EXHIBIT 1.1
_________ Shares of Common Stock
(Par Value $1.00 Per Share)
FORM OF UNDERWRITING AGREEMENT
_____________, 2004
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated
▇▇▇▇▇▇ & ▇▇▇▇▇▇, Incorporated
as Co-representatives of the Several Underwriters
named in Schedule I hereto
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Texas United Bancshares, Inc., a Texas corporation (the "Company")
proposes to issue and sell to the several underwriters listed on Schedule I
hereto (the "Underwriters"), pursuant to the terms of this Agreement,
_____________ shares of the Company's common stock, $1.00 par value per share
(the "Common Stock"). The aforementioned ________ shares of Common Stock to be
sold to the Underwriters are herein called the "Firm Shares." Solely for the
purpose of covering over-allotments in the sale of the Firm Shares, the Company
further proposes to issue and sell to the Underwriters, at their option, up to
an additional _______ shares of Common Stock (the "Option Shares") upon exercise
of the over-allotment option granted in Section 1 hereof. The Firm Shares and
any Option Shares are herein collectively referred to as the "Designated
Shares." ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated and ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Incorporated are acting as co-representatives of the Underwriters and in such
capacity are sometimes herein referred to as the "Representatives."
The Company hereby confirms as follows its agreement with each of the
Underwriters in connection with the proposed purchase of the Designated Shares.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED SHARES, DESCRIPTION OF
DESIGNATED SHARES.
On the basis of the representations, warranties and agreements herein
contained, and subject to the terms and conditions herein set forth, the Company
hereby agrees to issue and sell to each of the Underwriters and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
the respective number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto, plus any additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 of this Agreement at a purchase price of $_____ per Firm
Share, other than sales aggregating no more than $1,500,000 to such persons
identified by the Company and provided to the Underwriters in writing prior to
the Closing Date, with respect to which the purchase price shall be $____ per
Firm Share (either purchase price being referred to herein as the "Purchase
Price"). The Representatives may by notice to the Company amend Schedule I to
add, eliminate or substitute names set forth therein (other than to eliminate
the names of the Representatives) and to amend the number of Firm Shares to be
purchased by any firm or corporation listed thereon, provided that the total
number of Firm Shares listed on Schedule I shall equal ________.
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants to the Underwriters,
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severally and not jointly, an option to purchase all or any portion of the
______ Option Shares, and upon the exercise of such option in accordance with
this Section 1, the Company hereby agrees to issue and sell to the Underwriters,
severally and not jointly, all or any portion of the Option Shares at a purchase
price of $_____ per Option Share; provided, that the purchase price per share
for any Option Shares purchased upon the exercise of the over-allotment option
shall be reduced by an amount equal to any dividends or distributions declared
by the Company and payable on the Firm Shares but not payable on the Option
Shares. If any Option Shares are to be purchased, each Underwriter, severally
and not jointly, agrees to purchase from the Company that proportion (subject to
adjustment as the Representatives may determine to avoid fractional shares) of
the number of Option Shares to be purchased that the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to _________. The option
hereby granted (the "Option") shall expire 30 days after the date upon which the
Registration Statement (as hereinafter defined) becomes effective and may be
exercised only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Firm Shares. The Option may
be exercised in whole or in part at any time (but not more than once) by the
Representatives giving notice (confirmed in writing) to the Company setting
forth the number of Option Shares as to which the Underwriters are exercising
the Option and the time, date and place for payment and delivery of the
certificates for such Option Shares. Such time and date of payment and delivery
for the Option Shares (the "Option Closing Date") shall be determined by you,
but shall not be earlier than two nor later than five full business days after
the exercise of such Option, nor in any event prior to the Closing Date (as
hereinafter defined). The Option Closing Date may be the same as the Closing
Date.
Payment of the Purchase Price for the Firm Shares shall be made at the
offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as shall be agreed to by
the Representatives and the Company, at 10:00 a.m., St. Louis time, on the third
(or, if permitted by Rule 15c6-1(c) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), not later than 12:00 p.m. on the fourth) full business
day following the date of this Agreement (the "Closing Date"), or unless
postponed in accordance with the provisions of Section 9. If the Underwriters
exercise the option to purchase any or all of the Option Shares, payment of the
Purchase Price for such Option Shares shall be made on the Option Closing Date
at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, or at such other
place as the Company and the Representatives shall determine. Such payments
shall be made to an account designated by the Company by wire transfer of same
day funds, in the amount of the aggregate Purchase Price therefor, against
delivery by or on behalf of the Company to the Representatives for the
respective accounts of the several Underwriters of certificates for the
Designated Shares to be purchased by the Underwriters.
Certificates for Designated Shares to be purchased by the Underwriters
shall be delivered by the Company to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Representative(s), not later than 12:00 noon, St. Louis time, two
business days prior to the Closing Date and, if applicable, the Option Closing
Date. Certificates for Designated Shares to be purchased by the Underwriters
shall be made available by the Company to the Underwriters for inspection,
checking and packaging at the office of DTC or its designated custodian or as
the Representatives may designate in writing not later than 1:00 p.m., St. Louis
time, on the last business day prior to the Closing Date and, if applicable, on
the last business day prior to the Option Closing Date.
Time shall be of the essence, and delivery of the certificates for the
Designated Shares at the time and place specified pursuant to this Agreement is
a further condition of the obligations of each Underwriter hereunder.
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The Company has carefully prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File Number 333-116542) for the registration of the offer and sale of the
Designated Shares under the Securities Act of 1933, as amended (the "1933 Act"),
including the related prospectus subject to completion, and one or more
amendments to such registration statement may have been so filed, in each case
in conformity with the requirements of the 1933 Act and the rules and
regulations promulgated thereunder (the "1933 Act Regulations"). Copies of such
registration statement, including any amendments thereto, each Preliminary
Prospectus (as defined herein) contained therein and the exhibits, financial
statements and schedules to such registration statement, as finally amended and
revised, have heretofore been delivered by the Company to the Representatives.
After the execution of this Agreement, the Company will file with the Commission
(A) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the 1933 Act, a prospectus in
the form most recently included in an amendment to such registration statement
(or, if no such amendment shall have been filed, in such registration
statement), with such changes or insertions as are required by Rule 430A of the
1933 Act Regulations ("Rule 430A) or permitted by Rule 424(b) of the 1933 Act
Regulations ("Rule 424(b)") and as have been provided to and not objected to by
the representatives prior to (or as are agreed to by the Representatives
subsequent to) the execution of this Agreement, or (B) if such registration
statement, as it may have been amended, has not been declared by the Commission
to be effective under the 1933 Act, an amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective, a copy of which amendment has been furnished to
and not objected to by the Representatives prior to (or is agreed to by the
Representatives subsequent to) the execution of this Agreement. As used in this
Agreement, the term "Registration Statement" means such registration statement,
as amended at the time when it was or is declared effective under the 1933 Act,
including (1) all financial statements and schedules and exhibits thereto, and
(2) any information omitted therefrom pursuant to Rule 430A and included in the
Prospectus (as hereinafter defined) (and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, the term "Registration Statement" also means such
registration statement as so amended or such Rule 462(b) Registration Statement,
as the case may be); the term "Rule 462(b) Registration Statement" means a
registration statement and any amendments thereto filed pursuant to Rule 462(b)
of the 1933 Act Regulations relating to the offering covered by the Registration
Statement; the term "Preliminary Prospectus" means each prospectus subject to
completion filed with such registration statement or any amendment thereto
(including the prospectus subject to completion, if any, included in the
Registration Statement and each prospectus filed pursuant to Rule 424(a) under
the ▇▇▇▇ ▇▇▇); and the term "Prospectus" means the prospectus first filed with
the Commission pursuant to Rule 424(b)(1) or (4) or, if no prospectus is
required to be filed pursuant to Rule 424(b)(1) or (4), the prospectus included
in the Registration Statement, in each case including the financial statements
and schedules. The date on which the Registration Statement becomes effective is
hereinafter referred to as the "Effective Date."
2. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) The reports filed with the Commission by the Company under
the 1934 Act and the rules and regulations thereunder (the "1934 Act
Regulations") at the time they were filed with the Commission complied
as to form in all material respects with the requirements of the 1934
Act and the 1934 Act Regulations and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.
(ii) The Company entered into an Agreement and Plan of Merger,
dated as of April 29, 2004 with GNB Bancshares, Inc., a Texas
corporation ("GNB"), as amended by that
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certain Amended and Restated Agreement and Plan of Merger, executed as
of June 14, 2004 and dated as of April 29, 2004 (as amended, the
"Merger Agreement"), pursuant to which GNB will merge with and into the
Company with the Company continuing as the surviving entity (the
"Merger"). A portion of the proceeds from the sale of the Designated
Shares will be used by the Company to pay the cash portion of the
consideration to be paid in the Merger. In connection with the Merger,
the Company filed with the Commission a registration statement on Form
S-4 (File No. 333-_____) which constitutes a proxy statement for each
of the Company and GNB relating to the approval of the Merger Agreement
by the shareholders of each of the Company and GNB and which
constitutes a prospectus of the Company relating to the issuance of
shares of Common Stock of the Company to shareholders of GNB as a
portion of the consideration for the Merger. As used in this Agreement,
such registration statement, including the exhibits, appendices and
schedules thereto, if any, at the time it became effective is referred
to as the "Merger Proxy/Registration Statement." For purposes of this
Agreement, all references to the Merger Proxy/Registration Statement or
any amendment or supplement thereto shall be deemed to include the copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval ("▇▇▇▇▇") system.
(iii) The Company entered into a Branch Purchase and
Assumption Agreement, dated as of May 3, 2004 (the "Branch Purchase
Agreement"), with Central Bank, a Texas banking association, pursuant
to which the Company will purchase certain loans and other assets and
assume certain deposits and other liabilities of the Lexington, Texas
and Caldwell, Texas branches of Central Bank (the "Branch Purchases").
A portion of the proceeds from the sale of the Designated Shares will
be used by the Company to repay amounts borrowed by the Company under a
line of credit with a commercial bank, the proceeds of which loan were
contributed by the Company to the Bank (as hereinafter defined) to
supplement the capital base of the Bank to facilitate the pending
Branch Purchases.
(iv) No order preventing or suspending the effectiveness of
the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the
qualification or registration of the Designated Shares for offering or
sale in any jurisdiction has been issued by the Commission, any state
or other jurisdiction or other regulatory body nor has the Commission,
any state or other jurisdiction or other regulatory body, to the
knowledge of the Company, threatened to issue such an order or
instituted proceedings for such purpose. Each Preliminary Prospectus,
at the time of filing thereof, (A) complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations, and
(B) did not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty does not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by any of the Underwriters expressly for
inclusion in the Prospectus beneath the heading "Underwriting" (such
information referred to herein as the "Underwriters' Information"). As
of the date that each Preliminary Prospectus was filed with the
Commission or as of the date that the Prospectus and any amendment or
supplement thereto was filed with the Commission (or, if not filed, on
the date provided by the Company to the Underwriters in connection with
the offering and sale of the Designated Shares), as the case may be, no
event has occurred which should have been set forth in an amendment or
supplement to any Preliminary Prospectus or the Prospectus which has
not been set forth in any Preliminary Prospectus, the Prospectus or
such an amendment or supplement. Each Preliminary Prospectus and the
Prospectus will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to its ▇▇▇▇▇ system, except
to the extent permitted by Regulation S-T.
