Exhibit 1.2 Draft Form of Underwriting Agreement between Annapolis National
Bancorp, Inc. and Xxxxxxx Xxxx & Company, A Division of Xxxxx,
Xxxxxxxx & Xxxxx, Inc.
ANNAPOLIS NATIONAL BANCORP, INC.
833,334 Shares
COMMON STOCK
($.01 Par Value)
Subscription Price $6.00 Per Share
AGENCY AGREEMENT
----------------
________ __, 1997
Xxxxxxx Xxxx & Company
A Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Annapolis National Bancorp, Inc., a Maryland corporation (the
"Company") and Annapolis National Bank, a federally chartered commercial bank
(the "Bank"), hereby confirm their agreement with Xxxxxxx Xxxx & Company, A
Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxx" or the "Agent" or "you") as
follows:
SECTION 1. THE OFFERING. The Company is offering up to 833,334 shares
of its common stock, par value $.01 per share (the "Shares" or "Common Stock"),
in an offering (the "Offering") to the general public. Prior to the Offering,
there are 1,478,972 shares of Common Stock outstanding and there was no active
public market in the Common Stock. The shares of Common Stock are to be offered
at the price per share (the "Purchase Price") set forth on the cover page of the
Prospectus (as hereinafter defined). The Purchase Price may be changed by the
Company after consultation with and the consent of the Agent, subject to such
declaration of effectiveness of an amendment to the Prospectus by the Securities
and Exchange Commission (the "Commission") as may be required. The Offering will
commence on ________ __, 1997 and subscriptions will be accepted until 4:00
p.m., Annapolis, Maryland time on _______ __, 1997, subject to the Company's
right to extend the subscription period for a period of up to ____ months or
terminate the Offering prior to _____ __, 1997 upon the sale of at least 333,334
shares (the "Expiration Date"). All purchases in the Offering will be subject to
certain minimum and maximum purchase limitations and other terms and conditions,
including the right of the Company, in its sole discretion, to reject orders in
whole or in part. Notwithstanding the foregoing, Xxxx shall have the right, in
its sole discretion, to permit investors to submit irrevocable orders together
with legally binding commitments for payment for Shares for which they subscribe
at any time prior to the Closing Date (as defined hereinafter). Persons may
subscribe for the Shares offered by completing, signing and delivering or
mailing a subscription
order form, substantially in the form attached as an exhibit to the Registration
Statement (as defined hereinafter) together with payment in full for the number
of Shares for which such person is subscribing by cashier's check, draft or wire
transfer, payable in next day funds to Xxxx. All subscription funds will be
deposited into a separate, interest-bearing account (the "Escrow Account") with
First National Bank of Maryland (the "Escrow Agent") until the Closing Date or
termination of the Offering. In accordance with Rule 15(c) of the Securities
Exchange Act of 1934, as amended, any funds received by the Agent as payment for
the Shares will be forwarded to the Escrow Agent by noon of the day following
receipt. The Company, the Agent and the Escrow Agent will, prior to the
beginning of the offering of the Shares, enter into a subscription escrow
agreement in a form satisfactory to the parties. The parties mutually agree to
faithfully perform their obligations under the subscription escrow agreement.
Concurrently with or as soon as practicable after the execution of the
Agreement, the Company will deliver to Xxxx copies of the Prospectus of the
Company, dated _______ __, 1997, to be used in the Offering. Concurrently with
or as soon as practicable after the execution of the Agreement, but in any event
prior to the commencement of the Offering, the Company will cause to be
delivered to Xxxx a Blue Sky survey setting forth the jurisdictions in which the
Shares may be offered and sold and the number of Shares that may be offered and
sold in each such jurisdiction.
The Company agrees and acknowledges that the Agent may utilize its
broker network in the Offering to distribute Common Stock, on a "best efforts"
basis, and, if deemed appropriate by the Agent, other broker/dealers which are
members of the National Association of Securities Dealers, Inc. (the "NASD")
pursuant to the terms and conditions of a Selected Dealers' Agreement between
the Agent and such broker/dealers, the form of which is attached hereto as
Exhibit B. The Agent hereby agrees that prior to utilizing its other
broker/dealers ("Approved Brokers"), the Agent will consult with the Company
regarding its determination and will not take any action in this regard which is
not approved in writing by the Company.
The Company has filed with the Commission a registration statement on
Form SB-2 (File No. 333-_____) 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. Such Registration Statement,
including any documents incorporated by reference therein and all financial
schedules and exhibits thereto, as amended, including post-effective amendments,
is herein called the "Registration Statement." 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 430A or 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 430A or Rule 424(b) or (c) from and after the
time said prospectus is filed with the Commission.
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SECTION 2. RETENTION OF XXXX; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company and
Bank hereby appoint Xxxx as their financial advisor and marketing agent to
utilize its best efforts to solicit subscriptions for Shares of the Common Stock
and to advise and assist the Company and the Bank with respect to the Company's
sale of the Shares in the Offering.
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, Xxxx
accepts such appointment and agrees to consult with and advise the Company as to
the matters set forth herein and in the letter agreement ("Letter Agreement"),
dated May 2, 1997 between the Company and Xxxx (a copy of which is attached
hereto as Exhibit A). The Agent agrees to use its best efforts, as agent for the
Company, to sell the shares subject to the terms and conditions set forth in
this Agreement. It is acknowledged by the Company and the Bank that Xxxx shall
not be required to purchase any Shares and shall not be obligated to take any
action which is inconsistent with all applicable laws, regulations, decisions or
orders.
The obligations of Xxxx pursuant to this Agreement shall terminate upon
the completion or termination or abandonment of the Offering, but in no event
later than _______ __, 1997 (the "End Date"). All fees or expenses due to Xxxx
but unpaid will be payable to Xxxx 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 Xxxx may agree to
renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 333,334 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall cause to be refunded 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 and 8 hereof. In the event of
over-subscription in the Offering, the shares will be allocated by the Agent in
accordance with the terms of the Prospectus.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of Xxxx, Xxxx shall be paid the fees due to the date
of such termination pursuant to subparagraph (a) below.
If all conditions precedent to the consummation of the Offering,
including, without limitation, the sale of at least 333,334 Shares, 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 Company, 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 Xxxx and its counsel. The
release of Shares against payment therefor shall be made at ____a.m., Annapolis,
Maryland Time, on a date and at a place acceptable to the Company and Xxxx (it
being understood that such date shall not be more than ten business days after
the
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expiration of the Offering) or such other time or place as shall be agreed upon
by the Company and Xxxx. 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."
Xxxx shall receive on the Closing Date (unless stated otherwise) the
following compensation for its services hereunder:
(a) A management fee of $25,000 payable in four consecutive
monthly installments of $6,250 commencing with the signing of
the engagement letter. Should the Offering be terminated for
any reason not attributable to the action or inaction of Xxxx,
Xxxx shall have earned and be entitled to be paid fees
accruing through the stage at which point the termination
occurred.
(b) A marketing fee of 5.0% of the aggregate Purchase Price of
Common Stock sold in the Offering, excluding shares purchased
by the Company's or the Bank's officers, directors or
employees (or members of their immediate families).
(c) During the initial offering period, stock may be offered
through local brokers/dealers selected and agreed upon by the
Bank and Xxxx. The Bank, in consultation with Xxxx, shall
determine the number of shares which any such broker/dealer
shall be allotted. Xxxx will be paid a fee not to exceed 5.0%
of the aggregate Purchase Price of the shares of common stock
sold by local broker/dealers. Xxxx will pass onto such
selected local broker-dealers 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 local broker/dealers other
than Xxxx shall be transmitted by Xxxx to such broker/dealer.
The decision to utilize selected broker-dealers will be made
by the Bank upon consultation with Xxxx. In the event, with
respect to any stock purchases, fees are paid pursuant to this
subparagraph (c), such fees shall be in lieu of, and not in
addition to, payment pursuant to subparagraph (b).
(d) If any shares of the Company's stock remain available after
the initial offering period, Xxxx, at the request of the Bank,
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. Xxxx will endeavor to distribute
the common stock among dealers in a fashion which best meets
the distribution objectives of the Bank. Xxxx will be paid a
fee not to exceed 5.0% of the aggregate Purchase Price of the
shares of common stock sold. Xxxx 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
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with the assistance of a broker/dealer other than Xxxx shall
be transmitted by Xxxx to such broker/dealer. The decision to
utilize selected broker-dealers will be made by the Bank upon
consultation with Xxxx. In the event, with respect to any
stock purchases, fees are paid pursuant to this subparagraph
(d), such fees shall be in lieu of, and not in addition to,
payment pursuant to subparagraph (b).
