1
AGREEMENT
AMONG
XXX XXXXX
RDB FAMILY LIMITED PARTNERSHIP
XXXXXX X. XXX, XX.
J. XXXXXX XXXX
XXXXXX X. XXXXX
XXXX X. XXX
X. XXXXXXXX XXXXXX
AND
XXXXXX X. XXXXX
AS THE AUGUSTA GROUP
AND
PINNACLE BANCSHARES, INC.
FOR THE PURCHASE OF
CAPITAL STOCK OF
PINNACLE BANCSHARES, INC.
DATED AS OF OCTOBER 6, 1997
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TABLE OF CONTENTS
Page
ARTICLE I OFFER FOR SALE OF COMMON STOCK
1.1 Structure of Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Facilitation of Sale by Augusta Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Regulatory Approval and Proposed Purchase of Common Stock
by Augusta Group Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Restrictions on Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Escrow of Subscription Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Issue Price of the Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PINNACLE
2.1 Due Incorporation and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Outstanding Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Options or Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Title to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Authority of Pinnacle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE AUGUSTA GROUP
3.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Assistance in Making Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV APPOINTMENT OF DIRECTORS AND OFFICERS
4.1 Regulatory Approval for Appointment of Directors . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Appointment of Certain Directors to be Named By the Augusta Group . . . . . . . . . . . . . . . 4
4.3 Appointment of Xxxxx X. Xxxxxxxx, Xx. as Chairman of Pinnacle's Board . . . . . . . . . . . . . 5
4.4 Appointment of Xxxxxx X. Xxxxxx, Xx. to Pinnacle's Board . . . . . . . . . . . . . . . . . . . 5
4.5 Selection of Executive Committee Members . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.6 Selection of Chairman of Bank's Board of Directors . . . . . . . . . . . . . . . . . . . . . . 6
4.7 Information Regarding the Augusta Group Director Nominees . . . . . . . . . . . . . . . . . . . 7
4.8 Selection of President and CEO of Pinnacle . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.9 Selection of President and CEO of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
5.1 Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Regulatory Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 Pinnacle Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(i)
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ARTICLE VI MISCELLANEOUS
6.1 Repurchase of the A.H. Dallas Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.4 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.5 Standard for Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.6 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.9 Waivers and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.11 Rights of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.14 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.16 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
LIST OF SCHEDULES
Schedule 2.2 - Outstanding Capital Stock
Schedule 2.3 - Options or Other Rights
LIST OF EXHIBITS
Exhibit A - Director Resignation Agreement
Exhibit B - Employment Agreement with Xxxxxxx X. Xxxxxxxxx, Xx.
(ii)
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AGREEMENT
THIS AGREEMENT (the "Agreement") dated as of the 6th day of October,
1997, is made and entered into among XXX XXXXX, RDB FAMILY LIMITED PARTNERSHIP,
XXXXXX X. XXX, XX., J. XXXXXX XXXX, XXXXXX X. XXXXX, XXXX X. XXX, X. XXXXXXXX
XXXXXX, and XXXXXX X. XXXXX (collectively, the "Augusta Group"), and PINNACLE
BANCSHARES, INC. ("Pinnacle").
W I T N E S S E T H :
WHEREAS, Pinnacle is a bank holding company owning one hundred percent
(100%) of the issued and outstanding common stock of XxXxxxxx Bank & Trust, a
Georgia state bank (the "Bank"), Pinnacle's sole subsidiary; and
WHEREAS, Pinnacle will authorize, subject to shareholder approval, the
sale and issuance in a public offering primarily to purchasers in Columbia and
Richmond County, Georgia of a number of shares of Pinnacle's Common Stock (the
"Offering"), $.001 par value (the "Common Stock") to be determined after
consultation with a reputable investment banking firm, such Common Stock having
a minimum value of $7,000,000;
WHEREAS, each member of the Augusta Group desires to purchase Common
Stock in the Offering, subject to review of a prospectus, having a minimum
purchase price of $50,000 (giving effect to the purchase of the A.H. Dallas
stock), the aggregate minimum purchase price of all members of the Augusta
Group being $700,000 (subject to adjustment as set forth in this Agreement);
and
WHEREAS, the Augusta Group desires to have certain persons represent its
interests on the Boards of Directors of Pinnacle and the Bank;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
OFFER FOR SALE OF COMMON STOCK
1.1 Structure of Offering. Pinnacle shall offer for sale in the
Offering an amount of the Common Stock having a minimum value of $7,000,000
(the "Minimum Offering Amount"). All shares sold in the Offering shall be sold
pursuant to a Registration Statement to be filed by Pinnacle as soon as
practicable after the date of this Agreement with the Securities and Exchange
Commission.
