Exhibit 1.2
CBCT BANCSHARES, INC.
304,175 Shares
COMMON STOCK
(Par Value $.l0 Per Share)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
_________, 2000
Keefe, Bruyette & Woods, Inc.
211 Bradenton Avenue
Dublin, Ohio 43017
Ladies and Gentlemen:
CBCT Bancshares, Inc., a Maryland corporation (the "Company") and
Community Bank of Central Texas, ssb, a Texas chartered mutual savings bank (the
"Bank") with its' deposit accounts insured by the Savings Association Insurance
Fund ( "SAIF") administered by the Federal Deposit Insurance Corporation
("FDIC"), hereby confirm, jointly and severally, their agreement with Keefe,
Bruyette & Woods, Inc. (the "Agent"), as follows:
Section 1. The Offering. In accordance with the Stock Issuance Plan
adopted by its Board of Directors (the "Plan"), the Company will offer and sell
up to 304,175 shares of its common stock, par value, $.01 per share (the
"Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors with the Bank on September 30, 1998; (2) the CBCT
Bancshares, Inc. employee stock ownership plan; (3) depositors with the Bank on
March 31, 2000; (4) other members of the Bank on _______, 2000; and (5) the
Bank's director, officers and employees. To the extent Shares remain unsold in
the Subscription Offering, the Company is offering for sale to the general
public in a direct community offering (the "Community Offering" and when
referred to together with the Subscription Offering, the "Subscription and
Community Offering") the Shares not so subscribed for or ordered in the
Subscription Offering to members of the general public ("Other Subscribers"),
(all such offerees being referred to in the aggregate as "Eligible Offerees").
It is anticipated that shares not subscribed for in the Subscription and
Community Offering will be offered to certain members of the general public on a
best efforts basis through a selected dealers arrangement (the "Syndicated
Community Offering") (the Subscription Offering, Community Offering and
Syndicated Community Offering are collectively referred to as
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the "Offering"). It is acknowledged that the purchase of Shares in the Offering
is subject to the maximum and minimum purchase limitations as described in the
Plan and that the Company and the Bank may reject, in whole or in part, any
orders received in the Community Offering or Syndicated Community Offering. The
Company will issue the Shares at a purchase price of $10.00 per share (the
"Purchase Price").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-33102) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof and such amended prospectuses as
may have been required to the date hereof. The term "Registration Statement"
shall include all exhibits thereto, as amended, including post-effective
amendments. The prospectus, as amended, on file with the Commission at the time
the Registration Statement initially became effective is hereinafter called the
"Prospectus," except that if any Prospectus is filed by the Company pursuant to
Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations") differing from the prospectus on file at the
time the Registration Statement initially becomes effective, the term
"Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c)
from and after the time said prospectus is filed with the Commission.
The Bank and the Company have filed with the Texas Savings and Loan
Department (the "TSLD") and the Federal Deposit Insurance Corporation (the
"FDIC") an Application for Conversion of the Bank with respect to the stock
issuance (the "Conversion Application"), including the Prospectus and the
Valuation Appraisal Report prepared by Ferguson & Company, Inc. (the
"Appraisal") and has filed such amendments thereto as may have been required by
the TSLD and the FDIC. The Company has filed an Application to become a bank
holding company (the "Holding Company Application") pursuant to the Bank Holding
Company Act of 1956, as amended (the "BHC Act") with the Board of Governors of
the Federal Reserve System ("FRB"). The Conversion Application and Holding
Company Application have each been approved by their respective agencies and the
related Prospectus has been authorized for use. The TSLD, FDIC and FRB are
sometimes referred to herein as the "Agencies."
Section 2. Retention of Agent; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank have retained the Agent to consult with and to advise the Bank and the
Company, and to assist the Company, on a best efforts basis, in the distribution
of the shares of Common Stock in the Offering. The services that the Agent will
provide include, but are not limited to (i) training the employees of the Bank
who will perform certain ministerial functions in the Subscription and Community
Offering regarding the mechanics and regulatory requirements of the stock
offering process, (ii) managing the Stock Information Center by assisting
interested stock subscribers and by keeping records of all stock orders and
(iii) preparing marketing materials.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement
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("Letter Agreement"), dated November 24, 1999 between the Bank and the Agent (a
copy of which is attached hereto as Exhibit A). It is acknowledged by the
Company and the Bank that the Agent shall not be required to take or purchase
any Shares or be obligated to take any action which is inconsistent with all
applicable laws, regulations, decisions or orders. In the event of a Syndicated
Community Offering, the Agents will assemble and manage a selling group of
broker-dealers which are members of the National Association of Securities
Dealers, Inc. (the "NASD") to participate in the solicitation of purchase orders
for shares under a selected dealers' agreement ("Selected Dealers' Agreement"),
the form of which is set forth as a Exhibit B to this Agreement.
The obligations of the Agent pursuant to this Agreement (other than
those set forth in Sections 2(d), 8 and 9 hereof) shall terminate upon the
completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than the date (the "End
Date") which is 45 days after the Closing Date (as hereinafter defined). All
fees or expenses due to the Agent but unpaid will be payable to the Agent in
next day funds at the earlier of the Closing Date (as hereinafter defined) or
the End Date. In the event the Offering is extended beyond the End Date, the
Company, the Bank and the Agent may agree to renew this Agreement under mutually
acceptable terms.
In the event the Company is unable to sell a minimum of 195,500 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated, the Agent shall be reimbursed
for its actual accountable out-of-pocket expenses.
If all conditions precedent to the consummation of the Offering,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of the Agent and their
counsel. The release of Shares against payment therefor shall be made on a date
and at a place acceptable to the Company, the Bank and the Agent. Certificates
for shares shall be delivered directly to the purchasers in accordance with
their directions. The date upon which the Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
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The Agent shall receive the following compensation for its services
hereunder:
(a) A management fee of $25,000, which has been paid prior to the
date hereof. Should the Offering be terminated for any reason
not attributable to the action or inaction of the Agent, the
Agent shall have earned and be entitled to such paid fees.
(b) A Success Fee of $50,000.
Notwithstanding anything contained herein to the contrary, the
total amount that the Company shall pay Agent relating to the
Management Fee in 7(a) above, the Success Fee in 7(b) above
and the expense reimbursement set forth in Section 6 below
shall not exceed $105,000.
(c) If any of the shares remain available after the Subscription
and Community Offerings, at the request of the Company, the
Agent will seek to form a syndicate of registered
broker-dealers to assist in the sale of such Common Stock on a
best efforts basis, subject to the terms and conditions set
forth in the selected dealers agreement. the Agent will
endeavor to distribute the Common Stock among dealers in a
fashion which best meets the distribution objectives of the
Company and the Plan. The Agent will be paid a fee not to
exceed 5.5% of the aggregate Purchase Price of the Shares sold
by them. The Agent will pass onto selected broker-dealers, who
assist in the syndicated community, an amount competitive with
gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per
share in a similar market environment. Fees with respect to
purchases affected with the assistance of a broker/dealer
other than the Agent shall be transmitted by the Agent to such
broker/dealer. The decision to utilize selected broker-dealers
will be made by the Company upon consultation with the Agent.
In the event, with respect to any purchases of Shares, fees
are paid pursuant to this subparagraph 2(c), such fees shall
be in lieu of, and not in addition to, payment pursuant to
subparagraph 2(a) and 2(b).
(d) The Company will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation,
regulatory filing fees, "Blue Sky," and NASD filing and
registration fees; the fees of the Company's accountants,
attorneys, appraiser, transfer agent and registrar, printing,
mailing and marketing and syndicate expenses associated with
the Offering; and fees for "Blue Sky" legal work. If the Agent
incurs expenses on behalf of the Company, the Company will
reimburse the Agent for such expenses.
The Agent shall be reimbursed for reasonable out-of-pocket
expenses, including costs of travel, meals and lodging,
photocopying, telephone, facsimile and couriers. The Agent
shall also be reimbursed for its fees of underwriter's counsel
(including counsel's out-of-pocket expenses) not to exceed
$25,000. The selection of such counsel will be done by the
Agent, after consultation with the Company.
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Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover page
of the Prospectus. The Purchase Price may be changed by the Company after
consultation with the Agent, subject to such approval of the TSLD and FDIC and
declaration of effectiveness of an amendment to the Prospectus by the Commission
as may be required. The parties hereto hereby acknowledge that, without the
prior written consent of the TSLD and FDIC, the Conversion will not be
consummated until the Company has received subscriptions for at least the
minimum range of the pro forma market value of the Company.
Section 4. Representations and Warranties of the Company and the Bank.
The Company and the Bank jointly and severally represent and warrant to and
agree with the Agent as follows:
(a) The Registration Statement which was prepared by the Company
and the Bank and filed with the Commission was declared
effective by the Commission on May ___, 2000. At the time the
Registration Statement, including the Prospectus contained
therein (including any amendment or supplement), became
effective, the Registration Statement contained all statements
that were required to be stated therein in accordance with the
1933 Act and the 1933 Act Regulations, complied in all
material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Registration Statement,
including the Prospectus contained therein (including any
amendment or supplement thereto), and any information
regarding the Company or the Bank contained in Sales
Information (as such term is defined in Section 8 hereof)
authorized by the Company or the Bank for use in connection
with the Offering, 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 under which they were made, not
misleading, and at the time any Rule 424(b) or (c) Prospectus
was filed with the Commission and at the Closing Date referred
to in Section 2, the Registration Statement, including the
Prospectus contained therein (including any amendment or
supplement thereto), and any information regarding the Company
or the Bank contained in Sales Information (as such term is
defined in Section 8 hereof) authorized by the Company or the
Bank for use in connection with the Offering will contain all
statements that are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations and
will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the
representations and warranties in this Section 4(a) shall not
apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company
or the Bank by the Agent or its counsel expressly regarding
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the Agent for use in the Prospectus or statements in or
omissions from any Sales Information or information filed
pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(b) The Conversion Application which was prepared by the Company
and the Bank and filed with the TSLD and the FDIC was approved
by the TSLD on ______________, 2000 and the FDIC on
_________________, 2000, and the related Prospectus has been
authorized for use by the TSLD and the FDIC. At the time of
the approval of the Conversion Application, including the
Prospectus (including any amendment or supplement thereto), by
the TSLD and FDIC and at all times subsequent thereto until
the Closing Date, the Conversion Application, including the
Prospectus (including any amendment or supplement thereto),
will comply in all material respects with the rules and
regulations of the TSLD and the FDIC ("Conversion
Regulations"), except to the extent waived in writing by the
TSLD or FDIC, as appropriate. The Conversion Application,
including the Prospectus (including any amendment or
supplement thereto), does not include any 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 under which they were made, not
misleading; provided, however, that the representations and
warranties in this Section 4(b) shall not apply to statements
or omissions made in reliance upon and in conformity with
written information furnished to the Company or the Bank by
the Agent or its counsel expressly regarding the Agent for use
in the Prospectus contained in the Conversion Application or
statements in or omissions from any sales information.