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(v) The Registration Statement has been declared effective
under the 1933 Act, and no post-effective amendment to the Registration
Statement has been filed with the Commission as of the date of this
Agreement. At the Effective Date and at all times subsequent thereto,
up to and including the Closing Date and, if applicable, the Option
Closing Date, the Registration Statement and any post-effective
amendment thereto (A) complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations, and
(B) did not 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 does not apply to
Underwriters' Information. At the Effective Date, if not filed pursuant
to Rule 424(b), and at the date of any filing pursuant to Rule 424(b)
and at all times when the Prospectus is required to be delivered in
connection with offers and sales of Designated Shares, including,
without limitation, the Closing Date and, if applicable, the Option
Closing Date, the Prospectus, as amended or supplemented, (A) complied
and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations, and (B) did not contain 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, in light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty does not apply to Underwriters' Information. As of the date
that the Registration Statement was filed with the Commission, no event
has occurred which should have been set forth in an amendment or
supplement to such registration statement which has not then been set
forth in such an amendment or supplement. The Registration Statement
will be identical to the electronically transmitted copy thereof filed
with the Commission pursuant to its ▇▇▇▇▇ system, except to the extent
permitted by Regulation S-T.
(vi) The Company is legally permitted, pursuant to the terms
of the 1933 Act, to distribute the shares of Common Stock as required
by the Merger Agreement pursuant to the Merger Proxy/Registration
Statement. At the time the Merger Proxy/Registration Statement is
declared effective under the 1933 Act, on the dates that the Merger
Proxy/Registration Statement is delivered to the respective
shareholders of the Company and/or GNB and at the Merger Effective
Date, the Merger Proxy/Registration Statement will comply in all
material respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act 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.
(vii) The Company is duly incorporated, validly existing and
in good standing under the laws of the State of Texas, with full
corporate and other power and authority to own, lease and operate its
properties and conduct its business as described in and contemplated by
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, in each Preliminary Prospectus) and as currently
being conducted and is duly registered as a bank holding company and a
financial holding company under the Bank Holding Company Act of 1956,
as amended (the "BHC Act").
(viii) GNB is duly incorporated, validly existing and in good
standing under the laws of the State of Texas, with full corporate and
other power and authority to own, lease and operate its properties and
conduct its business as described in and contemplated by the
Registration Statement, the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus), and the Merger
Proxy/Registration Statement and as currently being conducted and is
duly registered as a bank holding company under the BHC Act.
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(ix) The Company has only the direct and indirect subsidiaries
identified on Exhibit A-1 attached hereto and incorporated herein (the
"Subsidiaries"). The Company does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries.
Each Subsidiary is a corporation, business trust, or bank duly
organized or incorporated, as the case may be, validly existing and in
good standing under the laws of its respective jurisdiction of
organization. Each such Subsidiary has full power and authority to own,
lease and operate its properties and to conduct its business as
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus) and as currently being conducted. The deposit
accounts of State Bank (the "Bank") are insured by the Bank Insurance
Fund administered by the Federal Deposit Insurance Corporation (the
"FDIC") up to the maximum amount provided by law, and no proceedings
for the modification, termination or revocation of any such insurance
are pending or, to the knowledge of the Company, threatened.
(x) GNB has only the direct and indirect subsidiaries
identified on Exhibit A-2 attached hereto and incorporated herein (the
"GNB Subsidiaries"). GNB does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the GNB
Subsidiaries. Each GNB Subsidiary is a corporation, business trust, or
bank duly organized or incorporated, as the case may be, validly
existing and in good standing under the laws of its respective
jurisdiction of organization. Each such GNB Subsidiary has full power
and authority to own, lease and operate its properties and to conduct
its business as described in and contemplated by the Registration
Statement, the Prospectus (or, if the Prospectus is not in existence,
in each Preliminary Prospectus), and the Merger Proxy/Registration
Statement and as currently being conducted. The deposit accounts of GNB
Financial, n.a. are insured by the Bank Insurance Fund administered by
the FDIC up to the maximum amount provided by law, and no proceedings
for the modification, termination or revocation of any such insurance
are pending or, to the knowledge of the Company, threatened.
(xi) The Company and each of the Subsidiaries and GNB and each
of the GNB Subsidiaries is duly qualified to transact business as a
foreign corporation, bank, or business trust, as the case may be, and
is in good standing in each other jurisdiction in which it owns or
leases property or conducts its business so as to require such
qualification and in which the failure to so qualify is reasonably
likely, individually or in the aggregate, to have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business prospects, business or results of operations of the Company
and the Subsidiaries on a consolidated basis.
(xii) All of the issued and outstanding shares of capital
stock of Texas United Nevada, Inc., State Bank and Community Home Loan,
Inc., and all of the issued and outstanding common securities of TXUI
Statutory Trust I and TXUI Statutory Trust II (A) have been duly
authorized and are validly issued, (B) are fully paid and
nonassessable, and (C) are wholly owned, directly or indirectly, by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, restriction upon voting or transfer, preemptive
rights, claim, equity or other defect. There are no outstanding rights,
warrants or options to acquire or instruments convertible into or
exchangeable for any capital stock or equity securities of the
Subsidiaries. All of the issued and outstanding shares of capital stock
of Guaranty National Bancshares, Inc. and GNB Financial, National
Association, and all of the issued and outstanding common securities of
GNB Capital Trust I (A) have been duly authorized and are validly
issued, (B) are fully paid and nonassessable, and (C) are wholly owned,
directly or indirectly, by GNB free and clear of any security interest,
mortgage, pledge, lien, encumbrance, restriction upon voting or
transfer, preemptive rights, claim, equity or other defect. There are
no outstanding rights, warrants or
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options to acquire or instruments convertible into or exchangeable for
any capital stock or equity securities of the GNB Subsidiaries.
(xiii) The capital stock of the Company conforms to the
description thereof contained in the Prospectus (or, if the Prospectus
is not in existence, in each Preliminary Prospectus). The outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and no such shares
were issued in violation of the preemptive or similar rights of any
security holder of the Company. No person has any preemptive or similar
right to purchase any shares of capital stock or equity securities of
the Company. Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus), there
are no outstanding rights, options or warrants to acquire any
securities of the Company, and there are no outstanding securities
convertible into or exchangeable for any securities of the Company and
no restrictions upon the voting or transfer of any capital stock of the
Company 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 the Company is bound. As of the date set forth therein, the
Company had an authorized and outstanding capitalization as set forth
in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, in each Preliminary Prospectus) under the caption
"Capitalization".
(xiv) The Company has all requisite power and authority to
issue, sell and deliver the Designated Shares in accordance with and
upon the terms and conditions set forth in this Agreement, the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, each Preliminary Prospectus). All corporate action
required to be taken by the Company for the reservation, authorization,
issuance, sale and delivery of the Designated Shares in accordance with
such terms and conditions has been validly and sufficiently taken. The
Designated Shares, when delivered and paid for in accordance with this
Agreement, will be duly and validly issued and outstanding and will be
fully paid and nonassessable, will not be issued in violation of or
subject to any preemptive or similar rights, and will conform to the
description thereof in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, each Preliminary
Prospectus). None of the Designated Shares, immediately prior to
delivery, will be subject to any security interest, lien, mortgage,
pledge, encumbrance, restriction upon voting or transfer, preemptive
rights, claim, equity or other defect.
(xv) The Merger Agreement was duly authorized, executed and
delivered by the Company and GNB and constitutes a valid, legal and
binding agreement of the Company and GNB, enforceable against the
Company and GNB in accordance with its terms, and conforms to the
description thereof contained in the Registration Statement, the
Prospectus (or, if the Prospectus is not in existence, each Preliminary
Prospectus), and the Merger Proxy/Registration Statement. The shares of
Common Stock of the Company when delivered pursuant to the terms of the
Merger Agreement will be duly authorized for issuance by the Company
pursuant to the Merger Agreement, will be issued, executed and
authenticated in accordance with the Merger Agreement and delivered as
provided in the Merger Agreement, and will be validly issued and fully
paid and non-assessable and conform to the description thereof in the
Merger Proxy/Registration Statement. The issuance of such shares of
Common Stock will not be subject to preemptive or other similar rights.
The net proceeds from the sale of the Designated Shares and the
Company's cash on hand will be sufficient to pay the cash consideration
payable to GNB shareholders pursuant to the Merger and related fees and
expenses.
(xvi) The Company and the Subsidiaries have complied in all
respects with all foreign, federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and
operation of their properties or the conduct of their businesses as
described in and
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contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, in each Preliminary Prospectus) and
as currently being conducted, except such noncompliance which is not
reasonably likely, individually or in the aggregate, to have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business prospects, business or results of operations of the
Company and the Subsidiaries on a consolidated basis. Neither the
Company nor any non-banking Subsidiary engages directly or indirectly
in any activity prohibited by the Board of Governors of the Federal
Reserve System (the "FRB") or the BHC Act or the regulations
promulgated thereunder.
(xvii) The Company and the Subsidiaries have all material
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, in each Preliminary Prospectus) and as currently being
conducted, except where the failure to possess such Permits would not
be reasonably likely, individually or in the aggregate, to have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business prospects, business or results of
operations of the Company and the Subsidiaries on a consolidated basis.
All such Permits are in full force and effect and each of the Company
and the Subsidiaries are in all material respects complying therewith,
and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or will result in any
other material impairment of the rights of the holder of any such
Permit. Such Permits contain no restrictions that would materially
impair the ability of the Company or the Subsidiaries to conduct their
businesses in the manner consistent with their past practices. Neither
the Company nor any of the Subsidiaries have received notice or
otherwise has knowledge of any proceeding or action relating to the
revocation or modification of any such Permit.
