Exhibit 1
GUARANTY FINANCIAL CORPORATION
Common Stock
($1.25 par value)
UNDERWRITING AGREEMENT
____________, 1999
XxXxxxxx & Company, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Ladies and Gentlemen:
Guaranty Financial Corporation, a Virginia corporation (the "Company"),
proposes to employ you (sometimes referred to herein as the "Underwriter") to
advise the Company in the structure of a public offering of the Company's Common
Stock, par value $1.25 per share (the "Common Stock"), and, as agent of the
Company, to assist in the sale on a best efforts basis of 800,000 shares of the
Common Stock (collectively, the "Shares") in the public offering.
You have advised the Company (a) that you are authorized to enter into
this Agreement and (b) that you are willing to sell on a best efforts basis the
Shares as agent for the Company.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company
and the Underwriter hereby agree as follows:
1. Representation and Warranties of the Company. The Company
represents and warrants as follows:
(a) The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form S-1 (File No. 333-88335), including a preliminary
prospectus, relating to the Shares. Such registration statement as amended at
the time that it becomes effective is referred to collectively in this Agreement
as the "Registration Statement," and the prospectuses in the form filed with the
Commission as part of the Registration Statement or pursuant to its Rule 424(b),
if any, after the Registration Statement becomes effective are referred to
collectively as the "Prospectus."
XxXxxxxx & Company, Inc.
______________, 1999
Page 2
(b) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto when so filed complied in all material respects with the
provisions of the Securities Act; except that this representation and warranty
does not apply to statements in or omissions from any such preliminary
prospectus (or any amendment or supplement thereto) made in reliance upon and
conformity with information relating to the Underwriter furnished to the Company
in writing by such Underwriter expressly for use therein.
(c) The Registration Statement in the form in which it
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective, and the Prospectus filed as part of
the Registration Statement and in the form first filed with the Commission under
its Rule 424(b), if any, and when any supplement thereto is filed with the
Commission, will comply in all material respects with the provisions of the
Securities Act and will not contain at any such times an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus (or any amendment or supplement
thereto) made in reliance upon information relating to the Underwriter furnished
to the Company in writing by the Underwriter expressly for use therein.
(d) All the outstanding shares of the Common Stock of the
Company are duly authorized and validly issued, fully paid and nonassessable and
free of preemptive or similar rights; the Shares to be issued and sold by the
Company have been duly authorized and upon delivery to the subscribers therefor
(the "Subscribers") against payment therefor in accordance with the terms
hereof, will have been validly issued and fully paid and will be nonassessable
and free of preemptive or similar rights; and the Common Stock conforms in all
material respects to the description thereof in the Registration Statement and
the Prospectus (or any amendment or supplement thereto).
(e) The Company and its wholly owned subsidiary, Guaranty
Bank (the "Bank"), are duly organized and validly existing and in good standing
under Virginia law and the regulations promulgated by the Board of Governors of
the Federal Reserve System and are duly qualified to do business and are in good
standing in all jurisdictions that require such qualification or in which the
failure to qualify in such jurisdictions could have, in the aggregate, any
material adverse effect on the business, condition or properties of the Company
or the Bank. The Company and the Bank hold all material licenses, certificates
and permits from governmental authorities necessary for the conduct of their
businesses as described in the Prospectus and own, or possess adequate rights to
use, all material rights necessary for the conduct of their business and have
not received any notice of conflict with the asserted rights of others in
respect thereof; and the Company and the Bank have the corporate power and
authority to own their properties and conduct their businesses as described in
the Prospectus.
(f) All of the outstanding shares of capital stock of the
Bank are owned by the Company, have been duly authorized and are validly issued,
fully paid and nonassessable and are
XxXxxxxx & Company, Inc.
______________, 1999
Page 3
owned by the Company free and clear of any lien, claim, security interest or
other encumbrance. The Bank is the Company's only subsidiary.
