAYMENT OF EXPENSES. Except as provided in Sections 4(j) and
10 hereof, and in the following sentence, the Company shall have no
obligation to pay, or reimburse if paid by the Underwriter, any costs or
expenses incident to the performance by Underwriter of its obligations under
this Agreement and the Pricing Agreement. The Company shall pay, or
reimburse if paid by the Underwriter, any and all costs and expenses,
including but not limited to reasonable attorneys' fees, filing charges and
printing costs, of researching and complying with any applicable state
securities laws (blue sky laws) and printing and delivering to the
Underwriter copies of the preliminary and final blue sky memoranda.
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SECTION 6. CONDITION OF THE UNDERWRITER'S OBLIGATIONS. The obligation
of the Underwriter to purchase the Firm Shares hereunder is subject to the
following conditions:
(a) The price of the Shares and any price-related or other
information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period and on or
prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Underwriter of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for the purpose shall have been instituted or
shall be pending or, to the knowledge of' the Company, shall be contemplated
by the Commission and there shall not have come to the attention of the
Underwriter any facts that would cause them to believe that the Prospectus,
at the time it was required to be delivered to purchasers of the Shares,
contained any untrue statement of material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which there were made, not misleading.
(b) Subsequent to the effective date of the Registration Statement
(i) there shall not have occurred any material adverse change, or any
development involving a material adverse change, in or affecting particularly
the business or properties of the Company or its subsidiaries, taken as a
whole, not contemplated by the Prospectus, which, in the Underwriter's
opinion, would materially adversely affect the market for the Shares or make
it impracticable or inadvisable to proceed with the offering or the delivery
of the Shares, as contemplated herein and in the Prospectus, or to attempt to
enforce contracts for the purchase of Shares, and (ii) the business and
operations of the Company shall not have been adversely affected by strike,
fire, flood, accident or other calamity (whether or not insured).
(c) The Underwriter shall have received from ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., counsel for the Company, a favorable opinion dated the Closing Date
and satisfactory to the Underwriter and the Underwriter's counsel to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Texas, and the Bank has been duly organized and
is validly existing as a national association under the laws
of the United States, both with full power and authority to
own, lease and operate their respective properties and
conduct their business as described in the Prospectus. The
Company and the Bank are duly qualified to do business and
are in good standing in each jurisdiction where the
ownership or leasing of their properties or the conduct of
their business requires such qualification, except in any
such case where the failure to so qualify or be in good
standing would not reasonably be expected to have a
-13-
material adverse effect on the condition (financial or
otherwise) or results of operations of the Company.
(ii) The issued and outstanding capital stock of the Company has
been duly authorized and validly issued and is fully paid
and non-assessable and free of preemptive rights.
(iii) The authorized capitalization of the Company consists
entirely of 10,000,000 shares of preferred stock, $1.00
par value ("Preferred Stock"), issuable in series, none
of which is issued or outstanding, and 50,000,000
shares of Common Stock, of which 1,399,583 were issued
and 1,357,657 were outstanding on the date of the
Prospectus, all of which conform to the descriptions
thereof in the Prospectus.
(iv) The form of certificate for the Shares to be delivered
hereunder is in due and proper form, and when duly
countersigned by the Company's transfer agent and delivered
to the Underwriter against payment of the agreed
consideration therefor in accordance with the provisions of
this Agreement, the Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable
and free of preemptive rights and, to the knowledge of such
counsel, will be free of any security interest, claim, lien,
encumbrance or adverse interest of any nature, or rights of
first refusal in favor of, shareholders with respect to any
of the Shares or the issuance or sale thereof, pursuant to
the articles of incorporation or bylaws of the Company and,
to such counsel's knowledge other than as disclosed in the
Prospectus, there are no contractual preemptive rights,
rights of first refusal, rights of co-sale or other similar
rights which exist with respect to any of the Shares or the
issuance and sale thereof; and the Shares to be sold
hereunder have been qualified for inclusion on The Nasdaq
National Market, subject to notice of issuance.