Full payment of Xxxx'x actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Company to terminate or abandon the Offering.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Company and the Bank
jointly and severally represent and warrant to Xxxx on the date hereof as
follows:
(a) The Registration Statement was declared effective by the
Commission on ___________, 1997. At the time the Registration
Statement, including the Prospectus contained therein (including any
amendment or supplement thereto), became effective, and at all times
subsequent thereto up to and including the Closing Date, the
Registration Statement conformed and will conform 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 any
document, advertisement, oral statement or communication (the "Sales
Information") 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; provided,
however, that the representations and warranties in this Section 3(a)
shall not apply to statements in or omissions from any preliminary
Prospectus, the Prospectus or the Registration Statement made in
reliance upon and in conformity with written information furnished to
the Company or the Bank by Xxxx or its counsel expressly regarding Xxxx
for use in the Prospectus under the caption "The Offering--Selling
Arrangements" or statements in or omissions from any Sales Information
or information filed pursuant to state securities or blue sky laws or
regulations regarding Xxxx.
(b) At the Closing Date, the Company and the Bank will have
conducted the Offering in accordance with all applicable statutes,
laws, regulations, decisions and orders, provided, however, no
representation or warranty is provided with respect to actions taken by
Xxxx regarding the sale of the Common Stock; except with respect to the
filing of certain post-sale reports and documents in compliance with
the 1933 Act Regulations or any letter of approval, the Company and the
Bank will have satisfied and complied with, or obtained appropriate
waivers with respect to, all terms, conditions, requirements and
provisions precedent to the Offering imposed upon the Company and the
Bank by the Commission or any other regulatory authority; and no order
has been issued by the Commission preventing or suspending the use of
the Prospectus and no action by or before
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the Commission to revoke the order of effectiveness related to the
Offering is pending or, to the best knowledge of the Company,
threatened and no person has sought or threatened any action to prevent
the Offering. Other than as permitted by the 1933 Act and the 1933 Act
Regulations, neither the Company nor the Bank have distributed any
prospectus or other offering material in connection with the Offering
and sale of the Shares.
(c) The Bank has been organized and is a validly existing
federally chartered commercial bank, 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 of its business except those which
individually or in the aggregate would not materially adversely affect
the financial condition of the Company and the Bank taken as a whole;
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 except those which individually or in the
aggregate would not materially adversely affect the financial condition
of the Company and the Bank taken as a whole; the Bank is in good
standing under the rules and regulations of the Office of the
Comptroller of the Currency ("OCC") 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 financial condition,
business, operations or income of the Bank or the Company, taken as a
whole. The Bank does not own equity securities or any equity interest
in any other business enterprise except those which individually or in
the aggregate would not materially adversely affect the financial
condition of the Company and the Bank taken as a whole. Upon completion
of the sale by the Company of the Shares contemplated by the
Prospectus, (i) the Bank will continue to be a federally chartered
commercial bank, (ii) all of the authorized and outstanding capital
stock of the Bank will continue to be owned by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank.
(d) 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 full 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 the Company is qualified
to do business as a foreign corporation 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 business, operations or income of the Company or the Bank, taken as
a whole. The Company has obtained all material licenses, permits and
other governmental authorizations currently required for the conduct of
its business except where failure to do so would not have a material
adverse effect on the business results of operations or general
business affairs of the Bank; 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
6
of its business except where failure to do so would not have a material
adverse effect on the results of operations or general business affairs
of the Bank.
(e) The Bank is the Company's only subsidiary and the Bank has
no direct or indirect subsidiaries.
(f) The Bank is a member of the Federal Home Loan Bank of
Atlanta ("FHLB-Atlanta"), the Federal Reserve Bank of Richmond and is
subject to regulation, supervision and examination by the OCC. As a
bank holding company, the Company is subject to examination and
supervision by the Board of Governors of the Federal Reserve System
(the "Federal Reserve"). The deposit accounts of the Bank are insured
by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
(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, and no approvals by
or filings with the FDIC, the OCC or the Federal Reserve, except such
as have been obtained, are necessary to consummate the Offering.
(g) The Company and the Bank have good and marketable title to
all real property and other assets material to the business of the
Company and the Bank, taken as a whole, and to those respective
properties and assets described in the Registration Statement and
Prospectus as owned by each of them, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in
the Registration Statement and Prospectus, as were incurred in the
ordinary course of business, 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.
(h) The Company and the Bank maintain insurance of the types
and in the amounts generally deemed adequate for their respective
businesses, including, but not limited to, general liability insurance,
fidelity bond insurance and insurance covering real and personal
property owned or leased by the Company or the Bank against theft,
forgery, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force
and effect.
(i) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and the Bank have sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals and governmental
authorizations to conduct their businesses as now conducted; the
expiration of any trademarks, trade names, patent rights, copyrights,
licenses, approvals or governmental authorizations would not have a
material adverse effect; and the Company and the Bank have no knowledge
of any material infringement by it of trademark, trade name rights,
patent rights, copyrights, licenses, trade secret or other similar
rights of others, and, to the Company's and the Bank's knowledge, there
is no claim being made against the Company or the Bank regarding
trademark, trade name,
7
patent, copyright, license, trade secret or other infringement which
could have a material adverse effect.
(j) The Company and the Bank have all such corporate power,
authority, authorizations and approvals 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.
(k) All material transactions between the Company and the Bank
and the officers, directors and major stockholders of the Company that
are required to be disclosed under the Exchange Act and the Rules and
Regulations have been accurately disclosed in the Prospectus; and the
terms of each such transaction are fair to the Company and no less
favorable to the Company than the terms that could have been obtained
from unrelated parties, except as disclosed in the Prospectus.
(l) The Company and the Bank are not in material violation of
any directive received from the OCC, the Federal Reserve, the FDIC, or
any other governmental agency to make any material change in the method
of conducting their businesses so as to comply with all applicable
statutes and regulations (including, without limitation, regulations,
decisions, directives and orders of the OCC, the Federal Reserve and
the FDIC or any other agency) 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 and the Bank, threatened, to which the Company or the
Bank may be a party or of which property owned or leased by the Company
or the Bank is or may be the subject, or related to environmental,
discrimination or financial regulatory matters, which actions, suits or
proceedings might, individually or in the aggregate affect the
Offering, the performance of this Agreement or the consummation of the
transactions contemplated in the Offering and as described in the
Registration Statement and the Prospectus or which might result in any
material adverse change in the financial condition, business, results
of operations or general business affairs of the Company and the Bank
taken as a whole, or which would materially affect their properties and
assets. Except as disclosed in the Prospectus, neither the Company nor
the Bank, nor any of their respective officers, employees or directors
is a party or subject to the provisions of any regulatory action,
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body affecting the business
of the Company or the Bank.
(m) The financial statements which are included in the
Prospectus present fairly the consolidated financial condition, results
of operations, retained earnings and cash flows of the Company at the
respective dates thereof and for the respective periods covered thereby
and comply as to form in all material respects with the applicable
accounting requirements and generally accepted accounting principles
(including those requiring the recording of certain assets at their
current market value). Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
8
applied through the periods involved, present fairly the information
required to be stated therein and are consistent with the most recent
financial statements and other reports filed by the Bank and the
Company with the OCC and the Federal Reserve, respectively, except that
accounting principles employed in such filings conform to the
requirements of such authority and not necessarily to generally
accepted accounting principles (there being no other supervisory or
regulatory authority with which such filings are required). 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 made therein have been properly
applied on the basis described therein.