(g) The Company and the Bank have good and marketable
title to all property described in the Prospectus as being owned by them, free
and clear of all liens, claims, security interests or other encumbrances except
such as are described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto or in a document filed as an exhibit to the
Registration Statement) or such as are not material and do not interfere in any
material respect with the use of the property or the conduct of the business of
the Company and the Bank taken as a whole, and the property held under lease by
the Company and the Bank is held by them under valid and enforceable leases with
only such exceptions as in the aggregate are not material and do not interfere
in any material respect with the conduct of the business of the Company and the
Bank taken as a whole; provided that no representation or warranty is made
hereby to the title of the lessor of any such property.
(h) There are no legal or governmental proceedings
pending, or to the knowledge of the Company threatened, required to be described
in the Registration Statement or the Prospectus (or any amendment or supplement
thereto) that are not described as required, and there is no contract or
document of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required.
(i) Neither the Company nor the Bank is in violation of
their articles of incorporation, as applicable, or bylaws or in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any agreement indenture, lease or other instrument material to the Company
and the Bank which default is material to the Company and the Bank taken as a
whole. Neither the issuance nor the sale of the Shares nor the execution and
delivery of this Agreement nor the performance of the obligations of the Company
set forth herein nor the consummation of the transactions herein contemplated
requires any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body (except such
as may be required under the Securities Act or other securities laws or Blue Sky
laws) or will conflict with or constitute a breach of, or default under, the
articles of incorporation or bylaws of the Company or the Bank, or constitute a
breach or default under any agreement, indenture or other instrument to which
the Company or the Bank is a party or by which either of them or any of their
property is bound, or any law, administrative regulation or ruling or court
decree applicable to the Company or the Bank or any of their properties, which
breach or default is material to the business property of the Company and the
Bank taken as a whole.
(j) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
XxXxxxxx & Company, Inc.
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Page 4
Company has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company or the Bank taken as a whole, and there has not been any
material change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or the Bank, or any material adverse
change, or any development involving a prospective material adverse change, in
the condition (financial or otherwise), business, net worth or results of
operations of the Company and the Bank taken as a whole.
(k) BDO Xxxxxxx, LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement and the Prospectus, are independent public accountants as required by
the Securities Act.
(l) The Company's financial statements, together with
related schedules and notes, forming part of the Registration Statement and the
Prospectus, present fairly the financial position and the results of operations
of the Company and the Bank at the respective dates or for the respective
periods to which they apply; said statements and related notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the financial and statistical information and data set forth in the
Registration Statement and the Prospectus is fairly presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company and the Bank. The Company and the Bank have no material contingent
obligations that are not disclosed in the Registration Statement and the
Prospectus, as they may be amended or supplemented.
(m) No holders of securities of the Company have rights
to the registration of such securities in the offering contemplated hereby.
(n) The Company and the Bank have filed all Federal,
state and foreign income tax returns that have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due, and are not
being contested in good faith.
(o) The Company and the Bank hold all material licenses,
certificates and permits from governmental authorities that are necessary to the
conduct of their businesses; and neither the Company nor the Bank have infringed
any patents, patent rights, trade names, trademarks or copyrights in any manner
material to the business of the Company and the Bank taken as a whole.
(p) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms.
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(q) All employee benefit plans established, maintained or
contributed by the Company comply in all material respects with requirements of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
no such plan incurred or assumed any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability to the Pension Benefit Guaranty Corporation.
2. [Intentionally omitted.]
3. Sale of the Shares. On the basis of the representations,
warranties and covenants herein contained, and subject to the conditions herein
set forth, the Company agrees to issue and sell the Shares through the
Underwriter, as agent for the Company, to the public and the Underwriter agrees
to use its best efforts to sell the Shares as agent for the Company, at the
price per share set forth on the cover page of the Prospectus (the "Public
Offering Price"). The Company reserves the right to increase the total number of
shares offered to the public by up to 120,000 Shares. The Company agrees to pay
the Underwriter a commission equal to $_______ per Share of the Shares sold
through the Underwriter in the public offering ("Selling Commission"). The
Underwriter may reject any offer to purchase the Shares made through the
Underwriter in whole or in part, and any such rejection shall not be deemed a
breach of the Underwriter's agreement contained herein.