(v) This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a
valid and binding obligations of the Company, enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity, and except
that such counsel need express no opinion as to those
provisions relating to indemnities for liabilities under the
Act.
(vi) No authorization, approval, order or consent of any
governmental authority or agency is required for the valid
issuance and sale of the
-14-
Shares, except such as may be required under the Act or
state securities laws as to which such counsel need express
no opinion.
(vii) The execution, delivery and performance by the Company
of this Agreement and the issue and sale of the Shares
will not conflict with or result in a breach of any of
the provisions of, or constitute a default under (A)
the Company's articles of incorporation or bylaws or
any agreement, franchise, license, indenture, mortgage,
deed of trust or other instrument or agreement known to
such counsel to which the Company is a party or by
which the Company is bound or to which its properties
are subject or (B) so far as known to such counsel, any
statute, order, rule or regulation applicable to the
Company of any court or other governmental authority or
body having jurisdiction over the Company or its
properties.
(viii) The Registration Statement has become effective under
the Act, and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose have been instituted or are pending or
contemplated under the Act.
(ix) The Registration Statement (including the information deemed
to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b), if applicable) as
amended or supplemented (except for the financial statements
and notes thereto, the financial statement schedules and
other statistical or financial data included therein as to
which such counsel need express no opinion) and the
Prospectus and any supplements or amendments thereto (except
for the financial statements and notes thereto, the
financial statement schedules and other statistical or
financial data included therein, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules
promulgated thereunder and nothing has come to the attention
of such counsel that would cause such counsel to believe
that the Registration Statement (including the information
deemed to be part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A(b), if applicable) as
amended or supplemented (except for the financial statements
and notes thereto, the financial statement schedules and
other statistical or financial data included therein as to
which such counsel need express no opinion) at the time it
became effective, and at the Closing Date, contained any
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 not misleading, or
that, as of its date, the Prospectus or any amendment
-15-
or supplement thereto (except for the financial statements
and notes thereto, the financial statement schedules and
other statistical or financial data included therein as to
which such counsel need express no opinion) included or
includes any untrue statement of a material fact or omitted
or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading. [If used, the
Rule 434 Prospectus conforms to the requirements of Rule 434
of the Act.]
(x) The statements in the Prospectus in the sections captioned
"Description of Securities of the Company," "The
Acquisitions" and "Supervision and Regulation" in each case
insofar as such statements constitute matters of law,
summaries of law or legal conclusions have been reviewed by
counsel and accurately present and summarize, in all
material respects, the matters described herein.
(xi) To the knowledge of such counsel there are no statutes or
regulations or any pending or threatened litigation or
governmental proceedings against the Company required to be
described in the Prospectus which are not so described, nor
of any contracts or documents of a character required to be
described in or filed as a part of the Registration
Statement which are not described or filed as required.
(xii) To such counsel's knowledge, except as disclosed in the
Prospectus, no person has the right, contractual or
otherwise, to cause the Company to register pursuant to
the Act any shares of capital stock of the Company upon
the issuance and sale of the Shares to be sold by the
Company to the Underwriter pursuant to this Agreement.
(xiii) Neither the Company nor the Bank is an "investment
company" or a person "controlled by" an "investment
company" within the meaning of the Investment Company
Act.
(xiv) To such counsel's knowledge, all offers and sales of
the Company's capital stock prior to the date hereof
were at all relevant times exempt from the
registration requirements of the Act and were duly
registered or the subject of an available exemption
from the registration requirements of the applicable
state securities or Blue Sky laws.
In rendering such opinion, such counsel may state that it is relying upon
the certificate of the officers of the Company and the transfer agent for the
Common Stock, as to the number of shares of Common Stock at any time or times
outstanding, and that insofar as its opinion under clause (x) above relates to
the accuracy and completeness of the Prospectus and Registration
-16-
Statement, it is based upon a general review with the Company's
representatives and independent accountants of the information contained
therein, without independent verification by such counsel of the accuracy or
completeness of such information. Such counsel may also rely upon the
opinions of other competent counsel and, as to factual matters, on
certificates of officers of the Company and its subsidiaries and of state
officials, in which case its opinion is to state that it is so doing and
copies of such opinions or certificates are to be attached to the opinion
unless such opinions or certificates (or, in the case of certificates, the
information therein) have been furnished to the Underwriter otherwise.