(n) Since the respective dates as of which information is
given in the Registration Statement including the Prospectus: (i) the
Company and the Bank have not incurred any material liabilities or
obligations, indirect, direct or contingent, or entered into any
material verbal or written agreement or other transaction whether or
not arising in the ordinary course of business or which would result in
a material reduction in the future earnings of the Company and the Bank
(taken as a whole); (ii) there has not been any material adverse
change, financial or otherwise, in the condition of the Company or the
Bank taken as a whole, or in the earnings, capital or properties of the
Company and the Bank taken as a whole, whether or not arising in the
ordinary course of business; (iii) there has not been any Material
Adverse Effect on the aggregate dollar amount of the Company's and the
Bank's (taken as a whole) deposits or their consolidated net worth or
spread; (iv) there has not been any change in the capital stock (other
than upon the sale of the Common Shares hereunder); (v) the Company has
not paid or declared any dividends or other distributions with respect
to its capital stock and the Company and the Bank are not in default in
the payment of principal or interest on any outstanding debt
obligations; (vi) there has not been any material increase in the
long-term debt of the Company or the Bank 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 Company or the Bank nor has
the Company or the Bank issued any securities (other than pursuant to
the exercise of stock options) or incurred any liability or obligation
for borrowing other than in the ordinary course of business; (vii)
there have not been any material transactions entered into by the
Company or the Bank, except with respect to those transactions entered
into in the ordinary course of business; (viii) there has been no
material adverse change in the Company's and 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; (ix) the Company
and the Bank have not sustained any material loss or interference with
their respective business or properties from fire, flood, windstorm,
earthquake, accident or other calamity, whether or not covered by
insurance; (x) there has been no material legal proceeding or employee
grievance initiated against the Bank or the Company; (xi) there has
been no material change in management of the Bank or the
9
Company; and (xii) neither the Company nor the Bank has any material
contingent liabilities, except as set forth in the Prospectus.
(o) As of the date hereof and as of the Closing Date, neither
the Company nor the Bank is in violation of its articles of
incorporation or bylaws or charter or bylaws, as appropriate, or in
default in the performance or observance of any obligation, agreement,
covenant, or condition contained in any 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 which default in any
individual case or in the aggregate would not have a material adverse
effect on the financial condition, earnings, capital or properties of
the Bank and the Company, taken as a whole; 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 federally chartered commercial
banks or bank holding companies, (ii) general equitable principles
whether enforceability is considered in a proceeding at law or in
equity, (iii) laws relating to the safety and soundness of insured
depository institutions, (iv) the enforcement of remedies, including
the remedy of specific performance and injunctive and other forms of
equitable relief which may be subject to certain equitable defenses and
to the discretion of the court before which any proceedings may be
brought, and (v) 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, the articles of incorporation and bylaws of the Company or the
charter and bylaws of the Bank; (ii) conflict with or constitute a
breach of, or default under, any contract, lease or other instrument to
which the Company or the Bank has a beneficial interest, or violate any
applicable law, rule, regulation or order except for such conflict,
breach or default which would not have a material adverse effect on the
financial condition and results of operations of the Company and the
Bank taken as a whole; (ii) violate any authorization, approval,
judgment, 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 taken as a whole; or (iii)
result in the creation of any material lien, charge or encumbrance upon
any property of the Company or the Bank.
(p) 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
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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 and the Bank taken as a whole; 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 or the Bank,
threatened any action or proceeding wherein the Company or the Bank
would or might be alleged to be in default thereunder.
(q) The Company has the authorized and outstanding capital
stock as set forth under the heading Capitalization in the Prospectus;
the issued and outstanding shares of the Company's capital stock have
been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities (except as may be disclosed in the Prospectus), and conform
in all material respects to the description thereof contained in the
Prospectus. All issued and outstanding shares of capital stock of the
Bank have been duly authorized and validly issued and are fully paid
and nonassessable. 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 of Common Stock have been or will be issued and
outstanding prior to the Closing Date referred to in Section 2 (other
than as otherwise disclosed in the Prospectus); the Shares will have
been duly and validly authorized for issuance and, when issued and
delivered by the Company against payment of the consideration
calculated as set forth in the Prospectus, will be duly and validly
issued, fully paid and non-assessable; no preemptive rights exist with
respect to the Shares; and the terms and provisions of the Shares will
conform 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.
(r) No approval, consent of or filing with any regulatory 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 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 and/or the National Association of Securities
Dealers Automated Quotation ("Nasdaq") SmallCap Market.
(s) Neither the Company nor the Bank is, or after giving
effect to the consummation of the transactions contemplated herein,
will be, and neither the Company nor the Bank is directly or indirectly
controlled by, or acting on behalf of any person
11
which is, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(t) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that the Company reasonably
believes would cause or result in, stabilization or manipulation of the
price of the Shares.
(u) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person.
(v) Xxxxxx & Company, LLP, which has expressed its opinions
with respect to the financial statements of the Company included in the
Prospectus, have informed the Company 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 and applicable federal rules, regulations
and issuances.
(w) The Company and the Bank have filed all required federal,
state and local income and franchise 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) 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.
(y) 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,
other liabilities in the ordinary course of business or otherwise as
disclosed in the Prospectus); (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 except for the Letter Agreement
set forth in Exhibit A; and (iv) engaged any intermediary between Xxxx
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.
12
(z) The Company and the Bank have not relied upon Xxxx or its
legal counsel for any legal, tax or accounting advice in connection
with the Offering.
Any certificates signed by an officer of the Company or the Bank
pursuant to the conditions of this Agreement and delivered to Xxxx or its
counsel that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Bank to Xxxx as to the matters covered thereby
with the same effect as if such representation and warranty were set forth
herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Xxxx represents and warrants to the Company and the Bank that:
(a) Xxxx is a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("KBW"). KBW is
a corporation validly existing and in good standing under the laws of the State
of New York with full power and authority to provide the services to be
furnished to the Bank and the Company hereunder.
(b) 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 Xxxx, and this Agreement has been duly and
validly executed and delivered by Xxxx and is a legal, valid and binding
agreement of Xxxx, enforceable in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors, 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 Section 8 hereof may be unenforceable as against public policy.
(c) Each of Xxxx 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.
(d) The execution and delivery of this Agreement by Xxxx, 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 KBW or any material agreement, indenture
or other instrument to which KBW is a party or by which it or its property is
bound.
(e) No approval of any regulatory or supervisory or other public
authority is required in connection with Xxxx'x execution and delivery of this
Agreement or the performance of its terms, except as may have been received.
13
(f) 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
Xxxx, pending or threatened, which might materially adversely affect Xxxx'x
performance of this Agreement.
SECTION 5.1 COVENANTS OF THE COMPANY AND THE BANK. The Company and the
Bank hereby jointly and severally covenant with Xxxx 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 Xxxx and its
counsel an opportunity to review such amendment or supplement or file
any amendment or supplement to which amendment or supplement Xxxx or
its counsel shall reasonably object.
(b) 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 will promptly upon receipt of
any information concerning the events listed below notify Xxxx: (i)
when the Registration Statement, as amended, has become effective; (ii)
any comments from the Commission, the OCC, the Federal Reserve or any
other governmental entity with respect to the Offering or the
transactions contemplated by this Agreement; (iii) of the request by
the Commission, the OCC, the Federal Reserve or any other governmental
entity for any amendment or supplement to the Registration Statement or
for additional information; (iv) of the issuance by the Commission, the
OCC, the Federal Reserve 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 applicable law, or the threat of any such action; (v) the
issuance by the Commission, the OCC, the Federal Reserve or any federal
or state 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 (vi) of the
occurrence of any event mentioned in paragraph (h) below. The Company
and the Bank will make every reasonable effort (i) to prevent the
issuance by the Commission, the OCC, the Federal Reserve or any federal
or state authority of any such order and, if any such order shall at
any time be issued, (ii) to obtain the lifting thereof at the earliest
possible time.
(c) The Company and the Bank will deliver to Xxxx and to its
counsel two conformed copies of the Registration Statement, 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 Xxxx as may
be required for any NASD filings.
(d) The Company and the Bank will furnish to Xxxx, 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
Xxxx
14
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 Xxxx to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner
contemplated in the Offering in connection with the sale of the Shares
by Xxxx.
(e) During such period as may be required by applicable law,
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, by
applicable state law 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, by applicable state law 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 shares of Common Stock
during such period in accordance with the provisions hereof and the
Prospectus.
(f) 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 opinion of Xxxx'x 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, at their expense, prepare and
file with the Commission and furnish to Xxxx 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 Xxxx 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 Xxxx such information
with respect to itself as Xxxx may from time to time reasonably
request.
(g) The Company and the Bank will take all necessary actions,
in cooperating with Xxxx, and furnish to whomever Xxxx 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 blue sky laws of such jurisdictions in which
the Shares are required to be sold
15
or as Xxxx 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.
(h) The Company will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date,
without Xxxx'x prior written consent, any shares of 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.