4. Sales by the Underwriter. It is understood that, after the
Registration Statement becomes effective, you propose to sell the Shares to the
public as agent for the Company upon the terms and conditions set forth in the
Prospectus. The escrow procedures established by the Underwriter shall comply
with Commission Rule 15c2-4 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All subscribers to whom the Underwriter
directly sells Shares shall be instructed to make their check for payment of the
Shares payable to "Guaranty Financial Corporation Escrow Account." In addition,
the Underwriter shall comply with Rule 15c2-4. The Underwriter shall transmit
all funds that it receives from subscribers to _____________, the escrow agent
(the "Escrow Agent") by noon of the next business day following receipt thereof.
Only broker/dealers who are either (i) members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") that are registered with
the NASD and maintain net capital pursuant to Rule 15c3-1 promulgated under the
Exchange Act of not less than $25,000 or (ii) dealers with their principal
places of business located outside the United States, its territories and its
possessions and not registered as brokers or dealers under the Exchange Act, who
have agreed not to make any sales within the United States, its territories or
its possessions or to persons who are nationals thereof or residents therein
shall be designated selected dealers by the Underwriter. The Underwriter shall
require all selected dealers to comply with Rule 15c2-4.
5. Payment and Delivery. The Underwriter shall direct the Escrow
Agent to make payment for the Shares sold hereunder by wire transfer or
certified or bank cashier's check drawn to the order of the Company in next day
funds. Such payment is to be made at the offices of Guaranty Financial
Corporation, 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxxxxxxxxxxx, Xxxxxxxx 00000, at
________ local
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Page 6
time, on or about __________, 1999, or at such other time, date and place as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." Unless the transaction is closed book-entry only through The
Depository Trust Company in which case the procedures applicable thereto shall
be complied with, the certificates for the Shares will be delivered in such
denominations and in such registrations as the Underwriter requests in writing
not later than the third (3rd) full business day prior to the Closing Date, and
will be made available for inspection by the Underwriter at least twenty-four
(24) hours prior to the Closing Date. Such certificates will be delivered to the
Escrow Agent by 12:00 p.m. on the day prior to the Closing Date, along with
addressed labels to be used to mail the certificates to the purchasers thereof.
The Company shall direct the Escrow Agent to deliver (i) payment of the portion
of the Selling Commission due to the Underwriter by wire transfer or certified
or bank cashier's check drawn to the order of the Underwriter in next day funds,
to the Underwriter on the Closing Date and (ii) payment of the portion of the
Selling Commission due to each selected dealer by wire transfer or certified or
bank cashier's check drawn to the order of such selected dealer in next day
funds, to each selected dealer on the Closing Date.
6. Covenants of the Company. The Company covenants and agrees
with the Underwriter as follows:
(a) The Company will endeavor to cause the Registration
Statement to become effective and will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and when any amendment thereto thereafter becomes effective,
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction, or the initiation or contemplation of
any proceeding for such purposes and (iv) within the period of time referred to
in Section 6(e), of the happening of any event that makes any statement made in
the Registration Statement or the Prospectus (as then amended or supplemented)
untrue in any material respect or that requires the making of any addition to or
change in the Registration Statement or the Prospectus (as then amended or
supplemented) to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented) to comply
with the Securities Act or any other law. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration Statement,
the Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(b) The Company will furnish you, without charge, three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment to it, including financial statements and all
exhibits thereto, and will also furnish to you, such number of conformed copies
of the Registration Statement (without exhibits) as originally filed and of each
amendment thereto as you may reasonably request.
XxXxxxxx & Company, Inc.
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(c) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not have been advised previously or to which you shall
reasonably object in writing promptly after being so advised.
(d) Prior to the effective date of the Registration
Statement, the Company has delivered or will deliver to you, without charge, in
such quantities as you have requested or may hereafter reasonably request,
copies of each form of preliminary prospectus. The Company consents to the use,
in accordance with the provisions of the Securities Act and with the securities
or Blue Sky laws of the jurisdictions in which the Shares are offered by the
Underwriter and by dealers to whom Shares may be sold, prior to the effective
date of the Registration Statement, of each preliminary prospectus so furnished
by the Company.