1.2 Facilitation of Sale by Augusta Group. Certain members of the
Augusta Group shall use their best efforts to facilitate within the boundaries
of applicable state and federal securities laws, the sale of the Common Stock
in the Offering to individuals, partnerships, corporations or other entities
not already owners of the Common Stock primarily residing or
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located in Columbia County, Georgia and Richmond County, Georgia. Pinnacle
shall pay no compensation to the Augusta Group for such services.
Notwithstanding the foregoing, existing shareholders of Pinnacle may purchase
shares in the Offering subject to Section 1.4, below.
1.3 Regulatory Approval and Proposed Purchase of Common Stock by
Augusta Group Members. The Augusta Group shall file all necessary applications
and make such other filings with the appropriate state and federal bank
regulatory agencies as are necessary to approve the purchase of Common Stock in
the Offering by the Augusta Group and each of the members thereof, and shall
present proof of such regulatory approval(s) to Pinnacle. Upon Pinnacle's
satisfaction that all necessary regulatory approval(s) have been obtained, and
subject to review by the Augusta Group members of a prospectus, the Augusta
Group shall purchase Common Stock in the Offering having an aggregate value
greater than or equal to $700,000, each Augusta Group member agreeing to
purchase, subject to the foregoing, Common Stock having a value of not less
than $50,000; provided however, that the dollar amount of Common Stock to be
purchased by the Augusta Group may be reduced once the issue price has been
established pursuant to Section 1.6 in order to comply with the 5% restriction
in Section 1.4. The purchase price paid by subscribers, including the Augusta
Group, shall be held in escrow pursuant to Section 1.5.
1.4 Restrictions on Sale. All subscriptions for purchase of the
Common Stock shall be subject to acceptance by Pinnacle, with Pinnacle having
the exclusive and unqualified right to reject or reduce any subscription for
any reason prior to acceptance. In addition, no subscriber for shares in the
Offering shall be permitted to buy an amount of the Common Stock which is, or
will cause such person's holdings of the Common Stock to be, greater than 5% of
the outstanding Common Stock of Pinnacle as of the Expiration Date (defined
below). The offer to accept subscriptions for purchase of the Common Stock in
the Public Offering shall expire at 5:00 p.m. Eastern Time, on June 30, 1998
(the "Expiration Date"), subject to the right of Pinnacle to extend such date.
If, as of the Expiration Date, less than the Minimum Offering Amount of Common
Stock offered for sale has been subscribed for in subscriptions received and
accepted by Pinnacle prior to the Expiration Date, Pinnacle shall have the
unqualified right to cancel the Offering and terminate this Agreement.
1.5 Escrow of Subscription Funds. All subscription funds tendered
in the Offering, including subscription funds received from the Augusta Group,
if any, shall be deposited in an escrow account (the "Subscription Escrow
Account") maintained at the Bank. If the minimum subscription amount of
$7,000,000 is attained on or before the Expiration Date, the escrow agent
having control over the Subscription Escrow Account (the "Escrow Agent") shall
release all subscription funds to Pinnacle. In the event the minimum offering
of $7,000,000 is not attained by the Expiration Date and Pinnacle elects to
terminate the Offering as contemplated in this Section 1.5, the Escrow Agent
shall promptly return to the subscribers, including the Augusta Group, their
respective subscription funds. Any income earned on the investment of the
subscription funds will be retained by Pinnacle.