(c) As of the Closing Date, the Bank and the Company will have
satisfied the conditions precedent to their consummation of
the Conversion in all material respects in accordance with the
Plan, and shall have complied in all material respects with
the BHC Act and all other applicable laws, regulations,
decisions and orders, including all terms, conditions,
requirements, and provisions precedent to the Conversion
imposed upon each of them by the Agencies. The Plan has been
duly and validly adopted by the Board of Directors of each of
the Bank and the Company. The filing of the Holding Company
Application has been approved by the Board of Directors of the
Company. The Agencies have approved the Plan and authorized
the use of the Prospectus and such approvals and authorization
remain in full force and effect.
(d) The Company is a bank holding company under the BHC Act. The
Holding Company Application which was prepared by the Company
and the Bank and filed with the FRB was approved by the FRB on
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______________, 2000. At the time of the approval of the
Holding Company Application, including the Prospectus
(including any amendment or supplement thereto), by the FRB
and at all times subsequent thereto until the Closing Date,
the Holding Company Application, including the Prospectus
(including any amendment or supplement thereto), will comply
in all material respects with the BHC Act and related
regulations, except to the extent waived in writing by the
FRB. The Holding Company Application, including the Prospectus
(including any amendment or supplement thereto), does not
include any 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 under which they were made, not misleading;
provided, however, that the representations and warranties in
this Section 4(d) shall not apply to statements or omissions
made in reliance upon and in conformity with written
information furnished to the Company or the Bank by the Agent
or its counsel expressly regarding the Agent for use in the
Prospectus contained in the Holding Company Application or
statements in or omissions from any sales information.
(e) No order has been issued by the Agencies (hereinafter any
reference to the Agencies or the FDIC shall include the SAIF)
preventing or suspending the use of the Prospectus, and no
action by or before any such government entity to revoke any
approval, authorization or order of effectiveness related to
the Offering is, to the best knowledge of the Company or the
Bank, pending or threatened.
(f) The Company does not own any equity securities or any equity
interest in any business enterprise except as described in the
Prospectus.
(g) At the Closing Date, the Plan will have been adopted by the
Boards of Directors of the Company and the Bank and approved
by the members of the Bank, and the offer and sale of the
Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations, and all
other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Offering imposed upon the Company or the Bank
by the Agencies, the Commission, or any other regulatory
authority and in the manner described in the Prospectus. To
the best knowledge of the Company, no person has sought to
obtain review of the final action of the Agencies in approving
the Plan, the Conversion Application or the Holding Company
Application, or any other statute or regulation.
(h) The Bank has been organized and is a validly existing Texas
chartered savings bank in capital stock form of organization,
duly authorized to conduct its business and own its property
as described in the Registration Statement and the Prospectus;
the Bank has obtained all material licenses, permits and other
governmental authorizations currently required for the conduct
7
of its business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is
in all material respects complying with all laws, rules,
regulations and orders applicable to the operation of its
business; the Bank is existing under the laws of the Texas and
is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
its ownership of property or leasing of property or the
conduct of its business requires such qualification, unless
the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the
condition, financial or otherwise, or the business, operations
or income of the Bank. The Bank does not own equity securities
or any equity interest in any other business enterprise except
as described in the Prospectus or as would not be material to
the operations of the Bank. Upon completion of the sale by the
Company of the Shares contemplated by the Prospectus, (i) all
of the issued and outstanding capital stock of the Bank will
be owned by the Company and (ii) the Company will have no
direct subsidiaries other than the Bank. The Offering will
have been effected in all material respects in accordance with
all applicable statutes, regulations, decisions and orders;
and, except with respect to the filing of certain post-sale,
post-Offering reports, and documents in compliance with the
1933 Act Regulations, the Agencies' resolutions or letters of
approval, all terms, conditions, requirements and provisions
with respect to the Offering imposed by the Commission and the
Agencies, if any, will have been complied with by the Company
and the Bank in all material respects or appropriate waivers
will have been obtained and all material notice and waiting
periods will have been satisfied, waived or elapsed.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Maryland with corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus,
and at the Closing Date the Company will be qualified to do
business as a foreign corporation in Texas and in each
jurisdiction in which the conduct of its business requires
such qualification, except where the failure to so qualify
would not have a material adverse effect on the condition,
financial or otherwise, or the business, operations or income
of the Company. The Company has obtained all material
licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such
licenses, permits and governmental authorizations are in full
force and effect, and the Company is in all material respects
complying with all laws, rules, regulations and orders
applicable to the operation of its business.
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(j) The Bank is a member of the Federal Home Loan Bank of Dallas
("FHLB-Dallas"). The deposit accounts of the Bank are insured
by the FDIC up to the applicable limits; and no proceedings
for the termination or revocation of such insurance are
pending or, to the best knowledge of the Company or the Bank,
threatened.
(k) The Company and the Bank have good and marketable title to all
real property and good title to all other assets material to
the business of the Company and the Bank, taken as a whole,
and to those properties and assets described in the
Registration Statement and Prospectus as owned by them, free
and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Registration Statement and
Prospectus, or are not material to the business of the Company
and the Bank, taken as a whole; and all of the leases and
subleases material to the business of the Company and the
Bank, taken as a whole, under which the Company or the Bank
hold properties, including those described in the Registration
Statement and Prospectus, are in full force and effect. (l)
The Company and the Bank have received an opinion of their
special counsel, Silver, Freedman & Taff, L.L.P. with respect
to the federal income tax consequences of the Conversion, the
acquisition of the capital stock of the Bank by the Company
and the sale of the Shares as described in the Registration
Statement and the Prospectus, and an opinion from Padgett,
Padgett, Stratemann & Co., LLP ("Padgett") with respect to the
Texas state income tax consequences of the proposed
Conversion, acquisition of the capital stock of the Bank by
the Company and the sale of the Shares as described in the
Registration Statement and the Prospectus; all material
aspects of the opinions of Silver, Freedman & Taff, L.L.P. and
Padgett are accurately summarized in the Prospectus; and the
facts and representations upon which such opinions are based
are truthful, accurate and complete.
(m) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to
enter into this Agreement, to carry out the provisions and
conditions hereof and to issue and sell the Shares to be sold
by the Company, as provided herein and as described in the
Prospectus except approval or confirmation by the TSLD and the
FDIC of the final appraisal of the Company. The consummation
of the Offering, the execution, delivery and performance of
this Agreement and the consummation of the transactions herein
contemplated have been duly and validly authorized by all
necessary corporate action on the part of the Company and the
Bank and this Agreement has been validly executed and
delivered by the Company and the Bank and is the valid, legal
and binding agreement of the Company and the Bank enforceable
in accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy,
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insolvency, moratorium, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of Texas savings banks
and bank holding companies, the accounts of whose subsidiaries
are insured by the FDIC or by general equity principles
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent if
any, that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy).
(n) The Company and the Bank are not in violation of any directive
received from the Agencies, the State of Maryland or any other
agency to make any material change in the method of conducting
their businesses so as to comply in all material respects with
all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of
the TSLD, FDIC and the FRB) and, except as may be set forth in
the Registration Statement and the Prospectus, there is no
suit or proceeding or charge or action before or by any court,
regulatory authority or governmental agency or body, pending
or, to the knowledge of the Company or the Bank, threatened,
which might materially and adversely affect the Offering, the
performance of this Agreement or the consummation of the
transactions contemplated in the Plan and as described in the
Registration Statement and the Prospectus or which might
result in any material adverse change in the condition
(financial or otherwise), earnings, capital or properties of
the Company and the Bank, or which would materially affect
their properties and assets.
(o) The financial statements, schedules and notes related thereto
which are included in the Prospectus fairly present the
consolidated balance sheet, income statement, statement of
changes in equity and cash flows of the Company at the
respective dates indicated and for the respective periods
covered thereby and comply as to form in all material respects
with the applicable accounting requirements of the Agencies
and generally accepted accounting principles (including those
requiring the recording of certain assets at their current
market value). Such financial statements, schedules and notes
related thereto have been prepared in accordance with
generally accepted accounting principles consistently applied
through the periods involved, present fairly in all material
respects the information required to be stated therein and are
consistent with the most recent financial statements and other
reports filed by the Company and the Bank with the Agencies.
The other financial, statistical and pro forma information and
related notes included in the Prospectus present fairly the
information shown therein on a basis consistent with the
audited and unaudited financial statements of the Company
included in the Prospectus, and as to the pro forma
adjustments, the adjustments described therein have been
properly applied on the basis described therein.
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(p) Since the respective dates as of which information is given in
the Registration Statement including the Prospectus: (i) there
has not been any material adverse change, financial or
otherwise, in the condition of the Company or the Bank
considered as one enterprise, or in the earnings, capital or
properties of the Company or the Bank, whether or not arising
in the ordinary course of business; (ii) there has not been
any material increase in the long-term debt of the Bank or in
the principal amount of the Bank's assets which are classified
by the Bank as substandard, doubtful or loss or in loans past
due 90 days or more or real estate acquired by foreclosure, by
deed-in-lieu of foreclosure or deemed in-substance foreclosure
or any material decrease in retained earnings or total assets
of the Bank nor has the Company or the Bank issued any
securities (other than in connection with the incorporation of
the Company) or incurred any liability or obligation for
borrowing other than in the ordinary course of business; (iii)
there have not been any material transactions entered into by
the Company or the Bank; (iv) there has not been any material
adverse change in the aggregate dollar amount of the Bank's
deposits or its consolidated net worth; (v) there has been no
material adverse change in the Company's or the Bank's
relationship with its insurance carriers, including, without
limitation, cancellation or other termination of the Company's
or the Bank's fidelity bond or any other type of insurance
coverage; (vi) except as disclosed in the Prospectus there has
been no material change in management of the Company or the
Bank, neither of which has any material undisclosed liability
of any kind, contingent or otherwise; (vii) the Company or the
Bank has not sustained any material loss or interference with
its respective business or properties from fire, flood,
windstorm, earthquake, accident or other calamity, whether or
not covered by insurance; (viii) the Company or the Bank is
not in default in the payment of principal or interest on any
outstanding debt obligations; (ix) the capitalization,
liabilities, assets, properties and business of the Company
and the Bank conform in all material respects to the
descriptions thereof contained in the Prospectus; and (x)
neither the Company nor the Bank has any material contingent
liabilities, except as set forth in the Prospectus. All
documents made available to or delivered or to be made
available to or delivered by the Bank or the Company or their
representatives in connection with the issuance and sale of
the Shares, including records of account holders, depositors
and other members of the Bank, or in connection with the
Agent's exercise of due diligence, except for those documents
which were prepared by parties other than the Bank the Company
or their representatives, to the best knowledge of the Bank
and the Company, were on the dates on which they were
delivered, or will be on the dates on which they are to be
delivered, true, complete and correct in all material
respects.