(xviii) Neither the Company nor any of the Subsidiaries are in
breach or violation of their corporate charter, by-laws or other
governing documents. Neither the Company nor any of the Subsidiaries is
in violation, breach or default (with or without notice or lapse of
time or both) in the performance or observance of any term, covenant,
agreement, obligation, representation, warranty or condition contained
in (A) any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, which such breach, violation or default is
reasonably likely, individually or in the aggregate with other
breaches, violations or defaults, to have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis, and to the knowledge of the
Company, no other party has asserted that the Company or any of the
Subsidiaries is in such violation, breach or default, or (B) any order,
decree, judgment, rule or regulation, including, without limitation,
Section 13 of the 1934 Act, of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, having
jurisdiction over the Company or the Subsidiaries or any of their
respective properties the breach, violation or default of which is
reasonably likely, individually or in the aggregate with other
breaches, violations or defaults, to have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(xix) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement, the Merger Agreement, the Branch Purchase Agreement, the
Registration Statement, the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus) (including, without
limitation, the issuance and
8
sale of the Designated Shares and the use of proceeds from the sale of
the Designated Shares as described in the Prospectus under the caption
"Use of Proceeds"), and the Merger Proxy/Registration Statement do not
and will not conflict with, result in the creation or imposition of any
material lien, claim, charge, encumbrance or restriction upon any
property or assets of the Company or the Subsidiaries or the Designated
Shares pursuant to, constitute a breach or violation of, or constitute
a default under, with or without notice or lapse of time or both, any
of the terms, provisions or conditions of (A) the charter or by-laws or
other governing documents of the Company or the Subsidiaries, (B) any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease, franchise, license, Permit or any other agreement or
instrument to which the Company or the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound,
or (C) any order, decree, judgment, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality,
domestic or foreign, having jurisdiction over the Company or the
Subsidiaries or any of their respective properties which conflict,
creation, imposition, breach, violation or default is reasonably likely
to have, either individually or in the aggregate, a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business prospects, business or results of operations of the Company
and the Subsidiaries on a consolidated basis. No authorization,
approval, consent or order of or filing, registration or qualification
with, any person (including, without limitation, any court,
governmental body or authority) is required in connection with the
transactions contemplated by this Agreement, the Registration Statement
and the Prospectus (or any Preliminary Prospectus), except such as have
been obtained under the 1933 Act and from the Nasdaq National Market
relating to the listing of the Designated Shares, and such as may be
required under state securities laws or Interpretations or Rules of the
National Association of Securities Dealers, Inc. ("NASD") in connection
with the purchase and distribution of the Designated Shares by the
Underwriters.
(xx) The Company has all requisite power and authority to
enter into this Agreement and this Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally, and except to
the extent that the indemnification and contribution provisions of
Section 9 hereof may be limited by federal or state securities laws and
public policy considerations in respect thereof.
(xxi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business, in
each case free and clear of all security interests, liens, mortgages,
pledges, encumbrances, restrictions, claims, equities and other defects
except such as are referred to in the Prospectus (or, if the Prospectus
is not in existence, in each Preliminary Prospectus) or such as do not
materially affect the value of such property in the aggregate and do
not materially interfere with the use made or proposed to be made of
such property; and all of the leases under which the Company or the
Subsidiaries hold real or personal property are valid and existing
leases, enforceable against the parties thereto, and in full force and
effect with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real or
personal property, and neither the Company nor any of the Subsidiaries
is in default in any material respect of any of the terms or provisions
of any material leases.
(xxii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain of the
consolidated financial statements of the Company and the Subsidiaries
including the notes thereto, included in the Registration Statement and
Prospectus, are independent public accountants with respect to the
Company and the Subsidiaries, as required by the 1933 Act and the 1933
Act Regulations.
9
(xxiii)
(A) The consolidated financial statements including
the notes thereto, included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus) with respect to the Company and the
Subsidiaries comply with the 1933 Act and the 1933 Act Regulations and
present fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries as of the dates indicated
and the consolidated results of operations, cash flows and
shareholders' equity of the Company and the Subsidiaries for the
periods specified and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. The
selected consolidated financial data concerning the Company and the
Subsidiaries included in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, in each Preliminary
Prospectus) comply in all material respects with the 1933 Act and the
1933 Act Regulations, present fairly, in all material respects, the
information set forth therein, have been derived from the financial
statements or operating records of the Company and have been compiled
on a basis consistent with that of the consolidated financial
statements of the Company and the Subsidiaries in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus).
(B) The summary pro forma consolidated financial
information and the pro forma combined consolidated financial
information included in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, in each Preliminary
Prospectus) present fairly, in all material respects, the information
relating to the Company, and the information relating to the Branch
Purchases, shown therein, and have been compiled on a basis consistent
with that of the audited consolidated financial statements of the
Company and the assumptions underlying the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(C) The other financial, statistical and numerical
information included in the Registration Statement and the Prospectus
(or such Preliminary Prospectus) is accurate in all material respects,
complies with the 1933 Act and the 1933 Act Regulations, has been
derived from the financial statements or operating records of the
Company, presents fairly, in all material respects, the information
shown therein, and to the extent applicable has been compiled on a
basis consistent with the consolidated financial statements of the
Company and the Subsidiaries included in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus).
(xxiv) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under
the 1934 Act), which (A) are designed to ensure that material
information relating to the Company, including its consolidating
subsidiaries, is made known to the Company's principal executive
officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared, (B) have been evaluated
for effectiveness as of the end of the relevant period covered by the
Company's most recent annual or quarterly report filed with the
Commission, and (C) are effective in all material respects to perform
the functions for which they were established. Based on the evaluation
of the Company's disclosure controls and procedures described above,
the Company is not aware of (1) any significant deficiency in the
design or operation of its internal controls over financial reporting
which could adversely affect the Company's ability to record, process,
summarize and report financial data or any material weakness in its
internal controls over financial reporting, or (2) any fraud, whether
or not material, that involves management or other employees who have a
10
significant role in the Company's internal controls over financial
reporting. Since the most recent evaluation of the Company's disclosure
controls and procedures described above, there have been no significant
changes in its internal controls over financial reporting or in other
factors that could significantly affect its internal controls over
financial reporting.
(xxv) There is and has been no failure on the part of the
Company and, to the Company's knowledge, any of the Company's directors
or officers, in their capacities as such, to comply in all material
respects with any material provision of the Sarbanes Oxley Act of 2002
and the rules and regulations promulgated therewith, including Section
402 related to loans and Sections 302 and 906 related to
certifications.
(xxvi) The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted
only in accordance with management's general or specific authorization,
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The books, records and accounts and
systems of internal accounting controls of the Company and its
Subsidiaries comply in all material respects with the requirements of
Section 13(b)(2) of the 1934 Act.
(xxvii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus), except
as otherwise stated therein:
(A) neither the Company nor any of the Subsidiaries
has sustained any 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 which is material, individually or in the aggregate, to
the condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis;
(B) there has not been any material adverse change
in, or any development which is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings,
affairs, business prospects, business or results of operations of the
Company and the Subsidiaries on a consolidated basis, whether or not
arising in the ordinary course of business;
(C) neither the Company nor any of the Subsidiaries
has incurred any liabilities or obligations, direct or contingent, or
entered into any material transactions, other than in the ordinary
course of business, which are material, individually or in the
aggregate, to the condition (financial or otherwise), earnings,
affairs, business prospects, business or results of operations of the
Company and the Subsidiaries on a consolidated basis;
(D) the Company has not declared or paid any
dividend, and neither the Company nor any of the Subsidiaries has
become delinquent in the payment of principal or interest on any
outstanding borrowings;
11
(E) there has not been any change in the capital
stock, equity securities, long-term debt, obligations under capital
leases or, other than in the ordinary course of business, short-term
borrowings of the Company or the Subsidiaries; and
(F) there has not occurred any other material event
and there has arisen no material set of circumstances required by the
1933 Act or the 1933 Act Regulations to be disclosed in the
Registration Statement or the Prospectus which has not been so set
forth in the Registration Statement or the Prospectus as fairly and
accurately summarized therein.
(xxviii) Since the respective dates as of which information is
given in the Registration Statement, the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus), there
has not been any material adverse change in the condition (financial or
otherwise), earnings, affairs, business prospects, business or results
of operation of GNB and the GNB Subsidiaries on a consolidated basis,
whether or not arising in the ordinary course of business.
(xxix) No charge, investigation, action, suit or proceeding is
pending or, to the knowledge of the Company, threatened, against or
affecting the Company or the Subsidiaries or GNB or the GNB
Subsidiaries or any of their respective properties before or by any
court or any regulatory, administrative or governmental official,
commission, board, agency or other authority or body, or any
arbitrator, and there is no factual basis for any such charge,
investigation, action, suit or proceeding, wherein an unfavorable
decision, ruling or finding is reasonably likely, individually or in
the aggregate with other unfavorable decisions, rulings or findings, to
have a material adverse effect on the consummation of this Agreement or
the transactions contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated basis,
or which is required to be disclosed in the Registration Statement or
the Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus) and is not so disclosed.
(xxx) There are no contracts or other documents required to be
filed as exhibits to the Registration Statement by the 1933 Act or the
1933 Act Regulations which have not been filed as exhibits or
incorporated by reference into the Registration Statement, or that are
required to be summarized in the Prospectus (or, if the Prospectus is
not in existence, in each Preliminary Prospectus) that are not so
summarized.
(xxxi) The Company has not taken, directly or indirectly, any
action designed to result in or which has constituted or which might
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Designated Shares, and the Company is not aware of any such action
taken or to be taken by any affiliate of the Company.
(xxxii) The Company and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the businesses
now conducted by them in all material respects or as described in the
Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus) and neither the Company nor the Subsidiaries
have received any notice of infringement or conflict with asserted
rights of others with respect to any patents, copyrights, trademarks,
service marks, trade names or other rights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, is reasonably likely to have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business
prospects, prospects or results of operations of
12
the Company and the Subsidiaries on a consolidated basis, and the
Company does not know of any basis for any such infringement or
conflict.
(xxxiii) No labor dispute involving the Company or the
Subsidiaries exists or, to the knowledge of the Company, is imminent
which is reasonably likely, individually or in the aggregate with other
labor disputes, to have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business prospects,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis or which is required to be disclosed in the
Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus). Neither the Company nor any of the
Subsidiaries has received notice of any existing or threatened labor
dispute by the employees of any of its principal suppliers, customers
or contractors which is reasonably likely, individually or in the
aggregate with other disputes, to have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(xxxiv) The Company and the Subsidiaries have timely and
properly prepared and filed all material federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file are not reasonably likely,
individually or in the aggregate, to have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis. The Company has no knowledge of
any tax deficiency which has been or might be assessed against the
Company or the Subsidiaries which, if the subject of an unfavorable
decision, ruling or finding, is reasonably likely, individually or in
the aggregate, to have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business prospects,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis.
(xxxv) Each of the contracts, agreements and instruments
material to the condition (financial or otherwise), earnings, affairs,
business prospects, business or results of operations of the Company
and its Subsidiaries on a consolidated basis, or listed, described, or
attached as an exhibit to the Company's Annual Reports on Form 10-K for
the year ended December 31, 2003, Quarterly Report on Form 10-Q for the
quarter ended March 31, 2004, or the Registration Statement, each as
filed with the Commission, is in full force and effect in accordance
with its terms and is the legal, valid and binding agreement of the
Company or the Subsidiaries and the other parties thereto, enforceable
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally. Neither the Company nor
any Subsidiary is (with or without notice or lapse of time or both) in
breach or default in any material respect under any such contacts,
agreements or instruments referred to in the preceding sentence (or
upon consummation of the transactions contemplated by this Agreement,
the Merger Agreement or the Branch Purchase Agreement will be in breach
or default in any material respect thereunder) and, to the knowledge of
the Company, no other party to any such agreement is (with or without
notice or lapse of time or both) in breach or default in any material
respect thereunder.