1.6 Issue Price of the Common Stock. The issue price per share of
the Common Stock to be offered in the Offering shall be determined by the Board
of Directors of Pinnacle upon consultation with a reputable investment banking
firm chosen by Pinnacle's Board of Directors.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PINNACLE
As an inducement to the Augusta Group to enter into this Agreement and to
consummate the transactions contemplated hereby, and with the knowledge that
the Augusta Group shall rely thereon, Pinnacle, represents and warrants to the
Augusta Group, subject to Section 6.4, the following as of the date of this
Agreement:
2.1 Due Incorporation and Qualification. Pinnacle is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia, and has the corporate power and lawful authority to own and
operate its properties and assets, to carry on its business as now being
conducted, and to execute and deliver this Agreement and to perform the terms
hereof. Pinnacle has taken all corporate action necessary to authorize the
execution and delivery of this Agreement.
2.2 Outstanding Capital Stock. The title, par value, number of
authorized shares and number of issued and outstanding shares of each class of
capital stock of Pinnacle are set forth on Schedule 2.2 annexed hereto. No
other class of capital stock of Pinnacle is authorized or outstanding. All of
the issued and outstanding shares of the Common Stock are duly authorized and
are validly issued, fully paid and non-assessable from all taxes, liens and
charges with respect to the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
2.3 Options or Other Rights. Except as provided in Pinnacle's
Schedule 2.3, There is no outstanding right, subscription, warrant, conversion
right, call, unsatisfied preemptive right, commitment, option or other
agreement or right of any kind pursuant to which any person or entity has the
right or option to purchase or otherwise to receive from Pinnacle any shares of
the Common Stock or any other security of Pinnacle and there is no outstanding
security of any kind convertible into or redeemable or exchangeable for any
shares of the Common Stock of Pinnacle.
2.4 Title to Common Stock. Pinnacle has full power and authority to
convey free and clear of all liens, encumbrances, equities, restrictions,
claims and obligations of every kind, all of the shares of the Common Stock
contemplated to be issued in the Offering and, upon delivery of and payment for
such Common Stock as herein provided, all subscribers therefor will acquire
good and marketable title thereto, free and clear of all liens, encumbrances,
equities, restrictions, claims and obligations of every kind.
2.5 Authority of Pinnacle. Pinnacle has full power and legal
capacity to execute and deliver this Agreement and the other agreements
required to be executed and delivered by Pinnacle hereunder and, subject to the
receipt of approvals, if any, required under applicable banking regulation, to
carry out the transactions contemplated hereby.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE AUGUSTA GROUP
As an inducement to Pinnacle to enter into this Agreement and to
consummate the transactions contemplated hereby, and with the knowledge that
Pinnacle shall rely thereon, the members of the Augusta Group, jointly and
severally, represent and warrant to Pinnacle the following:
3.1 Authorization. This Agreement when executed and delivered by
the Augusta Group will constitute a valid and legally binding obligation of the
Augusta Group and each of them, enforceable in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency,
and relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief, and other equitable remedies.
3.2 Assistance in Making Offering. The Augusta Group shall use its
best efforts to assist Pinnacle in locating primarily in Columbia County and
Richmond County, Georgia, individuals, partnerships, corporations, or other
entities not already owners of any of the Common Stock of Pinnacle and
satisfactory to Pinnacle, to facilitate the sale of subscriptions for the
Common Stock in the Public Offering to the extent necessary to sell the Minimum
Offering Amount.
ARTICLE IV
APPOINTMENT OF DIRECTORS AND OFFICERS
4.1 Regulatory Approval for Appointment of Directors. The Augusta
Group shall file all necessary applications and make such other filings with
the appropriate state and federal bank regulatory agencies as are necessary to
approve the appointments of the members of the Pinnacle Board of Directors and
Bank Board of Directors contemplated in this Article IV. Prior to the
appointment of any proposed Augusta Group Director or Augusta Group Bank
Director (as defined in Section 4.2), Pinnacle shall have received proof of
such regulatory approval(s). The failure of the Augusta Group to obtain the
requisite regulatory approvals shall relieve Pinnacle of any of its obligations
under this Article IV.