(d) The Underwriter shall have received on the Closing Date a
favorable opinion dated the Closing Date from Rothgerber, Appel, Powers &
▇▇▇▇▇▇▇ LLP, counsel for the Underwriter, as to such matters as the
Underwriter may reasonably require.
(e) On the Closing Date and Second Closing Date, the Underwriter
shall have received letters addressed to the Underwriter and dated the date
hereof and the Closing Date from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, independent public
accountants for the Company, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., independent
public accountants for Texas Bank, and ▇▇▇▇▇▇▇▇▇▇▇▇▇ & Company P.C.,
independent public accountants for Texas National and First Bank, in a form
and substance reasonably satisfactory to the Underwriter. There shall not
have been any change or decrease specified in the letters referred to in this
subparagraph which makes it impractical or inadvisable in the judgment of the
Underwriter to proceed with the public offering or purchase of the Shares as
contemplated hereby.
(f) (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short- or long-term debt of the Company or the
Acquired Banks from that set forth or contemplated in the Registration
Statement; (iii) there shall not have been, since the respective dates as to
which information is given in the Registration Statement and the Prospectus,
except as may otherwise be set forth or contemplated in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition or results of operations of the Company or any of the Acquired
Banks; (iv) the Company shall not have incurred any material liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), other than those reflected in the Registration Statement; (v) the
acquisition of the Acquired Banks shall have been consummated or, if not yet
consummated, the Company shall not have knowledge of any circumstance raising
substantial doubt that any of such acquisitions will be timely consummated;
and (vi) all of the representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on and
as of the date hereof and the Closing Date as if made on and as of each such
date and the Underwriter shall have received a certificate, dated the Closing
Date and signed by the chief executive officer and the principal financial
officer (or such other officers as are acceptable to the Underwriter) to the
effect set forth in this Section 6(f) and in Section 6(g) hereof.
-17-
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with by
it at or prior to the Closing Date.
(h) Within 24 hours after the Registration Statement becomes
effective, or within such longer period as to which the Underwriter shall
have consented, the Shares shall have been qualified for sale or exempted
from such qualification under the securities laws of such jurisdictions as
the Underwriter shall have designated and such qualification or exemption
shall continue in effect to and including the Closing Date.
(i) Prior to the Closing Date, the Company shall have furnished to
the Underwriter or the Underwriter's counsel such further information,
certificates and documents as the Underwriter or the Underwriter's counsel
may reasonably request.
The obligations of the Underwriter to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Option Closing
Date of the conditions set forth in paragraphs (a) through (i); except that
the opinions called for in paragraphs (c) and (d) shall be revised to reflect
the sale of Additional Shares and shall be dated the Option Closing Date, if
different from the Closing Date.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of the
Act or the Exchange Act from and against any and all losses, claims, damages or
liabilities, joint or several, whatsoever (including any investigation, legal or
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted) to which the
Underwriter, or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Registration Statement or the Prospectus or in any
amendment or supplement thereto or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading and will reimburse
the Underwriter for any legal or other expenses reasonably incurred by the
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred, except insofar as such losses, claims,
damages or liabilities arise out of or are based upon any such untrue statement
or omission or allegation thereof which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating to the
Underwriter furnished in writing to the Company by the Underwriter expressly for
use therein; provided, however, that the indemnification contained in this
paragraph with respect to any preliminary prospectus shall not inure to the
benefit of the Underwriter (or of any person controlling the Underwriter) with
respect to any action or claim arising from the sale of the Shares by the
Underwriter brought by any person who purchased Shares from the Underwriter if
(i) a copy of the Prospectus (as amended or supplemented if any amendments or
supplements thereto shall have been furnished to the
-18-
Underwriter prior to the written confirmation of the sale involved) shall not
have been given or sent to such person by or on behalf of the Underwriter
with or prior to the written confirmation of the sale involved and (ii) the
untrue statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus (as amended or supplemented if
amended or supplemented as aforesaid).