(xxxvi) No relationship, direct or indirect, exists between or
among the Company or the Subsidiaries, on the one hand, and the
directors, officers, trustees, shareholders, customers or suppliers of
the Company or the Subsidiaries, on the other hand, which is required
to be described in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, in each Preliminary Prospectus)
which is not adequately described therein.
13
(xxxvii) No person has the right to request or require the
Company or the Subsidiaries to register any securities for offering and
sale under the 1933 Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the
Designated Shares.
(xxxviii) The Designated Shares will be quoted on the Nasdaq
National Market at or immediately prior to the Closing.
(xxxix) Except as described in the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus), there
are no contractual encumbrances or restrictions or legal restrictions
on the ability of Texas United Nevada, Inc., State Bank or Community
Home Loan, Inc. (A) to pay dividends or make any other distributions on
its capital stock or to pay any indebtedness owed to the Company, (B)
to make any loans or advances to, or investments in, the Company, or
(C) to transfer any of its property or assets to the Company.
(xl) The Company is not an "investment company," an entity
"controlled" by an "investment company" or an "investment adviser"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act") or the Investment Advisers Act of 1940,
as amended (the "Investment Advisers Act").
(xli) The Company has not distributed and will not distribute
prior to the Closing Date or, if applicable, the Option Closing Date,
any offering material in connection with the offering of the Designated
Shares contemplated by this Agreement, other than a Preliminary
Prospectus, the Prospectus, the Registration Statement and the other
materials permitted by the 1933 Act and the 1933 Act Regulations and
reviewed by the Representatives.
(xlii) The activities of the Company and the Subsidiaries are
permitted under applicable federal and state banking laws and
regulations. The Company has all necessary approvals, including the
approval of the FDIC, the Texas Department of Banking (the "TDB") and
the FRB, as applicable, to own the capital stock of the Subsidiaries.
Neither the Company nor any of the Subsidiaries is a party or subject
to any agreement or memorandum with, or directive or other order issued
by, the FRB, the FDIC, the TDB or other regulatory authority having
jurisdiction over it (each, a "Regulator," and collectively, the
"Regulators"), which imposes any restrictions or requirements not
generally applicable to entities of the same type as the Company and
the Subsidiaries. Neither the Company nor any Subsidiary is subject to
any order or other directive from any Regulator to make any material
change in the method of conducting their respective businesses, and no
such directive is pending or threatened by such Regulators.
(xliii) The Bank and the other Subsidiaries have properly
administered all accounts for which they act as a fiduciary, including
but not limited to accounts for which they serve as a trustee, agent,
custodian, personal representative, guardian, conservator or investment
advisor, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law, except
where the failure to so administer is not reasonably likely,
individually or in the aggregate, to have a material adverse effect
upon the condition (financial or otherwise), earnings, affairs,
business prospects, business or results of operations of the Company
and the Subsidiaries on a consolidated basis. Neither the Bank or the
other Subsidiaries or, to the knowledge of the Company, any of the
directors, officers or employees of the Bank or the other Subsidiaries
has committed any material breach of trust with respect to any such
fiduciary account, and the accountings for each such fiduciary account
are true and correct
14
in all material respects and accurately reflect the assets of such
fiduciary account in all material respects.
(xliv) Other than as contemplated by this Agreement and as
disclosed in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the Preliminary Prospectus), the
Company has not incurred any liability for any finder's or broker's fee
or agent's commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
thereby.
(xlv) All reports or applications by the Company or any of its
Subsidiaries required to be filed with the FRB, the FDIC, the TDB or
any other Regulator have been timely filed and, as of the date such
reports or applications were filed or amended, complied with the
applicable requirements of the FRB, the FDIC, the TDB or such other
Regulator, as the case may be and were complete and accurate in all
material respects.
(xlvi) None of the Company, the Subsidiaries or, to the
knowledge of the Company, any other person associated with or acting on
behalf of the Company or any of the Subsidiaries, including, without
limitation, any director, officer, agent, or employee of any of the
Subsidiaries or the Company has, directly or indirectly, while acting
on behalf of such Company or Subsidiary (i) used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; (ii) made any unlawful
contribution to any candidate for foreign or domestic office, or to any
foreign or domestic government officials or employees or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof or to foreign or domestic political parties or
campaigns from corporate funds, or failed to disclose fully any
contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other payment of funds for the Company or a Subsidiary or retained any
funds which constitute a violation of any law, rule or regulation, or
which was or is required to be disclosed in the Registration Statement
or the Prospectus pursuant to the requirements of the 1933 Act or the
1933 Act Regulations.
(xlvii) Neither the Company nor any Subsidiary has any
liability under any "pension plan," as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The
employee benefit plans, including employee welfare benefit plans, of
the Company and each of the Subsidiaries (the "Employee Plans") have
been operated in material compliance with the applicable provisions of
ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), all
regulations, rulings and announcements promulgated or issued thereunder
and all other applicable governmental laws and regulations (except to
the extent such noncompliance is not reasonably likely, individually or
in the aggregate, to have a material adverse effect upon the condition
(financial or otherwise) earnings, affairs, business prospects,
business or results of operations of the Company or the Subsidiaries on
a consolidated basis). No reportable event under Section 4043(c) of
ERISA has occurred with respect to any Employee Plan of the Company or
any of the Subsidiaries for which the reporting requirements have not
been waived by the Pension Benefit Guaranty Corporation. No prohibited
transaction under Section 406 of ERISA, for which an exemption does not
apply, has occurred with respect to any Employee Plan of the Company or
any of the Subsidiaries. There are no pending or, to the knowledge of
the Company, threatened, claims by or on behalf of any Employee Plan,
by any employee or beneficiary covered under any such Employee Plan or
by any governmental authority or otherwise involving such Employee
Plans or any of their respective fiduciaries (other than for routine
claims for benefits).
15
(xlviii) Except as described in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the
Preliminary Prospectus), there is no factual basis for any action, suit
or other proceeding involving the Company or the Subsidiaries or any of
their material assets for any failure of the Company or any of the
Subsidiaries, or any predecessor thereof, to comply with any material
requirements of federal, state or local regulation relating to air,
water, solid waste management, hazardous or toxic substances, or the
protection of health or the environment; except where such action, suit
or other proceeding is not reasonably likely, individually or in the
aggregate with other actions, suits or proceedings, to have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business prospects, business or results of operations of the
Company and the Subsidiaries on a consolidated basis. Except as
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) or as
is not reasonably likely, individually or in the aggregate, to have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business prospects, business or results of
operations of the Company and the Subsidiaries on a consolidated basis,
none of the property owned or leased by the Company or any of the
Subsidiaries or their predecessors is contaminated with any waste or
hazardous substances, and neither the Company nor any of the
Subsidiaries may be deemed an "owner or operator" of a "facility" or
"vessel" which owns, possesses, transports, generates or disposes of a
"hazardous substance" as those terms are defined in Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601 et seq.
(xlix) The Company and the Subsidiaries maintain insurance
covering their properties, personnel and business. Such insurance
provides coverage against such losses and risks as are reasonably
believed by the Company to be adequate to protect in all material
respects the Company and the Subsidiaries and their businesses. Neither
the Company nor any of the Subsidiaries has received notice from any
insurer or agent of such insurer that substantial capital improvements
or other expenditures shall have to be made in order to continue such
insurance. All such insurance is duly in force on the date hereof, with
such exceptions as would not have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(l) Other than the Merger and the Branch Purchases, neither
the Company nor any Subsidiary has any agreement or understanding with
any person (A) concerning the future acquisition by the Company or the
Bank of a controlling interest in any entity, or (B) concerning the
future acquisition by any person of a controlling interest in the
Company or any Subsidiary, in either case that is required by the 1933
Act or the 1933 Act Regulations to be disclosed by the Company that is
not disclosed in the Prospectus.
For purposes of this Section 2, all representations and warranties that
specifically refer to GNB or the GNB Subsidiaries shall be deemed to be
qualified by the phrase, "to the best of the Company's knowledge after due
inquiry", it being understood that such inquiry includes all diligence conducted
by the Company and its agents in connection with the Merger, including
representations and warranties made by GNB in the Merger Agreement.
3. OFFERING BY THE UNDERWRITERS.
After the Registration Statement becomes effective or, if the
Registration Statement is already effective, after this Agreement becomes
effective, the Underwriters propose to offer the Firm Shares for sale to the
public upon the terms and conditions set forth in the Prospectus. The
Underwriters may from
16
time to time thereafter reduce the public offering price and change the other
selling terms, provided the proceeds to the Company shall not be reduced as a
result of such reduction or change.
The Underwriters may reserve and sell such of the Designated Shares
purchased by the Underwriters as the Underwriters may elect to dealers chosen by
them (the "Selected Dealers") at the public offering price set forth in the
Prospectus less the applicable Selected Dealers' concessions set forth therein,
for re-offering by Selected Dealers to the public at the public offering price.
The Underwriters may allow, and Selected Dealers may re-allow, a concession set
forth in the Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE COMPANY.
The Company covenants with the Underwriters as follows:
(a) The Company shall cause the Registration Statement and any
amendments thereto, if not effective at the time of execution of this Agreement,
to become effective as promptly as possible. If the Registration Statement has
become or becomes effective pursuant to Rule 430A and information has been
omitted therefrom in reliance on Rule 430A, then, the Company will prepare and
file in accordance with Rule 430A and Rule 424(b) copies of the Prospectus or,
if required by Rule 430A, a post-effective amendment to the Registration
Statement (including the Prospectus) containing all information so omitted and
will provide evidence satisfactory to the Representatives of such timely filing.
(b) The Company shall notify the Representatives immediately,
and confirm such notice in writing:
(i) when the Registration Statement, or any
post-effective amendment to the Registration Statement, has become
effective, or when the Prospectus or any supplement to the Prospectus
or any amended Prospectus has been filed;
(ii) of the receipt of any comments or requests from
the Commission relating in any way to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendments or supplements
to any of the aforementioned, and of any request of the Commission to
amend or supplement the Registration Statement, any Preliminary
Prospectus or the Prospectus or for additional information; and
(iii) of the issuance by the Commission or any state
or other regulatory body of any stop order or other order suspending
the effectiveness of the Registration Statement, preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, or
suspending the qualification of any of the Designated Shares for
offering or sale in any jurisdiction or the institution or threat of
institution of any proceedings for any of such purposes. The Company
shall use its best efforts to prevent the issuance of any such stop
order or of any other such order and if any such order is issued, to
cause such order to be withdrawn or lifted as soon as possible.