4.2 Appointment of Certain Directors to be Named By the Augusta
Group.
(a) Pinnacle shall as promptly as practicable following
the execution of this Agreement by the parties hereto and the receipt of all
necessary regulatory approvals, as provided in Section 4.1, undertake to call
a special meeting of the Board of Directors of Pinnacle, at which meeting the
Board of Directors of Pinnacle shall take all such action necessary to increase
the number of members of the Pinnacle's Board of Directors from nine (9) to
sixteen (16) members and shall cause eight (8) persons designated by the
Augusta Group willing so to serve, reasonably satisfactory to Pinnacle and
approved, if necessary, by the Department of Banking and Finance and the
Federal Reserve Bank of Atlanta ("the Augusta Group Directors") to be appointed
as directors of Pinnacle. As a condition to such appointment, each Augusta
Group Director and any approved substitute therefor shall sign a self-executing
resignation having substantially the terms and form as that set forth in
Exhibit "A" (a
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"Director's Resignation"). Subject to a reduction inthe number of the Augusta
Group Directors pursuant to the terms of subparagraph (c) of this Section 4.2,
at the first annual meeting of the Shareholders of Pinnacle subsequent to the
sale of the Minimum Offering Amount, Pinnacle shall take all corporate action
necessary to, and shall, renominate each of the Augusta Group Directors, or any
person or persons substituted therefor by the Augusta Group, reasonably
satisfactory to Pinnacle and approved, if necessary, by the Department of
Banking and Finance and the Federal Reserve Bank of Atlanta, and shall
recommend that the Pinnacle's stockholders vote for the election of such
individuals as directors.
(b) Pinnacle shall as promptly as practicable following
the execution of this Agreement by the parties hereto and the receipt of all
necessary regulatory approvals, as provided in Section 4.1, cause to be called
a special meeting of the shareholders of the Bank, at which meeting Pinnacle,
as sole shareholder of the Bank, shall resolve and vote its shares of the Bank
("Pinnacle's Bank Shares") to amend the Bylaws of the Bank to increase the size
of the Bank's Board of Directors from nine (9) members to eighteen (18) members
and shall take such other and further action as is necessary to cause nine (9)
persons designated by the Augusta Group and willing so to serve, reasonably
satisfactory to Pinnacle and approved, if necessary, by the Department of
Banking and Finance and the Federal Deposit Insurance Corporation ("Augusta
Group Bank Directors") to be appointed as directors of the Bank. As a
condition to such appointment, each Augusta Group Bank Director and any
approved substitute therefor shall sign a self-executing resignation having
substantially the terms and form as that set forth in Exhibit B (a "Director's
Resignation"). Subject to a reduction in the numbers of Augusta Group Bank
Directors pursuant to the terms of subparagraph (c) of this Section 4.2, at the
first annual meeting of shareholders of the Bank subsequent to the sale of the
Minimum Offering Amount, Pinnacle shall cause the Augusta Group Bank Directors
or any person or persons substituted therefor by the Augusta Group, reasonably
satisfactory to Pinnacle and approved, if necessary, by the Department of
Banking and Finance and the Federal Deposit Insurance Corporation, to be
renominated and shall vote Pinnacle's Bank Shares for the election of such
individuals as members of the Bank's Board of Directors for a term of one year.
(c) The number of the Augusta Group Directors and the
Augusta Group Bank Directors appointed to Pinnacle's Board of Directors and the
Bank's Board of Directors, respectively, pursuant to subparagraphs (a) and (b)
of this Section, shall be automatically reduced on the Expiration Date if, on
the Expiration Date, the Minimum Offering Amount of the Common Stock has not
been sold in the Offering. Upon the occurrence of the foregoing, all of the
Augusta Group Directors and the Augusta Group Bank Directors shall
automatically resign, effective at 12:01 a.m. on the Expiration Date, from
Pinnacle's Board of Directors and the Bank's Board of Directors, respectively,
pursuant to the terms of the Director's Resignation executed by each of them.