(b) If any action or claim shall be brought against the Underwriter
or any person controlling the Underwriter, in respect of which indemnity may
be sought against the Company, the Underwriter shall promptly notify the
Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses.
The Underwriter or any such person controlling the Underwriter shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Underwriter or such controlling person unless (i) the Company
has agreed in writing to pay such fees and expenses, (ii) the Company has
failed to assume the defense and employ counsel, or (iii) the named parties
to any such action (including any impleaded party) included the Underwriter
or controlling person and the Company and the Underwriter or controlling
person shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the Company and which may also result in a conflict of
interest (in which case if the Underwriter or controlling person notifies the
Company, the Company shall not have the right to assume the defense of such
action on behalf of the Underwriter or controlling person, it being
understood, however, that the Company shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys for the Underwriter and any such controlling
persons, which firm shall be designated in writing by the Underwriter). The
Company shall not be liable for any settlement or any such action effected
without the written consent of the Company, but if settled with the written
consent of the Company, or if there shall be a final judgment for the
plaintiff in any such action and the time for filing all appeals has expired,
the Company agrees to indemnify and hold harmless the Underwriter and any
such controlling person from and against any loss or liability by reason of
such settlement or judgment.
(c) The Underwriter will indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and any person
controlling the Company within the meaning of the Act or the Exchange Act to the
same extent as the foregoing indemnity from the Company to the Underwriter, but
only with respect to information relating to the Underwriter furnished in
writing to the Company by the Underwriter expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus. If any action or claim
shall be brought or asserted against the Company, any of its directors, any such
officer, or any such controlling person based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity may
be sought against the Underwriter, the Underwriter shall have the rights and
duties given to the Company pursuant to Section 7(b) hereof (except that if the
Company shall have assumed the defense thereof, the Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
the defense
-19-
thereof but the fees and expenses of such counsel shall be at the expense of
the Underwriter), and the Company, its directors, any such officer, and any
such controlling person shall have the rights and duties given to the
Underwriter by Section 7(b) hereof.
(d) (i) If the indemnification provided for in this Section 7 is
unavailable as a matter of law to any indemnified party under this Section 7
in respect of any losses, claims, damages, liabilities or expenses referred
to therein, then the indemnifying party in lieu of indemnifying such
indemnified party thereunder shall contribute to the amount paid or payable
by damages, liabilities or expenses (A) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Underwriter
from the offering of the Shares or (B) if the allocation provided by clause
(A) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(A) above but also the relative fault of the Company and the Underwriter in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriter shall be deemed to be in the same proportion, in
the case of the Company as the total price paid to the Company for the Shares
by the Underwriter (net of underwriting discount but before deducting
expenses), and in the case of the Underwriter as the underwriting discount
received by it, bears to the total of such amounts paid to the Company and
received by the Underwriter as underwriting discount, in each case as
contemplated by the Prospectus. The relative fault of the Company and the
Underwriter shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to
in this section shall be deemed to include, subject to the limitations set
forth in this section, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.
(ii) The Company and the Underwriter agree that the
determination of contribution pursuant to this section based on pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph would not be just and equitable. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Underwriter
or any person controlling the Underwriter, the Company or its directors or
officers (or any person controlling the Company), (ii) acceptance of any
Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor or assign of the Underwriter, the Company or its
directors or officers, and their legal and personal representatives
-20-
(or of any person controlling the Underwriter or the Company) shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this section.
SECTION 8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective immediately as to Sections 5, 7, 8, 9 and 10 and as to all other
provisions at 10:00 a.m., San Francisco time, on the day following the date
upon which this Agreement is executed and delivered, unless such a day is a
Saturday, Sunday or holiday (and in that event this Agreement shall become
effective at such hour on the business day next succeeding such Saturday,
Sunday or holiday); but this Agreement shall nevertheless become effective at
such earlier time after the Pricing Agreement is executed and delivered as
the Underwriter may determine on and by notice to the Company or by release
of any Shares for sale to the public. For the purposes of this section, the
Shares shall be deemed to have been so released upon the release for
publication of any newspaper advertisement relating to the Shares or upon the
release by the Underwriter of telegrams (i) advising that the Shares are
released for public offering, or (ii) offering the Shares for sale to
securities dealers, whichever may occur first.