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(q) As of the date hereof and as of the Closing Date, neither the
Company nor the Bank is (i) in violation of its charter or
bylaws, respectively, or (ii) in default in the performance or
observance of any material obligation, agreement, covenant, or
condition contained in any material contract, lease, loan
agreement, indenture or other instrument to which it is a
party or by which it or any of its property may be bound; the
consummation of the Offering, the execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of
the Company and the Bank and this Agreement has been validly
executed and delivered by the Company and the Bank and is a
valid, legal and binding Agreement of the Company and the Bank
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of Texas savings
institutions, (ii) general equitable principles, (iii) laws
relating to the safety and soundness of insured depository
institutions, and (iv) applicable law or public policy with
respect to the indemnification and/or contribution provisions
contained herein, and except that no representation or
warranty need be made as to the effect or availability of
equitable remedies or injunctive relief (regardless of whether
such enforceability is considered in a proceeding in equity or
at law). The consummation of the transactions herein
contemplated will not: (i) conflict with or constitute a
breach of, or default under, or result in the creation of any
material lien, charge or encumbrance upon any of the assets of
the Company or the Bank pursuant to the charter and bylaws of
the Company, the Bank and or any material contract, lease or
other instrument to which the Company or the Bank has a
beneficial interest, or any applicable law, rule, regulation
or order; (ii) violate any authorization, approval, judgement,
decree, order, statute, rule or regulation applicable to the
Company or the Bank, except for such violations which would
not have a material adverse effect on the financial condition
and results of operations of the Company and the Bank on a
consolidated basis; or (iii) result in the creation of any
material lien, charge or encumbrance upon any property of the
Company or the Bank.
(r) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default, on the
part of the Company or the Bank in the due performance and
observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other instrument or agreement to which the
Company or the Bank is a party or by which any of them or any
of their property is bound or affected, except such defaults
which would not have a material adverse affect on the
financial condition or results of operations of the Company
12
and the Bank on a consolidated basis; such agreements are in
full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the
Company and the Bank, threatened any action or proceeding
wherein the Company or the Bank would or might be alleged to
be in default thereunder.
(s) Upon consummation of the Offering, the authorized, issued and
outstanding equity capital of the Company will be within the
range set forth in the Prospectus under the caption
"Capitalization," and no Shares have been or will be issued
and outstanding prior to the Closing Date (other than Shares
issued to the Company); the Shares will have been duly and
validly authorized for issuance and, when issued and delivered
by the Company pursuant to the Plan against payment of the
consideration calculated as set forth in the Plan and in the
Prospectus, will be duly and validly issued, fully paid and
non-assessable, except for shares purchased by the ESOP with
funds borrowed from the Company to the extent payment therefor
in cash has not been received by the Company; except to the
extent that subscription rights and priorities pursuant
thereto exist pursuant to the Plan, no preemptive rights exist
with respect to the Shares; and the terms and provisions of
the Shares will conform in all material respects to the
description thereof contained in the Registration Statement
and the Prospectus. To the best knowledge of the Company and
the Bank, upon the issuance of the Shares, good title to the
Shares will be transferred from the Company to the purchasers
thereof against payment therefor, subject to such claims as
may be asserted against the purchasers thereof by third-party
claimants.
(t) No consent, approval, authorization or any other order of any
court, regulatory, administrative or supervisory or other
public authority is required in connection with the execution
and delivery of this Agreement or the issuance of the Shares,
except for the approval of the Commission, the Agencies and
any necessary qualification, notification, registration or
exemption under the securities or blue sky laws of the various
states in which the Shares are to be offered, and except as
may be required under the rules and regulations of the NASD.
(u) Padgett, which has certified the consolidated audited
financial statements and schedules of the Bank included in the
Prospectus, has advised the Company and the Bank in writing
that they are, with respect to the Company and the Bank,
independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified
Public Accountants.
(v) Ferguson & Company, Inc., which has prepared the Valuation
Appraisal Report as of March 1, 2000 (as amended or
supplemented, if so amended or
13
supplemented) (the "Appraisal"), has advised the Company in
writing that it is independent of the Company and the Bank
within the meaning of applicable law.
(w) The Company and the Bank have timely filed all required
federal, state and local tax returns; the Company and the Bank
have paid all taxes that have become due and payable in
respect of such returns, except where permitted to be
extended, have made adequate reserves for similar future tax
liabilities and no deficiency has been asserted with respect
thereto by any taxing authority.
(x) The Company and the Bank are in compliance in all material
respects with the applicable financial record-keeping and
reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(y) To the knowledge of the Company and the Bank, neither the
Company, the Bank nor employees of the Company or the Bank
have made any payment of funds of the Company or the Bank as a
loan for the purchase of the Shares or made any other payment
of funds prohibited by law, and no funds have been set aside
to be used for any payment prohibited by law.
(z) Prior to the Offering, neither the Company nor the Bank has:
(i) issued any securities within the last 18 months (except
for notes to evidence other bank loans and reverse repurchase
agreements or other liabilities in the ordinary course of
business or as described in the Prospectus, shares of the Bank
issued to the Company); (ii) had any material dealings within
the 12 months prior to the date hereof with any member of the
NASD, or any person related to or associated with such member,
other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of United States
government and agency securities; (iii) entered into a
financial or management consulting agreement except as
contemplated hereunder; and (iv) engaged any intermediary
between the Agent and the Company and the Bank in connection
with the offering of the Shares, and no person is being
compensated in any manner for such service. Appropriate
arrangements have been made for placing the funds received
from subscriptions for Shares in a special interest-bearing
account with the Bank until all Shares are sold and paid for,
with provision for refund to the purchasers in the event that
the Offering is not completed for whatever reason or for
delivery to the Company if all Shares are sold.
(aa) The Company and the Bank have not relied upon the Agent or its
legal counsel or other advisors for any legal, tax or
accounting advice in connection with the Offering.
14
(bb) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(cc) The Prospectus provides a complete and accurate description,
in all material respects, of (i) each employee pension benefit
plan, within the meaning of Section 3(2) of the Employee
Retirement Income Security Act ("ERISA"), to which the Bank
contributes or is obligated to contribute on behalf of its
employees; and (ii) each material unfunded deferred
compensation plan, each material supplemental death,
disability and retirement plan, each material medical
reimbursement plan. Except as described in the Prospectus,
neither the Bank nor a member of the Controlled Group (as
defined in Internal Revenue Code Section 414(b), (c), (m) or
(o)) involving the Bank, has maintained, and does maintain or
contribute to, has contributed to, or has been required to
contribute to, any "defined benefit plans," as such term is
defined in Section 414(j) of the Internal Revenue Code or any
other employee benefit plan subject to the funding
requirements of Section 412 of the Internal Revenue Code. All
required contributions to all "employee benefit plans" (as
that term is defined in Section 3(3) of ERISA) maintained by
the Bank (or to which the Bank is obligated to contribute)
have been timely made. Neither the Bank, any "employee benefit
plans" which the Bank maintains or maintained, or to which the
Bank is or was obligated to contribute, nor any party in
interest (as defined in Section 3(14) of ERISA) with respect
thereto, nor any trusts created thereunder, has engaged in a
"prohibited transaction," as such term is defined in Section
4975 of the Internal Revenue Code or Sections 406 and 407 of
ERISA, or any breach of fiduciary duty, which could subject
the Bank, any officer, director or employee of the Bank, any
of such plans, or any trust, to any tax or penalty on
prohibited transactions imposed by such Section 4975, any
liability under ERISA, or would have a material adverse effect
on the business, prospects, general affairs operations or
financial condition of the Bank. Except as set forth in the
Prospectus , the Bank is not obligated to provide any benefits
under any employee welfare benefit plan as defined in Section
3(1) of ERISA ("Welfare Plan") to any retiree of the Bank.
Each Welfare Plan subject to the continuation coverage
requirements of Part 6 of Title I of ERISA has complied in all
respects with such continuation coverage requirements. The
Bank is not, and has not been a contributing employer to any
"multiemployer plan," without regard to whether it was a
retirement plan or a welfare plan, as such terms are defined
in Section 3(37) or Section 4001(a)(3) of ERISA. All employee
pension benefit plans and Welfare Plans have timely complied
in all material respects with the applicable requirements of
Part 1 of Subtitle B of Title I of ERISA and currently comply
and have complied in the past in all material respects, both
as to form and operation, with ERISA, the Internal Revenue
Code and all other applicable laws. All employee pension
benefit plans intended to be qualified plans within the
meaning of Sections 401(a) and 501(a)
15
of the Internal Revenue Code are so qualified and have been so
qualified since their inception.
(dd) Any certificates signed by an officer of the Company or the
Bank pursuant to the conditions of this Agreement and
delivered to the Agent or their counsel that refers to this
Agreement shall be deemed to be a representation and warranty
by the Company or the Bank to the Agent as to the matters
covered thereby with the same effect as if such representation
and warranty were set forth herein.
(ee) All documents delivered or to be delivered by the Bank or the
Company or their representatives in connection with the
issuance and sale of the Conversion Stock including records of
account holders, depositors, borrowers and other members of
the Bank, or in connection with the Agents' exercise of due
diligence, except for those documents which were prepared by
parties other than the Bank, the Company or their
representatives were on the dates on which they were
delivered, or will be on the dates on which they are to be
delivered, true, complete and correct in all material
respects.
(ff) The Bank and the Company have complied or will comply in all
material respects with each and every undertaking or
commitment made by them under the blue sky laws, including,
without limitation, each and every undertaking or commitment
made in connection with the Subscription and Community
Offering.
(gg) Appropriate arrangements have been made for placing the funds
received from subscriptions for Shares in special
interest-bearing accounts with the Bank until all Shares are
sold and paid for, with provision for refund to the purchasers
in the event that the Conversion is not completed for whatever
reason or for delivery to the Company if all shares are sold.
Section 5. Representations and Warranties of the Agent.
The Agent represents and warrants to the Company and the Bank that:
(i) it is a corporation and is validly existing in good
standing under the laws of the State of New York and licensed to
conduct business in the State of New York and it has the full power and
authority to provide the services to be furnished to the Bank and the
Company hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Agent,
and this Agreement has been duly and validly executed and delivered by
the Agent and is a legal, valid and binding agreement of the Agent,
enforceable in accordance with its terms.
16
(iii) Each of the Agent and its employees, agents and
representatives who shall perform any of the services hereunder shall
be duly authorized and empowered, and shall have all licenses,
approvals and permits necessary to perform such services.
(iv) The execution and delivery of this Agreement by the
Agent, the consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not conflict with,
or result in a breach of, any of the terms, provisions or conditions
of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, the articles of
incorporation of the Agent or any agreement, indenture or other
instrument to which the Agent is a party or by which it or its property
is bound.
(v) No approval of any regulatory or supervisory or other
public authority is required in connection with the Agent's execution
and delivery of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before
or by any court, regulatory authority or government agency or body or,
to the knowledge of the Agent, pending or threatened, which might
materially adversely affect the Agent's performance of this Agreement.