4.3 Appointment of Xxxxx X. Xxxxxxxx, Xx. as Chairman of Pinnacle's
Board. Pinnacle shall as promptly as practicable following the execution of
this Agreement by the parties hereto and the receipt of all necessary
regulatory approvals, as provided in Section 4.1, appoint Xxxxx X. Xxxxxxxx,
Xx. as Chairman of Pinnacle's Board of Directors.
4.4 Appointment of Xxxxxx X. Xxxxxx, Xx. to Pinnacle's Board.
Pinnacle shall as promptly as practicable following the execution of this
Agreement by the parties hereto and the receipt of all necessary regulatory
approvals, as provided in Section 4.1, take such action as is
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necessary to cause Xxxxxx X. Xxxxxx, Xx. to be appointed, as a representative
of the Bank, to Pinnacle's Board of Directors.
4.5 Selection of Executive Committee Members. Pinnacle shall as
promptly as practicable following the execution of this Agreement by the
parties hereto and the receipt of all necessary regulatory approvals, as
provided in Section 4.1, take such action as is necessary to cause Pinnacle's
Executive Committee and the Bank's Executive Committee to have the following
composition and to have the respective members of each elected in the following
manner:
(a) Pinnacle's Executive Committee shall be comprised of four
(4) members. Pinnacle shall independently select two (2)
members from Pinnacle's Board of Directors to fill two (2)
seats on Pinnacle's Executive Committee and the Augusta
Group shall independently select two (2) members from
Pinnacle's Board of Directors to fill the two (2) remaining
seats on Pinnacle's Executive Committee. Xxxxxxx X.
Xxxxxxxxx, Xx. and Xxxxxxx Xxxxxx, Xx. shall serve as ex
officio, non-voting members of Pinnacle's Executive
Committee. Pinnacle's Executive Committee members so
chosen shall serve until Pinnacle's 1998 Annual Meeting of
Shareholders after which time the members of Pinnacle's
Executive Committee shall be elected by the members of
Pinnacle's Board of Directors.
(b) The Bank's Executive Committee shall be comprised of four
(4) members. The Augusta Group shall independently select
from the Bank's Board of Directors two (2) persons to sit
on the Bank's Executive Committee and Pinnacle shall
independently select from the Bank's Board of Directors two
(2) persons to sit on the Bank's Executive Committee.
Xxxxxxx X. Xxxxxxxxx, Xx. and Xxxxxxx Xxxxxx, Xx. shall
serve as ex officio, non-voting members of the Bank's
Executive Committee. The Bank's Executive Committee
members so chosen shall serve until the Bank's 1998 Annual
Meeting of Shareholders after which time the members of the
Bank's Executive Committee shall be elected by the members
of the Bank's Board of Directors.
(c) Pursuant to Section 4.2(c) of this Agreement, if the
Minimum Offering Amount is not subscribed for prior to the
Expiration Date, all of the Augusta Group Executive
Committee members shall resign from their respective
positions on Pinnacles' Executive Committee and the Bank's
Executive Committee and Pinnacle shall be under no further
or continuing obligation to maintain the size or
composition of the Executive Committees as described in
subparagraphs (a) and (b) of this Section.
4.6 Selection of Chairman of Bank's Board of Directors. Pinnacle
shall as promptly as practicable following the execution of this Agreement by
the parties hereto and the receipt of all
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necessary regulatory approvals, as provided in Section 4.1, cause Xxxx X. Xxx
to be appointed as Chairman of the Bank's Board of Directors.
4.7 Information Regarding the Augusta Group Director Nominees. The
Augusta Group shall hereby provide to Pinnacle not later than November 1, 1997
such biographical and financial information respecting each of the Augusta
Group's proposed nominees to the boards of directors of Pinnacle and the Bank,
as provided for in this Article IV, as is required to be disclosed to the
Georgia Department of Banking and Finance and the Federal Reserve Bank of
Atlanta.