(c) The Company shall furnish to the Underwriters, from time
to time without charge, as soon as available, as many copies as the Underwriters
may reasonably request of (i) the registration statement as originally filed and
of all amendments thereto, in executed form, including exhibits, whether filed
before or after the Registration Statement becomes effective, (ii) all exhibits
and documents incorporated therein or filed therewith, (iii) all consents and
certificates of experts in executed form, (iv) the Preliminary Prospectus and
all amendments and supplements thereto, and (v) the Prospectus, and all
amendments and supplements thereto.
17
(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Company shall comply with the 1933 Act and the
1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Designated Shares as
contemplated herein and in the Prospectus. The Company shall not file any
amendment to the registration statement as originally filed or to the
Registration Statement and shall not file any amendment thereto or make any
amendment or supplement to any Preliminary Prospectus or to the Prospectus of
which the Representatives shall not previously have been advised in writing and
provided a copy a reasonable time prior to the proposed filings thereof or to
which the Representatives or counsel for the Underwriters shall reasonably
object. If it is necessary, in the Representatives' reasonable opinion or in the
reasonable opinion of counsel to the Underwriters, to amend or supplement the
Registration Statement or the Prospectus in connection with the distribution of
the Designated Shares, the Company shall forthwith amend or supplement the
Registration Statement or the Prospectus, as the case may be, by preparing and
filing with the Commission, and furnishing to the Representatives such number of
copies as the Representatives may reasonably request of an amendment or
amendments of, or a supplement or supplements to, the Registration Statement or
the Prospectus, as the case may be (in form and substance satisfactory to the
Representatives and counsel for the Underwriters). If any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus to correct
an untrue statement of material fact or to include a material fact necessary 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 at any time to amend
or supplement the Prospectus to comply with the 1933 Act and the 1933 Act
Regulations, the Company shall, subject to the second sentence of this
subsection (d), forthwith at its cost and expense amend or supplement the
Prospectus by preparing and filing with the Commission, and furnishing to the
Representatives, such number of copies as the Representatives may reasonably
request of an amendment or amendments of, or a supplement or supplements to, the
Prospectus (in form and substance satisfactory to the Representatives and
counsel for the Underwriters) so that, as so amended or supplemented, the
Prospectus shall not contain an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) The Company shall cooperate with the Representatives and
counsel for the Underwriters in order to qualify the Designated Shares for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may reasonably request and shall continue such
qualifications in effect so long as may be advisable for distribution of the
Designated Shares; provided, however, that the Company shall not be required to
qualify to do business as a foreign corporation or file a general consent to
service of process in any jurisdiction in connection with the foregoing. The
Company shall file such statements and reports as may be required by the laws of
each jurisdiction in which the Designated Shares have been qualified as above.
The Company will notify the Representatives immediately of, and confirm in
writing, the suspension of qualification of the Designated Shares or threat
thereof in any jurisdiction.
(f) The Company will deliver against payment of the purchase
price the certificates for the Designated Shares and registered in such names
and denominations as the Representatives shall have requested at least two full
business days prior to the Closing Date and, if applicable, the Option Closing
Date and shall be made available, at the request of the Representatives, for
inspection at least 24 hours prior to such Closing Date and Option Closing Date.
(g) The Company shall make generally available to its security
holders in the manner contemplated by Rule 158 of the 1933 Act Regulations and
furnish to the Representatives as soon as practicable, but in any event not
later than 16 months after the Effective Date, a consolidated earnings statement
of the Company in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, conforming with the requirements of Section 11(a) of the 1933 Act and
Rule 158.
18
(h) The Company shall use the net proceeds from the sale of
the Designated Shares in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(i) For five years from the Effective Date, the Company shall
furnish to the Representatives copies of all reports and communications
(financial or otherwise) furnished by the Company to the holders of the
Designated Shares as a class, copies of all reports and financial statements
filed with or furnished to the Commission (other than portions for which
confidential treatment has been obtained from the Commission) or with any
national securities exchange or the Nasdaq National Market or other
self-regulatory organization and such other documents, reports and information
concerning the business and financial conditions of the Company as the
Representatives may reasonably request, other than such documents, reports and
information for which the Company has the legal obligation not to reveal to the
Representatives.
(j) For a period of 180 days from the Effective Date, the
Company shall not, without the Representatives' prior written consent, directly
or indirectly offer, sell, contract to sell or otherwise dispose of any shares
of the Company's equity securities, any securities convertible or exchangeable
for such equity securities or any other rights to acquire such equity
securities, other than (A) Designated Shares issued and sold to the Underwriters
pursuant to this Agreement, (B) Common Stock issued upon exercises of employee
stock options outstanding on the date hereof, (C) grants of options or other
rights to purchase Common Stock and issuances of shares of Common Stock under
employee benefit plans and other compensatory programs in existence on the date
hereof and registrations thereof on Form S-8, and (D) Common Stock issued as
consideration in any bona-fide merger or other business combination transaction.
The Company will use its commercially reasonable efforts to cause the persons
listed under the heading "Management" in the Prospectus (or, if the Prospectus
is not in existence, in the Preliminary Prospectus) to deliver to the
Underwriters on or before the date of this Agreement, an agreement satisfactory
in form and substance to the Underwriters and counsel for the Underwriters
whereby each such person agrees, for a period of 180 days from the Effective
Date, not to, directly or indirectly, offer, sell, contract to sell or otherwise
dispose of any shares of the Company's equity securities or any other rights to
acquire such equity securities without the prior written consent of the
Underwriters.
(k) The Company shall use its commercially reasonable efforts
to cause the Designated Shares to become quoted on the Nasdaq National Market,
or in lieu thereof a national securities exchange, and to remain so quoted.
(l) Subsequent to the date of this Agreement and through the
date which is the later of (i) the day following the date on which the
Underwriters' option to purchase the Option Shares shall expire or (ii) the day
following the Option Closing Date with respect to any Option Shares that the
Underwriters shall elect to purchase, except as described in or contemplated by
the Prospectus, neither the Company nor any of the Subsidiaries shall take any
action (or refrain from taking any action) which will result in the Company or
the Subsidiaries incurring any material liability or obligation, direct or
contingent, or enter into any material transaction, except in the ordinary
course of business, or take or refrain from taking any action which will cause
or result in any material adverse change in the financial position, capital
stock, or any material increase in long-term debt, obligations under capital
leases or short-term borrowings of the Company and the Subsidiaries on a
consolidated basis.
(m) Except as described in the Prospectus, the Company shall
not, for a period of 180 days after the date hereof, without the prior written
consent of the Representatives, purchase, redeem or call for redemption, or
prepay or give notice of prepayment (or announce any redemption or call for
redemption, or any repayment or notice of prepayment) of the Company's Common
Stock, except for any purchases of shares of Common Stock pursuant to a publicly
announced stock buy-back program.
19
(n) The Company shall not take, directly or indirectly, any
action designed to result in or which constitutes or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the sale or resale of the Designated
Shares in violation of the Commission's rules and regulations, including, but
not limited to, Regulation M, and the Company is not aware of any such action
taken or to be taken by any affiliate of the Company.
(o) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will not issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Company, the Subsidiaries or the offering of the Designated Shares
without the Representatives' prior consent.
(p) The Company shall comply with all registration, filing and
reporting requirements of the 1934 Act and the 1934 Act Regulations for so long
as the Prospectus is required to be delivered.
5. PAYMENT OF EXPENSES.
Whether or not this Agreement is terminated or the sale of the
Designated Shares to the Underwriters is consummated, the Company covenants and
agrees that it will pay or cause to be paid (directly or by reimbursement) all
costs and expenses incident to the performance of the obligations of the Company
under this Agreement, including:
(a) the preparation, printing, filing, delivery and shipping
of the initial registration statement, each Preliminary Prospectus, the
Registration Statement and the Prospectus and any amendments or supplements
thereto, and the printing, delivery and shipping of this Agreement and any other
underwriting documents (including, without limitation, selected dealers
agreements);
(b) all fees, expenses and disbursements of the Company's
counsel and accountants;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Shares under the securities or blue sky laws of
such jurisdictions as the Representatives may request, including all filing fees
and fees and disbursements of counsel for the Underwriters in connection
therewith;
(d) all fees and expenses incurred in connection with filings
made with the NASD;
(e) any applicable fees and other expenses incurred in
connection with the quotation of the Designated Shares on the Nasdaq National
Market;
(f) the cost of furnishing to the Representatives copies of
the initial registration statements, any Preliminary Prospectus, the
Registration Statement and the Prospectus and all amendments or supplements
thereto;
(g) the costs and charges of any transfer agent or registrar
and the fees and disbursements of counsel for any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes)
incurred in connection with the printing, issuance and delivery of the
Designated Shares to the Underwriters; and
20
(i) all other costs and expenses incident to the performance
of the obligations of the Company hereunder that are not otherwise specifically
provided for in this Section 5.
If the sale of Designated Shares contemplated by this Agreement is not
completed because this Agreement is terminated by the Company or because this
Agreement is terminated by the Representatives pursuant to Sections 8(a), 8(b)
or 8(c), the Company will pay the Representatives their accountable
out-of-pocket expenses in connection herewith or in contemplation of the
performance of the Representatives' obligations hereunder, including without
limitation travel expenses, fees, expenses and disbursements of counsel or other
out-of-pocket expenses incurred by the Representatives in connection with any
discussion of the offering of the Designated Shares or the contents of the
Registration Statement, any investigation of the Company and the Subsidiaries,
or any preparation for the marketing, purchase, sale or delivery of the
Designated Shares, in each case following presentation of reasonably detailed
invoices therefor.
If the sale of the Designated Shares contemplated by this Agreement is
completed or this Agreement is terminated by the Representatives for any reason
other than as set forth in the preceding paragraph, the Company shall not be
responsible for payment of fees or disbursements of counsel for the Underwriters
other than in accordance with paragraph (c) above, or for the reimbursement of
any expenses of the Underwriters (provided that any fees previously paid to
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Incorporated for its acting as financial advisor to the Company
in connection with the Merger as disclosed in the Prospectus shall not have to
be refunded).
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for the Firm
Shares and, following exercise of the option granted by the Company in Section 1
of this Agreement, the Option Shares, are subject, in the Representatives' sole
discretion, to the accuracy of the representations and warranties and compliance
with the agreements of the Company herein as of the date hereof and as of the
Closing Date (or in the case of the Option Shares, if any, as of the Option
Closing Date), to the accuracy of the written statements of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) If the Registration Statement or any amendment thereto
filed prior to the Closing Date has not been declared effective prior to the
time of execution hereof, the Registration Statement shall become effective not
later than 10:00 a.m., St. Louis time, on the first business day following the
time of execution of this Agreement, or at such later time and date as the
Representatives may agree to in writing. If required, the Prospectus and any
amendment or supplement thereto shall have been timely filed in accordance with
Rule 424(b) and Rule 430A under the 1933 Act and Section 4(a) hereof. No stop
order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued under the 1933 Act or any
applicable state securities laws and no proceedings for that purpose shall have
been instituted or shall be pending, or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission or any state authority.