(i) The Company has registered its Common Stock under Section
12(g) of the 1934 Act and such registration is effective. The Company
shall maintain the effectiveness of such registration for not less than
one year.
(j) During the period during which the Company's Common Stock
is registered under the 1934 Act, the Company will furnish to its
stockholders 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, stockholders' 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).
(k) During the period of three years from the date hereof, the
Company will furnish to Xxxx: (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 OCC, the Federal Reserve or any other supervisory or
regulatory authority or any national securities exchange or system on
which any class of securities of the Company is listed or quoted and
additional documents and information with respect to the Company or the
Bank as Xxxx may reasonably request; and (iii) from time to time, such
other nonconfidential information concerning the Company or the Bank as
Xxxx may reasonably request.
(l) 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."
(m) Other than as permitted by 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
16
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.
(n) 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 the Shares on a national or regional securities exchange
or on the Nasdaq Small-Cap Market effective on or prior to the Closing
Date.
(o) The Company shall not deliver the Shares until the Company
has satisfied or caused to be satisfied each condition set forth in
Section 7 hereof, unless any such condition is waived.
(p) The Company and the Bank will take such actions and
furnish such information as are reasonably requested by Xxxx in order
for Xxxx to ensure compliance with the NASD's "Interpretation Relating
to Free Riding and Withholding."
(q) The Company will not revise its plan of distribution as
described in the Prospectus without notifying Xxxx prior thereto.
(r) The Company and the Bank shall conduct their businesses in
all material respects in compliance with all applicable federal and
state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the OCC, the FDIC and
the Federal Reserve.
SECTION 5.2 COVENANTS OF XXXX. Xxxx hereby covenants with the Company
and the Bank as follows:
(a) During the period when the Prospectus is used, Xxxx will
comply, in all material respects and at its own expense, with all
requirements imposed upon it, to the extent applicable, by the 1933 Act
and the 1934 Act and the rules and regulations promulgated thereunder
and state blue sky laws and regulations applicable to Xxxx; Xxxx will
distribute the Prospectuses or offering materials in connection with
the sales of the Shares only in accordance with the 1933 Act and the
rules and regulations promulgated thereunder.
(b) Xxxx shall assist the Bank in maintaining arrangements for
the deposit of funds and the making of refunds, as appropriate.
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
agrees to pay or reimburse Xxxx for: (a) all Commission, "Blue Sky" and NASD
filing and registration fees; (b) any stock issue or transfer taxes which may be
payable with respect to the sale of the Shares; (c) all reasonable expenses of
the Offering, including but not limited to the Company's and the Bank's
attorneys' fees, transfer agent, registrar and other agent charges, fees
relating to auditing and accounting or
17
other advisors and marketing, printing and mailing expenses necessary in
connection with the Offering; and (d) all reasonable out-of-pocket expenses
incurred by Xxxx not to exceed $10,000 (exclusive of reasonable legal fees and
out-of-pocket expenses in an amount not to exceed $30,000). Such out-of-pocket
expenses include, but are not limited to, travel, lodging, meals, legal,
communications and postage provided such expenses are at prevailing rates
available to the Agent. However, such out-of-pocket expenses do not include
expenses incurred with respect to the matters set forth in (a), (b) or (c)
above.
SECTION 7. CONDITIONS TO XXXX'X OBLIGATIONS. Xxxx'x obligations
hereunder, as to the Shares to be delivered at the Closing Date, are subject, to
the extent not waived by Xxxx, 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:
(a) At the Closing Date, the Company and the Bank shall have
conducted the Offering in accordance with all applicable laws,
regulations, decisions and orders.
(b) The Registration Statement shall have been declared
effective by the Commission as of the date of this Agreement, or with
Xxxx'x 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 Offering shall have been issued or
proceedings therefore initiated or, to the Company's or the Bank's
knowledge, threatened by the Commission, the OCC, the Federal Reserve,
the FDIC, or any state authority.
(c) At the Closing Date, Xxxx shall have received:
(1) the favorable opinion, dated as of the Closing
Date and addressed to Xxxx, of Xxxxxxx, Xxxxxx & Xxxxxxxx,
special counsel for the Company and the Bank, substantially in
the form set forth in Exhibit C hereto; and
(2) The favorable opinion, dated as of the Closing
Date, of Silver, Xxxxxxxx & Taff, LLP Xxxx'x counsel, with
respect to such matters as Xxxx 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.
(d) At the Closing Date, Xxxx shall receive a certificate of
the Chief Executive Officer and the principal accounting officer of the
Company and the Bank, dated as of such
18
Closing Date, to the effect that: (i) they have carefully examined the
Prospectus and at the time the Prospectus became authorized for final
use and at the Closing Date, 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
taken as a whole, whether or not arising in the ordinary course of
business; (iv) the representations and warranties in Section 3 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 issued or, to the best knowledge of the Company or the Bank,
threatened by the Commission or any state authority; and (vii) no order
suspending the Offering, the acquisition of all of the shares of the
Bank by the Company or the effectiveness of the Prospectus has been
issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company or the Bank, threatened by the Commission, the
OCC, the Federal Reserve, the Commission, the FDIC, or any state
authority.
(e) Prior to and at the Closing Date: (i) in the reasonable
opinion of Xxxx, there shall have been no material adverse change in
the condition, financial or otherwise, or in the earnings or business
of the Company and the Bank taken as a whole, 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 OCC, the Federal
Reserve, the Commissioner, 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 Xxxx) 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; (iv) 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; (v) 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
19
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 (vi) 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 Xxxx shall have reasonably requested and as agreed to
by the Company and the Bank.
(f) Concurrently with the execution of this Agreement, Xxxx
shall receive a letter from Xxxxxx & Company, LLP dated as of the date
of the Prospectus and addressed to Xxxx: (i) confirming that Xxxxxx &
Company, 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 applicable regulations of
the Commission and stating in effect that in its opinion the
consolidated financial statements of the Company as of December 31,
1996 and 1995 and for the years then ended, 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
Commission and the 1933 Act; (ii) stating in effect that, on the basis
of certain agreed upon procedures (but 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 prepared by 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 Commission 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 material increase in borrowings, other than normal deposit
fluctuations, by the Company; or (C) there was any decrease in the
consolidated stockholders' equity 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 Xxxx may reasonably request;
and they have reported on the results of such comparisons.
(g) At the Closing Date, Xxxx shall receive a letter dated the
Closing Date, addressed to Xxxx, confirming the statements made by
Xxxxxx & Company, LLP in the letter delivered by it pursuant to
subsection (f) of this Section 7, the "specified date"
20
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.
(h) 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.
(i) At or prior to the Closing Date, Xxxx shall receive: (i) a
certificate from the Federal Reserve evidencing the good standing of
the Company as a bank holding company; (ii) a copy of the order from
the Commission declaring the Registration Statement effective; (iii) a
certificate of good standing from the OCC evidencing the existence of
the Bank; (iv) certificates of good standing from the State of Maryland
evidencing the good standing of the Company; (v) a certificate from the
FDIC evidencing the Bank's insurance of accounts; (vi) a certificate of
the FHLB-Atlanta evidencing the Bank's membership thereof; (vii) such
other certificates and documents reasonably requested by Xxxx or its
counsel.
(j) 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 Small-Cap Market, 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, or a general
moratorium on the withdrawal of deposits from commercial banks,
declared by federal or state 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 (iv) a
material decline in the price of equity or debt securities if the
effect of such a declaration or decline, in Xxxx'x reasonable
judgement, 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.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company hereby agrees to (i) to indemnify and hold
harmless the Agent, each of its directors, officers, other employees
and agents and any person who controls the Agent within the meaning of
Section 15 or Section 20(a) of the 1934 Act (the Agent and each person
being indemnified hereinafter called an "Indemnified Party") against
any and all losses, claims, damages or liabilities, joint or several,
to which an Indemnified Party may become subject, under the 1933 Act,
the 1934 Act or other federal or state statutory law or regulation, at
common law or otherwise; (ii) to reimburse promptly such Indemnified
Party for reasonable legal or other expenses incurred by such
21
Indemnified Party in connection with investigating any claims or
preparing for or defending any actions, commenced or threatened,
whether or not resulting in any liability; and (iii) to reimburse
promptly such Indemnified Party for any amount paid in settlement of
any claim or action, commenced or threatened, if such settlement is
effected with the written consent of the Company; insofar as such
losses, claims, damages, liabilities, expenses, actions or settlements,
referred to above, arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, Prospectus or any amendment or supplement
thereto, or in any application filed under any Blue Sky Law, or in any
other document executed by the Company in connection with or in
contemplation of the transactions contemplated by this Agreement, or in
the information furnished or otherwise made available to the Agent by
the Company, or arise out of or are based upon the omission or alleged
omission to state therein 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 arise out
of any theory of liability resulting from any action or omission to act
by the Company, its officers, directors, employees or agents, which is
related to the Offering. The Company shall be responsible for the
losses, damages or expenses arising from or in connection with oral
misstatements made by the Company which are not based upon information
provided by the Agent in writing or based upon information contained in
the Registration Statement, the Prospectus, any Blue Sky Application or
other information distributed in connection with the Offering. The
Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus or
any amendment or supplement thereto or in any Blue Sky Application in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Agent specifically for use therein.