4.8 Selection of President and CEO of Pinnacle. Pinnacle shall as
promptly as practicable following the execution of this Agreement by the
parties hereto cause Xxxxxxx X. Xxxxxxxxx, Xx. to be appointed as the President
and Chief Executive Officer of Pinnacle, which position shall report to and be
under the direct supervision of the Executive Committee of Pinnacle, and to
enter into an employment agreement with Pinnacle in substantially the form and
upon the terms as set forth in Exhibit B hereto.
4.9 Selection of President and CEO of the Bank. Pinnacle shall as
promptly as practicable following the execution of this Agreement by the
parties hereto cause Xxxxxxx Xxxxxx, Xx. to be appointed as the President and
Chief Executive Officer of the Bank which position shall report to and be under
the direct supervision of the Executive Committee of the Bank.
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
5.1 Compliance with Securities Laws. Pinnacle shall not be under
any obligation to complete the transactions contemplated under this Agreement
unless and until Pinnacle shall have satisfied all requirements under any
federal or state securities laws necessary for the offer and sale of the Common
Stock in the Offering.
5.2 Regulatory Approvals and Filings. Pinnacle shall not be under
any obligation to complete the transactions contemplated under this Agreement
unless and until Pinnacle or the Augusta Group (as set forth in Section 4.1)
shall have made all filings and registrations with and obtained all approvals
from all federal and state bank regulatory agencies respecting the transactions
contemplated herein which approvals shall be in full force and effect and all
waiting periods required by law shall have expired. In addition, if Pinnacle
or the Augusta Group shall have received notification from any state or federal
bank regulatory agency which in the reasonable judgment of Pinnacle is
materially adverse to the transactions contemplated herein and which requires
Pinnacle to undertake to make any filing or to take other measures which are
unduly onerous to Pinnacle, Pinnacle shall not be under any obligation to
complete that transaction contemplated by this Agreement.
5.3 Fairness Opinion. Pinnacle shall have received a fairness
opinion satisfactory to Pinnacle from The Xxxxxxxx-Xxxxxxxx Company, Inc. that
the price of the Common Stock to be sold in the Offering is fair from a
financial point-of-view to the shareholders of Pinnacle existing prior to the
Offering.
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5.4 Pinnacle Shareholder Approval. The Offering of the Common Stock
contemplated herein is subject to the approval of the shareholders of Pinnacle
which approval shall be sought at a Special Meeting of Pinnacle Shareholders to
be held as soon as practicable following the execution of this Agreement. The
failure of the Pinnacle shareholders entitled to vote at the Special Meeting to
approve the issuance of the Common Stock in the Offering shall terminate this
Agreement without further action on the part of Pinnacle or the Augusta Group
and shall release the parties hereto from all of their respective rights and
obligations hereunder.
ARTICLE VI
MISCELLANEOUS
6.1 Repurchase of the A.H. Dallas Stock. In the event that this
Agreement is terminated pursuant to Section 1.4 or a failure to satisfy the
conditions set forth in Article II of this Agreement, then within thirty (30)
days from such termination of this Agreement, Pinnacle shall purchase 51,058
shares of Pinnacle's Common Stock which the Augusta Group acquired on June 13,
1997, from Xxxxxx X. Dallas, Xxxxxx X. Dallas Pension and Profit Sharing Plans
and Trusts, Xxxxx X. Dallas, Xxxxx X. Dallas Nominee, Xxxxx X. Dallas Custodian
for Xxxxxx X. Dallas, III and Xxxxx X. Dallas Custodian for Xxxxx Xxx Dallas,
for the same price as the Augusta Group paid for such shares.
6.2 Survival of Representations and Warranties. All of the
representations and warranties of Pinnacle and the Augusta Group contained in
this Agreement shall survive the termination of this Agreement or the sale of
the Minimum Offering Amount, which ever is the first to occur, for the period
permitted under applicable law.