Section 5.l Covenants of the Company and the Bank. The Company and the
Bank hereby jointly and severally covenant with the Agent as follows:
(a) The Company will not, at any time after the date the
Registration Statement is declared effective, file any
amendment or supplement to the Registration Statement without
providing the Agent and its counsel an opportunity to review
such amendment or supplement or file any amendment or
supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(b) The Bank will not, at any time after the Conversion
Application and Holding Company Application are approved by
the Agencies, file any amendment or supplement to such
Applications without providing the Agent and its counsel an
opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the
Agent or its counsel shall reasonably object.
(c) The Company and the Bank will use their best efforts to cause
any post-effective amendment to the Registration Statement to
be declared effective by the Commission and any post-effective
amendment to the Conversion Application and Holding Company
Application to be approved by the
17
Agencies and will immediately upon receipt of any information
concerning the events listed below notify the Agent: (i) when
the Registration Statement, as amended, has become effective;
(ii) when the Conversion Application and Holding Company
Application, as amended have been approved by the Agencies;
(iii) any comments from the Commission, the Agencies or any
other governmental entity with respect to the Offering or the
transactions contemplated by this Agreement; (iv) of the
request by the Commission, the Agencies or any other
governmental entity for any amendment or supplement to the
Registration Statement, the Conversion Application and the
Holding Company Application or for additional information; (v)
of the issuance by the Commission, the Agencies or any other
governmental entity of any order or other action suspending
the Offering or the use of the Registration Statement or the
Prospectus or any other filing of the Company or the Bank
under the Conversion Regulations, BHC Act or other applicable
law, or the threat of any such action; (vi) the issuance by
the Commission, the Agencies or any authority of any stop
order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or
threat of any proceedings for that purpose; or (vii) of the
occurrence of any event mentioned in paragraph (g) below. The
Company and the Bank will make every reasonable effort (i) to
prevent the issuance by the Commission, the Agencies or any
state authority of any such order and, if any such order shall
at any time be issued and (ii) to obtain the lifting thereof
at the earliest possible time.
(d) The Company and the Bank will deliver to the Agent and to its
counsel two conformed copies of the Registration Statement,
the Conversion Application and the Holding Company
Application, as originally filed, and of each amendment or
supplement thereto, including all exhibits. Further, the
Company and the Bank will deliver such additional copies of
the foregoing documents to counsel to the Agent as may be
required for any NASD and "blue sky" filings.
(e) The Company and the Bank will furnish to the Agent, from time
to time during the period when the Prospectus (or any later
prospectus related to this offering) is required to be
delivered under the 1933 Act or the Securities Exchange Act of
1934 (the "1934 Act"), such number of copies of such
Prospectus (as amended or supplemented) as the Agent may
reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the rules and
regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes the Agent to use the
Prospectus (as amended or supplemented, if amended or
supplemented) in any lawful manner contemplated by the Plan in
connection with the sale of the Shares by the Agent.
18
(f) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect to
the Offering, and the transactions contemplated thereby,
imposed by the Commission, the Agencies or the Conversion
Regulations or the BHC Act, and by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations to be
complied with prior to or subsequent to the Closing Date and
when the Prospectus is required to be delivered, and during
such time period the Company and the Bank will comply, at
their own expense, with all material requirements imposed upon
them by the Commission, the Agencies or the Conversion
Regulations, the BHC Act and by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations,
including, without limitation, Rule 10b-5 under the 1934 Act,
in each case as from time to time in force, so far as
necessary to permit the continuance of sales or dealing in the
Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(g) If, at any time during the period when the Prospectus relating
to the Shares is required to be delivered, any event relating
to or affecting the Company or the Bank shall occur, as a
result of which it is necessary or appropriate, in the opinion
of counsel for the Company and the Bank or in the reasonable
opinion of the Agent's counsel, to amend or supplement the
Registration Statement or Prospectus in order to make the
Registration Statement or Prospectus not misleading in light
of the circumstances existing at the time the Prospectus is
delivered to a purchaser, the Company and the Bank will
immediately so inform the Agent and prepare and file, at their
own expense, with the Commission and the Agencies and furnish
to the Agent a reasonable number of copies of an amendment or
amendments of, or a supplement or supplements to, the
Registration Statement or Prospectus (in form and substance
reasonably satisfactory to the Agent and its counsel after a
reasonable time for review) which will amend or supplement the
Registration Statement or Prospectus so that as amended or
supplemented it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading. For the purpose of this
Agreement, the Company and the Bank each will timely furnish
to the Agent such information with respect to itself as the
Agent may from time to time reasonably request.
(h) The Company and the Bank will take all necessary actions, in
cooperating with the Agent, and furnish to whomever the Agent
may direct, such information as may be required to qualify or
register the Shares for offering and sale by the Company or to
exempt such Shares from registration, or to exempt the Company
as a broker-dealer and its officers, directors and employees
as broker-dealers or agents under the applicable securities or
19
blue sky laws of such jurisdictions in which the Shares are
required under the Conversion Regulations to be sold or as the
Agent and the Company and the Bank may reasonably agree upon;
provided, however, that the Company shall not be obligated to
file any general consent to service of process, to qualify to
do business in any jurisdiction in which it is not so
qualified, or to register its directors or officers as
brokers, dealers, salesmen or agents in any jurisdiction. In
each jurisdiction where any of the Shares shall have been
qualified or registered as above provided, the Company will
make and file such statements and reports in each fiscal
period as are or may be required by the laws of such
jurisdiction.
(i) The Company and the Bank will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after
the Closing Date, without the Agent's prior written consent,
any Common Stock other than the Shares or other than in
connection with any plan or arrangement described in the
Prospectus, including existing stock benefit plans.
(j) The Company shall register its Common Stock under Section
12(g) of the 1934 Act on or prior to the Closing Date pursuant
to the Plan and shall request that such registration be
effective prior to or upon completion of the Offering. The
Company shall maintain the effectiveness of such registration
for not less than three years or such shorter period as may be
required by the Agencies.
(k) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three (3) years from the
date hereof, whichever period is greater, the Company will
furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report of the Company
(including a consolidated balance sheet and statements of
consolidated income, shareholders' equity and cash flows of
the Company and its subsidiaries as at the end of and for such
year, certified by independent public accountants in
accordance with Regulation S-X under the 1933 Act and the 1934
Act).
(l) During the period of three years from the date hereof, the
Company will furnish to the Agent: (i) as soon as practicable
after such information is publicly available, a copy of each
report of the Company furnished to or filed with the
Commission under the 1934 Act or any national securities
exchange or system on which any class of securities of the
Company is listed or quoted (including, but not limited to,
reports on Forms 10-K, 10-Q and 8-K and all proxy statements
and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its
stockholders or filed with the Commission, the Agencies or any
other supervisory or regulatory authority or any national
securities exchange or system on which any class
20
of securities of the Company is listed or quoted, each press
release and material news items and additional documents and
information with respect to the Company or the Bank as the
Agent may reasonably request; and (iii) from time to time,
such other nonconfidential information concerning the Company
or the Bank as the Agent may reasonably request.
(m) The Company and the Bank will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus
under the caption "Use of Proceeds."
(n) Other than as permitted by the Conversion Regulations, the BHC
Act, the 1933 Act, the 1933 Act Regulations, and the laws of
any state in which the Shares are registered or qualified for
sale or exempt from registration, neither the Company nor the
Bank will distribute any prospectus, offering circular or
other offering material in connection with the offer and sale
of the Shares.
(o) The Company will use its best efforts to (i) encourage and
assist a market maker to establish and maintain a market for
the Shares and (ii) list and maintain quotation of the Shares
on the OTC Bulletin Board effective on or prior to the Closing
Date.
(p) The Bank will maintain appropriate arrangements for depositing
all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offering on an
interest-bearing basis at the rate described in the Prospectus
until the Closing Date and satisfaction of all conditions
precedent to the release of the Bank's obligation to refund
payments received from persons subscribing for or ordering
Shares in the Offering in accordance with the Plan and as
described in the Prospectus or until refunds of such funds
have been made to the persons entitled thereto or withdrawal
authorizations canceled in accordance with the Plan and as
described in the Prospectus. The Bank will maintain such
records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the
maximum extent allowable) and to enable the Bank to make the
appropriate refunds of such funds in the event that such
refunds are required to be made in accordance with the Plan
and as described in the Prospectus.
(q) The Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in
order for the Agent to ensure compliance with the NASD's
"Interpretation Relating to Free Riding and Withholding."
(r) Neither the Company nor the Bank will amend the Plan without
notifying the Agent prior thereto.
21
(s) The Company shall assist the Agent, if necessary, in
connection with the allocation of the Shares in the event of
an oversubscription and shall provide the Agent with any
information necessary to assist the Company in allocating the
Shares in such event and such information shall be accurate
and reliable in all material respects.
(t) Prior to the Closing Date, the Company and the Bank will
inform the Agent of any event or circumstances of which it is
aware as a result of which the Registration Statement and/or
Prospectus, as then amended or supplemented, would contain an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein not misleading.
(u) Subsequent to the date the Registration Statement is declared
effective by the Commission and prior to the Closing Date,
except as otherwise may be indicated or contemplated therein
or set forth in an amendment or supplement thereto, neither
the Company nor the Bank will have: (i) issued any securities
or incurred any liability or obligation, direct or contingent,
for borrowed money, except borrowings from the same or similar
sources indicated in the Prospectus in the ordinary course of
its business, or (ii) entered into any transaction which is
material in light of the business and properties of the
Company and the Bank, taken as a whole.
(v) The facts and representations provided to Silver, Freedman &
Taff, L.L.P. by the Bank and the Company and upon which
Silver, Freedman & Taff, L.L.P. will base its opinion under
Section 7(c)(1) are and will be truthful, accurate and
complete.
Section 6. Payment of Expenses. Whether or not the Offering is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse the Agent for the
Company and the Bank have agreed to reimburse the Agent for its out-of-pocket
expenses, and its legal fees (as specified in Section 2) and to indemnify the
Agent against certain claims or liabilities, including certain liabilities under
the Securities Act, and will contribute to payments the Agent may be required to
make in connection with any such claims or liabilities. In the event the Company
is unable to sell a minimum of 195,500 Shares, the Company and the Bank shall
promptly reimburse the Agent in accordance with Section 2 hereof.
Section 7. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder, as to the Shares to be delivered at the Closing Date, are
subject, to the extent not waived in writing by the Agent, to the condition that
all representations and warranties of the Company and the Bank herein are, at
and as of the commencement of the Offering and at and as of the Closing Date,
true and correct in all material respects, the condition that the Company and
the Bank shall have performed all of their obligations hereunder to be performed
on or before such dates, and to the following further conditions:
22
(a) At the Closing Date, the Company and the Bank shall have
conducted the Offering in all material respects in accordance
with the Plan, the Conversion Regulations, the BHC Act and all
other applicable laws, regulations, decisions and orders,
including all terms, conditions, requirements and provisions
precedent to the Offering imposed upon them by the Agencies.