It is hereby acknowledged that the Agent has furnished to the Company
the information contained in the Prospectus under the caption "The
Offering--Selling Arrangements." The Company will not, however, be
responsible for claims, liabilities, losses, damages or expenses to the
extent they result primarily from actions taken or omitted to be taken
by the Agent in bad faith or from the Agent's gross negligence. In the
event that the Holding company advances any amounts alleged to be due
under this Section 8(a) to the Indemnified Party and it is determined
by a court of competent jurisdiction that the Indemnified Party is not
entitled to indemnification hereunder, then the Indemnified Party shall
repay, without interest, any amounts so advanced to the Company. The
indemnification obligations of the Company as provided above are in
addition to any liabilities the Company may have under other
agreements, under common law or otherwise. The obligation of indemnity
provided for hereunder is effective immediately in respect of all
events prior to or after the date hereof and shall survive any
expiration, termination or other cessation of this Agreement.
(b) The Agent agrees (i) to indemnify and hold harmless the
Company, each of its respective directors and officers and each person
who controls the Company within the meaning of the 1933 Act (the
Company and each person being indemnified hereinafter
22
called an "Indemnified Party") against any and all losses, claims,
damages or liabilities, joint or several, to which an Indemnified Party
may become subject, under the 1933 Act, the 1934 Act, or other federal
or state statutory law or regulations, at common law or otherwise; (ii)
to reimburse promptly such Indemnified Party for reasonable legal or
other expenses incurred by such Indemnified Party in connection with
investigating any claims or preparing for or defending any actions,
commenced or threatened, whether or not resulting in any liability; and
(iii) to reimburse promptly such Indemnified Party for any amount paid
in settlement of any claims or actions, commenced or threatened, if
such settlement is effected with the written consent of the Agent;
insofar as such losses, claims, damages, liabilities, expenses, actions
or settlements referred to above arise out of or are based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application, in
each case in reliance upon and in conformity with written information
furnished to the Company by the Agent specifically for use in the
preparation thereof. It is hereby acknowledged that the Agent has
furnished to the Holding Company the information contained in the
Prospectus under the caption "The Offering-Selling Arrangements." The
Agent will not, however, be responsible for claims, liabilities,
losses, damages or expenses to the extent they result primarily from
actions taken or omitted to be taken by the Company in bad faith or
from the Company's negligence. In the event that the Agent advances any
amounts alleged to be due under this Section 8(b) to an Indemnified
Party and it is determined by a court of competent jurisdiction that
the Indemnified Party is not entitled to indemnification hereunder,
then the Indemnified Party shall repay, without interest, any amounts
so advanced to the Agent. The indemnification obligations of the Agent
as provided above are in addition to any liabilities the Agent may have
under other agreements, under common law or otherwise. The obligation
of indemnity provided for hereunder is effective immediately in respect
of all events prior to or after the date hereof and shall survive any
expiration, termination or other cessation of this Agreement.
(c) Promptly after receipt by an Indemnified Party under this
Section of notice of the commencement of any action, such Indemnified
Party shall, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof. In no case shall an indemnifying
party be liable under this Agreement with respect to any loss, claim,
damage, liability, expense, action or settlement unless the
indemnifying party shall have been notified in writing by the
Indemnified Party seeking indemnification, of the assertion or filing
of the claim or action giving rise to such loss, claim, damage,
liability, expense, action or settlement promptly after such
Indemnified Party shall have been advised of, or otherwise shall have
received information as to, the assertion or filing of such claim or
action. In case any such action is brought against any Indemnified
Party, and such Indemnified Party notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it or he may wish, jointly with
all other Indemnifying Parties, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such
Indemnified Party; provided,
23
however, if the defendants in any such action include both the
Indemnified Party and the indemnifying party and the Indemnified Party
shall have reasonably concluded, based upon advice of its counsel, that
there may be legal defenses available to it or he and/or any other
Indemnified Party which are different from or additional to those
available to the indemnifying party, the Indemnified Party shall have
the right to select separate counsel to assume such legal defenses and
to otherwise participate int he defense of such action on behalf of
such Indemnified Party. Upon receipt of notice from the indemnifying
party to such Indemnified Party of its election so to assume the
defense of such action and approval by the Indemnified Party of
counsel, the indemnifying party will not be liable to such Indemnified
Party under this Section for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with defense thereof
unless:
(i) the Indemnified Party shall have employed such
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall
not be liable for the expenses of more than one separate
counsel);
(ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after
notice or commencement of the action; or
(ii) the indemnifying party has authorized the
employment of counsel at the expense of the indemnifying
party.
(d) If the Indemnification provided for in this Section is
unavailable to an Indemnified Party in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such Indemnified Party, shall, subject
to the limitations hereinafter set forth, contribute to the amount paid
or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities:
(i) in such proportion as is appropriate to reflect
the relative benefits received by the Holding Company, taken
as a whole, and the Agent from the offering of the Common
Stock; or
(ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the
Holding Company, taken as a whole, and the Agent in connection
with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.
The respective relative benefits received by the Company and the Agent
shall be deemed to be in such proportion so that the Agent is responsible for
the portion of the losses, claims, damages or liabilities represented by the
percentage that the per share fee to be paid to the Agent
24
in connection with the solicitation of subscriptions described in Section 2
hereof bears to the actual Purchase Price per share of the Common Stock, and the
Company and its respective officers and directors and controlling persons, in
the aggregate, jointly and severally are responsible for the remaining portion,
provided however, that the Agent shall not be liable for any amount in excess of
the fees paid to the Agent under this Agreement. The relative fault of the
Company, and the Agent shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company, or by the Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (d) of this Section, any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim.
The Company and the Agent agree that it would not be just and equitable
if contribution pursuant to this section were determined by pro rata or per
capita allocation or by any other method or allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
SECTION 9. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities and agreements of the Company and Xxxx and the
representations and warranties and other statements of the Company and Xxxx 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 Xxxx, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any successor or assign of Xxxx, the Company and any
such controlling person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
SECTION 10. TERMINATION. This Agreement may be terminated by any party
hereto by giving the notice indicated in this Section 10, in the event the
Company fails to sell the required minimum number of the Shares by ________ __,
1997, and in accordance with the provisions of applicable law, this Agreement
shall terminate upon refund by the Escrow Agent 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 as set forth in Sections 2(a), 6 and 8 hereof.
Xxxx may terminate this Agreement by giving the notice indicated below
in this Section 10 at any time after this Agreement becomes effective as
follows:
25
(a) 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
Xxxx'x obligations hereunder may be cancelled by Xxxx 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 and 8 hereof.
(b) If Xxxx elects to terminate this Agreement as provided in
this Section, the Company and the Bank shall be notified promptly by
Xxxx by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement in the event Xxxx
is in material breach of the representations and warranties or covenants
contained herein and such breach has not been cured after the Company and the
Bank have provided Xxxx with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 11. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to Xxxx
shall be mailed, delivered or telegraphed and confirmed to Xxxxxxx Xxxx &
Company, 000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxx Xxxxx (with a
copy to Silver, Xxxxxxxx & Xxxx, Attention: Xxxx X. Xxxxxxxxxx, P.C.) and, if
sent to the Company and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company and the Bank at 000 Xxxxxxx Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx, Xx., President (with a
copy to Xxxxxxx, Xxxxxx & Xxxxxxxx, A Professional Corporation, Attention: Xxxx
Xxxxxxxx, Esq.).