(e) On the effective date of the Registration Statement
and thereafter from time to time, for such period as in the opinion of counsel
for the Underwriter a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will deliver to
you and each dealer through whom Shares may be sold without charge (except as
provided below) as many copies of the Prospectus (and of any amendment or
supplement thereto) as they may reasonably request. The Company consents to the
use of such Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Securities Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
Underwriter and by dealers through whom Shares may be sold, both in connection
with the offering or sale of the Shares and for such period of time thereafter
as the Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriter requires that a
material fact be stated in the Prospectus (as then amended or supplemented) in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with the Securities Act or any other law, the Company at
its own expense (except as provided below) will forthwith prepare and file with
the Commission an appropriate amendment or supplement thereto, and will furnish
to the Underwriter and each dealer through whom Shares may be sold without
charge (except as provided below), a reasonable number of copies thereof.
(f) If required, the Company will cooperate with you and
your counsel in connection with the registration or qualification of the Shares
for offer and sale by you and by dealers through whom Shares may be sold under
the securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to the service of process in suits, other than those arising out of
the offer and sale of the Shares, in any jurisdiction where it is not now so
subject.
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(g) The Company will make generally available to its
security holders an earnings statement, which need not be audited, covering a
12-month period commencing after the effective date of the Registration
Statement and ending no later than 15 months thereafter, as soon as practicable
after the end of such period, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and any applicable regulation.
(h) During the period of five years hereafter, the
Company will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to shareholders or filed with the Commission and (ii) from
time to time such other proper information concerning the business and financial
condition of the Company as you may reasonably request.
(i) The Company will not sell, contract to sell or
otherwise dispose of any Common Stock or rights to purchase Common Stock, except
pursuant to this Agreement, for a period of 120 days after the commencement of
the public offering, without your prior written consent.
7. Costs and Expenses.
(a) The Company will pay all costs and expenses incident
to the performance by it of its obligations hereunder, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), each preliminary prospectus, the Prospectus
and all amendments and supplements to any of the foregoing, during the period
specified in Section 6(e) but not exceeding nine months after the date on which
the Shares are first offered to the public, (ii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp tax in connection with the original issuance of the Shares, (iii) the
preparation and delivery of the preliminary and supplemental Blue Sky Memoranda
(including the reasonable fees and disbursements of counsel for the Underwriter
relating thereto), (iv) the registration or qualification, if required, of the
Shares for offer and sale under the securities or Blue Sky laws of the several
states (including the reasonable fees and disbursements of counsel for the
Underwriter relating thereto), (v) the fees and expenses of the Company's
accountants and the fees and expenses of counsel for the Company and the
Underwriter, (vi) during the period specified in Section 6(e) but not exceeding
nine months after the date on which the Shares are first offered to the public,
delivery to the Underwriter and dealers through whom Shares may be sold
(including postage, air freight and the expenses of counting and packaging) of
such copies of the Registration Statement, the Prospectus, each preliminary
prospectus and amendments or supplements to the Registration Statement and the
Prospectus as may be requested for use by the Underwriter or by dealers through
whom Shares may be sold in connection with the offering and sale of the Shares
and during such period of time thereafter as the Prospectus is required, in the
judgment of the Company or in the opinion of counsel for the Underwriter, to be
delivered in connection with the offer and sale of the Shares by you and by
dealers, (vii) filing fees with the NASD in connection with the offering, (viii)
filing fees and costs associated with any additional listing with the Nasdaq
National Market; (ix) the costs of all informational and/or investor due
diligence
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meetings and (x) the performance by the Company of its other obligations under
this Agreement. The Underwriter shall pay its own costs and expenses except as
otherwise provided in this Agreement.
(b) If this Agreement shall be terminated pursuant to any
of the provisions hereof (other than by notice given by you terminating this
Agreement pursuant to Section 12 hereof), or if this Agreement shall be
terminated by you because of any failure or refusal on the part of the Company
to comply in any material respect with the terms or fulfill in any material
respect any of the conditions of this Agreement, the Company agrees without
further obligation to reimburse you for all out-of-pocket expenses (including
fees and expenses of your counsel) reasonably and actually incurred in
connection herewith.
8. Conditions of the Underwriter's Obligations. The obligations
of you hereunder are subject to the following conditions:
(a) That the Registration Statement shall have become
effective not later than ____ p.m., on the date hereof, or at such later date
and time as shall be consented to by you.