SECTION 9. TERMINATION OF AGREEMENT. The Underwriter shall have the
right to terminate this Agreement at any time prior to the Closing Date (and
with respect to the Additional Shares, the Option Closing Date) by notice to
the Company from the Underwriter, without liability (other than with respect
to Section 7) on the Underwriter's part to the Company if, on or prior to
such date, (i) the Company shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed
hereunder, (ii) any other condition to the obligations of the Underwriter
hereunder as provided in Section 6 is not fulfilled when and as required in
any material respect, (iii) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the NASD Automated Quotation
System shall have been suspended or materially limited, or minimum prices
shall have been established on any such exchange by the Commission, or by
such exchange or other regulatory body or governmental authority having
jurisdiction, (iv) a general Banking moratorium shall have been declared by
federal or Texas state authorities, (v) there is a material outbreak or
escalation of armed hostilities involving the United States on or after the
date hereof, or if there has been a declaration by the United States of a
national emergency or war, the effect of which shall be, in the Underwriter's
reasonable judgment, to make it inadvisable or impracticable to proceed with
the public offering or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus as supplemented or amended prior to the
occurrence of such event, (vi) in the Underwriter's reasonable opinion any
material adverse change shall have occurred since the respective dates as of
which information is given in the Registration Statement or the Prospectus
(as supplemented or amended prior to the occurrence of such event) in the
condition (financial or other) of the Company or any of the Acquired Banks
whether or not arising in the ordinary course of business other than as set
forth in the Prospectus as supplemented or amended prior to the occurrence of
such event, or (vii) there shall have been such a material adverse change in
general economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States shall
be such as, in the Underwriter's reasonable opinion, makes it inadvisable or
impracticable to proceed with the delivery of the Shares as contemplated
hereby. Notice of
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such cancellation shall be given to the Company by telecopy or telephone but
shall be subsequently confirmed by letter.
SECTION 10. REIMBURSEMENT OF UNDERWRITER'S EXPENSES. If the sale to the
Underwriter of the Shares on the Closing Date is not consummated because any
condition to the Underwriter's obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless
such failure to satisfy such condition or to comply with any provision hereof
is due to the default or omission of the Underwriter, the Company agrees to
reimburse the Underwriter upon demand, subject to the limits set forth in
this Agreement, for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by the Underwriter in
connection with the proposed purchase and the sale of the Shares. Any such
termination shall be without liability of any party to any other party except
that the provisions of this section, Section 4(j), Section 5 and Section 7
shall at all times be effective and shall apply.
SECTION 11. NOTICES. Except as otherwise provided in Section 9 hereof,
notice given pursuant to any of the provisions of this Agreement shall be in
writing and shall be delivered (a) if to the Company, at the office of the
Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇.
▇▇▇▇▇▇, President; with a copy to Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.;
or (b) if to the Underwriter, at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; with a copy to Rothgerber, Appel, Powers &
▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, Esq., or in any case to such other address
as the person to be notified may have requested in writing.
SECTION 12. SUCCESSORS. The Agreement and the Pricing Agreement are
made solely for the benefit of the Underwriter, the Company, their directors
and officers and other controlling persons referred to in Section 7 hereof,
and their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or the Pricing
Agreement. The term "successors and assigns" as used in this Agreement shall
not include a purchaser from the Underwriter of any of the Shares in his
status as such purchaser.
SECTION 13. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 14. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State
of California.
SECTION 15. COUNTERPARTS. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
BAY BANCSHARES, INC.