SECTION 12. 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 Xxxx when the same shall have been given by the undersigned. Xxxx
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, Xxxx, 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 13. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at the offices of Xxxxxxx, Xxxxxx & Xxxxxxxx in the
District of Columbia. At the closing, the Company and the Bank shall deliver to
Xxxx in same day funds the commissions, fees and expenses due and owing to Xxxx
as set forth in Sections 2 and 6 hereof and the opinions and certificates
required hereby and other documents deemed reasonably necessary by Xxxx shall be
executed and delivered to effect the sale of the Shares as contemplated hereby
and pursuant to the
26
terms of the Prospectus. Similarly, Xxxx shall execute and deliver to the Bank
and the Company such certificates, consents and documents deemed reasonably
necessary by the Bank or the Company to effect the sale of the shares and the
closing hereunder.
SECTION 14. 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 15. CONSTRUCTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
SECTION 16. 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.
27
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and Xxxx, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and Xxxx'x acceptance
shall constitute a binding agreement.
Very truly yours,
ANNAPOLIS NATIONAL BANCORP, INC. ANNAPOLIS NATIONAL BANK
By: By:
---------------------------- ------------------------------
Xxxxxx Xxxxxxxx Xxxx X. Xxxxxxxx, Xx.
President President
Accepted as of the date first above written
XXXXXXX XXXX & COMPANY
By:
-----------------------------
Xxxx Xxxxx
Senior Vice President
28
EXHIBIT A
[KBW LOGO] Xxxxxxx Xxxx & Company [LOGO]
A Division of
XXXXX, XXXXXXXX & XXXXX, INC.
May 2, 1997
Xx. Xxxx X. Xxxxxxxx, Xx.
President and Chief Executive Officer
Annapolis National Bank
000 Xxxxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxxxx:
This is in connection with the your proposal to recapitalize Annapolis National
Bank, (the "Bank") through a public offering of stock (the "Offering") of the
Bank's holding company, Maryland Publick Banks (the "Company"). Xxxxxxx Xxxx
& Company, a Division of Xxxxx Xxxxxxxx & Xxxxx, Inc. ("Xxxx" and "KBW") will
act as the Bank's and the Company's exclusive financial advisor and marketing
agent/managing dealer in connection with the Offering. This letter sets forth
selected terms and conditions of our engagement.
1. Advisory/Offering Services. As the Bank's and Company's financial advisor and
marketing agent, Xxxx will provide the Bank and the Company with a comprehensive
program of services designed to promote an orderly, efficient, cost-effective
and long-term stock distribution. Xxxx will provide financial and logistical
advice to the Bank and the Company concerning the offering and related issues,
including methods to best accomplish the goal of a broad local distribution of
the stock. Xxxx will provide services intended to maximize stock sales to
residents of the Bank's market area. This will be accomplished through direct
solicitation of orders by Xxxx and through selected local brokers. If necessary,
Xxxx will assist in placing any remaining shares through a syndicate to be
managed by Xxxx. KBW may participate in such syndicated offering.
Xxxx shall provide financial advisory services to the Bank which are typical in
connection with an equity offering and include, but are not limited to, overall
financial analysis of the client with a focus on identifying factors which
impact the valuation of an equity security and provide the appropriate
recommendations for the betterment of the equity valuation. Xxxx will use its
best efforts to price the sale of the stock in the offering at a price of $5.50
to $6.00 per share. The final price will depend upon, among other things, the
financial condition, operations and
------------------Investment Bankers and Financial Advisors---------------------
000 Xxxxxxxxx x Xxxxxx, Xxxx 00000-0000 o 000-000-0000 o Fax: 000-000-0000
Xx. Xxxx X. Xxxxxxxx, Xx.
May 2, 1997
Page 2 of 6
prospects of the Company as well as economic, financial and market conditions
affecting the market for financial institutions' stock and the economy in
general.
Additionally, post Offering financial advisory services will include advice on
shareholder relations, NASDAQ listing, dividend policy, capital management
strategy and communication with market makers. Prior to the closing of the
offering, Xxxx shall furnish to client a Post-Offering reference manual which
will include specifics relative to these items.
2. Preparation of Offering Documents. The Bank, the Company and their counsel
will draft the Registration Statement, Prospectus and other documents to be used
in connection with the offering. Xxxx will attend meetings to review these
documents and advise you on their form and content. Xxxx and their counsel will
draft appropriate agency agreement and related documents as well as marketing
materials other than the Prospectus.
3. Due Diligence Review. Prior to filing the Registration Statement or any
offering or other documents naming Xxxx as the Bank's and the Company's
financial advisor and marketing agent, Xxxx and their representatives will
undertake necessary investigations to learn about the Bank's proposed business
and operations ("due diligence review") in order to confirm information provided
to us and to evaluate information to be contained in the Bank's and/or the
Company's offering documents. The Bank agrees that it will make available to
Xxxx all relevant information, whether or not publicly available, which Xxxx
shall reasonably request, and will permit Xxxx to discuss personnel and the
operations and prospects of the Bank with management. Xxxx will treat all
material non-public information as confidential. The Bank acknowledges that Xxxx
will rely upon the accuracy and completeness of all information received from
the Bank, its officers, directors, employees, agents and representatives,
accountants and counsel including this letter of intent to serve as the Bank's
and the Company's financial advisor and marketing agent.
4. Regulatory Filings. The Bank and/or the Company will cause appropriate
offering documents to be filed with all regulatory agencies including, the
Securities and Exchange Commission ("SEC"), the National Association of
Securities Dealers ("NASD"), and such state securities commissioners as may be
determined by the Bank.
5. Agency Agreement. The specific terms of Xxxx'x services, including offering
enhancement and syndicated offering services contemplated in this letter, shall
be set forth in an Agency Agreement between Xxxx and the Bank and the Company to
be executed prior to commencement of the offering, and dated the date that the
Company's Prospectus is declared effective and/or authorized to be disseminated
by the appropriate regulatory agencies, the SEC, the NASD and such state
securities commissioners and other regulatory agencies as required by applicable
law.
Xx. Xxxx X. Xxxxxxxx, Xx.
May 2, 1997
Page 3 of 6
6. Representations, Warranties and Covenants. The Agency Agreement will provide
for customary representations, warranties and covenants by the Bank and Xxxx,
and for the Company to indemnify Xxxx and their controlling persons (and, if
applicable, the members of the selling group and their controlling persons), and
for Xxxx to indemnify the Bank and the Company against certain liabilities,
including, without limitation, liabilities under the Securities Act of 1933.
7. Fees. For the services hereunder, the Bank and/or Company shall pay the
following fees to Xxxx at closing unless stated otherwise:
(a) A Management Fee of $25,000 payable in four consecutive monthly
installments of $6,250 commencing with the signing of this letter. Such
fees shall be deemed to have been earned when due. Should the Offering
be terminated for any reason not attributable to the action or inaction
of Xxxx, Xxxx shall have earned and be entitled to be paid fees accruing
through the stage at which point the termination occurred.
(b) A Success Fee of 5.0% of the aggregate Purchase Price of Common Stock
sold in the Offering excluding shares purchased by the Bank's officers,
directors, or employees (or members of their immediate families).
(c) During the initial offering period, stock may be offered through local
brokers/dealers selected and agreed upon by the Bank and Xxxx. The Bank,
in consultation with Xxxx, shall determine the number of shares which
any such broker/dealer shall be allotted. Xxxx will be paid a fee not to
exceed 5.0% of the aggregate Purchase Price of the shares of common
stock sold by local broker/dealers. Xxxx will pass onto such selected
local broker-dealers 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 selected local
broker/dealers other than Xxxx shall be transmitted by Xxxx to such
broker/dealer. The decision to utilize selected broker-dealers will be
made by the Bank upon consultation with Xxxx. In the event, with respect
to any stock purchases, fees are paid pursuant to this subparagraph
7(c), such fees shall be in lieu of, and not in addition to, payment
pursuant to subparagraph 7(b).
(d) If any shares of the Company's stock remain available, Xxxx, at the
request of the Bank, 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
Xx. Xxxx X. Xxxxxxxx, Xx.