Any request on the part of the Commission or any state authority for additional
information (to be included in the Registration Statement or Prospectus or
otherwise) shall have been disclosed to the Representatives and complied with to
the Representatives' satisfaction and to the satisfaction of counsel for the
Underwriters.
(b) No Underwriter shall have advised the Company at or before
the Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of a material fact or omits to state a material fact which is required to be
stated therein or is
21
necessary to make statements therein (in the case of the Prospectus or any
amendment or supplement thereto, in light of the circumstances under which they
were made) not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement and the Designated
Shares, and the authorization and form of the Registration Statement and the
Prospectus, other than financial statements and other financial data, and all
other legal matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Subsidiaries shall have furnished to such
counsel all documents and information relating thereto that they may reasonably
request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the Company,
shall have furnished to the Representatives their signed opinion, dated the
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Texas, and is duly registered as a bank holding company and financial
holding company under the BHC Act. The entities listed on Exhibit A are
the only subsidiaries, direct or indirect, of the Company. Each of the
Subsidiaries is duly incorporated or organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, as the case may be. Each of the Company and the
Subsidiaries has full power (corporate or otherwise) and authority to
own or lease its properties and to conduct its business as such
business is described in the Prospectus and is currently conducted in
all material respects. Each of the Company and the Subsidiaries is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result, individually or in the aggregate, in a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business prospects, business or results of
operations of the Company and the Subsidiaries on a consolidated basis.
To such counsel's knowledge, all outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, are owned, directly or indirectly, by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, and none of the outstanding shares
of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary,
and, to such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding rights, options or warrants to
purchase any such shares or securities convertible into or exchangeable
for any such shares. The deposit accounts of the Bank are insured by
the FDIC up to the maximum amount provided by law, and, to such
counsel's knowledge, no proceedings for the termination or revocation
of any such insurance are pending or threatened.
(ii) The capital stock of the Company conforms to the
description thereof contained in the Prospectus in all material
respects. To such counsel's knowledge, the authorized, issued and
outstanding capital stock of the Company as of March 31, 2004, is as
set forth under the caption "Capitalization" in the Prospectus (except
for subsequent issuances, if any, pursuant to the Underwriting
Agreement or pursuant to reservations, agreements or employee benefit
plans or programs referred to in the Prospectus). To such counsel's
knowledge, the capital stock of the Company has been duly authorized
and validly issued, and is fully paid and nonassessable and, to such
counsel's knowledge, is not in violation of or subject to any other
rights to subscribe for or purchase any securities. The form of
certificates to evidence the Common Stock has been approved by the
Board of Directors and is in due and proper form and
22
complies with all applicable requirements. To such counsel's knowledge,
there are no outstanding rights, options or warrants to purchase, no
other outstanding securities convertible into or exchangeable for, and
no commitments, plans or arrangements to issue, any shares of capital
stock of the Company, except as described in the Prospectus, and none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(iii) The Company has all requisite corporate power
and authority to issue, sell and deliver the Designated Shares in
accordance with any upon the terms and conditions set forth in this
Agreement and the Registration Statement and the Prospectus. All
corporate action required to be taken by the Company for the
authorization, issuance, sale and delivery of the Designated Shares has
been validly taken. All of the Designated Shares have been duly and
validly authorized and, when delivered and paid for in accordance with
this Agreement, will be duly and validly issued, fully paid and
nonassessable, and will conform to the description thereof in the
Registration Statement and the Prospectus. The Designated Shares will
be quoted on the Nasdaq National Market, subject to official notice of
issuance. There are no preemptive or other rights to subscribe for or
to purchase, and other than as disclosed in the Prospectus, no
restrictions upon the voting or transfer of, any equity securities of
the Company or the Subsidiaries pursuant to the corporate charter,
by-laws or other governing documents of the Company or the
Subsidiaries, or, to such counsel's knowledge, any agreement or other
instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries may be bound.
(iv) The Company has all requisite power and
authority to enter into this Agreement and this Agreement has been duly
and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally, and except to the extent that the indemnification and
contribution provisions of Section 9 hereof may be limited by federal
or state securities laws and public policy considerations in respect
thereof.
(v) Each of the Merger Agreement and the Branch
Purchase Agreement has been duly authorized, executed and delivered by
the Company, and is a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
(vi) To such counsel's knowledge, neither the Company
nor any of the Subsidiaries is in breach or violation of, or default
under, with or without notice or lapse of time or both, its corporate
charter, by-laws or governing document. To such counsel's knowledge, no
breach or default by the Company or any Subsidiary exists (nor has any
event occurred which with notice, lapse of time, or both, would result
in a breach of, or constitute a default under) in the due performance
or observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease, franchise, license or any other
agreement or instrument to which either the Company or any Subsidiary
is a party or by which any of them or any of their respective
properties may be bound, except such breach or default which would not
result, individually or in the aggregate, in a material adverse effect
on the condition (financial or otherwise), earnings, affairs, business
prospects, business or results of operations of the Company and the
Subsidiaries on a consolidated basis. The execution, delivery and
performance of this Agreement and the
23
consummation of the transactions contemplated by this Agreement, the
Merger Agreement, the Branch Purchase Agreement or the other agreements
contemplated hereby or thereby do not and will not conflict with,
result in the creation or imposition of any material lien, claim,
charge, encumbrance or restriction upon any property or assets of the
Company or the Subsidiaries or the Designated Shares pursuant to, or
constitute a breach or violation of, or constitute a default under,
with or without notice or lapse of time or both, any of the terms,
provisions or conditions of the charter, by-laws or governing document
of the Company or the Subsidiaries, or any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease, franchise, license or any other material agreement or instrument
to which the Company or the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound or any order,
decree, judgment, franchise, license, Permit, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Company or the Subsidiaries or any of their
respective properties which, in each case, is material to the Company
and the Subsidiaries on a consolidated basis.
(vii) To such counsel's knowledge, holders of
securities of the Company do not have any right that, if exercised,
would require the Company to cause such securities to be included in
the Registration Statement or have waived such right. To such counsel's
knowledge, neither the Company nor any of the Subsidiaries is a party
to any agreement or other instrument which grants rights for or
relating to the registration of any securities of the Company other
than the Merger Agreement.
(viii) No action, suit or proceeding at law or in
equity is pending or, to such counsel's knowledge, threatened to which
the Company or any Subsidiary is or is threatened to be made a party,
and no action, suit or proceeding is pending or, to such counsel's
knowledge, threatened against or affecting the Company or any
Subsidiary or any of their properties, before or by any court or
governmental official, commission, board or other administrative
agency, authority or body, or any arbitrator, wherein an unfavorable
decision, ruling or finding could have a material adverse effect on the
consummation of this Agreement or the issuance and sale of the
Designated Shares as contemplated herein, or the condition (financial
or otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated basis,
or which is required to be disclosed in the Registration Statement or
the Prospectus and is not so disclosed.
(ix) No authorization, approval, consent or order of
or filing, registration or qualification with, any person (including
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, except such
as have been obtained under the 1933 Act, and except such as may be
required under state securities laws or Interpretations or Rules of the
NASD in connection with the purchase and distribution of the Designated
Shares by the Underwriters.
(x) Each of the Registration Statement, the
Prospectus and the Merger Proxy/Registration Statement and any
amendments or supplements thereto (other than the exhibits, financial
statements or other financial data included therein or omitted
therefrom and Underwriters' Information, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations as of their
respective dates of effectiveness or issuance.
24
(xi) To such counsel's knowledge, there are no
contracts, agreements, leases or other documents of a character
required to be disclosed in the Registration Statement, the Merger
Proxy/Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement or the Merger Proxy/Registration
Statement that are not so disclosed or filed.
(xii) The statements under the captions "Our Policy
Regarding Dividends", "The Merger", "Pending Acquisitions", "Business",
"Certain Relationships and Related Transactions", "Supervision and
Regulation", and "Description of Capital Stock" in the Prospectus,
insofar as such statements constitute a description of legal or
regulatory matters, documents or instruments referred to therein, are
accurate descriptions of the matters purported to be summarized therein
in all material respects and fairly present the information called for
with respect to such legal or regulatory matters, documents and
instruments.
(xiii) Such counsel has been advised by the staff of
the Commission that the Registration Statement has become effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made within the time period required by Rule
424(b); to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for a stop order are pending or threatened by the
Commission.
(xiv) Except as disclosed in the Prospectus, to such
counsel's knowledge, there are no contractual encumbrances or
restrictions, or material legal restrictions required to be disclosed
on the ability of Texas United Nevada, Inc., State Bank or Community
Home Loan, Inc. (A) to pay dividends or make any other distributions on
its capital stock or to pay indebtedness owed to the Company, (B) to
make any loans or advances to, or investments in, the Company or (C) to
transfer any of its property or assets to the Company.
(xv) To such counsel's knowledge, (A) the business
and operations of the Company and the Subsidiaries comply in all
material respects with all statutes, ordinances, laws, rules and
regulations applicable thereto and which are material to the Company
and the Subsidiaries on a consolidated basis, except in those instances
where non-compliance would not, individually or in the aggregate,
materially impair the ability of the Company and the Subsidiaries to
conduct their business and would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated basis;
and (B) the Company and the Subsidiaries possess and are operating in
all material respects in compliance with the terms, provisions and
conditions of all Permits, consents, licenses, franchises and
governmental and regulatory authorizations ("Authorizations") required
to conduct their business as described in the Prospectus and which are
material to the Company and the Subsidiaries on a consolidated basis,
except in those instances where the loss thereof or non-compliance
therewith would not be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business prospects, business or results of operations of the Company
and the Subsidiaries on a consolidated basis; to such counsel's
knowledge, all such Authorizations are valid and in full force and
effect, and, to counsel's knowledge, no action, suit or proceeding is
pending or threatened which may lead to the revocation, termination,
suspension or non-renewal of any such Authorization, except in those
instances where the loss thereof or non-compliance therewith would not
materially impair the ability of the Company or the Subsidiaries to
conduct their businesses and would not have a material adverse effect
on the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Company and the Subsidiaries
on a consolidated basis.
25
(xvi) The Company is not and, after giving effect to
the offering and sale of the Designated Shares and the application of
the proceeds thereof as described in the Prospectus will not be, an
"investment company," an entity "controlled" by an "investment company"
or an "investment adviser" as defined in the Investment Company Act and
the Investment Advisers Act.