(b) The Registration Statement shall have been declared effective
by the Commission and the Conversion Application and the
Holding Company Application shall be approved by the Agencies
not later than 5:30 p.m. on the date of this Agreement, or
with the Agent's consent at a later time and date; and at the
Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the
1933 Act or proceedings therefore initiated or threatened by
the Commission or any state authority, and no order or other
action suspending the authorization of the Prospectus or the
consummation of the Conversion shall have been issued or
proceedings therefore initiated or, to the Company's or the
Bank's knowledge, threatened by the Commission, the Agencies
or any state authority.
(c) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to the Agent and for its benefit, of Silver,
Freedman & Taff, L.L.P., special counsel for the Company and
the Bank, in form and substance to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of
the United States.
(ii) The Company has corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus.
(iii) The Bank has been organized and is a validly
existing Texas savings bank in capital stock form of
organization, authorized to conduct its business and
own its property as described in the Registration
Statement and the Prospectus. All of the outstanding
capital stock has been duly authorized, and is
validly issued, fully paid and non-assessable and is
owned by the Company, free and clear of any liens,
encumbrances, claims or other restrictions.
23
(iv) The Bank is a member of the FHLB-Dallas. The
deposit accounts of the Bank are insured by the FDIC
up to the maximum amount allowed under law and no
proceedings for the termination or revocation of such
insurance are pending or, to such counsel's Actual
Knowledge, threatened.
(v) The Company has been duly organized and is
validly existing as a Maryland corporation, duly
authorized to conduct its business and own its
properties as described in the Registration Statement
and Prospectus.
(vi) Upon consummation of the Offering, the
authorized, issued and outstanding capital stock of
the Company will be within the range set forth in the
Prospectus under the caption "Capitalization," no
shares of Common Stock have been issued prior to the
Closing Date; at the time of the Offering, the Shares
subscribed for pursuant to the Offering will have
been duly and validly authorized for issuance, and
when issued and delivered by the Company pursuant to
the Plan against payment of the consideration
calculated as set forth in the Plan and Prospectus,
will be duly and validly issued and fully paid and
non-assessable; the issuance of the Shares is not
subject to preemptive rights and the terms and
provisions of the Shares conform in all material
respects to the description thereof contained in the
Prospectus. To such counsel's Actual Knowledge, upon
the issuance of the Shares, good title to the Shares
will be transferred by the Company to the purchasers
thereof against payment therefor, subject to such
claims as may be asserted against the purchasers
thereof by third-party claimants.
(vii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated
hereby, have been duly and validly authorized by all
necessary action on the part of the Company and the
Bank; and this Agreement is a valid and binding
obligation of the Company and the Bank, enforceable
in accordance with its terms, except as the
enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws
now or hereafter in effect relating to or affecting
the enforcement of creditors' rights generally or the
rights of creditors of savings institutions, the
deposits of which are insured by the FDIC and bank
holding companies, (ii) general equitable principles,
(iii) laws relating to the safety and soundness of
insured depository institutions and their holding
companies, and (iv) applicable law or public policy
with respect to the indemnification and/or
contribution provisions contained herein, including
without limitation the provisions of Sections 23A and
23B of the Federal Reserve Act and except that no
opinion need be expressed as to the effect or
availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
24
(viii) The Conversion Application has been approved
by the TSLD and the FDIC and the Prospectus has been
authorized for use by the Agencies, and no action has
been taken, and to such counsel's Actual Knowledge
none is pending or threatened, to revoke any such
authorization or approval. The Holding Company
Application has been approved by the FRB and no
action has been taken, and to such counsel's Actual
Knowledge none is pending or threatened, to revoke
any such authorization or approval.
(ix) The Plan has been duly adopted by the required
vote of the directors of the Company and the Bank.
(x) Subject to the satisfaction of the conditions
to the Agencies' approval of the Offering, no further
approval, registration, authorization, consent or
other order of any federal regulatory agency is
required in connection with the execution and
delivery of this Agreement, the issuance of the
Shares and the consummation of the Offering, except
as may be required under the securities or blue sky
laws of various jurisdictions (as to which no opinion
need be rendered) and except as may be required under
the rules and regulations of the NASD and/or the NYSE
(as to which no opinion need be rendered). To such
counsel's Actual Knowledge, the Offering has been
consummated in all material respects in accordance
with Conversion Regulations and the BHC Act, except
that no opinion is rendered with respect to (a) the
Conversion Application, the Holding Company
Application, the Registration Statement or
Prospectus, which are covered by other clauses of
this opinion, (b) the satisfaction of the
post-Offering conditions in the Conversion
Regulations or in the Agency approvals of the
Conversion Application and the Holding Company
Application, (c) the securities or "blue sky" laws of
various jurisdictions and (d) the rules and
regulations of the NASD.
(xi) The Registration Statement is effective under
the 1933 Act, and no stop order suspending the
effectiveness has been issued under the 1933 Act or
proceedings therefor initiated or, to such counsel's
Actual Knowledge, threatened by the Commission.
(xii) At the time the Conversion Application,
including the Prospectus contained therein, was
approved by the TSLD and the FDIC, the Conversion
Application, including the Prospectus contained
therein, complied as to form in all material respects
with the requirements of the Conversion Regulations,
Texas and federal law and all applicable rules and
regulations promulgated thereunder (other than the
financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data
included therein, as to which no opinion need be
rendered). At the time the Holding Company
Application, including the Prospectus contained
therein, was approved by the
25
FRB, the Holding Company Application, including the
Prospectus contained therein, complied as to form in
all material respects with the requirements of the
Conversion Regulations, Texas and federal law and all
applicable rules and regulations promulgated
thereunder (other than the financial statements, the
notes thereto, and other tabular, financial,
statistical and appraisal data included therein, as
to which no opinion need be rendered).
(xiii) At the time that the Registration Statement
became effective, (i) the Registration Statement (as
amended or supplemented, if so amended or
supplemented) (other than the financial statements,
the notes thereto, and other tabular, financial,
statistical and appraisal data included therein, as
to which no opinion need be rendered), complied as to
form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations, and
(ii) the Prospectus (other than the financial
statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included
therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act
Regulations, the Conversion Regulations, the BHC Act
and federal law.
(xiv) The terms and provisions of the Shares of the
Company conform, in all material respects, to the
description thereof contained in the Registration
Statement and Prospectus, and the form of certificate
used to evidence the Shares is in due and proper
form.
(xv) To such counsel's Actual Knowledge, there are
no legal or governmental proceedings pending or
threatened which are required to be disclosed in the
Registration Statement and Prospectus, other than
those disclosed therein, and to such counsel's Actual
Knowledge, all pending legal and governmental
proceedings to which the Company or the Bank is a
party or of which any of their property is the
subject, which are not described in the Registration
Statement and the Prospectus, including ordinary
routine litigation incidental to the Company's or the
Bank's business, are, considered in the aggregate,
not material.
(xvi) To such counsel's Actual Knowledge, there are
no material contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments
required to be described or referred to in the
Conversion Application, the Holding Company
Application, the Registration Statement or the
Prospectus or required to be filed as exhibits
thereto other than those described or referred to
therein or filed as exhibits thereto in the
Conversion Application, the Holding Company
Application, the Registration Statement or the
Prospectus. The description in the Conversion
Application, the Holding Company Application, the
Registration Statement and the Prospectus of such
26
documents and exhibits is accurate in all material
respects and fairly presents the information required
to be shown.
(xvii) To such counsel's Actual Knowledge, the
Company and the Bank have conducted the Offering, in
all material respects, in accordance with all
applicable requirements of the Plan and applicable
Texas and federal law, except that no opinion is
rendered with respect to (a) the Conversion
Application, the Holding Company Application, the
Registration Statement or Prospectus, which are
covered by other clauses of this opinion, (b) the
satisfaction of the post-Offering conditions in the
Conversion Regulations or in the TSLD and FDIC
approval of the Conversion Application, (c) the
securities or "blue sky" laws of various
jurisdictions, and (d) the rules and regulations of
the NASD. The Plan complies in all material respects
with all applicable Texas and federal laws, rules,
regulations, decisions and orders including, but not
limited to, the Conversion Regulations; no order has
been issued by the TSLD, the Commission, the FDIC, or
any state authority to suspend the Offering or the
use of the Prospectus, and no action for such
purposes has been instituted or, to such counsel's
Actual Knowledge, threatened by the TSLD, the
Commission, the FDIC, or any state authority and no
person has sought to obtain regulatory or judicial
review of the final action of the Agencies, approving
the Plan, the Conversion Application or the
Prospectus.
(xviii) To such counsel's Actual Knowledge, the
Company and the Bank have obtained all material
federal licenses, permits and other federal
governmental authorizations currently required for
the conduct of their businesses and all such
licenses, permits and other governmental
authorizations are in full force and effect, and the
Company and the Bank are in all material respects
complying therewith, except where the failure to have
such licenses, permits and other governmental
authorizations or the failure to be in compliance
therewith would not have a material adverse effect on
the business or operations of the Bank and the
Company, taken as a whole.
(xix) To such counsel's Actual Knowledge, neither
the Company nor the Bank is in violation of its
Charter and bylaws, as appropriate or, to such
counsel's Actual Knowledge, in default or violation
of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which
it is a party or by which it or its property may be
bound, except for such defaults or violations which
would not have a material adverse impact on the
financial condition or results of operations of the
Company and the Bank on a consolidated basis; to such
counsel's Actual Knowledge, the execution and
delivery of this Agreement, the occurrence of the
obligations herein set forth and the consummation of
the transactions contemplated herein will not
27
conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or
assets of the Company or the Bank pursuant to any
material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which
the Company or the Bank is a party or by which any of
them may be bound, or to which any of the property or
assets of the Company or the Bank are subject; and,
such action will not result in any violation of the
provisions of the charter or bylaws of the Company or
the Bank or, to such counsel's Actual Knowledge,
result in any violation of any applicable federal
law, act, regulation (except that no opinion with
respect to the securities and blue sky laws of
various jurisdictions or the rules or regulations of
the NASD need be rendered) or order or court order,
writ, injunction or decree.
(xx) The Company's and the Bank's charter and
bylaws comply in all material respects with the rules
and regulations of the Agencies.
(xxi) To such counsel's Actual Knowledge, neither
the Company nor the Bank is in violation of any
directive from the TSLD, FRB or the FDIC to make any
material change in the method of conducting its
respective business.