May 2, 1997
Page 4 of 6
conditions set forth in the selected dealers agreement. Xxxx will
endeavor to distribute the common stock among dealers in a fashion which
best meets the distribution objectives of the Bank. Xxxx will be paid a
fee not to exceed 5.0% of the aggregate Purchase Price of the shares of
common stock sold by them. Xxxx 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 Xxxx shall be transmitted by Xxxx to such
broker/dealer. The decision to utilize selected broker-dealers will be
made by the Bank upon consultation with Xxxx. In the event, with respect
to any stock purchases, fees are paid pursuant to this subparagraph
7(d), such fees shall be in lieu of, and not in addition to, payment
pursuant to subparagraph 7(b).
8. Expenses. The Bank will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation, regulatory filing
fees, SEC, "Blue Sky," and NASD filing and registration fees; the fees of the
Bank's accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing and syndicate expenses associated with the
Offering; the fees set forth in Section 7; and fees for "Blue Sky" legal work.
The Bank shall reimburse Xxxx for its reasonable out-of-pocket expenses,
including meals, travel, lodging, and communication, in an amount not to exceed
$10,000. In addition, the Bank shall reimburse Xxxx for the fees and expenses of
its counsel in an amount to be agreed upon by Xxxx and the Bank.
9. Conditions. Xxxx'x willingness and obligation to proceed hereunder shall be
subject to, among other things, satisfaction of the following conditions in
Xxxx'x opinion, which opinion shall have been formed in good faith by Xxxx after
reasonable determination and consideration of all relevant factors: (a) full and
satisfactory disclosure of all relevant material, financial and other
information in the disclosure documents and a determination by Xxxx, in its sole
discretion, that the sale of stock on the terms proposed is reasonable given
such disclosures; (b) no material adverse change in the proposed condition or
operations of the Bank subsequent to the execution of the agreement; and (c) no
market conditions at the time of offering which in Xxxx'x opinion make the sale
of the shares by the Company inadvisable.
10. Benefit. This Agreement shall inure to the benefit of the parties hereto and
their respective successors and to the parties indemnified hereunder and their
successors, and the obligations and liabilities assumed hereunder by the parties
hereto shall be binding upon their respective successors provided, however, that
this Agreement shall not be assignable by Xxxx.
Xx. Xxxx X. Xxxxxxxx, Xx.
May 2, 1997
Page 5 of 6
11. Definitive Agreement. This letter reflects Xxxx'x present intention of
proceeding to work with the Company on its proposed Offering. It does not create
a binding obligation on the part of the Bank, the Company or Xxxx except as set
forth below and except as to the agreement to maintain the confidentiality of
non-public information set forth in Section 3, the payment of certain fees as
set forth in Section 7(a) and 7(b) and the assumption of expenses as set forth
in Section 8, all of which shall constitute the binding obligations of the
parties hereto and which shall survive the termination of this Agreement or the
completion of the services furnished hereunder and shall remain operative and in
full force and effect. You acknowledge that any report or analysis rendered by
Xxxx pursuant to this engagement is rendered for use solely by the management of
the Bank and its agents in connection with the Offering. Accordingly, you agree
that you will not provide any such information to any other person without our
prior written consent.
Xxxx acknowledges that in offering the Company's stock no person will be
authorized to give any information or to make any representation not contained
in the offering prospectus and related offering materials filed as part of a
registration statement to be declared effective in connection with the offering.
Accordingly, Xxxx agrees that in connection with the offering it will not give
any unauthorized information or make any unauthorized representation. We will be
pleased to elaborate on any of the matters discussed in this letter at your
convenience.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned.
Very truly yours,
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
Senior Vice President
Agreed to: MARYLAND PUBLICK BANKS
By: /s/ Xxxx X. Xxxxxxxx, Xx. 5/8/97
-------------------------------- ---------------
Xxxx X. Xxxxxxxx, Xx. Date
Vice President & Chief Executive Officer
EXHIBIT B
ANNAPOLIS NATIONAL BANCORP, INC.
Up to 833,334 Shares (Anticipated Maximum)
(Par Value $.01 Per Share)
Selected Dealers' Agreement
---------------------------
____________, 1997
Gentlemen:
We have agreed to assist Annapolis National Bancorp, Inc. (the "Company")
and Annapolis National Bank (the "Bank"), a federally chartered commercial bank,
in connection with the offer and sale of up to 833,334 shares of the common
stock, par value $.01 per share (the "Common Stock") of the Company, a Maryland
corporation, to be issued in connection with an offering (the "Offering") to the
general public. The total number of shares of Common Stock to be offered may be
decreased to a minimum of 333,334 shares. Prior to the Offering, there are
1,478,972 shares of Common Stock outstanding and there is no active public
market in the Common Stock. The shares of Common Stock are to be offered at the
price per share (the "Purchase Price") set forth on the cover page of the
Prospectus (as hereinafter defined). Such Prospectus contains information with
respect to, among other things, the Company, the Bank, the Offering and the
Common Stock. All purchases in the Offering are subject to certain minimum and
maximum purchase limitations and other terms and conditions, including the right
of the Company, in its sole discretion, to reject orders in whole or in part.
The Common Stock is also being sold by broker/dealers licensed by the
National Association of Securities Dealers, Inc. ("NASD") which have been
approved by the Company and 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 (__%) 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 should clearly identify your firm. You shall instruct any
subscriber who elects to send his order form to you to make any accompanying
check payable to "First National Bank of Maryland as Escrow Agent for Annapolis
National Bancorp, 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 l0b-7 promulgated under the Securities
Exchange Act of 1934) with respect to the Company's Common Stock during the
Offering.
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 SELECTED
DEALER THAT IS NOT A $25,000 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 at least 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 ________ Annapolis, Maryland 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
2
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 Offering. 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 Offering.
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.
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 Maryland.
3
Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Xxxxxxx Xxxx & Company,
000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000. The enclosed duplicate copy will
evidence the agreement between us.
XXXXXXX XXXX & COMPANY
By: ______________________________
Xxxx Xxxxx
Senior Vice President
CONFIRMED AS OF:
____________, 1997
___________________________
(Name of Dealer)
By:________________________
Its:_______________________
4
EXHIBIT C
____________, 1997
Xxxxxxx Xxxx & Company
000 Xxxxxxxxx
Xxxxxx, Xxxx 00000-0000
Re: Annapolis National Bancorp, Inc.
Offering of up to 833,334 shares of Common Stock
Dear Sirs and Mesdames:
We have acted as counsel for Annapolis National Bancorp, Inc. (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission (the "SEC" or the "Commission") under the Securities Act of
1933, as amended (the "Securities Act"), of the Company's Registration Statement
on Form SB-2 (No. 333-29841), as amended, relating to the offering of up to
833,334 shares of its common stock (the "Common Stock"). Such registration
statement, as amended when it became effective, is herein referred to as the
"Registration Statement," and the related prospectus, dated _______, 1997, as
filed with the SEC on _______, 1997, pursuant to Rule 424(b) is herein referred
to as the "Prospectus." This letter is furnished pursuant to Section 7(c)(1) of
the Agency Agreement, dated _______, 1997 (the "Agency Agreement"), between the
Company, Annapolis National Bank (the "Bank") and Xxxxxxx Xxxx and Company, a
Division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. (the "Agent"). Capitalized terms have
the meanings given them in the Underwriting Agreement unless defined herein.
We have examined originals, or copies, of such corporate records of the
Company and the subsidiary of the Bank, and have made such examinations of law
as we have deemed relevant. In our examination, we have assumed and have not
verified (i) the genuineness of all signatures, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity with the originals
of all documents supplied to us as copies, (iv) the accuracy and completeness of
all corporate records and documents and of all certificates and statements of
fact, in each case given or made available to us by the Company and (v) that the
Agency Agreement has been duly and validly executed and delivered by, and
constitutes the legal, valid, binding and enforceable agreement of the Agent. We
have relied as to factual matters upon certificates from officers of the Company
and certificates and other documents from public officials and government
agencies and departments and we have
Xxxxxxx Xxxx & Co.
____________, 1997
Page 2
assumed the accuracy and authenticity of such certificates and documents. We
note that, although certain portions of the Registration Statement (including
the financial statements) have been included therein on the authority of
"experts" within the meaning of the Securities Act, we are not such experts with
respect to any portion of the Registration Statements, including without
limitation, such financial statements or the other financial information or
statistical data included therein.