In giving the above opinion, such counsel may state that, insofar as
such opinion involves factual matters, they have relied upon certificates of
officers of the Company including, without limitation, certificates as to the
identity of any and all material contracts, indentures, mortgages, deeds of
trust, loans or credit agreements, notes, leases, franchises, licenses or other
agreements or instruments, and all material permits, easements, consents,
licenses, franchises and government regulatory authorizations, for purposes of
paragraphs (viii) and (xvii) hereof, and certificates of public officials. Such
counsel may limit its opinion to the laws of the State of Texas and the
applicable laws of the United States of America.
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Company and
with their independent public accountants and with the Representatives and its
counsel, at which conferences such counsel made inquiries of such officers,
representatives and accountants and discussed in detail the contents of the
Registration Statement and the Prospectus and such counsel has no reason to
believe (A) that the Registration Statement or any amendment thereto (except for
the financial statements and related schedules included therein or omitted
therefrom or Underwriters' Information, as to which such counsel need express no
opinion), at the time the Registration Statement or any such amendment became
effective, contained any untrue statement of material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or (B) that the Prospectus or any amendment or
supplement thereto (except for the financial statements and related schedules
included therein or omitted therefrom or Underwriters' Information, as to which
such counsel need express no opinion), at the time the Registration Statement
became effective (or, if the term "Prospectus" refers to the prospectus first
filed pursuant to Rule 424(b) of the 1933 Act Regulations, at the time the
Prospectus was issued), at the time any such amended or supplemented Prospectus
was issued, at the Closing Date and, if applicable, the Option Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or (C) that there is any amendment to the Registration
Statement required to be filed that has not already been filed.
(e) ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇., counsel for the
Underwriters, shall have furnished the Representatives their signed opinion,
dated the Closing Date or the Option Closing Date, as the case may be, with
respect to the sufficiency of all corporate procedures and other legal matters
relating to this Agreement, the validity of the Designated Shares, the
Registration Statement, the Prospectus and such other related matters as the
Representatives may reasonably request and there shall have been furnished to
such counsel such documents and other information as they may request to enable
them to pass on such matters. In giving such opinion, ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇,
▇.▇. may rely as to matters of fact upon statements and certifications of
officers of the Company and of other appropriate persons and may rely as to
matters of law, other than law of the United States and the State of Missouri,
upon the opinions of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P. described herein.
(f) On the date of this Agreement and on the Closing Date
(and, if applicable, any Option Closing Date), the Representatives shall have
received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and McGladrey & ▇▇▇▇▇▇, LLP letters, dated the
date of this Agreement and the Closing Date (and, if applicable, the Option
Closing Date), respectively, in form and substance satisfactory to the
Representatives, confirming that, with respect to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, they are
independent public accountants with respect to the
26
Company and the Subsidiaries, within the meaning of the 1933 Act and the 1933
Act Regulations and, with respect to McGladrey & ▇▇▇▇▇▇, LLP, they are
independent public accountants with respect to GNB and its subsidiaries within
the meaning of the 1933 Act and the 1933 Act Regulations, and each stating in
effect that:
(i) In their opinion, the consolidated financial
statements of the Company or GNB, as the case may be, audited by them
and included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act
Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in SAS
No. 71, "Interim Financial Information," inquiries of officials of the
Company or GNB, as the case may be, responsible for financial and
accounting matters, and such other inquiries and procedures as may be
specified in such letter, which procedures do not constitute an audit
in accordance with U.S. generally accepted auditing standards, nothing
came to their attention that caused them to believe that, if
applicable, the unaudited interim consolidated financial statements of
the Company or GNB, as the case may be, included in the Registration
Statement do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act, the 1934 Act, the
1933 Act Regulations and the 1934 Act Regulations or are not in
conformity with U.S. generally accepted accounting principles applied
on a basis substantially consistent, except as noted in the
Registration Statement, with the basis for the audited consolidated
financial statements of the Company or GNB, as the case may be,
included in the Registration Statement.
(iii) On the basis of limited procedures, not
constituting an audit in accordance with U.S. generally accepted
auditing standards, consisting of a reading of the unaudited interim
financial statements and other information referred to below, a reading
of the latest available unaudited condensed consolidated financial
statements of the Company or GNB, as the case may be, inspection of the
minute books of the Company or GNB, as the case may be, since the date
of the latest audited financial statements of the Company or GNB, as
the case may be, included in the Registration Statement, inquiries of
officials of the Company or GNB, as the case may be, responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) as of a specified date not more than
five days prior to the date of such letter, there have been any changes
in the capital stock, allowance for loan losses, or net loans
receivable of the Company or GNB, as the case may be, any increase in
the long-term debt, short-term borrowings or real estate owned of the
Company or GNB, as the case may be, or any decreases in consolidated
total assets or consolidated shareholders' equity of the Company or
GNB, as the case may be, or any changes, decreases or increases in
other items specified by the Representatives, in each case as compared
with amounts shown in the latest consolidated statement of financial
condition of the Company or GNB, as the case may be, included in the
Registration Statement, except in each case for changes, increases or
decreases which the Registration Statement specifically discloses have
occurred or may occur or which are described in such letter; and
(B) for the period from the date of the
latest unaudited interim consolidated financial statements of the
Company or GNB, as the case may be, included in the Registration
Statement to the specified date referred to in clause (iii)(A), there
were any decreases in the consolidated interest income, net interest
income, other income or net income of the
27
Company or GNB, as the case may be, or in the per share amount of net
income of the Company or GNB, as the case may be, or any changes,
decreases or increases in other items specified by the Representatives
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Registration Statement discloses have occurred or may occur, or
which are described in such letter.
(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with U.S. generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
and consolidated financial statements of the Company or GNB, as the
case may be, which appear in the Registration Statement, and have
compared such amounts, percentages and financial information with the
accounting records and the material derived from such records and
consolidated financial statements of the Company or GNB, as the case
may be, have found them to be in agreement.
(v) With respect to the pro forma financial
information which appears in the Registration Statement, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP shall provide the information contemplated in, and comment upon the
matters described in, Example D "Comments on Pro Forma Information"
included in SAS No. 72 "Letters for Underwriters and Certain Other
Requesting Parties."
In the event that the letters to be delivered on the date hereof, on
the Closing Date (and, if applicable, any Option Closing Date) referred to above
set forth any such changes, decreases or increases as specified in clauses
(iii)(A) or (iii)(B) above, or any exceptions from such agreement specified in
clause (iv) above, it shall be a further condition to the obligations of the
Underwriters that the Representatives shall have determined, after discussions
with officers of the Company responsible for financial and accounting matters,
that such changes, decreases, increases or exceptions as are set forth in such
letters do not (x) reflect a material adverse change in the items specified in
clause (iii)(A) above as compared with the amounts shown in the latest
consolidated statement of financial condition of the Company or GNB, as the case
may be, included in the Registration Statement, (y) reflect a material adverse
change in the items specified in clause (iii)(B) above as compared with the
corresponding periods of the prior year or other period specified by the
Representatives, or (z) reflect a material adverse change in items specified in
clause (iv) above from the amounts shown in the Preliminary Prospectus
distributed by the Underwriters in connection with the offering contemplated
hereby or from the amounts shown in the Prospectus.
(g) At the Closing Date and, if applicable, the Option Closing
Date, the Representatives shall have received certificates of the chief
executive officer and the chief financial or accounting officer of the Company,
which certificates shall be deemed to be made on behalf of the Company, dated as
of the Closing Date and, if applicable, the Option Closing Date, evidencing
satisfaction of the conditions of Section 6(a) and stating that (i) the
representations and warranties of the Company set forth in Section 2 hereof are
accurate as of the Closing Date and, if applicable, the Option Closing Date, and
that the Company has complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
such Closing Date and, if applicable, the Option Closing Date; (ii) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there has not been any material adverse change in the
condition (financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Company and the Subsidiaries on a consolidated
basis; (iii) since such dates there has not been any
28
material transaction entered into by the Company or the Subsidiaries other than
transactions in the ordinary course of business; and (iv) they have carefully
examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue dates,
contained, and the Prospectus as amended or supplemented at such Closing Date
(and, if applicable, the Option Closing Date), contains any untrue statement of
material fact, or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made) not
misleading; and (v) covering such other matters as the Representatives may
reasonably request. The officers' certificate of the Company shall further state
that no stop order affecting the Registration Statement is in effect or, to
their knowledge, threatened.
(h) The NASD, upon review of the terms of the public offering
of the Designated Shares, shall not have objected to the Underwriters'
participation in such offering.
(i) At the Closing Date, the Representatives shall have
received the agreements described in Section 4(j), duly executed by the Company
and its directors and officers.
(j) Prior to the Closing Date and, if applicable, the Option
Closing Date, the Company shall have furnished to the Representatives and
counsel for the Underwriters all such other documents, certificates and opinions
as they have reasonably requested.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you. The Company shall furnish the Representatives with
conformed copies of such opinions, certificates, letters and other documents as
the Representatives shall reasonably request.
If any of the conditions referred to in this Section 6 shall not have
been fulfilled when and as required by this Agreement, this Agreement and all of
the Underwriters' obligations hereunder may be terminated by the Representatives
on notice to the Company at, or at any time before, the Closing Date or the
Option Closing Date, as applicable. Any such termination shall be without
liability of the Underwriters to the Company.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each of its directors, officers and agents, and each person, if
any, who controls any Underwriter within the meaning of the 1933 Act, against
any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and attorneys fees and expenses), joint or
several, arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact made by or on behalf of the Company contained in
the registration statement as originally filed or the Registration Statement,
any Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any of the
Designated Shares under the securities laws thereof (any such application,
document or information being hereinafter referred to as a "Blue Sky
Application"), (iii) any omission or alleged omission to state a material fact
in the registration statement as originally filed or the Registration Statement,
any Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application required to be stated therein or
necessary to make the statements therein not misleading, (iv) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or arising out of or
29
based upon any omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (v)
the enforcement of this indemnification provision or the contribution provisions
of Section 7(d); and shall reimburse each such indemnified party for any
reasonable legal or other expenses as incurred, but in no event less frequently
than 30 days after each invoice is submitted, incurred by them in connection
with investigating or defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, however, that the Company shall not be liable in any such case to the
extent, but only to the extent, that any such losses, claims, damages,
liabilities and expenses arise out of or are based upon any untrue statement or
omission or allegation thereof that has been made therein or omitted therefrom
in reliance upon and in conformity with the Underwriters' Information. The
foregoing indemnity agreement is in addition to any liability the Company may
otherwise have to any such indemnified party. The foregoing indemnity contained
in this subsection (a) with respect to any Preliminary Prospectus or the
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) with respect to any person asserting any loss,
claim, damage, liability or expense which is the subject thereof if any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
prepared with the consent of the Representatives and furnished to the
Underwriters prior to the Closing Date corrected any such untrue statement or
alleged untrue statement or omission or alleged omission of a material fact, and
if such Underwriter failed to send or give a copy of such Preliminary
Prospectus, Prospectus or any amendment or supplement thereto to such person at
or prior to the time written confirmation of the sale of Firm Shares was given
to such person.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of the Company's directors, each
of the Company's officers and each person, if any, who controls the Company
within the meaning of the 1933 Act, to the same extent as required by the
foregoing indemnity from the Company to each Underwriter, but only with respect
to any untrue statement or alleged untrue statement of material fact or any
omission or alleged omission to state a material fact in the registration
statement as originally filed or the Registration Statement, any Preliminary
Prospectus or the Prospectus, or in any amendment or supplement thereto related
to the Underwriters' Information (in the case of the Preliminary Prospectus or
the Prospectus, in light of the circumstances under which they were made). The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to any such indemnified party.
