EXHIBIT 1
FIRST SHARES BANCORP, INC.
UP TO 120,000 SHARES OF COMMON STOCK
TO BE SOLD BY A SELLING SHAREHOLDER
AGENCY AGREEMENT
______________, 2002
Xxxxx X. Xxxxx & Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Mr. Xxxx Xxxx
Dear Sir:
The Xxxxxxxx and Xxxxxxx Xxxxx Family Trust (the "Selling Shareholder")
proposes to sell up to 120,000 shares (the "Shares") of the Common Stock, $0.01
par value per share (the "Common Stock") of First Shares Bancorp, Inc., an
Indiana bank holding corporation (the "Company").
The Selling Shareholder will be offering the Shares pursuant to an
offering registered with the Securities and Exchange Commission (the
"Commission") on Form SB-2 (the "Offering"). The Shares will be offered to the
public by the Selling Shareholder at a price of $____ per Share. The purpose of
this Agreement is to set forth the understanding of the parties relating to the
right of Xxxxx X. Xxxxx & Company (the "Agent") to participate in the sale of
the Shares as agent exercising its best efforts to sell the Shares.
1. REPRESENTATIONS AND WARRANTIES OF AGENT. Agent represents and
warrants that:
(a) Agent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Illinois with all
requisite corporate power to carry on its business.
(b) Agent is licensed as a broker-dealer, authorized to conduct
offerings of the sort contemplated hereby by the Commission
and the blue sky authorities of each other state in which the
Selling Shareholder and Agent have agreed to offer the Shares
and is a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD"), and, to Agent's best
knowledge, no proceedings are pending or threatened to revoke
or limit any such status.
(c) This Agreement has been duly authorized, executed and
delivered by Agent and is a valid and binding agreement on the
part of Agent, enforceable in accordance with its
terms, except as enforceability may be limited by the
application of bankruptcy, insolvency, moratorium or similar
laws affecting the rights of creditors generally and by
judicial limitations on the right of specific performance, and
except as the enforceability of the indemnification or
contribution provisions hereby may be affected by applicable
federal or state securities laws.
(d) Agent hereby represents and warrants to, and agrees with, the
Company and the Selling Shareholder that in connection with
the Offering: (i) Agent has not distributed and will not
distribute any prospectus or any other offering material in
connection with the offering and sale of the Shares other than
a Preliminary Prospectus (as defined in Section 2(a)) relating
to the Offering and filed with the Commission or the
Prospectus (as defined in Section 2(a)) or other materials
permitted by the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated
by the Commission thereunder (the "Rules") to be distributed
by the Agent and consented to by the Company and the Selling
Shareholder or their counsel; (ii) neither Agent nor any
officer or other person employed by Agent will provide any
information or make any representations to purchasers of the
Shares, other than such information and representations as are
either contained in a Preliminary Prospectus or the Prospectus
or are not inconsistent with the information set forth in such
Preliminary Prospectus or the Prospectus which shall be
pre-approved by the Company and the Selling Shareholder; and
(iii) Agent will endeavor to comply with Rule 2310, Conduct
Rules, of the National Association of Securities Dealers, Inc.
Manual and similar applicable state and federal securities
laws regarding the suitability of the Shares for its
customers.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Agent and agrees with the Agent as follows:
(a) The Company has carefully prepared, in conformity with the
requirements of the Securities Act and the Rules, a
registration statement on Form SB-2 (Registration No.
333-100237), including a Preliminary Prospectus, and has filed
with the Commission the registration statement and such
amendments thereof as may have been required to the date of
this Agreement. Copies of such registration statement
(including all amendments thereof) and of the related
Preliminary Prospectus have heretofore been delivered by the
Company to the Agent. The term "Preliminary Prospectus" means
any preliminary prospectus (as defined in Rule 430 of the
Rules) included at any time as a part of the registration
statement. The registration statement as amended (including
any supplemental registration statement under Rule 462(b) or
any amendment under Rule 462(c) of the Rules) at the time and
on the date it becomes effective (the "Effective Date"),
including the prospectus, financial statements, schedules,
exhibits, and all other documents incorporated by reference
therein or filed as a part thereof, is called the
"Registration Statement;" provided, however, that
"Registration Statement" shall also include all Rule 430A
Information (as defined below) deemed to be included in such
Registration Statement at the time such Registration Statement
becomes effective as provided by Rule 430A of the Rules. The
term "Prospectus" means the Prospectus as filed with the
Commission
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pursuant to Rule 424(b) of the Rules or, if no filing pursuant
to Rule 424(b) of the Rules is required, means the form of
final prospectus included in the Registration Statement at the
time such Registration Statement becomes effective. The term
"Rule 430A Information" means information with respect to the
Shares and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant
to Rule 430A of the Rules. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any document attached as an exhibit
thereto or incorporated by reference therein, as of the date
of such Preliminary Prospectus or the Prospectus, as the case
may be. The Company will not file any amendment of the
Registration Statement or supplement to the Prospectus to
which the Agent or the Selling Shareholder shall reasonably
object in writing after being furnished with a copy thereof.