On the basis of the foregoing and having a regard for such legal
considerations as we deem relevant, we hereby are of the opinion that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Maryland and is duly registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") as a bank
holding company. The Company has the corporate power and authority to own, lease
and operate its properties and conduct its business as described in the
Registration Statement and Prospectus. The Bank is validly existing as a
federally-chartered bank with a charter in full force and effect and in
possession of full corporate power and authority to own, lease and operate its
properties and to conduct its business substantially as described in the
Prospectus. To our knowledge, the Company is duly qualified to do business as a
foreign corporation under the laws of, and is in good standing as such in, each
jurisdiction in which such qualification is required, except where the failure
to so qualify would not have a material adverse effect on the financial
condition, business or results of operation of the Company and the Bank on a
consolidated basis.
(ii) The Bank is a member of the FHLB-Atlanta and the Federal Reserve
Bank of Richmond; the Bank is an insured bank under the provisions of the
Federal Deposit Insurance Act; the deposits of the Bank are insured up to
applicable limits by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation as provided by applicable law, and to our knowledge, no proceeding
for the termination or revocation of such insurance is pending or threatened.
(iii) The stock of the Bank has been duly and validly issued and is
fully paid and nonassessable and is owned by the Company free and clear of any
material lien, charge, claim or encumbrance. 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";
the Shares of the Company subscribed for pursuant to the Offering have been duly
and validly authorized for issuance, and, when issued and delivered by the
Company pursuant to the Prospectus against payment of the consideration therefor
as described in such Prospectus, will be duly and validly issued and fully paid
and nonassessable; upon payment for, and delivery of, the Shares in accordance
with the terms of the Prospectus, and assuming the subscriber is acquiring the
Shares in good faith without notice of any adverse Claim, the holders of the
Shares will be the owners of the Shares, free and clear of any material lien,
claim, security interest or other encumbrance or other defect in title (other
than restrictions on transfer under applicable law and subject to such claims as
may be asserted against the purchasers thereof by third party claimants);
Xxxxxxx Xxxx & Co.
____________, 1997
Page 3
and there are no preemptive or other rights to subscribe for or to purchase, or,
except as otherwise set forth in Maryland or Federal law, as applicable, any
restriction upon voting of any shares of the Common Stock or the common stock of
the Bank.
(iv) the Bank is the Company's only subsidiary, and the Bank has no
subsidiaries.
(v) The Agreement and the performance by the Bank and the Company of
their respective obligations thereunder have been duly and validly authorized by
all necessary corporate action, and the Agreement has been duly executed and
delivered by the Bank and the Company and is the legal, valid and binding
obligation of each, enforceable against each in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
the enforcement of creditors' rights generally, or the rights of creditors of
federally-chartered banks or bank holding companies and subject, as to the
enforcement of remedies, including the remedy of specific performance and
injunctive and other forms of equitable relief which may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding may be brought, to general principles of equity regardless of whether
the enforceability is considered in a proceeding at law or in equity, and except
as the obligations of the Company under the indemnification and contribution
provisions of the Agreement may be limited by federal or state securities laws
or unenforceable as against public policy, as to which no opinion is expressed.
The Bank and the Company have full corporate power and authority to enter into
the Agreement and to consummate the transactions contemplated thereby.
(vi) The transactions contemplated by the Agreement have been duly
approved and authorized by all requisite corporate action; the Shares have been
registered under the Securities Act pursuant to the appropriate SEC form, the
Registration Statement has been declared effective by the SEC and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement, the approval of the Prospectus, or the offer or sale of the Shares
has been issued and no proceedings for that purpose have been instituted or are
pending or contemplated.
(vii) No further approval, authorization, consent or other order of any
court, governmental or public board, body or agency is required in connection
with the execution and delivery of the Agreement, the issuance of the Shares and
consummation of the Offering, except as may be required under the securities or
Blue Sky laws of various jurisdictions (as to which no opinion is rendered) and
as may be required under the regulations of the National Association of
Securities Dealers, Inc. and the National Association of Securities Dealers
Automated Quotation System (as to which no opinion is rendered).
(viii) At the time the Registration Statement was declared effective by
the SEC, the Registration Statement and the Prospectus (other than the financial
statements, notes to financial statements, tables, schedules or other financial
and statistical information included therein, as to
Xxxxxxx Xxxx & Co.
____________, 1997
Page 4
which no opinion is rendered) complied as to form in all material respects with
the applicable requirements of the rules and regulations of the SEC under the
Act.
(ix) The capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus and the form of
certificate used to evidence the Shares conforms in all material respects to all
applicable laws and regulations of the State of Maryland.
(x) To the best of our knowledge, there are no material contracts,
agreements or other documents of a character required to be described or
referred to in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed as exhibits thereto, respectively; to the best of our
knowledge, the existing contracts and agreements described or referred to
therein or filed as exhibits have been duly authorized by the Company or the
Bank, as appropriate, and are valid and enforceable contracts and agreements of
the Company or the Bank except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors' rights generally, or the
rights of creditors of federally-chartered banks or bank holding companies and
subject, as to the enforcement of remedies, including the remedy of specific
performance and injunctive and other forms of equitable relief which may be
subject to certain equitable defenses and to the discretion of the court before
which any proceeding may be brought, to general principles of equity regardless
of whether the enforceability is considered in a proceeding at law or in equity;
to the best of our knowledge no material default by the Company or the Bank, as
appropriate, or any other party exists in the due performance or observance of
any of its material obligations, agreements, covenants or conditions contained
in any such contract, agreement or other document; and the description in the
Prospectus of all contracts, agreements and other documents therein described
fairly present in all material respects the information required to be shown.
(xi) To the best of our knowledge, there are no legal or governmental
proceedings pending or threatened which are required to be disclosed in the
Prospectus which are not described therein. To the best of our knowledge, no
person has filed or threatened to file suit or any other action to prevent the
Offering.
(xii) The information in the Prospectus under the captions
"Regulation," "The Offering," "Restrictions on Acquisition of the Company" and
"Description of Capital Stock of the Company" to the extent that it constitutes
statements pertaining to matters of law or legal conclusions, has been reviewed
by us and fairly describes such matters of law or legal conclusions in all
material respects (except as to the financial statements and other financial and
statistical data included therein as to which we express no opinion).
(xiii) To the best of our knowledge, the Bank and the Company have
obtained all material licenses, permits and other governmental authorizations
currently required for the conduct of their respective businesses unless the
failure to obtain the same would not have a material adverse effect
Xxxxxxx Xxxx & Co.
____________, 1997
Page 5
on the financial condition of the Bank and the Company taken as a whole; and to
the best of our knowledge, all material licenses, permits and other governmental
authorizations, leases and subleases are in full force and effect and the Bank
and the Company are in all material respects complying therewith.
(xiv) The execution and delivery of the Agreement, the incurrence of
the obligations therein set forth and the consummation of the transactions
therein contemplated will not conflict with or constitute a breach of, or
default under, the Articles of Incorporation or Bylaws of the Company or the
Bank, or to the best of our knowledge, will not materially conflict with or
constitute a material breach of, default under or result in the creation of or
imposition of any material lien, charge or encumbrance pursuant to any material
contract, lease, loan agreement, mortgage, note, indenture or other instrument
to which the Bank or the Company is a party or by which either of them may be
bound, or any law, regulation or administrative or court decree or violate any
statute, rule, order or regulation of any regulatory or governmental body having
jurisdiction over the Company or the Bank.
(xv) To the best of our knowledge, neither the Company nor the Bank is
in violation of its Articles of Incorporation and Bylaws or its Articles of
Association and Bylaws, respectively.
(xvi) To the best of our knowledge, no order has been issued by the SEC
or any state securities commission to suspend the Offering or the use of the
Prospectus; no action for such purposes has been instituted or threatened by the
SEC or any state securities commission; and no person has sought to obtain
regulatory or judicial review of the final action of the SEC or any state
securities commission approving the Prospectus. To the best of our knowledge,
neither the Company nor the Bank is in violation of any directive from the OCC,
the Federal Reserve, or the FDIC to make any material change in the method of
conducting their respective businesses.
Xxxxxxx Xxxx & Co.
____________, 1997
Page 6
We assume no obligation to advise you of any events that occur
subsequent to the date of this opinion. This opinion is being furnished to you
and your counsel solely for your and its benefit and may not be relied upon by
any other person or for any other purpose, and it should not be quoted in whole
or in part or otherwise referred to or be filed with or furnished to any
governmental agency or other person or entity without the prior written consent
of this firm.
Very truly yours,
XXXXXXX, XXXXXX & XXXXXXXX