(c) If any action or claim shall be brought or asserted
against any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the indemnifying
party in writing, and the indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all expenses; provided, however, that the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under such paragraph, and
further, shall only relieve it from liability under such paragraph to the extent
prejudiced thereby. Any indemnified party or any such controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it that
are different from or in
30
addition to those available to the indemnifying party (in which case, if such
indemnified party or controlling person notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party or such
controlling person) it being understood, however, that the indemnifying party
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 at any time and for all
such indemnified party and controlling persons, which firm shall be designated
in writing by the indemnified party (and, if such indemnified parties are
Underwriters, by you, as Representatives). Each indemnified party and each
controlling person, as a condition of such indemnity, shall use reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. The indemnifying party shall not be liable for any settlement
of any such action effected without its written consent, but if there shall be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
An indemnifying party shall not, without the prior written consent of
each indemnified party, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the 1933 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes a release of each such
indemnified party reasonably satisfactory to each such indemnified party and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding or unless the indemnifying party shall confirm in a
written agreement with each indemnified party, that notwithstanding any federal,
state or common law, such settlement, compromise or consent shall not alter the
right of any indemnified party or controlling person to indemnification or
contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Designated Shares, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand shall be deemed to be allocated pro rata on the
basis of the total underwriting discounts, commissions and compensation received
by the Underwriters relative to the total net proceeds from the offering of the
Designated Shares (before deducting expenses) received by the Company, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and of the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of material fact or the omission or alleged omission to
state any material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this paragraph (d) were determined by pro rata
allocation (even if the
31
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
the first sentence of this paragraph (d) shall be deemed to include, subject to
the limitations set forth above, 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 paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Designated Shares underwritten by such
Underwriter and distributed to the public were offered to the public exceeds the
amount of any damages that 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this paragraph (d), each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
within the meaning of the 1933 Act, each officer of the Company and each
director of the Company shall have the same rights to contribution as the
Company subject in each case to the preceding sentence. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint. The obligations of the
Company under this paragraph (d) shall be in addition to any liability which the
Company may otherwise have and the obligations of the Underwriters under this
paragraph (d) shall be in addition to any liability that the respective
Underwriters may otherwise have.
(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 any Underwriter or
any person controlling an Underwriter or by or on behalf of the Company, or such
directors, trustees or officers (or any person controlling the Company), (ii)
acceptance of any Designated Shares and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor of any Underwriter or of the
Company, such directors, trustees or officers (or of any person controlling an
Underwriter or the Company) shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
8. TERMINATION.
The Representatives shall have the right to terminate this Agreement on
behalf of the Underwriters at any time at or prior to the Closing Date or, with
respect to the Underwriters' obligation to purchase the Option Shares, at any
time at or prior to the Option Closing Date, without liability on the part of
the Underwriters to the Company, if:
(a) The Company shall have failed, refused, or been unable to
perform any agreement on its part to be performed under this Agreement, or any
of the conditions referred to in Section 6 shall not have been fulfilled, when
and as required by this Agreement;
(b) The Company or any of the Subsidiaries shall have
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 which in the
judgment of the Representatives materially impairs the investment quality of the
Designated Shares;
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which in
32
the Representatives' reasonable judgment is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Company and the Subsidiaries
on a consolidated basis, whether or not arising in the ordinary course of
business;
(d) There has occurred any outbreak or escalation of
hostilities or other calamity or crisis (including, without limitation, an act
of terrorism) or material adverse change in general economic, political or
financial conditions, or other domestic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the
Representatives' reasonable judgment, impracticable to market the Designated
Shares or enforce contracts for the sale of the Designated Shares;
(e) Trading generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, by any of said
exchanges or market system or by the Commission or any other governmental
authority; or
(f) A banking moratorium shall have been declared by either
federal, New York or Texas authorities; or
(g) Any action shall have been taken by any government in
respect of its monetary affairs which, in the Representatives' reasonable
judgment, has a material adverse effect on the United States securities markets
so as to make it, in the Representatives' reasonable judgment, impracticable to
market the Designated Shares or to enforce contracts for the sale of the
Designated Shares.
If this Agreement shall be terminated pursuant to this Section 8, the
Company shall not then be under any liability to the Underwriters except as
provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS.
If any Underwriter or Underwriters shall default in its or their
obligations to purchase Designated Shares hereunder, the other Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Designated Shares which such defaulting Underwriter
or Underwriters agreed but failed to purchase; provided, however, that the
non-defaulting Underwriters shall be under no obligation to purchase such
Designated Shares if the aggregate number of Designated Shares to be purchased
by such non-defaulting Underwriters shall exceed 110% of the aggregate
underwriting commitments set forth in Schedule I hereto, and provided further,
that no non-defaulting Underwriter shall be obligated to purchase Designated
Shares to the extent that the number of such Designated Shares is more than 110%
of such Underwriter's underwriting commitment set forth in Schedule I hereto.
In the event that the non-defaulting Underwriters are not obligated
under the above paragraph to purchase the Designated Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase, the Representatives
may in their discretion arrange for one or more of the Underwriters or for
another party or parties to purchase such Designated Shares on the terms
contained herein. If within one business day after such default the
Representatives do not arrange for the purchase of such Designated Shares, then
the Company shall be entitled to a further period of one business day within
which to procure another party or parties satisfactory to the Representatives to
purchase such Designated Shares on such terms.
In the event that the Representatives or the Company do not arrange for
the purchase of any Designated Shares to which a default relates as provided
above, this Agreement shall be terminated.
33
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or a part of the Designated Shares of a
defaulting Underwriter or Underwriters as provided in this Section 9, (i) the
Representatives shall have the right to postpone the Closing Date for a period
of not more than five full business days, in order to effect any changes that,
in the opinion of counsel for the Underwriters or the Company, may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or agreements, and the Company agrees promptly to file any amendments
to the Registration Statement or supplements to the Prospectus which, in its
opinion, may thereby be made necessary, and (ii) the respective numbers of
Designated Shares to be purchased by the remaining Underwriters or substituted
underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of any liability it may have for damages occasioned by
its default hereunder. Any termination of this Agreement pursuant to this
Section 9 shall be without liability on the part of any non-defaulting
Underwriter or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT.
If the Registration Statement is not effective at the time of execution
of this Agreement, this Agreement shall become effective on the Effective Date
at the time the Commission declares the Registration Statement effective. The
Company shall immediately notify the Underwriters when the Registration
Statement becomes effective.
If the Registration Statement is effective at the time of execution of
this Agreement, this Agreement shall become effective at the earlier of 11:00
a.m. St. Louis time, on the first full business day following the day on which
this Agreement is executed, or at such earlier time as the Representatives shall
release the Designated Shares for public offering. The Representatives shall
notify the Company immediately after they have taken any action which causes
this Agreement to become effective.
Until such time as this Agreement shall have become effective, it may
be terminated by the Company, by notifying the Representatives, or by the
Representatives of the several Underwriters, by notifying the Company, except
that the provisions of Sections 5 and 7 shall at all times be effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and other
statements of the Company and its officers set forth in or made pursuant to this
Agreement and the agreements of the Underwriters contained in Section 7 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or controlling persons of the
Company, or by or on behalf of the Underwriters or controlling persons of the
Underwriters or any termination or cancellation of this Agreement and shall
survive delivery of and payment for the Designated Shares.
12. NOTICES.
Except as otherwise provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand, mailed by registered or certified mail, return
receipt requested, or transmitted by any standard form of telecommunication and
confirmed. Notices to the Company shall be sent to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Attention: L. ▇▇▇ ▇▇▇▇▇▇▇▇▇ (with a copy to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Esq.) and notices to the Underwriters shall be sent to
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ (with a copy to ▇▇▇▇▇, Rice &
▇▇▇▇▇▇▇▇, ▇.▇., 500
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇. ▇▇▇▇,
Esq.). In all dealings with the Company under this Agreement, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Company, Incorporated shall act as representative of and on behalf of the
several Underwriters, and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated on behalf of the Underwriters,
as if the same shall have been made or given in writing by the Underwriters.
13. PARTIES.
The Agreement herein set forth is made solely for the benefit of the
Underwriters and the Company and, to the extent expressed, directors and
officers of the Company, any person controlling the Company or the Underwriters,
and their respective successors and assigns. No other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, in his status as such purchaser, from
the Underwriters of the Designated Shares.
14. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Missouri,
without giving effect to the choice of law or conflicts of law principles
thereof.
15. AUTHORITY.
Any certificate signed by an authorized officer of the Company and
delivered to the Representatives or to counsel for the Underwriters pursuant to
this Agreement shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
16. COUNTERPARTS.
This Agreement may be executed by facsimile and in one or more
counterparts, and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same Agreement.
17. ENTIRE AGREEMENT.
This Agreement is intended by the parties as a final expression of
their agreement regarding the purchase and sale of the Designated Shares and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein.
Signatures appear on the next page
35
If the foregoing is in accordance with the Representatives'
understanding of our agreement, please sign and return to us a counterpart
hereof, whereupon this shall become a binding agreement between the Company and
the Representatives in accordance with its terms.
Very truly yours,
TEXAS UNITED BANCSHARES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
CONFIRMED AND ACCEPTED,
as of _______, 2004
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
For itself and as co-Representative of the several
Underwriters named in Schedule I hereto.
▇▇▇▇▇▇ & ▇▇▇▇▇▇, INCORPORATED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
For itself and as co-Representative of the several
Underwriters named in Schedule I hereto.
36
SCHEDULE I
UNDERWRITER NUMBER OF SECURITIES
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated..................................................................
▇▇▇▇▇▇ & ▇▇▇▇▇▇, Incorporated.............................................................................
Total.....................................................................................................
EXHIBIT A-1
LIST OF COMPANY SUBSIDIARIES
Texas United Nevada, Inc.
State Bank
Community Home Loan, Inc.
TXUI Statutory Trust I
TXUI Statutory Trust II
EXHIBIT A-2
LIST OF GNB SUBSIDIARIES
Guaranty National Bancshares, Inc.
GNB Financial, National Association
GNB Capital Trust I