(b) That subsequent to the effective date of the
Registration Statement, there shall not have occurred any change, or any
development involving a prospective change, in or affecting particularly the
condition (financial or otherwise), business, properties, net worth or results
of operations of the Company or the Bank not contemplated by the Prospectus (or
any amendment or supplement thereto) that, in your opinion, would materially
adversely affect the market for the Shares.
(c) That you shall have received on the Closing Date an
opinion dated the Closing Date, from Williams, Mullen, Xxxxx & Xxxxxxx, P.C.,
counsel to the Company, to the effect that:
(i) the Company and the Bank have been duly
organized and incorporated, are validly existing under the laws of the
Commonwealth of Virginia, are in good standing under applicable law and are duly
qualified to do business and are in good standing in all jurisdictions that
require such qualification or in which the failure to qualify in such
jurisdictions could, in the aggregate, have any material adverse effect on the
business, condition or properties of the Company or the Bank.
(ii) all of the shares of The Common Stock of the
Company outstanding prior to the issuance of the Shares to be issued and sold by
the Company hereunder have been duly authorized and validly issued and are fully
paid and nonassessable;
(iii) the Bank is the Company's only subsidiary
and all of the outstanding shares of capital stock of the Bank are owned by the
Company, have been duly authorized and validly issued, and are fully paid and
nonassessable and, to the knowledge of such counsel, are owned by the Company
free and clear of any lien, claim, security interest or other encumbrance,
except as otherwise
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described in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) or such as are not material;
(iv) the Shares to be issued and sold by the
Company hereunder have been duly authorized, and when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable, and the issuance of such Shares is not
subject to any preemptive rights or, to the knowledge of such counsel, similar
rights;
(v) the certificates for the Shares are in
proper legal form;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) neither the Company nor the Bank, to the
knowledge of such counsel, is in violation of its articles of incorporation or
its bylaws, or in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness or in any agreement, indenture or other
instrument known to such counsel that is material to the conduct of the business
of the Company and the Bank taken as a whole, and the execution, delivery and
performance of this Agreement, compliance by the Company with all provisions
hereof and the consummation of the transactions contemplated hereby will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the articles of incorporation or bylaws of the Company or the
Bank or, to the knowledge of such counsel, any material agreement, indenture or
other instrument to which the Company or the Bank is a party or by which either
of them is bound, or (assuming compliance with the Securities Act and other
securities or Blue Sky laws) violate any law, administrative regulation or
ruling (except as the indemnification or contribution provisions in this
Agreement may be limited by applicable law) or, to the knowledge of such
counsel, court decree applicable to the Company or the Bank or any of their
respective properties;
(viii) except for the order of the Commission
making the Registration Statement effective and any permits and similar
authorizations required under other securities or Blue Sky laws, no consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
consummation of the sale of the Shares to the purchasers through the Underwriter
as contemplated by this Agreement;
(ix) the statements in the Prospectus under
"Business," "Supervision and Regulation" and "Description of Capital Stock"
insofar as such statements constitute a summary of the documents, legal matters
or proceedings referred to therein, fairly and accurately present in all
material respects the information with respect to such documents, legal matters
or proceedings;
(x) to the knowledge of such counsel, there are
no pending or threatened legal or governmental proceedings to which the Company
or any subsidiary is a party or of which any
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property of the Company or any subsidiary is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the financial position or
results of operations of the Company and its subsidiaries taken as a whole.
In rendering the opinions required by this Section 8(c), such counsel
may rely, as to matters of fact, upon certificates and representations of
officers of the Company and the Bank and on certificates of public officials.
(d) Williams, Mullen, Xxxxx & Xxxxxxx, P.C. shall also
provide a written statement that nothing has come to their attention that has
caused them to believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data included or
incorporated by reference, therein, as to which counsel need make no statement),
at the time it became effective or as of the date of their respective opinions,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for financial statements and
schedules and other financial or statistical data included or incorporated by
reference therein, as to which counsel need make no statement), as at the date
hereof or at Closing Time, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) That you shall have received on the Closing Date the
opinion of your counsel, Williams, Mullen, Xxxxx & Xxxxxxx, P.C., dated the
Closing Date, covering such matters as you may have reasonably requested.