By:
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: President
Accepted and delivered as of
the date first written above
▇▇▇▇▇▇ & ▇▇▇▇▇▇ INCORPORATED
By:
-------------------------
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SELECTED DEALERS AGREEMENT
__________________, 1997
▇▇▇▇▇▇ & ▇▇▇▇▇▇, INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. GENERAL. We understand that ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Incorporated ("▇▇▇▇▇▇
& ▇▇▇▇▇▇") is entering into this Agreement with us and other firms who may be
offered the right to purchase as principal a portion of securities being
distributed to the public. The terms and conditions of this Agreement shall
be applicable to any public offering of securities ("Securities") pursuant to
a registration statement filed under the Securities Act of 1933 (the
"Securities Act") wherein ▇▇▇▇▇▇ & ▇▇▇▇▇▇ (acting for its own account or for
the account of any underwriting or similar group or syndicate) is responsible
for managing or otherwise implementing the sale of the Securities to selected
dealers ("Selected Dealers") and has expressly informed us that such terms
and conditions shall be applicable. Any such offering of Securities to us as
a Selected Dealer is hereinafter called an "Offering." In the case of any
Offering in which you are acting for the account of any underwriting or
similar group or syndicate ("Underwriters"), the terms and conditions of this
Agreement shall be for the benefit of, and binding upon, such Underwriters,
including, in the case of any Offering in which you are acting with others as
representatives of Underwriters, such other representatives. The term
"preliminary prospectus" means any preliminary prospectus relating to an
Offering of Securities or any preliminary prospectus supplement together with
a prospectus relating to an Offering of Securities; the term "Prospectus"
means the prospectus, together with the final prospectus supplement, if any,
relating to an Offering of Securities, either filed pursuant to Rule 424(b)
or Rule 424(c) under the Securities Act or, if no such filing is required,
the form of final prospectus contained in the related registration statement
at the time that it first becomes effective.
2. CONDITIONS OF OFFERING; ACCEPTANCE AND PURCHASE. Any Offering will
be subject to delivery of the Securities and their acceptance by you and any
other Underwriters, may be subject to the approval of certain legal matters
by counsel and the satisfaction of other conditions, and may be made on the
basis of reservation of Securities or an allotment against subscription. You
will advise us by telegram, telex, or other form of written communication
("Written Communication") of the particular method and supplementary terms
and conditions (including, without limitation, the information as to prices
and offering date referred to ion Section 3(b)) of any Offering in which we
are invited to participate. To the extent such supplementary terms and
conditions are inconsistent with any provision herein, such terms and
conditions shall supersede any
such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with respect to any
Offering should be sent to ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Incorporated, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. You reserve the right
to reject any acceptance in whole or in part. Payment for Securities
purchased by us is to be made at such office as you may designate, at the
public offering price, or, if you shall so advise us, at such price less the
concession to dealers or at the price set forth or indicated in a Written
Communication, on such date as you shall determine, on one days' prior notice
to us, by certified or official bank check payable in next day funds to the
order of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, against delivery of certificates evidencing such
Securities. If payment is made for Securities purchased by us at the public
offering price, the concession to which we shall be entitled will be paid to
us upon termination of the provisions of Section 3(b) hereof with respect to
such Securities.
Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, payment for and delivery of Securities purchased by
us will be made through such facilities if we are a member, or if we are not
a member, settlement may be made through or ordinary correspondent who is a
member.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENT.
(a) PROSPECTUSES. You shall provide us with such number of copies of
each preliminary prospectus, the Prospectus and any supplement thereto relating
to each Offering as we may reasonably request for the purposes contemplated by
the Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act")
and the applicable rules and regulations of the Securities and Exchange
Commission thereunder. We represent that we are familiar with Rule 15c2-8 under
the Exchange Act relating to the distribution of preliminary and final
prospectuses and agree that we will comply therewith. We agree to keep an
accurate record of our distribution (including dates, number of copies, and
persons to whom sent) of copies of the Prospectus or any preliminary prospectus
(or any amendment or supplement to any thereof), and promptly upon request by
you, to bring all subsequent changes to the attention of anyone to whom such
material shall have been furnished. We agree to furnish to persons who receive
a confirmation of sale a copy of the Prospectus. We agree that in purchasing
Securities in an Offering we will rely upon no statements in the Prospectus
delivered to us by you. We will not be authorized by the issuer or other seller
of Securities offered pursuant to a Prospectus or by any Underwriters to give
any information or to make any representation not contained in the Prospectus in
connection with the sale of such Securities.