(xxii) The information in the Prospectus under the
captions "Regulation," "The Stock Offering,"
"Restrictions on Acquisition of the Alamogordo
Financial and Alamogordo Federal" and "Description of
Capital Stock of Alamogordo Financial," to the extent
that such information constitutes matters of law,
summaries of legal matters, documents or proceedings,
or legal conclusions, has been reviewed by such
counsel and is correct in all material respects. The
discussion of statutes or regulations described or
referred to in the Prospectus are accurate summaries
and fairly present the information required to be
shown.
(xxiii) The Company is in good standing as a bank
holding company under the BHC Act.
(xxiv) In addition, such counsel shall state that
during the preparation of the Conversion Application,
the Holding Company Application, the Registration
Statement and the Prospectus, they participated in
conferences with certain officers of, the independent
public and internal accountants for, and other
representatives of the Company and the Bank, at which
conferences the contents of the Conversion
Application, the Holding Company Application, the
28
Registration Statement and the Prospectus and related
matters were discussed and, while such counsel have
not confirmed the accuracy or completeness of or
otherwise verified the information contained in the
Conversion Application, the Holding Company
Application, the Registration Statement or the
Prospectus, and do not assume any responsibility for
such information, based upon such conferences and a
review of documents deemed relevant for the purpose
of rendering their view (relying as to materiality as
to factual matters on certificates of officers and
other factual representations by the Company and the
Bank), nothing has come to their attention that would
lead them to believe that the Conversion Application,
the Holding Company Application, the Registration
Statement, the Prospectus, or any amendment or
supplement thereto (other than the financial
statements, the notes thereto, and other tabular,
financial, statistical and appraisal data included
therein as to which no view need be rendered)
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading.
In giving such opinion, such counsel may rely as to all matters of fact
on certificates of officers or directors of the Company and the Bank and
certificates of public officials. The opinion of Silver Freedman & Taff, L.L.P.
shall be limited to matters governed by federal banking and securities laws, and
shall be governed by the Legal Opinion Accord "Accord") of the American Bar
Association Section of Business Law (1991). The term "Actual Knowledge" as used
herein shall have the meaning set forth in the Accord. For purposes of such
opinion, no proceedings shall be deemed to be pending, no order or stop order
shall be deemed to be issued, and no action shall be deemed to be instituted
unless, in each case, a director or executive officer of the Company or the Bank
shall have received a copy of such proceedings, order, stop order or action. In
addition, such opinion may be limited to present statutes, regulations and
judicial interpretations and to facts as they presently exist; in rendering such
opinion, such counsel need assume no obligation to revise or supplement it
should the present laws be changed by legislative or regulatory action, judicial
decision or otherwise; and such counsel need express no view, opinion or belief
with respect to whether any proposed or pending legislation, if enacted, or any
proposed or pending regulations or policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation, would
affect the validity of the Offering or any aspect thereof. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company or the Bank.
The favorable opinion, dated as of the Closing Date and addressed to
the Agent and for their benefit, of the Bank's local counsel, in form and
substance to the effect that, to the best of such counsel's knowledge, (i) the
Company and the Bank have good and marketable title to all properties and assets
which are material to the business of the Company and the Bank and to those
properties and assets described in the Registration Statement and Prospectus, as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Registration Statement and
Prospectus, or are not material in relation to the business of the Company and
the Bank considered as one enterprise; (ii) all of the leases and subleases
material to the business of the Company and the Bank under which the Company and
the Bank hold properties, as described in the Registration Statement and
Prospectus, are in full force and effect; and (iii) the Bank is duly qualified
as a foreign corporation to transact business and is in good standing in each
29
jurisdiction in which its ownership of property or leasing of property or the
conduct of its business requires such qualification, unless the failure to be so
qualified in one or more of such jurisdictions would not have a material adverse
effect on the condition, financial or otherwise, or the business, operations or
income of the Bank.
(d) At the Closing Date, the Agent shall have received
the favorable opinion, dated as of the Closing Date,
of Selman Munson & Lerner, P.C., the Agent's counsel,
with respect to such matters as the Agent may
reasonably require. Such opinion may rely upon the
opinions of counsel to the Company and the Bank, and
as to matters of fact, upon certificates of officers
and directors of the Company and the Bank delivered
pursuant hereto or as such counsel shall reasonably
request.
(e) At the Closing Date, the Agent shall receive a
certificate of the Chief Executive Officer and the
Principal Financial and/or Accounting Officer of the
Company and the Bank in form and substance reasonably
satisfactory to the Agent's Counsel, dated as of such
Closing Date, to the effect that: (i) they have
carefully reviewed the Prospectus and, in their
opinion, at the time the Prospectus became authorized
for final use, the Prospectus did not contain any
untrue statement of a material fact or omit to state
a material fact necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading; (ii)
since the date the Prospectus became authorized for
final use, no event has occurred which should have
been set forth in an amendment or supplement to the
Prospectus which has not been so set forth, including
specifically, but without limitation, any material
adverse change in the condition, financial or
otherwise, or in the earnings, capital, properties or
business of the Company or the Bank, and the
conditions set forth in this Section 7 have been
satisfied; (iii) since the respective dates as of
which information is given in the Registration
Statement and the Prospectus, there has been no
material adverse change in the condition, financial
or otherwise, or in the earnings, capital or
properties of the Company or the Bank, independently,
or of the Company and the Bank, considered as one
enterprise, whether or not arising in the ordinary
course of business; (iv) the representations and
warranties in Section 4 are true and correct with the
same force and effect as though expressly made at and
as of the Closing Date; (v) the Company and the Bank
have complied in all material respects with all
agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to the
Closing Date and will comply in all material respects
with all obligations to be satisfied by them after
the Offering; (vi) no stop order suspending the
effectiveness of the Registration Statement has been
initiated or, to the best knowledge of the Company or
the Bank, threatened by the Commission or any state
authority; (vii) no order suspending the Offering or
the effectiveness of the Prospectus has been issued
and no proceedings for that purpose are
30
pending or, to the best knowledge of the Company or
the Bank, threatened by the TSLD, the Commission, the
FDIC, the FRB or any state authority; and (viii) to
the best knowledge of the Company or the Bank, no
person has sought to obtain review of the final
action of the Agencies approving the Plan.
(f) Prior to and at the Closing Date: (i) in the
reasonable opinion of the Agent, there shall have
been no material adverse change in the condition,
financial or otherwise, or in the earnings or
business of the Company or the Bank independently, or
of the Company and the Bank, considered as one
enterprise, from that as of the latest dates as of
which such condition is set forth in the Prospectus
other than transactions referred to or contemplated
therein; (ii) the Company or the Bank shall not have
received from the TSLD, FRB or the FDIC any direction
(oral or written) to make any material change in the
method of conducting their business with which it has
not complied (which direction, if any, shall have
been disclosed to the Agent) or which materially and
adversely would affect the business, operations or
financial condition or income of the Company and the
Bank taken as a whole; (iii) the Company and the Bank
shall not have been in default (nor shall an event
have occurred which, with notice or lapse of time or
both, would constitute a default) under any provision
of any agreement or instrument relating to any
outstanding indebtedness; (iv) no action, suit or
proceeding, at law or in equity or before or by any
federal or state commission, board or other
administrative agency, shall be pending or, to the
knowledge of the Company or the Bank, threatened
against the Company or the Bank or affecting any of
their properties wherein an unfavorable decision,
ruling or finding would materially and adversely
affect the business, operations, financial condition
or income of the Company and the Bank taken as a
whole; and (v) the Shares have been qualified or
registered for offering and sale or exempted
therefrom under the securities or blue sky laws of
the jurisdictions as the Agent shall have reasonably
requested and as agreed to by the Company and the
Bank.
(g) Concurrently with the execution of this Agreement,
the Agent shall receive a letter from Padgett,
Stratemann & Co., LLP dated as of the date of the
Prospectus and addressed to the Agent: (i) confirming
that Padgett, Stratemann & Co., LLP is a firm of
independent public accounts within the meaning of
Rule 101 of the Code of Professional Ethics of the
American Institute of Certified Public Accountants
and stating in effect that in its opinion the
consolidated financial statements, schedules and
related notes of the Company as of December 31, 1999
and 1998, and as are included in the Prospectus and
covered by their opinion included therein, comply as
to form in all material respects with the applicable
accounting requirements and related published rules
and regulations of the TSLD, FDIC and the 1933 Act;
(ii) stating in effect that, on the basis of certain
agreed upon procedures (but
31
not an audit in accordance with generally accepted
auditing standards) consisting of a reading of the
latest available unaudited interim consolidated
financial statements of the Company, a reading of the
minutes of the meetings of the Board of Directors and
stockholders of the Company and consultations with
officers of the Company responsible for financial and
accounting matters, nothing came to their attention
which caused them to believe that: (a) the unaudited
financial statements included in the Prospectus are
not in conformity with the 1933 Act, applicable
accounting requirements of the TSLD, FDIC and
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included in the
Prospectus; or (b) during the period from the date of
the latest unaudited consolidated financial
statements included in the Prospectus to a specified
date not more than three business days prior to the
date of the Prospectus, except as has been described
in the Prospectus, there was any increase in
borrowings, other than normal deposit fluctuations,
by the Bank; or (c) there was any decrease in the
consolidated net assets of the Company at the date of
such letter as compared with amounts shown in the
latest unaudited consolidated statement of condition
included in the Prospectus; and (iii) stating that,
in addition to the audit referred to in their opinion
included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this
subsection (f), they have compared with the general
accounting records of the Company, which are subject
to the internal controls of the Company, the
accounting system and other data prepared by the
Company, directly from such accounting records, to
the extent specified in such letter, such amounts
and/or percentages set forth in the Prospectus as the
Agent may reasonably request; and they have reported
on the results of such comparisons.
(h) At the Closing Date, the Agent shall receive a letter
dated the Closing Date, addressed to the Agent,
confirming the statements made by Padgett, Stratemann
& Co., LLP in the letter delivered by it pursuant to
subsection (f) of this Section 7, the "specified
date" referred to in clause (ii) of subsection (f)
thereof to be a date specified in such letter, which
shall not be more than three business days prior to
the Closing Date.
(i) At the Closing Date, the Agent shall receive a letter
from Ferguson & Company, Inc., dated the date thereof
and addressed to counsel for the Agent (i) confirming
that said firm is independent of the Company and the
Bank and is experienced and expert in the area of
corporate appraisals, (ii) stating in effect that the
Appraisal prepared by such firm complies in all
material respects with the applicable requirements of
the Conversion Regulations, and (iii) further stating
that their opinion of the aggregate pro forma market
value of the Company and the Bank expressed in their
Appraisal dated as of March 1, 2000, and most
recently updated, remains in effect.