(f) That you shall have received letters addressed to you
and dated _______________, the date hereof and the Closing Date from BDO
Xxxxxxx, LLP, independent public accountants, substantially in the form
heretofore approved by you.
(g) That (i) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material change in the capital stock of the Company nor any
material increase in long-term debt of the Company or the Bank from that set
forth or contemplated in the Registration Statement and the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or otherwise), business, properties, net worth or results of
operations of the Company and the Bank, taken as a whole; (iv) neither the
Company nor the
XxXxxxxx & Company, Inc.
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Bank shall have any material liability or obligation, direct or contingent,
other than those liabilities or obligations reflected in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) or
incurred or arising in the ordinary course of business; and (v) all of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and
the Closing Date as if made on and as of such date, and you shall have received
a certificate, dated the Closing Date and signed by the President and the chief
financial officer of the Company, to the effect set forth in this Section (g)
and (h) hereof.
(h) That the Company shall not have failed at or prior to
the Closing Date to have performed or complied in any material respect with any
of the agreements herein contained and required to be performed or complied with
by it at or prior to the Closing Date.
(i) The Company shall have furnished you such further
certificates and documents confirming the representations and warranties
contained herein and related matters as you may reasonably have requested.
(j) The Company shall have received agreements from the
directors and certain executive officers of the Company that they will not sell,
contract to sell or otherwise dispose of any Common Stock or rights to purchase
Common Stock (except for financial hardship or family emergency) for a period of
120 days after the commencement of the public offering, without the prior
written consent of the Underwriter.
9. Conditions to the Obligations of the Company. The obligations
of the Company to sell and deliver the portion of the Shares required to be
delivered as and when specified in this Agreement are subject to the conditions
that at or before ____ p.m., on the date of this Agreement, or such later time
and date to which the Company and the Underwriter may from time to time consent,
the Registration Statement shall have become effective; at the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and in effect or proceedings therefor initiated or threatened; and
the Escrow Agent shall have tendered to the Corporation payment for the Shares.
10. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities or expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses,
XxXxxxxx & Company, Inc.
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Page 13
claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement based upon information
relating to the Underwriter furnished in writing to the Company by or on behalf
of the Underwriter expressly for use in connection therewith; provided that the
indemnification contained in this paragraph with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter (or any person
controlling the Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Shares by the Underwriter to
any person if a copy of the Prospectus shall not have been delivered or sent to
such person with or prior to the written confirmation of the sale involved (or
any supplement to the Prospectus at the time of such confirmation was not so
delivered or sent) and the statement or omission giving rise to such loss,
claim, damage, liability or expense was contained in the preliminary prospectus
and corrected in the Prospectus (or any supplement thereto at the time such
confirmation was delivered or sent).
(b) If any action or claim shall be brought against the
Underwriter or any person controlling the Underwriter, in respect of which
indemnity may be sought against the Company in accordance with Section 10(a),
the Underwriter shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel and
payment of all reasonable fees and expenses. The Underwriter or any such person
controlling the Underwriter shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the reasonable fees
and expenses of such counsel shall be at the expense of the Underwriter or such
controlling person unless (i) the Company has agreed in writing to pay such fees
and expenses, (ii) the Company has failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any impleaded
party) include both the Underwriter or controlling person and the Company and
representations of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them (in which case, if such
Underwriter or controlling person notifies the Company in writing that it elects
to employ separate counsel at the expense of the Company, the Company shall not
have the right to assume the defense of such action on behalf of the Underwriter
or such controlling person, it being understood, however, that the Company shall
not, in connection with any such action or separate but substantially related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Underwriter and controlling
persons, which firm shall be designated in writing by you). The Company shall
not be liable for any settlement of any such action effected without the written
consent of the Company, but if settled with such written consent, or if there be
a final judgment for the plaintiff in any such action, the Company agrees to
indemnify and hold harmless the Underwriter and any such controlling person from
and against any loss, liability, damage or expense by reason of such settlement
or judgment.