(b) OFFER AND SALE TO THE PUBLIC. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public
offering price,
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the selling concession, the reallowance (if any) to dealers, and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession, and the reallowance to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
pubic offering price, except that if a reallowance is in effect, a
reallowance from the public offering price not in excess of such reallowance
may be allowed as consideration for services rendered in distribution to
dealers who are actually engaged in the investment banking or securities
business, who execute the written agreement prescribed by Section 24(c) of
Article III of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") and who are either members in good
standing of the NASD or foreign brokers or dealers not eligible for
membership in the NASD who represent to us that they will promptly reoffer
such Securities at the public offering price and will abide by the conditions
with respect to foreign brokers and dealers set forth in Section 3(e) hereof.
(c) STABILIZATION AND OVERALLOTMENT. You may, with respect to any
Offering, be authorized to overallot in arranging sales to Selected Dealers,
to purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such
issuer that you may designate for long or short account, and to stabilize or
maintain the market price of the Securities. We agree to advise you from
time to time upon request, prior to the termination of the provisions of
Section 3(b) with respect to any Offering, of the amount of Securities
purchased by us hereunder remaining unsold and we will, upon your request,
sell to you, for the accounts of the Underwriters, such amount of Securities
as you may designate, at the public offering price thereof less an amount to
be determined by you not in excess of the concession to dealers. In the
event that prior to the later of (i) the termination of the provisions of
Section 3(b) with respect to any Offering, or (ii) the covering by you of any
short position created by you in connection with such Offering for your
account or the account of one or more Underwriters, you purchase or contract
to purchase for the account or the account of one or more Underwriters, you
purchase or contract to purchase for the account of any of the Underwriters,
in the open market or otherwise, any Securities theretofore delivered to us,
you reserve the right to withhold the above-mentioned concession to dealers
on such Securities if sold to us at the public offering price, or if such
concession has been allowed to us through our purchase at a net price, we
agree to repay such concession upon your demand, plus in each case any taxes
on redelivery, commissions, accrued interest, and dividends paid in
connection with such purchase or contract to purchase.
(d) OPEN MARKET TRANSACTIONS. We agree not to bid for, purchase,
attempt to purchase, or sell, directly or indirectly, any Securities, any
other securities of the issuer of the Securities of the same class and
series, or any other securities of such
3
issuer as you may designate, except as brokers pursuant to unsolicited orders
and as otherwise provided in this Agreement. If the Securities are common
stock or securities convertible into common stock, we agree not to effect, or
attempt to induce others to effect, directly or indirectly, any transactions
in or relating to put or call options on any stock of such issuer, except to
the extent permitted by Rule 10b-6 under the Exchange Act as interpreted by
the Securities and Exchange Commission.
(e) NASD. We represent that we are actually engaged in the
investment banking or securities business and we are either a member in good
standing of the NASD, or, if not such a member, a foreign dealer not eligible
for membership. If we are such a member, we agree that in making sales of
the Securities we will comply with all applicable rules of the NASD,
including, without limitation, the NASD's Interpretation with Respect to
Free-Riding and Withholding and Section 24 of Article III of the Rule of Fair
Practice. If we are such a foreign dealer, we agree not to offer or sell any
Securities in the United States of America except through you and in making
sales of Securities outside the United States of America we agree to comply
as though we were a member with such Interpretation and Sections 8, 24, and
36 of Article III of the NASD's Rules of Fair Practice and to comply with
Section 25 of such Article III as it applies to a non-member broker or dealer
in a foreign country.