(b) Each Preliminary Prospectus, at the time of filing thereof,
contained all material statements which were required to be
stated therein in accordance with the Securities Act and the
Rules, and conformed in all material respects with the
requirements of the Securities Act and the Rules, and did not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Commission has not issued any order suspending or preventing
the use of any Preliminary Prospectus. When the Registration
Statement shall become effective, when the Prospectus is first
filed pursuant to Rule 424(b) of the Rules, when any
post-effective amendment of the Registration Statement shall
become effective, when any supplement to or pre-effective
amendment of the Prospectus is filed with the Commission and
at each Closing Date (as defined in Section 4), the
Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, or if previously
filed complied, with the applicable provisions of the
Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the respective rules and
regulations of the Commission thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain, or if previously
filed contains, any untrue statement of a material fact or
will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representation or warranty as to the information contained in
the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the
Company by the Agent or the Selling Shareholder, specifically
for use in connection with the preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with
the Commission as exhibits to the Registration Statement.
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(d) Xxxxx, Xxxxxx and Company LLP, on behalf of the Company and
First Bank, the Company's wholly-owned subsidiary (the
"Bank"), whose report is filed with the Commission as part of
the Registration Statement, are, and during the periods
covered by its report were, independent public accountants as
required by the Securities Act and the Rules.
(e) Each of the Company and the Bank has been duly organized and
is validly existing as a corporation or banking corporation,
as applicable, under the laws of the State of Indiana. Neither
the Company nor the Bank has any properties or conducts any
business outside of the State of Indiana that would require
either of them to be qualified as a foreign corporation or
bank, as the case may be, in any jurisdiction outside of
Indiana. Neither the Company nor the Bank has any directly or
indirectly held subsidiary other than the Bank. The Company
has all power, authority, authorizations, approvals, consents,
orders, licenses, certificates and permits needed to enter
into, deliver and perform this Agreement.
(f) No authorization, approval, consent, order, license,
certificate or permit of or from any federal, state, or local
governmental or regulatory official, body, or tribunal, is
required for the Company or the Bank to conduct their
respective businesses and own their respective properties as
described in the Prospectus, except such authorizations,
approvals, consents, orders, licenses, certificates, or
permits as have been obtained by them or are not material to
the commencement or conduct of their respective businesses or
to the ownership of their respective properties.
(g) The financial statements of the Company and any related notes
thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the
Company as of the date of such financial statements and for
the period covered thereby. Such statements and any related
notes have been prepared in accordance with accounting
principles generally accepted in the United States applied on
a consistent basis. The financial statements at and for the
three years ended December 31, 2001 and related notes have
been certified by the independent accountants named in
subsection 2(d) above. No other financial statements are
required to be included in the Prospectus or the Registration
Statement.
(h) The Company and the Bank own adequate and enforceable rights
to use any patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright
applications and other similar rights (collectively,
"Intangibles") necessary for the conduct of the material
aspects of their business as described in the Prospectus, and
neither the Company nor the Bank has infringed, is infringing,
or has received any notice of infringement of, any Intangible
of any other person.
(i) The Company or the Bank owns its offices located in Morgantown
and in Trafalgar and has valid and enforceable leasehold
interests in the real property in which its branch and other
facilities are located in Greenwood, Franklin, Bargersville
and Nashville, Indiana, which are as described in the
Prospectus and are, except as otherwise described in the
Prospectus, free and clear of all liens, encumbrances,
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claims, security interests and defects except to the extent
they would not have a material adverse effect on commencement
or conduct of the respective businesses of the Company or the
Bank or the ownership of their respective properties.
(j) There are no litigation, governmental or other proceedings or
investigations pending before any court or before or by any
public body or board or threatened against the Company or the
Bank, and to the best of the Company's knowledge, except as
set forth in the Prospectus, there is no reasonable basis for
any such litigation, proceedings or investigations, which
would have a material adverse effect on the commencement or
conduct of the respective businesses of the Company or the
Bank or the ownership of their respective properties.
(k) The Company and Bank have filed all federal, state, and local
tax returns required to be filed by them and paid all taxes
shown due on such returns as well as all other material taxes,
assessments and governmental charges which have become due; no
material deficiency with respect to any such return has been
assessed or proposed.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there
has not been any material adverse change in the condition
(financial or other), business, properties or prospects of the
Company or the Bank.
(m) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default, in the
due performance and observance of any material term, covenant
or condition, by the Company, the Bank or, to the best of the
Company's knowledge, any other party, of any lease, indenture,
mortgage, note or any other agreement or instrument to which
the Company or the Bank is a party or by which either of them
or either of their businesses may be bound or affected, except
such defaults or events as are not material to the
commencement or conduct of their respective businesses or
ownership of their respective properties.
(n) Neither the Company nor the Bank is in violation of any term
or provision of the articles of incorporation, charter or
bylaws of the Company or the Bank. Neither the Company nor the
Bank is in violation of, nor is either of them required to
take any action to avoid any material violation of, any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation.