6.3 Publicity. Except as otherwise required by law or applicable
stock exchange rules, none of the parties hereto shall issue any press release
or make any other public statement, in each case relating to or in connection
with or arising out of this Agreement or the matters contained herein, without
obtaining the prior written approval of all parties hereto as to the contents
and manner of presentation and publication thereof.
6.4 Knowledge. Where any representation or warranty contained in
this Agreement is expressly qualified by reference to the knowledge,
information or belief of the party or parties making such representation or
warranty, each of the representing or warranting parties confirms that he has
made due and diligent inquiry as to the matters that are the subject of such
representations and warranties.
6.5 Standard for Representations and Warranties. No representation
or warranty of Pinnacle or the Augusta Group contained in this Agreement shall
be deemed untrue or incorrect, and no party hereto shall be deemed to have
breached a representation or warranty as a consequence of the existence of any
fact, circumstance or event, individually or taken together with all other
facts, circumstances or events inconsistent with any representation or warranty
made in Article II by Pinnacle or Article III by the Augusta Group of this
Agreement, unless such inconsistent fact, circumstance, or event has had or is
expected to have a material adverse effect on the other party.
6.6 Gender. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
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6.7 Expenses. The Augusta Group and Pinnacle shall pay their own
respective expenses, including the fees and disbursements of their respective
counsel in connection with the negotiation, preparation and execution of this
Agreement and the consummation of the transactions contemplated hereby;
provided, however, that if the transactions contemplated by this Agreement are
not completed as a consequence of the withdrawal of either party to this
Agreement otherwise than as expressly provided for herein or due to any other
intentional act in material contravention of this Agreement by either of the
parties hereto, such withdrawing or intentionally acting party (the "Breaching
Party") shall reimburse the other party (the "Nonbreaching Party") for all
expenses incurred by the Nonbreaching Party with respect to the transactions
contemplated by this Agreement, including the preparation of this Agreement and
all ancillary documents thereto and the enforcement of this provision.
6.8 Entire Agreement. This Agreement, including all schedules and
exhibits hereto, constitutes the entire agreement of the parties with respect
to the subject matter hereof, supersedes all prior agreements, negotiations or
letters of intent, and may not be modified, amended or terminated except by a
written instrument specifically referring to this Agreement signed by each of
the parties hereto.
6.9 Waivers and Consents. All waivers and consents given hereunder
shall be in writing. No waiver by any party hereto of any breach or
anticipated breach of any provision hereof by any other party shall be deemed a
waiver of any other contemporaneous, preceding or succeeding breach or
anticipated breach, whether or not similar, on the part of the same or any
other party.
6.10 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given only if and when (i)
personally delivered or (ii) three (3) business days after mailing, postage
prepaid, by certified mail or (iii) when delivered (as evidenced by a receipt)
by a nationally recognized overnight delivery service, addressed in each case
as follows:
(a) If to the Pinnacle to:
XxXxxxxx Bank & Trust
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: 000-000-0000
Attention: Xxxxxxx Xxxxxx, Xx.
copy to counsel:
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000, Promenade II
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy Number: 404-815-3509
Attention: Xxxxxx X. Xxxxxxxx
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(b) If to the Augusta Group to:
Xxx Xxxxx
RDB Family Limited Partnership
000 Xxxxxxxx Xxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx X. Xxx, Xx.
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
J. Xxxxxx Xxxx
1202 First Union Bank Building
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxx
X.X. Xxx 000000
Xxxxxxx, Xxxxxxx 00000
Xxxx X. Xxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
X. Xxxxxxxx Xxxxxx
0000 Xxxx Xxx
Xxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxx 00000
Each party may change its address for the giving of notices and communications
to it, and/or copies thereof, by written notice to the other parties in
conformity with the foregoing.
6.11 Rights of Third Parties. All conditions of the obligations of
the parties hereto, and all undertakings herein, are solely and exclusively for
the benefit of the parties hereto and their respective successors,
representatives and permitted assigns, and no other person or entity shall have
standing to require satisfaction of such conditions or to enforce such
undertakings in accordance with their terms, or be entitled to assume that any
party hereto will refuse to consummate the purchase and sale contemplated
hereby in the absence of strict compliance with any or all thereof, and no
other person or entity shall, under any circumstances, be deemed a beneficiary
of such conditions or undertakings, any or all of which may be freely waived in
whole or in part, by mutual consent of the parties hereto at any time, if in
their sole discretion they deem it desirable to do so.
6.12 Headings. The Table of Contents and Article and Section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
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6.13 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the internal
laws of the State of Georgia.
6.14 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by the Augusta Group or any one of them,
other than by operation of law or with the consent of Pinnacle. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors and permitted
assigns.
6.15 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
6.16 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this agreement under seal
as of the date first above written.
PINNACLE BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------
Name: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------
Title: Chairman
-----------------------------
Attest: /s/ Xxxxxxx Xxxxxx, Xx.
-----------------------------
Title: President
-----------------------------
[CORPORATE SEAL]
AUGUSTA GROUP MEMBERS:
/s/ Xxxxxx X. Key /s/ Xxx Xxxxx
------------------------------------------- --------------------------------------------------
Witness Xxx Xxxxx
RDB Family Limited Partnership
/s/ Xxxxxx X. Key By: /s/ X.X. Xxxxx
------------------------------------------- --------------------------------------------------
Witness General Partner
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxx, Xx.
------------------------------------------- --------------------------------------------------
Witness Xxxxxx X. Xxx, Xx.
/s/ Xxxxx X. Xxxxx /s/ J. Xxxxxx Xxxx
------------------------------------------- --------------------------------------------------
Witness J. Xxxxxx Xxxx
/s/ Xxxx X. Xxx /s/ Xxxxxx X. Xxxxx
------------------------------------------- --------------------------------------------------
Witness Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Key /s/ Xxxx X. Xxx
------------------------------------------- --------------------------------------------------
Witness Xxxx X. Xxx
/s/ Xxxx X. Xxx /s/ X. Xxxxxxxx Xxxxxx
------------------------------------------- --------------------------------------------------
Witness X. Xxxxxxxx Xxxxxx
/s/ Xxxx X. Xxx /s/ Xxxxxx X. Xxxxx
------------------------------------------- --------------------------------------------------
Witness Xxxxxx X. Xxxxx
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SCHEDULE 2.2
STOCKHOLDERS' EQUITY
June 30, 1997
Preferred Stock, $.001 par value per share; $ 0
1,000,000 shares authorized,
no shares issued and outstanding
Common Stock, $.001 par value per share; $ 635
9,000,000 shares authorized,
635,380 shares issued and outstanding
Paid-in Capital $ 7,160,544
-----------
Total Capital $ 7,161,179
===========
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SCHEDULE 2.3
PINNACLE BANCSHARES, INC.
1997 STOCK OPTION PLAN
1. Authorized number of shares . . . . . . . . . . . . . . . . . . . . . . 100,000
2. Number of shares under option . . . . . . . . . . . . . . . . . . . . . 8,500
3. Book Value as of June 4, 1997 . . . . . . . . . . . . . . . . . . . . . $ 11.00
4. Approved Options:*
Xxxxxxx Xxxxxx, Xx., 5,000 shares @ $12.10 per share, ten year option
J. Xxxxxx Xxxx, Xx., 2,500 shares @ $12.10 per share, ten year option
Xxxxxx X. Xxxx, 1,000 shares @ $12.10 per share, ten year option
TOTAL APPROVED INCENTIVE STOCK OPTIONS: 8,500 SHARES
* For the purposes of determining the Fair Market Value of shares, a
factor of 110% has been applied to the Book Value of the
Corporation's stock as of the date of grant.
OTHER OPTIONS
Options to acquire 16,000 shares at various prices held by Prime Group, Inc.