(c) The Underwriter agrees to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration Statement any
person controlling the Company to the same extent as the foregoing indemnity
from the Company to the Underwriter, but only with respect to information in the
last paragraph on the front cover of the Prospectus and in the section of the
Prospectus entitled "Underwriting," which were furnished by or on behalf of the
Underwriter expressly
XxXxxxxx & Company, Inc.
______________, 1999
Page 14
for use in the Registration Statement, the Prospectus or any preliminary
prospectus, or any amendment or supplement thereto. If any action or claim shall
be brought or asserted against the Company, its directors, any such officer or
any such controlling person based on the Registration Statement, the Prospectus
or any preliminary prospectus, or any amendment or supplement thereto and in
respect of which indemnity may be sought against the Underwriter, the
Underwriter shall have the rights and duties given to the Company by Section
10(b) hereof (except that if the Company shall have assumed the defense thereof,
the Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the Underwriter), and the Company, its
directors, any such officer, any such controlling person shall have the rights
and duties given to the Underwriter by Section 10(b) hereof.
(d) If the indemnification of the Underwriter or the
Company provided for in this Section 10 is unavailable as a matter of law to the
Underwriter or the Company, as the case may be, in respect of any loss, claim,
damage, liability or expense referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such loss,
claim, damage, liability or expense (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, as the case may be, on
the one hand and the Underwriter on the other from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriter on the other in connection
with the statements or omissions that resulted in such loss, claims, damage,
liability or expense, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company, bear to the total underwriting commissions received by the Underwriter
as set forth in the table on the cover page of the Prospectus (as amended or
supplemented) and in the section entitled "Underwriting" in the Prospectus (as
amended or supplemented). The relative fault of the Company on the one hand and
of the Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact related to information
supplied by the Company on the one hand or by the Underwriter on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 10(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses actually and reasonably incurred by
such indemnified party in connection with investigating or defending any such
XxXxxxxx & Company, Inc.
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Page 15
action or claim. Notwithstanding the provisions of this Section 10(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares sold by it as agent for the
Company exceeds the amount of any damages that the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentations.
(e) In any proceeding relating to the Registration
Statement, any preliminary prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 10 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) The indemnity and contribution agreements contained
in this Section 10 and the respective agreements, representations, warranties
and other statements of the Company or its officers and the Underwriter set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Underwriter or the Company or any person controlling the Underwriter, the
Company or its directors, officers (or any person controlling the Company), (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor of the Underwriter or the Company or
its directors or officers referred to above (or of any person controlling the
Underwriter or the Company) shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 10.
11. Effective Date of Agreement. This Agreement shall become
effective when notification of the effectiveness of the Registration Statement
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company by notifying you, or
by you by notifying the Company; provided, however, that the provisions of this
Section 11 and of Section 7 and Section 10 hereof shall at all times be
effective.
12. Termination of Agreement. This Agreement shall be subject to
termination in your sole discretion, without liability on your part, by notice
given to the Company, if prior to the Closing Date (i) trading in securities
generally on the New York Stock Exchange or American Stock Exchange shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking or thrift activities in Virginia or the United States shall have been
declared by either Federal or state authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or
XxXxxxxx & Company, Inc.
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Page 16
inadvisable to proceed with the offering. Notice of such cancellation shall be
given to the Company by telegraph or telephone but shall be subsequently
confirmed by letter.
13. Notices. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: if to the Underwriter, to XxXxxxxx & Company, Inc.,
000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxxxx Bank Building, Norfolk, Virginia
23510, Attention: Xxxxxxx X. XxXxxxxx, Xx.; if to the Company, to Guaranty
Financial Corporation, 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxxxxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxx.
14. Successors. This Agreement has been and is made solely for the
benefit of the Underwriter, the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successor" shall not include any purchaser of
the Shares merely because of such purchase.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Virginia.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
Very truly yours,
GUARANTY FINANCIAL CORPORATION
By:
-------------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive Officer
XxXxxxxx & Company, Inc.
______________, 1999
Page 17
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
XxXXXXXX & COMPANY, INC.
By:
-------------------------------------
Xxxxxxx X. XxXxxxxx, Xx.
President