(o) Neither the execution, delivery or performance of this
Agreement by the Company nor the consummation of the
transactions contemplated hereby will give rise to a right to
terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or require any consent under, or result in the
execution or imposition of any lien, charge or encumbrance
upon any properties or assets of the Company or the Bank
pursuant to the terms of, any lease, indenture, mortgage, note
or other agreement or instrument to which the Company or the
Bank is a party or by which either of them
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or either of their businesses may be bound or affected, or any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation or violate any provision of the articles of
incorporation, charter or bylaws of the Company or the Bank,
except those which are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth in the
Prospectus. There are 1,052,779 shares of Common Stock of the
Company issued and outstanding. No shares of Preferred Stock
are issued and outstanding. The Shares have been duly and
validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or other right. There
are no outstanding options, warrants or other rights calling
for the issuance of, and no commitment, plan or arrangement to
issue, any shares of stock of the Company or the Bank or any
security convertible into or exchangeable for stock of the
Company or the Bank, except for (i) 106,000 shares of Common
Stock that will be issuable upon the exercise of outstanding
options granted under the Company's option plans (and an
additional 2,000 shares of Common Stock that may be issuable
upon the exercise of an option the Company has committed to
grant) and (ii) 500,000 shares of Common Stock that will be
issuable upon the exercise of the Company's outstanding
mandatory stock purchase contracts. The Common Stock and the
options conform in all material respects to all statements in
relation thereto contained in the Registration Statement and
the Prospectus.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus,
neither the Company nor the Bank has (i) issued any securities
or incurred any material liability or obligation, direct or
contingent, (ii) entered into any material transaction, or
(iii) declared or paid any dividend or made any distribution
on any of their stock, except for liabilities, obligations,
and transactions reasonably expected based on the disclosures
in the Prospectus.
(r) This Agreement has been duly and validly authorized, executed
and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company.
(s) The Commission has not issued any order preventing or
suspending the use of any Prospectus or Preliminary
Prospectus.
(t) Neither the Company, nor the Bank, nor, to the Company's
knowledge, any director, officer, agent, employee or other
person associated with the Company or the Bank, acting on
behalf of the Company or the Bank, has used any corporate
funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made
any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
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(u) Neither the Company nor the Bank nor any affiliate of either
of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
the Shares or the Common Stock in order to facilitate the sale
or resale of any of the Shares.
(v) No transaction has occurred between or among the Company or
the Bank and any of their officers, directors, organizers or
the Company's shareholders or any affiliate or affiliates of
any such officer, director, organizer, or shareholder, that is
required to be described in and is not described in the
Prospectus.
(w) The Company is not and will not after the offering be an
"investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment
Company Act of 1940, as amended.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER. The
Selling Shareholder represents and warrants to the Agent and the Company and
agrees with the Agent and the Company as follows:
(a) The execution, delivery and performance of this Agreement by
or on behalf of the Selling Shareholder, the compliance by the
Selling Shareholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not
(i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental
body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii)
conflict with or constitute a breach of any of the terms or
provisions of, or a default under any indenture, loan
agreement, mortgage, lease or other agreement or instrument to
which the Selling Shareholder is a party or by which the
Selling Shareholder or any property of the Selling Shareholder
is bound or (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction
over the Selling Shareholder or any property of the Selling
Shareholder.
(b) This Agreement has been duly and validly authorized, executed
and delivered by the Selling Shareholder and is the legal,
valid and binding agreement and obligation of the Selling
Shareholder.
(c) The Selling Shareholder has, and on each Closing Date will
have, full legal right, power and authority, and all
authorization and approval required by law, to enter into this
Agreement and to sell, assign, transfer and deliver the Shares
to be sold by the Selling Shareholder in the manner provided
herein.
(d) The Selling Shareholder is the lawful owner of the Shares to
be sold by the Selling Shareholder pursuant to this Agreement
and has, and on each Closing Date with respect to the Shares
to be sold on such Closing Date will have, good and clear
title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security
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interests, equities and claims whatsoever. Upon delivery of
and payment for the Shares to be sold by the Selling
Shareholder pursuant to this Agreement on a Closing Date, good
and clear title to such Shares will pass to the purchasers
thereof, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims
whatsoever.
(e) To the knowledge of the Selling Shareholder, the Shares have
been duly authorized and are validly issued, fully paid and
non-assessable.
(f) The information in the Registration Statement under the
caption "Principal and Selling Shareholders" which
specifically relates to the Selling Shareholder does not, and
will not on any Closing Date, contain any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.
(g) Neither the Selling Shareholder nor any affiliate of the
Selling Shareholder has taken, and they will not take,
directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of
the price of the Shares or the Common Stock in order to
facilitate the sale or resale of any of the Shares.
4. CONDITIONS OF THE AGENT'S OBLIGATIONS. The obligations of the
Agent under this Agreement shall be subject to the accuracy of the
representations and warranties of the Company, the Bank and the Selling
Shareholder in this Agreement as of the date of this Agreement and as of each
date on which the Shares are sold pursuant to this Agreement (each such date a
"Closing Date"), and are further subject to the performance by the Company and
the Selling Shareholder of their respective obligations under this Agreement,
and to the following additional terms and conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M., Indianapolis time, on the date of this
Agreement or on such later date and time as shall be consented
to in writing by the Agent; if the filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b)
of the Rules, the Prospectus shall have been filed in the
manner and within the time period required by Rule 424(b) of
the Rules; at each Closing Date, no stop order shall have been
issued or proceedings therefor initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement, or
otherwise, shall have been complied with to the reasonable
satisfaction of the Agent.
(b) At the Effective Date, the Agent shall have received:
(1) The opinion of Leagre, Xxxxxxxx & Xxxxxxx LLP,
counsel for the Company, dated the Effective Date,
addressed to the Agent and in a form and scope
reasonably satisfactory to counsel for the Agent to
the effect that:
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(i) Each of the Company and the Bank (A) is a
corporation or banking corporation, as
applicable, duly organized and validly
existing under the laws of the State of
Indiana, and (B) is not required to be
qualified to do business in any jurisdiction
outside Indiana, except where the failure to
so qualify would not have a material adverse
effect on the Company or the Bank.
(ii) Each of the Company and the Bank has full
corporate power and authority and all
material authorizations, approvals, orders,
licenses, certificates and permits of and
from all governmental regulatory officials
and bodies necessary to own or lease their
respective properties and conduct their
respective businesses as described in the
Registration Statement and Prospectus.
(iii) The Company has authorized capital stock and
outstanding capital stock as set forth in
the Prospectus. The capital stock and stock
options of the Company conform in all
material respects to the descriptions
thereof contained in the Registration
Statement and the Prospectus.
(iv) The Company has no directly or indirectly
held subsidiary other than the Bank.
(v) The Company is the registered holder of all
of the outstanding capital stock of the
Bank, and all such shares of stock so held
have been duly authorized and validly
issued, fully paid and nonassessable and are
owned free and clear of any liens,
encumbrances or other claims or restrictions
whatsoever, subject to the provisions of the
Indiana Financial Institutions Act and the
security interest held in the Bank's stock
by the Company's senior lender.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by the
Company, and is the legal, valid and binding
agreement and obligation of the Company
enforceable in accordance with its terms,
except (A) as enforcement thereof may be
limited by bankruptcy, insolvency,
reorganization, moratorium or other laws
relating to or affecting enforcement of
creditors' rights or by general equity
principles, whether applied in an action at
law or in equity, or by the discretionary
nature of specific performance, injunctive
relief, and other equitable remedies,
including the appointment of a receiver, and
(B), with respect to provisions relating to
indemnification and contribution, to the
extent they are held by a court of competent
jurisdiction or regulatory authority with
jurisdiction over the subject matter to be
void or unenforceable as against public
policy.
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(vii) To the best of such counsel's knowledge or
as set forth in the Prospectus, after due
inquiry, there are (A) no contracts or other
documents which are required to be filed as
exhibits to the Registration Statement other
than those filed as exhibits thereto, (B) no
legal or governmental proceedings pending or
threatened against the Company or the Bank,
(C) no statutes or regulations applicable to
the Company or the Bank which are of a
character required to be disclosed in the
Registration Statement and Prospectus which
have not been so disclosed and properly
described therein, and (D) no certificates,
permits, grants or other consents,
approvals, orders, licenses or
authorizations from regulatory officials or
bodies, which are required to be obtained or
maintained by the Company or the Bank and
which are of a character required to be
disclosed in the Registration Statement and
Prospectus which have not been so disclosed
and properly described therein.
(viii) The statements in the Registration Statement
and the Prospectus, insofar as they are
descriptions of corporate documents, stock
option plans, contracts, agreements or other
documents specifically identified in the
Registration Statement or descriptions of
laws, regulations, or regulatory
requirements, or refer to compliance with
law or to statements of law or legal
conclusions, are correct in all material
respects.
(ix) To the best of such counsel's knowledge,
after due inquiry, the execution, delivery
and performance of this Agreement, the
consummation of the transactions herein
contemplated and the compliance with the
terms and provisions hereof by the Company
and the Bank, as the case may be, will not
give rise to a right to terminate or
accelerate the due date of any payment due
under, or conflict with or result in a
breach of any of the terms or provisions of,
or constitute a default (or an event which,
with notice or lapse of time, or both, would
constitute a default) under, or require any
consent under, or result in the execution or
imposition of any lien, charge or
encumbrance upon any properties or assets of
the Company or the Bank pursuant to the
terms of, any lease, indenture, mortgage,
note or other agreement or instrument to
which the Company or the Bank is a party or
by which either of them or either of their
properties or businesses is or may be bound
or affected, nor will such action result in
any violation of the provisions of the
articles of incorporation, charter or bylaws
of the Company or the Bank or any statute or
any order, rule, or regulation applicable to
the Company or the Bank of any court or any
federal, state, local or other regulatory
authority or other governmental body, the
effect of which, in any such case, would be
expected to have a material adverse effect
on the Company or the Bank.
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(x) To the best of such counsel's knowledge,
after due inquiry, no consent, approval,
authorization or order of any court or
governmental agency or body, domestic or
foreign, is required to be obtained by the
Company or the Bank in connection with the
execution and delivery of this Agreement,
except such as have been obtained.
(xi) To the best of such counsel's knowledge,
after due inquiry, (A) neither the Company
nor the Bank is in breach of, or in default
(and no event has occurred which, with
notice or lapse of time, or both, would
constitute a default) under, any lease,
indenture, mortgage, note, or other
agreement or instrument to which the Company
or the Bank is a party; or (B) neither the
Company nor the Bank is in violation of any
term or provision of either of their
articles of incorporation, charter or
bylaws, or of any franchise, license, grant,
permit, judgment, decree, order, statute,
rule or regulation; and (C) neither the
Company nor the Bank has received any notice
of conflict with the asserted rights of
others in respect of Intangibles necessary
for the commencement or conduct of its
business, the effect of which, in any such
case, would be expected to have a material
adverse effect on the Company or the Bank.
(xii) The Registration Statement and the
Prospectus and any amendments or supplements
thereto (other than financial statement and
notes, any related schedules or other
financial information contained in such
Prospectus or amendment or supplement
thereto, as to which such counsel need
express no opinion or belief) comply as to
form in all material respects with the
requirements of the Securities Act and the
Rules.
(xiii) The Registration Statement is effective
under the Securities Act, and any required
filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and
within the time period required by Rule
424(b) and, to the best of such counsel's
knowledge, after due inquiry, no stop order
suspending the effectiveness of the
Registration Statement or any post-effective
amendment to the Registration Statement and
no order directed at any document
incorporated by reference in the
Registration Statement or the Prospectus or
any amendment or supplement thereto has been
issued, and no proceedings for that purpose
have been instituted or threatened or are
contemplated by the Commission.
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(2) The opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the
Selling Shareholder, dated the Effective Date,
addressed to the Agent and in a form and scope
reasonably satisfactory to counsel for the Agent to
the effect that:
(i) This Agreement has been duly and validly
authorized, executed and delivered by the
Selling Shareholder, and is the legal, valid
and binding agreement and obligation of the
Selling Shareholder enforceable in
accordance with its terms, except (A) as
enforcement thereof may be limited by
bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or
affecting enforcement of creditors' rights
or by general equity principles, whether
applied in an action at law or in equity, or
by the discretionary nature of specific
performance, injunctive relief, and other
equitable remedies, including the
appointment of a receiver, and (B), with
respect to provisions relating to
indemnification and contribution, to the
extent they are held by a court of competent
jurisdiction or regulatory authority with
jurisdiction over the subject matter to be
void or unenforceable as against public
policy.
(ii) The Selling Shareholder has full legal
right, power and authority, and all
authorization and approval required by law,
to enter into this Agreement and to sell,
assign, transfer and deliver the Shares in
the manner provided herein.
(iii) The execution, delivery and performance of
this Agreement by the Selling Shareholder,
the compliance by the Selling Shareholder
with all the provisions hereof and the
consummation of the transactions
contemplated hereby will not (A) require any
consent, approval, authorization or other
order of, or qualification with, any court
or governmental body or agency (except such
as may be required under the securities or
blue sky laws of the various states), except
such as have been obtained, (B) to such
counsel's actual knowledge, conflict with or
constitute a breach of any of the terms or
provisions of, or a default under any
indenture, loan agreement, mortgage, lease
or other agreement or instrument to which
such Selling Shareholder is a party or by
which any property of such Selling
Shareholder is bound or (C) violate or
conflict with any applicable law, rule or
regulation or to such counsel's actual
knowledge any judgment, order or decree of
any court or any governmental body or agency
having jurisdiction over the Selling
Shareholder or any property of the Selling
Shareholder.
(iv) The Selling Shareholder is the lawful owner
of the Shares to be sold by the Selling
Stockholder pursuant to this Agreement and
has good and clear title to such Shares,
free of all restrictions on transfer, liens,
encumbrances, security interests, equities
and claims whatsoever.
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(v) Upon delivery of and payment for the Shares
to be sold by the Selling Shareholder
pursuant to this Agreement, good and clear
title to such Shares will pass to the
purchasers thereof, free of all restrictions
on transfer, liens, encumbrances, security
interests, equities and claims whatsoever.
(3) A favorable opinion from Bose XxXxxxxx & Xxxxx LLP,
counsel to the Agent, dated as of the Effective Date,
with respect to the matters set forth under
Subsections (b)(1)(iii), (xii) and (xiii) of this
Section 4 and with respect to such other related
matters as the Agent may require, if the failure to
receive a favorable opinion with respect to such
other related matters would cause the Agent to deem
it inadvisable to proceed with the sale of the
Shares.
(4) In rendering the foregoing opinions, such counsel may
rely upon certificates of public officials (as to
matters of fact and law) and officers of the Company
and the Bank (as to matters of fact), and include
customary qualifications in their opinions as are
acceptable to the Agent. Copies of all such
certificates relied upon by Company counsel shall be
furnished to counsel to the Agent on the Effective
Date. In addition, Leagre Xxxxxxxx & Xxxxxxx LLP and
Bose XxXxxxxx & Xxxxx LLP shall state that they have
participated in conferences with officials of the
Company and its independent auditors, and
representatives of the Agent at which the content of
the Registration Statement and Prospectus and related
matters were discussed, and also had discussions with
such officials of the Company with a view toward a
clear understanding on their part of the requirements
of the Securities Act with reference to the
preparation of registration statements and
prospectuses. Such counsel may also state that they
did not independently verify the accuracy or
completeness of the statements made in the
Registration Statement and Prospectus; however, based
on such counsel's examination of the Registration
Statement and the Prospectus and on their
participation in the above-mentioned conferences,
nothing has come to the attention of such counsel
that gives them reason to believe that the
Registration Statement or Prospectus (other than
financial statements and notes, any related schedules
or other financial information contained in such
Registration Statement or Prospectus as to which such
counsel need express no opinion or belief), at the
time the Registration Statement became effective,
contained any untrue statement of a material fact or
omitted to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other
than financial statements and notes, any related
schedules or other financial information contained in
such Prospectus or amendment or supplement thereto,
as to which such counsel need express no opinion or
belief), as of the date of the opinion, contains any
untrue statement of a material fact or omits to state
a material fact necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading.
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(c) On or prior to the Effective Date and each Closing Date, the
Agent shall have been furnished such documents, certificates
and opinions as it may reasonably require for the purpose of
enabling it to review the matters referred to in subsection
(b) of this Section 4 and its counsel to render the opinion
referred to in subsection (b)(3) of this Section 4, and in
order to evidence the accuracy, completeness or satisfaction
of the representations, warranties, covenants or conditions
herein contained.
(d) Prior to the Effective Date and each Closing Date, (i) there
shall have been no material adverse change in the condition or
prospects, financial or otherwise, of the Company or the Bank
except as set forth in the Prospectus; (ii) there shall have
been no material transaction, not in the ordinary course of
business, entered into by the Company or the Bank except as
set forth in the Registration Statement and Prospectus, other
than transactions referred to or contemplated therein or to
which the Agent has given its written consent; (iii) neither
the Company nor the Bank shall be 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
material agreement, understanding or instrument relating to
any outstanding indebtedness that is material in amount; (iv)
no action, suit or proceeding, at law or in equity, shall be
pending or threatened against the Company or the Bank before
or by any court or Federal, state or other commission, board
or other administrative agency having jurisdiction over the
Company or the Bank, as the case may be, which is expected to
have a material adverse effect on the Company or the Bank; and
(v) no stop order shall have been issued under the Securities
Act and no proceedings therefor shall have been initiated or
be threatened by the Commission.
(e) At each Closing Date, if requested by the Agent, the Agent
shall have received a certificate signed by the Chairman of
the Board, the President, and the Treasurer of the Company
dated the Closing Date to the effect that the conditions set
forth in subsection (d) above have been satisfied and as to
the accuracy, as of the Closing Date, of the representations
and warranties of the Company set forth in Section 2 hereof.
(f) At each Closing Date, if requested by the Agent, the Agent
shall have received a certificate signed by the trustee of the
Selling Shareholder dated the Closing Date as to the accuracy,
as of the Closing Date, of the representations and warranties
of the Selling Shareholder set forth in Section 3 hereof.
(g) All proceedings taken in connection with the sale of the
Shares as herein contemplated shall be reasonably satisfactory
in form and substance to the Agent and to counsel for the
Agent.
(h) No order suspending the sale of the Shares prior to the
Effective Date or any Closing Date, in any jurisdiction listed
in Exhibit A, shall have been issued, and no proceedings for
that purpose shall have been instituted or, to the Agent's
knowledge or that of the Company, shall be contemplated.
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(i) The NASD, upon review of the terms of the public offering of
the Shares, shall not have objected to the Agent's
participation in the same. If any condition to the Agent's
obligations hereunder to be fulfilled prior to or at the
Effective Date or any Closing Date is not so fulfilled, the
Agent may terminate this Agreement pursuant to Section
9(a)(iii) hereof or, if the Agent so elects, waive any such
conditions which have not been fulfilled or extend the time of
their fulfillment.
5. COVENANTS.
(a) The Company covenants and agrees that it will:
(i) Use its best efforts to cause the Registration
Statement to become effective and will notify the
Agent immediately, and confirm the notice in writing,
(A) when the Registration Statement and any
post-effective amendment thereto becomes effective,
(B) of the issuance by the Commission of any stop
order or of the initiation, or the threatening, of
any proceedings for that purpose and (C) of the
receipt of any comments from the Commission. The
Company will make every reasonable effort to prevent
the issuance of a stop order, and, if the Commission
shall enter a stop order at any time, the Company
will make every reasonable effort to obtain the
lifting of such order at the earliest possible
moment.
(ii) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as
it is able with all requirements imposed upon it by
the Securities Act, as now and hereafter amended, and
by the Rules, as from time to time in force, so far
as necessary to permit the continuance of sales of or
dealings in the Shares. If at any time when a
prospectus relating to the Shares is required to be
delivered under the Securities Act any event shall
have occurred as a result of which, in the reasonable
opinion of counsel for the Company or counsel for the
Agent, the Registration Statement or Prospectus as
then amended or supplemented includes an untrue
statement of a material fact or omits to state any
material fact required to be stated therein or
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading, or if it is necessary at any
time to amend or supplement the Registration
Statement or Prospectus to comply with the Securities
Act or the Rules, the Company will notify the Agent
promptly and prepare and file with the Commission an
appropriate amendment or supplement in form
satisfactory to the Agent. The cost of preparing,
filing and delivering copies of such amendment or
supplement shall be paid by the Company.
(iii) Deliver to the Agent, from time to time as requested,
such number of copies of each Preliminary Prospectus
as may reasonably be requested by them and, as soon
as the Registration Statement, or any amendment or
supplement thereto, becomes effective, deliver to the
Agent a signed copy of the Registration Statement,
including exhibits, and all post-effective amendments
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thereto and deliver to the Agent such number of
copies of the Prospectus, the Registration Statement
and supplements and amendments thereto, if any,
without exhibits, as they may reasonably request.
(iv) Endeavor in good faith, in cooperation with the Agent
and its counsel, at or prior to the time the
Registration Statement becomes effective, to qualify
the Shares for offering and sale under the securities
laws relating to the offering or sale of the Shares
of the states listed in Exhibit A. In each
jurisdiction where such qualification shall be
effected, the Company will, unless the Agent agrees
that such action is not at the time necessary or
advisable, file and make such statements or reports
at such times as are or may reasonably be required by
the laws of such jurisdiction. The Company will
advise the Agent promptly of the suspension of the
qualification of the Shares for offering, sale or
trading in any jurisdiction, or any initiation or
threat of any proceeding for such purpose, and in the
event of the issuance of any order suspending such
qualification, the Company, with the cooperation of
the Agent, will use all reasonable efforts to obtain
the withdrawal thereof.
(v) Furnish its security holders as soon as practicable
(within the time periods contemplated by Rule 158
under the Securities Act) an earnings statement
(which need not be certified by independent certified
public accountants unless required by the Securities
Act or the Rules) covering a period of at least
twelve months beginning after the effective date of
the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Securities Act and
the Rules thereunder.
(vi) For a period of five years from the Effective Date,
furnish to its shareholders annual audited and
quarterly unaudited consolidated financial statements
with respect to the Company including balance sheets
and income statements.
(vii) For a period of five years from the Effective Date,
furnish to the Agent the following:
(A) at the time they have been sent to
shareholders of the Company or filed with
the Commission, one copy of each annual,
quarterly, interim, or current financial and
other report or communication;
(B) as soon as practicable, one copy of every
press release which was released by the
Company; and
(C) all other information reasonably requested
by the Agent with respect to the Company to
comply with Rule 15c2-11 of the Rules and
Rule 6740 of the NASD Rules.
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(viii) Not file any amendment or supplement to the
Registration Statement or Prospectus after the
Effective Date to which the Agent shall reasonably
object in writing after being furnished a copy
thereof.
(ix) Comply with all registration, filing and reporting
requirements of the Securities Act or the Exchange
Act, which may from time to time be applicable to the
Company.
(x) Provide to the Agent, at or prior to each Closing
Date, the documents required by subsections (c) and
(e) of Section 4.
(b) The Selling Shareholder covenants and agrees that it will:
(i) Endeavor in good faith, in cooperation with the Agent
and its counsel, at or prior to the time the
Registration Statement becomes effective, to qualify
the Shares for offering and sale under the securities
laws relating to the offering or sale of the Shares
of the states listed in Exhibit A.
(ii) Pay, or reimburse if paid by the Agent or the
Company, whether or not the transactions contemplated
hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the
performance of the obligations of the Company and the
Selling Shareholder under this Agreement, including
those relating to (A) the preparation, printing,
filing and delivery of the Registration Statement,
including all exhibits thereto, each Preliminary
Prospectus, the Prospectus and all amendments of and
supplements to the Registration Statement and the
Prospectus; (ii) the transfer of title to the Shares;
(C) the registration or qualification of the Shares
for offer and sale under the securities or "blue sky"
laws of the various jurisdictions referred to in
Exhibit A, including the fees and disbursements of
counsel in connection with such registration and
qualification and the preparation and printing of
preliminary, supplemental, and final blue sky
memoranda; (D) the furnishing (including costs of
shipping and mailing) to the Agent of copies of each
Preliminary Prospectus, the Prospectus and all
amendments of or supplements to the Prospectus, and
of the several documents required by this section to
be so furnished; (E) the filing requirements and fees
of the NASD in connection with its review of the
terms of the public offering and the underwriting;
(F) all transfer taxes, if any, with respect to the
sale and delivery of the Shares; and (G) the Agent's
and the Company's out-of-pocket expenses, including
without limitation, legal fees and costs of counsel
to the Agent and counsel to the Company.
(iii) Provide to the Agent, at or prior to each Closing
Date, the documents required by subsection (d) of
Section 4.
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SECTION 6. ENGAGEMENT AND COMPENSATION.
(a) (i) Subject to the terms and conditions of this
Agreement, and except as provided in Section 9(c),
the Selling Shareholder hereby engages Agent from the
date hereof until December 31, 2002, as the Selling
Shareholder's exclusive agent in connection with the
sale, on a "best efforts" basis, of a maximum of
120,000 Shares of Common Stock owned by the Selling
Shareholder.
(ii) The price at which Agent shall sell the Shares, as
agent for the Selling Shareholder, shall be as set
forth on the cover page of the Prospectus, and the
Selling Shareholder shall pay to Agent a commission
of 10.0% of the offering price of the Shares sold to
all persons including those Shares sold through other
brokers or dealers. Agent shall have the right in its
sole discretion to allocate Shares among prospective
purchasers. Agent may form a group of securities
dealers (the "Selected Dealers"), who are members in
good standing of the NASD, pursuant to a Dealer
Agreement to find purchasers for the Shares. However,
failure to engage any Selected Dealers shall not
constitute a failure to discharge its duties under
this Agreement. The allocation of Shares among Agent
and the Selected Dealers shall be made by Agent.
(iii) The Selling Shareholder shall deliver certificates
representing the Shares to purchasers (or their
designees) through Agent, and shall pay to Agent (or
to Selected Dealers designated by Agent to the
Selling Shareholder) by check or wire transfer all
commissions due under this Section 6, at the time of
or as soon as practicable after a sale of Shares
under this Agreement. Agent is authorized to withhold
commissions due to Agent or to Selected Dealers and
amounts due to the Agent and the Company under
Section 5(b)(ii) from any proceeds from the sale of
Shares that are payable by Agent to the Selling
Shareholder.
(iv) Agent shall use its best efforts to assist the
Selling Shareholder in making sales of the Shares
pursuant to the Offering. Agent makes no
representations as to the amount of Shares it will be
able to sell. There is no firm commitment to sell any
certain amount of the Shares by Agent.
(v) Agent will only offer and sell the Shares in those
states listed on Exhibit A to this Agreement.
(b) Agent shall offer the Shares pursuant to the Prospectus.
7. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless Agent (including
its officers, directors, employees, counsel for Agent, and
Selected Dealers or any affiliate of any
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of the foregoing) and each person, if any, who controls Agent,
and each Selected Dealer and their affiliates, within the
meaning of the Securities Act or the Exchange Act (all
collectively "Agent Indemnitees") against any and all losses,
claims, damages and liabilities, joint or several (including
any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which they may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise (collectively,
"Losses"), insofar as such Losses arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, 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 not misleading; provided, however,
that such indemnity shall not inure to the benefit of any
Agent Indemnitee on account of any Losses arising from the
sale of the Shares in the public offering to any person by the
Agent or any Selected Dealer if such untrue statement or
omission or alleged untrue statement or omission was made in
such Preliminary Prospectus, the Registration Statement or the
Prospectus, or such amendment or supplement, in reliance upon
and in conformity with information furnished in writing to the
Company by or on behalf of the Agent or the Selling
Shareholder specifically for use therein. The Company shall
not be liable hereunder to any Agent Indemnitee to the extent
that any Loss incurred by the Agent Indemnitee arises from
such person's fraudulent act or omission.
(b) The Selling Shareholder agrees to indemnify and hold harmless
the Agent Indemnitees, to the same extent as the foregoing
indemnity from the Company to Agent, but only insofar as such
Losses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was
made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or any amendment thereof or supplement
thereto, in reliance upon and in conformity with information
furnished in writing to the Company or Agent by the Selling
Shareholder specifically for use therein. The Selling
Shareholder shall not be liable hereunder to any Agent
Indemnitee to the extent that any Loss incurred by the Agent
Indemnitee arises from such person's fraudulent act or
omission.
(c) Agent agrees to indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, each director of the Company and each officer of the
Company who signs the Registration Statement (collectively,
the "Company Indemnitees"), and the Selling Shareholder, each
person, if any, who controls the Selling Shareholder within
the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and each trustee of the Selling
Shareholder (collectively, the "Shareholder Indemnitees"),to
the same extent as the foregoing indemnity from the Company to
Agent, but only insofar as such Losses arise out of or are
based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or
-19-
any amendment thereof or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the
Company by Agent specifically for use therein; provided,
however, that the obligation of Agent to indemnify the Company
(including any controlling person, director or officer
thereof) and the Selling Shareholder (including any trustee or
controlling person thereof) hereunder shall be limited to the
total commissions earned by Agent hereunder. Agent shall not
be liable hereunder to any Company Indemnitee or Shareholder
Indemnitee to the extent that any Loss incurred by the Company
Indemnitee or Shareholder Indemnitee arises from such person's
fraudulent act or omission.
(d) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served, but
the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party otherwise
than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and
it shall notify the indemnifying parties of the commencement
thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the
reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof.
The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party
has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded
that, because of the existence of different or additional
defenses available to the indemnified party or of other
reasons, there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct
of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such
action on behalf of the indemnified party), or (iii) the
indemnifying parties shall not have employed counsel to assume
the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or
claims effected without its written consent.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for in Section
7 is for any reason judicially
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