(f) RELATIONSHIP AMONG UNDERWRITERS AND SELECTED DEALERS. You may
buy Securities from or sell Securities to any Underwriter or Selected Dealer
and, with your consent, the Underwriters (if any) and the Selected Dealers
may purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized
to act as agent for you or any Underwriter or the issuer or other seller of
any Securities in offering Securities to the public or otherwise. Nothing
contained herein or in any Written Communication from you shall constitute
the Selected Dealers partners with you or any Underwriter or with one
another. Neither you nor any Underwriter shall be under any obligation to us
except for obligations assumed hereby or in any Written Communication from
you in connection with any Offering. In connection with any Offering, we
agree to pay our proportionate share of any claim, demand, or liability
asserted against us, and the other Selected Dealers or any of them, or
against you or the Underwriters, if any, based on any claim that such
Selected Dealers or any of them constitute an association, unincorporated
business, or other separate entity, including in each case our proportionate
share of any expense incurred in defending against any such claim, demand, or
liability.
(g) BLUE SKY LAWS. Upon application to you, you will inform us as
to the jurisdictions in which you believe the Securities have been qualified
for sale under the respective securities or "blue sky" laws of such
jurisdictions. We understand and agree that compliance with the securities or
"blue sky" laws in each jurisdiction in which we shall offer or sell any of
the Securities shall be our sole responsibility and that you
4
assume no responsibility or obligations as to the eligibility of the
Securities for sale or our right to sell the Securities in any jurisdiction.
(h) COMPLIANCE WITH LAW. We agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of
the issuer or other seller of such Securities), we will comply with the
applicable provisions of the Securities Act and the Exchange Act, the
applicable rules and regulations of the Securities and Exchange Commission
thereunder and the applicable rules and regulations of any securities
exchange having jurisdiction of the Offering. You shall have full authority
to take such action as you may deem advisable in respect of all matters
pertaining to any Offering. Neither you nor any Underwriter shall be under
any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; PROVIDED, HOWEVER, that nothing
in this sentence shall be deemed to relieve you from any liability imposed by
the Securities Act.
4. TERMINATION; SUPPLEMENTS AND AMENDMENTS. This Agreement may be
terminated by either party hereto upon five business days' written notice to
the other party; PROVIDED that with respect to any Offering for which Written
Communication was sent and accepted prior to such notice, this Agreement as
it applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence
of this Section. This Agreement may be supplemented or amended by you by
written notice thereof to us, and any such supplement or amendment to this
Agreement shall be effective with respect to any Offering to which this
Agreement applies after the date of such supplement or amendment. Each
reference to "this Agreement" herein shall, as appropriate, be to this
Agreement as so amended and supplemented. The terms and conditions set forth
in Sections 3(b) and (d) hereof with regard to any Offering will terminate at
the close of business on the thirtieth day after the date of the initial
public offering of the Securities to which such Offering related, but such
terms and conditions, upon notice to us, may be terminated by you at any time.
5. SUCCESSOR AND ASSIGNS. This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and other persons specified or
indicated in Section 1 hereof, and the respective successors and assigns of
each of them; PROVIDED, HOWEVER, that we may not assign our rights or
delegate any of our duties under this Agreement without your prior written
consent.
6. GOVERNING LAW. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such supplementary
terms and conditions with respect to such Offering as may be contained in any
Written Communication from you to us in connection therewith shall be
governed by, and construed in accordance with, the laws of the State of
California.
5
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering
shall constitute (i) acceptance of and agreement to the terms and conditions
of this Agreement (as supplemented and amended pursuant to Section 4)
together with and subject to any supplementary terms and conditions contained
in any Written Communication from you in connection with such Offering, all
of such shall constitute a binding agreement between us and you,
individually, or as representative of any Underwriters, (ii) in confirmation
that our representations and warranties set forth in Section 3 hereof are
true and correct at that time and (iii) confirmation that our agreements set
forth in Sections 2 and 3 hereof have been and will be fully performed by us
to the extent and at the time required thereby.
Very truly yours,
------------------------------------
(Name of Firm)
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
Confirmed, as of the date
first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇▇, INCORPORATED
By:
--------------------------
Name:
------------------------
Title:
------------------------
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