32
(j) The Company and the Bank shall not have sustained
since the date of the latest financial statements
included in the Prospectus any material loss or
interference with its business from fire, explosion,
flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than
as set forth or contemplated in the Registration
Statement and Prospectus and since the respective
dates as of which information is given in the
Registration Statement and Prospectus, there shall
not have been any change in the long-term debt of the
Company or the Bank other than debt incurred in
relation to the purchase of Shares by the Bank's
Eligible Plans, or any change, or any development
involving a prospective change, in or affecting the
general affairs, management, financial position,
stockholders' equity or results of operations of the
Company or the Bank, otherwise than as set forth or
contemplated in the Registration Statement and
Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable
judgment sufficiently material and adverse as to make
it impracticable or inadvisable to proceed with the
Subscription Offering or the delivery of the Shares
on the terms and in the manner contemplated in the
Prospectus.
(k) At or prior to the Closing Date, the Agent shall
receive: (i) a copy of the letters from the TSLD and
FDIC approving the Conversion Application and
authorizing the use of the Prospectus; (ii) a copy of
the order from the Commission declaring the
Registration Statement effective; (iii) certificate
of good standing from the State of Maryland
evidencing the good standing of the Company; (iv) a
certificate from the FDIC evidencing the Bank's
insurance of accounts; (v) a certificate of the
FHLB-Dallas evidencing the Bank's membership thereof;
(vi) a certificate from the FRB evidencing the
Company's standing as a bank holding company; (vii) a
copy of the Bank's Texas stock charter; and (viii) a
copy of the letters from the FRB approving the
Holding Company Application.
(l) Subsequent to the date hereof, there shall not have
occurred any of the following: (i) a suspension or
limitation in trading in securities generally on the
New York Stock Exchange or in the over-the-counter
market, or quotations halted generally on the Nasdaq,
or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities
have been required by either of such exchanges or the
NASD or by order of the Commission or any other
governmental authority; (ii) a general moratorium on
the operations of commercial banks, federal savings
institutions or a general moratorium on the
withdrawal of deposits from commercial banks or
federal savings institutions declared by federal
authorities; (iii) the engagement by the United
States in hostilities which have resulted in the
declaration, on or after the date hereof, of a
national emergency or war; or
33
(iv) a material decline in the price of equity or
debt securities if the effect of such a declaration
or decline, in the Agent's reasonable judgment, makes
it impracticable or inadvisable to proceed with the
Offering or the delivery of the shares on the terms
and in the manner contemplated in the Registration
Statement and the Prospectus.
(m) At or prior to the Closing Date, counsel to the Agent
shall have been furnished with such documents and
opinions as they may reasonably require for the
purpose of enabling them to pass upon the sale of the
Shares as herein contemplated and related proceedings
or in order to evidence the occurrence or
completeness of any of the representations or
warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings
taken by the Company or the Bank in connection with
the Offering and the sale of the Shares as herein
contemplated shall be satisfactory in form and
substance to the Agent and its counsel.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree
to indemnify and hold harmless the Agent, its
respective officers and directors, employees and
agents, and each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement
expenses), joint or several, that the Agent or any of
them may suffer or to which the Agent and any such
persons may become subject under all applicable
federal or state laws or otherwise, and to promptly
reimburse the Agent and any such persons upon written
demand for any expense (including reasonable fees and
disbursements of counsel) incurred by the Agent or
any of them in connection with investigating,
preparing or defending any actions, proceedings or
claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities or
actions: (i) arise out of or are based upon any
untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
(or any amendment or supplement thereto), preliminary
or final Prospectus (or any amendment or supplement
thereto), the Conversion Application and Holding
Company Application (or any amendment or supplement
thereto), or any instrument or document executed by
the Company or the Bank or based upon written
information supplied by the Company or the Bank filed
in any state or jurisdiction to register or qualify
any or all of the Shares or to claim an exemption
therefrom, or provided to any state or jurisdiction
to exempt the Company as a broker-dealer or its
officers, directors and employees as broker-dealers
or agent, under the securities laws thereof
(collectively, the "Blue Sky Application"), or any
document, advertisement, oral statement or
communication ("Sales
34
Information") prepared, made or executed by or on
behalf of the Company or the Bank with their consent
or based upon written or oral information furnished
by or on behalf of the Company or the Bank, whether
or not filed in any jurisdiction, in order to qualify
or register the Shares or to claim an exemption
therefrom under the securities laws thereof; (ii)
arise out of or are based upon the omission or
alleged omission to state in any of the foregoing
documents or information, 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; or (iii) arise from
any theory of liability whatsoever relating to or
arising from or based upon the Registration Statement
(or any amendment or supplement thereto), preliminary
or final Prospectus (or any amendment or supplement
thereto), the Conversion Application and the Holding
Company Application (or any amendment or supplement
thereto), any Blue Sky Application or Sales
Information or other documentation distributed in
connection with the Offering; provided, however, that
no indemnification is required under this paragraph
(a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon
any untrue material statement or alleged untrue
material statement in, or material omission or
alleged material omission from, the Registration
Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application (or
any amendment or supplement thereto), any Blue Sky
Application or Sales Information made in reliance
upon and in conformity with information furnished in
writing to the Company or the Bank by the Agent or
its counsel regarding the Agent provided, that it is
agreed and understood that the only information
furnished in writing to the Company or the Bank by
the Agent regarding the Agent is set forth in the
Prospectus; and, provided further, that such
indemnification shall be to the extent permitted by
the Commissioner, the TSLD, the FDIC and the Board of
Governors of the Federal Reserve. The indemnification
provided for in this paragraph (a) shall not be
applicable with respect to any loss, liability,
claim, damage, or expense whatsoever if it is
determined by final judgment of a court having
jurisdiction over the matter that such loss,
liability, claim, damage or expense was primarily a
result of the Agent's willful misconduct or gross
negligence.
(b) The Agent agrees to indemnify and hold harmless the
Company and the Bank, their directors and officers
and each person, if any, who controls the Company or
the Bank within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act against any and
all loss, liability, claim, damage or expense
whatsoever (including but not limited to settlement
expenses), joint or several, which they, or any of
them, may suffer or to which they, or any of them may
become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the
Company, the
35
Bank, and any such persons upon written demand for
any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any of
them, in connection with investigating, preparing or
defending any actions, proceedings or claims (whether
commenced or threatened) to the extent such losses,
claims, damages, liabilities or actions: (i) arise
out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment or
supplement thereto), the Conversion Application, the
Holding Company Application (or any amendment or
supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information, (ii)
are based upon the omission or alleged omission to
state in any of the foregoing documents a material
fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading, or (iii) arise from any theory of
liability whatsoever relating to or arising from or
based upon the Registration Statement (or any
amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement
thereto), the Conversion Application, the Holding
Company Application (or any amendment or supplement
thereto), or any Blue Sky Application or Sales
Information or other documentation distributed in
connection with the Offering; provided, however, that
the Agent's obligations under this Section 8(b) shall
exist only if and only to the extent (i) that such
untrue statement or alleged untrue statement was made
in, or such material fact or alleged material fact
was omitted from, the Registration Statement (or any
amendment or supplement thereto), the preliminary or
final Prospectus (or any amendment or supplement
thereto), the Conversion Application, the Holding
Company Application (or any amendment or supplement
thereto), or any Blue Sky Application or Sales
Information in reliance upon and in conformity with
information furnished in writing to the Company or
the Bank by the Agent or its counsel regarding the
Agent, provided, that it is agreed and understood
that the only information furnished in writing to the
Company or the Bank by the Agent regarding the Agent
is set forth in the Prospectus. The indemnification
provided for in this Section 8 (b) shall not be
applicable with respect to any loss, liability,
claim, damage, or expense whatsoever if it is
determined by final judgment of a court having
jurisdiction over the matter that such loss,
liability, claim, damage or expense was primarily a
result of the Company's or the Bank's willful
misconduct or gross negligence.
(c) Each indemnified party shall give prompt written
notice to each indemnifying party of any action,
proceeding, claim (whether commenced or threatened),
or suit instituted against it in respect of which
indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve it
from any liability which it may have on account of
this Section 8 or
36
otherwise. An indemnifying party may participate at
its own expense in the defense of such action. In
addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party,
jointly with any other indemnifying parties receiving
such notice, may assume defense of such action with
counsel chosen by it and approved by the indemnified
parties that are defendants in such action, unless
such indemnified parties reasonably object to such
assumption on the ground that there may be legal
defenses available to them that are different from or
in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense
of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection
with such action, proceeding or claim, other than
reasonable costs of investigation. In no event shall
the indemnifying parties be liable for the fees and
expenses of more than one separate firm of attorneys
(and any special counsel that said firm may retain)
for each indemnified party in connection with any one
action, proceeding or claim or separate but similar
or related actions, proceedings or claims in the same
jurisdiction arising out of the same general
allegations or circumstances.
(d) The agreements contained in this Section 8 and in
Section 9 hereof and the representations and
warranties of the Company and the Bank 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 agent or their officers,
directors or controlling persons, agent or employees
or by or on behalf of the Company or the Bank or any
officers, directors or controlling persons, agent or
employees of the Company or the Bank; (ii) delivery
of and payment hereunder for the Shares; or (iii) any
termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, the Company,
the Bank and the Agent (provided, in the case of the Bank, that such
contribution is in compliance with the requirements of Section 23A of the
Federal Reserve Act and is consistent with any written interpretations regarding
Section 23A of the Federal Reserve Act issued by regulatory agencies having
jurisdiction with respect to such section generally or the Bank in particular,
including without limitation, any opinion issued by the FRB in response to a
request for interpretive advice submitted by counsel to the Bank) shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Company, the Bank
or the Agent from persons other than the other party thereto, who may also be
liable for contribution) in such proportion so that the Agent is responsible for
that portion represented by the percentage that the fees paid to the Agent
pursuant to Section 2 of this Agreement (not including expenses) bears to the
gross proceeds received by the Company from the sale of the Shares in the
Offering, and the Company and
37
the Bank shall be responsible for the balance. If, however, the allocation
provided above is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 8 above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative fault of
the Company and the Bank on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions, proceedings or claims in respect
thereto), but also the relative benefits received by the Company and the Bank on
the one hand and the Agent on the other from the Offering (before deducting
expenses). The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and/or the Bank on the one hand or the Agent on the
other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions, proceedings or claims in respect thereof)
referred to above in this Section 9 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. It is expressly
agreed that the Agent shall not be liable for any loss, liability, claim, damage
or expense or be required to contribute any amount which in the aggregate
exceeds the amount paid (excluding reimbursable expenses) to the Agent under
this Agreement. It is understood that the above stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation. The obligations of the Company and the Bank under this
Section 9 and under Section 8 shall be in addition to any liability which the
Company and the Bank may otherwise have. For purposes of this Section 9, each of
the Agent's, the Company's or the Bank's officers and directors and each person,
if any, who controls the Agent or the Company or the Bank within the meaning of
the 1933 Act and the 1934 Act shall have the same rights to contribution as the
Agent, the Company or the Bank. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 9, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities.
The respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company, the Bank and
the Agent set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Bank or any
38
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any successor or assign of the Agent, the Company,
the Bank, and any such controlling person shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
Section 11. Termination. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required
minimum number of the Shares by December 31, 2000,
and in accordance with the provisions of the Plan or
as required by the Conversion Regulations, and
applicable law, this Agreement shall terminate upon
refund by the Company to each person who has
subscribed for or ordered any of the Shares the full
amount which it may have received from such person,
together with interest as provided in the Prospectus,
and no party to this Agreement shall have any
obligation to the other hereunder, except for payment
by the Company and/or the Bank as set forth in
Sections 2(a), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall
not have been fulfilled when and as required by this
Agreement unless waived in writing, or by the Closing
Date, this Agreement and all of the Agent's
obligations hereunder may be cancelled by the Agent
by notifying the Company and the Bank of such
cancellation in writing or by telegram at any time at
or prior to the Closing Date, and any such
cancellation shall be without liability of any party
to any other party except as otherwise provided in
Sections 2(a), 6, 8 and 9 hereof.
(c) If the Agent elects to terminate this Agreement as
provided in this Section, the Company and the Bank
shall be notified promptly by telephone or telegram,
confirmed by letter.
The Company and the Bank may terminate this Agreement in the event the
Agent is in material breach of the representations and warranties or covenants
contained in Section 5 and such breach has not been cured within a reasonable
period of time after the Company and the Bank have provided the Agent with
notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to Charles Webb &
Company, a Division of Keefe, Bruyette & Woods, Inc., 211 Bradenton, Dublin,
Ohio 43017-3514, Attention: Patricia A. McJoynt, Executive Vice President (with
a copy to Selman Munson & Lerner, P.C., Attention: Jack A. Selman) and, if sent
to the Company and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company
39
and the Bank at 312 Main Street, Smithville, Texas 78957, Attention: Miles
Ledgewood, President (with a copy to Silver, Freedman and Taff, L.L.P.,
Attention: Martin L. Meyrowitz).
Section 13. Parties. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of the Agent when the same shall have been given by the undersigned.
The Agent shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the Bank, when
the same shall have been given by the undersigned or any other officer of the
Company or the Bank. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Agent, the Company, the Bank, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. It is understood and
agreed that this Agreement is the exclusive agreement among the parties hereto,
and supersedes any prior agreement among the parties and may not be varied
except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in next day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the laws of the State of Texas.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and the Agent, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
Section 18. Entire Agreement. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
40
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
Section 19. Headings. Headings on the Sections in this Agreement are
for reference purposes only and shall not be deemed to have any substantive
effect.
Section 20. Delivery by Telecopier. This Agreement shall become
effective upon execution and delivery hereof by all the parties hereto; delivery
of this Agreement may be made by telecopier to the parties with original copies
promptly to follow by overnight courier.
Section 21. Construction. This Agreement has been negotiated by the
parties and their respective counsel. This Agreement will be fairly interpreted
in accordance with its terms and without any strict construction in favor of or
against either party.
Section 22. Exhibits. Each and all of the Exhibits referred to herein
and attached hereto are hereby incorporated into this Agreement for all purposes
as fully as if set forth herein.
Section 23. Arbitration. Any disputes, controversies or claims arising
out of or relating to the negotiations, execution, delivery, performance or
breach of this Agreement shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The place
of arbitration shall be Smithville, Texas. Judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof. If
the amount claimed or disputed in such arbitration is $100,000 or more, the
arbitration shall be conducted before a panel of three arbitrators. In any
arbitration proceeding hereunder or any action to enforce its rights hereunder,
the prevailing party shall be awarded the costs (including reasonable attorneys'
fees) incurred by it related to such proceeding or action. The arbitrator(s)
shall have power to enter such orders by way of interim awards, and they shall
be enforceable in court.
Very truly yours,
CBCT BANCSHARES, INC. COMMUNITY BANK OF CENTRAL TEXAS, SSB
By Its Authorized Representative: By Its Authorized Representative:
- ---------------------------------- ----------------------------------
Brad M. Hurta Brad M. Hurta
President President
Accepted as of the date first above written
Keefe, Bruyette & Woods, Inc.
By Its Authorized
Representative:
- ----------------------------------
[Name]
Managing Director
EXHIBIT B
CBCT BANCHSHARES, INC.
Up to 304,175 Shares (Anticipated Maximum)
(Par Value $0.01 Per Share)
Selected Dealers' Agreement
, 2000
Gentlemen:
We have agreed to assist Community Bank of Central Texas (the "Bank"),
a Texas chartered mutual savings bank, in connection with the offer and sale of
up to 304,175 shares of the conversion common stock, par value $0.01 per share
(the "Common Stock") of CBCT Bancshares, Inc. (the "Company"), a Maryland
corporation, to be issued in connection with the conversion of the Bank. The
total number of shares of Common Stock to be offered may be decreased to a
minimum of shares. The price per share has been fixed at $10.00. The Common
Stock, the number of shares to be issued, and certain of the terms on which they
are being offered, are more fully described in the enclosed Prospectus dated
_________________, 1995 (the "Prospectus"). In connection with the Conversion,
the Company, on a best efforts basis is offering for sale between $1,950,000 of
shares and $3,041,750 of shares (the "Shares") of the Common Stock, in a
Subscription Offering. Any Shares not sold in the Subscription Offering will be
offered to the general public in a community offering (the "Community
Offering").
The Subscription and Community Offerings are being conducted under a
Plan of Conversion (the "Plan") adopted by the Bank pursuant to which the Bank
intends to convert from a Texas chartered mutual savings bank to a Texas
chartered stock savings bank and concurrent formation of a Maryland holding
company (the "Company") (the "Conversion"). As part of the Conversion, the Bank
will amend its Texas mutual savings bank charter to read in the form of a Texas
stock savings bank charter, sell all its to-be-issued common stock to the
Company which in turn will sell the Common Stock to the public as provided for
in the Plan. The Subscription and Community Offerings are further being
conducted in accordance with the regulations of the Texas Savings and Loan
Department and the Federal Deposit Insurance Corporation subject to the
restrictions contained in the Plan.
1
The Common Stock is also being offered in accordance with the Plan by
broker/dealers licensed by the National Association of Securities Dealers, Inc.
("NASD") which have been approved by the Bank ("Approved Brokers").
We are offering the selected dealers (of which you are one) the
opportunity to participate in the solicitation of offers to buy the Common Stock
and we will pay you a fee in the amount of ___percent (__.0%) of the dollar
amount of the Common Stock sold on behalf of the Company by you, as evidenced by
the authorized designation of your firm on the order form or forms for payment
therefor to the special account established by the Bank for the purpose of
holding such funds. It is understood, of course, that payment of your fee will
be made only out of compensation received by us for the Common Stock sold on
behalf of the Company by you, as evidenced in accordance with the preceding
sentence. As soon as practicable after the closing date of the offering, we will
remit to you, only out of our compensation as provided above, the fees to which
you are entitled hereunder.
Each order form for the purchase of Common Stock must set forth the
identity and address of each person to whom the certificates for such Common
Stock should be issued and delivered. Such order form also must clearly identify
your firm in order for you to receive compensation. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "CBCT Bancshares, Inc."
This offer is made subject to the terms and conditions herein set forth
and is made only to selected dealers who are members in good standing of the
NASD who are to comply with all applicable rules of the NASD, including, without
limitation, the NASD's Interpretation With Respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice.
Orders for Common Stock will be subject to confirmation and we, acting
on behalf of the Company and the Bank, reserve the right in our unfettered
discretion to reject any order in whole or in part, to accept or reject orders
in the order of their receipt or otherwise, and to allot. Neither you nor any
other person is authorized by the Company and the Bank, or by us to give any
information or make any representations other than those contained in the
Prospectus in connection with the sale of any of the Common Stock. No selected
dealer is authorized to act as agent for us when soliciting offers to buy the
Common Stock from the public or otherwise. No selected dealer shall engage in
any stabilizing (as defined in Rule 10b-7 promulgated under the Securities
Exchange Act of 1934) with respect to the Company's Common Stock during the
offering.
2
We and each selected dealer assisting in selling Common Stock pursuant
hereto agree to comply with the applicable requirements of the Securities
Exchange Act of 1934 and applicable state rules and regulations. Each
customer-carrying selected dealer that is not a $250,000 net capital reporting
broker/dealer agrees that it will not use a sweep arrangement and that it will
transmit all customer checks by noon of the next business day after receipt
thereof. In addition, we and each selected dealer confirm that the Securities
and Exchange Commission interprets Rule 15c2-8 promulgated under the Securities
Exchange Act of 1934 as requiring that a Prospectus be supplied to each person
who is expected to receive a confirmation of sale 48 hours prior to delivery of
such person's order form.
We and each selected dealer further agree that to the extent that your
customers desire to pay for shares with funds held by or to be deposited with
us, in accordance with the interpretations of the Securities and Exchange
Commission of Rule 15c2-4 promulgated under the Securities Exchange Act of 1934,
either (a) upon receipt of an executed order form or direction to execute an
order form on behalf of a customer to forward the offering price of the Common
Stock ordered on or before twelve noon Missouri time of the next business day
following receipt or execution of an order form by us to the Company for deposit
in a segregated account or (b) to solicit indications of interest in which event
(i) we will subsequently contact any customer indicating interest to confirm the
interest and give instructions to execute and return an order form or to receive
authorization to execute the order form on the customer's behalf, (ii) we will
mail acknowledgments of receipt of orders to each customer confirming interest
on the business day following such confirmation, (iii) we will debit accounts of
such customers on the fifth business day (the "Debit Date") following receipt of
the confirmation referred to in (i), and (iv) we will forward complete order
forms together with such funds to the Company on or before twelve noon on the
next business day and each selected dealer acknowledges that if the procedure in
(b) is adopted, our customers' funds are not required to be in their accounts
until the Debit Date.
Unless earlier terminated by us, this Agreement shall terminate upon
the closing date of the Conversion. We may terminate this Agreement or any
provisions hereof any time by written or telegraphic notice to you. Of course,
our obligations hereunder are subject to the successful completion of the
Conversion.
You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of shares of
Common Stock sold on behalf of the Company by you under this Agreement.
We shall have full authority to take such actions as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement.
Upon application to us, we will inform you as to the states in which we
believe the Common Stock has been qualified for sale under, or are exempt from
the requirements of, the respective blue sky laws of such states, but we assume
no responsibility or obligation as to your rights to sell Common Stock in any
state.
Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.
3
Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned, or telegraphed to you at the address to which this Agreement
is mailed.
This Agreement shall be construed in accordance with the laws of the
State of Ohio.
Please confirm your agreement hereto by signing and returning the
confirmations accompanying this letter at once to us at Keefe, Bruyette & Woods,
Inc., 211 Bradenton, Dublin, Ohio 43017. The enclosed duplicate copy will
evidence the agreement between us.
KEEFE, BRUYETTE & WOODS, INC.
By:
Name:________________
Its:___________________
CONFIRMED AS OF:
________________, 2000
(Name of Dealer)
By:
Its: