EXHIBIT 10.4
Offering Agreement
OFFERING AGREEMENT
THIS OFFERING AGREEMENT (the "Agreement") is made this 5th
day of January, 1999, by and among the (i) the Estate of Xxxx X. Xxxx (the
"Estate") through its co-executors, Xxxxx X. Xxxx and Xxxxx X. Xxxx, (ii) Xxxxx
X. Xxxx in his individual capacity (each a "Selling Shareholder"), Southwest
Bancorp, Inc. (the "Company"), and Xxxxxx, Xxxxxxxx & Company, Incorporated (the
"Underwriter").
PREMISES
A. The Selling Shareholders desire to sell certain shares of the common
stock, par value $1.00 per share, (the "Common Stock") of the Company in order
to receive the maximum amount of net proceeds available in a sale effected as
expeditiously as possible.
B. The Selling Shareholders desire the cooperation of the Company in
preparing the registration statement and other documents necessary or desirable
for the sale of their shares.
C. The Company has determined that the interests of its shareholders will
be better served if the shares owned by the Selling Shareholders are widely
distributed in a public offering (the "Public Offering") rather than being sold
to a small number of institutions or individuals (a "Narrow Distribution").
D. The Selling Shareholders and the Company have been advised that the
selling price per share is likely to be higher in a Public Offering than in a
Narrow Distribution, but that the Selling Shareholders are likely to receive
higher sales proceeds from a Narrow Distribution, after payment of underwriter's
compensation and offering expenses.
E. In order to obtain the benefits of a Public Offering for its remaining
shareholders, the Company is prepared: to offset the decrease in sales proceeds
likely to be incurred by the Selling Shareholders in a Public Offering (as
described below); to divert its employees from other tasks in order to prepare
and file the Registration Statement; and to commit other resources necessary for
expeditious sale of shares; provided that the Selling Shareholders proceed with
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the Offering and provide certain other promises and assurances to the Company.
F. The Company plans to offer newly issued shares of its Common Stock
with the shares offered by the Selling Shareholders in order to provide funds
for the payment of offering expenses and underwriters' compensation provided for
by this Agreement and for general corporate purposes, including use in its
lending and investment activities.
NOW, THEREFORE, based upon the premises and mutual promises contained
in this Agreement, and intending to be legally bound, the parties to this
Agreement agree as follows:
ARTICLE 1
COOPERATION TO ACCOMPLISH THE PUBLIC OFFERING
1.1 The Company and each of the Selling Shareholders agree to proceed in good
faith to effect a sale of the shares designated on Exhibit I to this Agreement
(the "Subject Shares") pursuant to the letter agreement dated January 5, 1999
(the "Letter Agreement"), a copy of which is attached as Exhibit II to this
Agreement, and an underwriting agreement described in the Letter Agreement (the
Underwriting Agreement").
1.2 Each of the Selling Shareholders agrees to provide information reasonably
requested by the Company or the Underwriter in connection with the Public
Offering and the registration of the Subject Shares under federal and state
securities laws.
1.3 The Company agrees to prepare and file a registration statement on Form S-2
(the "Registration Statement") for the Public Offering, including the sale of
the Subject Shares and, at the discretion of the Company, up to a total of
250,000 additional shares of Common Stock (the "Additional Shares") in the
Public Offering. The Additional Shares may be newly issued shares sold by the
Company or outstanding shares sold
by others, at the discretion of the Company. The Company also may issue and sell
shares of Common Stock upon exercise by the Underwriter of the over-allotment
option described in the Letter Agreement. The Public Offering will not be
increased without the approval of the Selling Shareholders.
1.4 The Subject Shares, the Additional Shares, and the over-allotment option
shall include and shall be automatically increased to reflect any stock split or
stock dividend paid on or before the closing of the Public Offering and per
share amounts shall be proportionally adjusted to reflect such stock split or
dividend. No such adjustment shall decrease the amount to be paid to or increase
the reimbursements of expenses to be made by the Selling Shareholders pursuant
to this Agreement.
1.5 The Company and the Selling Shareholders agree to use their best efforts to
effect the sale of the Subject Shares as soon as is reasonably possible.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS
Each of the Selling Shareholders represents and warrants as follows with
respect to the Selling Shareholder and its Subject Shares:
2.1 Each of the Selling Shareholders is the owner of the Subject Shares
designated on Exhibit I to this Agreement. None of the Subject Shares is subject
to any pledge, lien, or encumbrance of any nature other than liens on the
Subject Shares owned by the Estate for federal and state estate taxes.
2.2 Each Selling Shareholder has executed the Letter Agreement in the form
attached as Exhibit II to this Agreement.
2.3. Each Selling Shareholder has full power and authority to enter into this
Agreement, the Letter Agreement and the Underwriting Agreement and to effect the
transactions contemplated by this Agreement and those other agreements. (This
Agreement, the Letter Agreement, and the Underwriting Agreement are referred to
together as the "Selling Agreements.")
ARTICLE 3.
PAYMENT OF OFFERING EXPENSES; DISTRIBUTION OF NET PROCEEDS
3.1 Subject to reimbursement as provided in Article 5, the Company will pay the
offering expenses of the Public Offering (the "Direct Expenses"), consisting of:
(i) the fees and expenses of legal counsel to the Company, (ii) the fees and
expenses of the Company's independent accountants, (iii) printing costs,
including the costs of filing the Registration Statement and of printing and
coping the prospectus contained in the Registration Statement, (iv) the SEC
registration fee for the Subject Shares, (v) "blue sky" filing fees and
expenses, and (vi) other related costs of the Public Offering. Direct Expenses
do not include underwriter's compensation.
3.2 The Selling Shareholders will pay the fees and expenses of their legal
counsel, accountants and advisers.
3.3 The Selling Shareholders shall be entitled to the amount of net proceeds of
the Public Offering equal to the estimated net sales proceeds, after payment of
offering expenses, that the Selling Shareholders would have received had the
Subject Shares been sold in a Narrow Distribution, based solely on the following
formula:
(((Actual Offering Price per Share - $0.25) X Subject Shares Actually Sold) X
(0.97)) - ($92,500+SEC Registration Fee applicable to total Subject Shares).
The Company and each of the Selling Shareholders expressly agree that this
formula, without alteration, shall be the basis for the distribution of proceeds
of the Public Offering to the Selling Shareholders. A sample calculation is
provided as Exhibit III to this Agreement, for illustration only.
ARTICLE 4
DISTRIBUTION OF PROCEEDS; LIMITATION OF UNDERWRITER'S LIABILITY
4.1 On the Closing Date (as defined in the Underwriting Agreement) of the
Public Offering, the Underwriter will distribute a portion of the total proceeds
of the Public Offering after reduction for underwriter's compensation (the "Net
Proceeds") to the Selling Shareholders in the amount determined under Section
3.3 of this Agreement, and then shall pay the remaining amount of Net Proceeds
to the Company and any other seller. The Selling Shareholders will not be
entitled to any proceeds of the Public Offering in addition to the distribution
made pursuant to this Agreement or to any proceeds from the exercise of the
over-allotment option.
4.2 The Subject Shares shall be sold in the following priority: First, the
Subject Shares owned by the Estate; Second, the Subject Shares owned by the
other Selling Shareholder: Third, the Company and any other seller as they shall
determine. The Underwriter shall distribute funds among the Selling Shareholders
in the proportion that the Subject Shares actually sold by a Selling Shareholder
bear to the total Subject Shares actually sold.
4.3 The Underwriter may consult with counsel of its choice regarding these
duties, and shall be fully protected for any action taken in good faith in
accordance with that advice. The Underwriter shall have no liability under this
Agreement other than as a direct result of its gross negligence, willful
misconduct, or criminal act. In the event any disagreement between one or more
Selling Shareholders and the Company results in adverse claims or demands being
made on the Net Proceeds of the Public Offering prior to distribution of those
funds, or in the event the Underwriter in good faith is in doubt as to what
action it should take under this Agreement with respect to distribution of those
funds, the Underwriter shall retain the Net Proceeds of the Public Offering
until the Underwriter shall have received (i) an enforceable final order of a
court of competent jurisdiction which is not subject to further appeal directing
delivery of such funds, or (ii) a written agreement executed by the Selling
Shareholders and the Company directing delivery of such funds, in which event
the Underwriter shall distribute the Net Proceeds in accordance with such order
or agreement. Any court order referred to in (i) above shall be accompanied by a
legal opinion of counsel for the presenting party satisfactory to the
Underwriter to the effect that said court order or judgement is final and
enforceable and is not subject to further appeal. The Underwriter shall act on
such court order and legal opinion without further question. The Underwriter
shall cause any funds retained by it pursuant to this paragraph to be invested
promptly in a money market mutual fund chosen by it in its good faith
discretion, and shall pay interest on such funds to the Selling Shareholders,
the Company and any other seller in proportion to their relative share of such
funds at the average total return earned on such fund for the period beginning
on the sixth business day after the Closing Date of the Public Offering and
ending with the calendar day immediately preceding delivery of such funds.
ARTICLE 5
FAILURE TO CONCLUDE OFFER; REIMBURSEMENT OF DIRECT EXPENSES
5.1 Notwithstanding the provisions of Article 3 of this Agreement, the Selling
Shareholders shall reimburse the Company for the Direct Expenses in an amount
determined by the Company in good faith, plus any amount payable by the Company
pursuant to Section 15 of the Letter Agreement, in each case relating only to
expenses incurred in the period beginning on the date of this Agreement and
ending on the date of termination of this Agreement, plus the sum of $25,000
(which relates to Direct Expenses incurred in June, July and August of 1998) if:
(a) The Public Offering is not completed because of a breach of any of the
Selling Agreements by one or more of the Selling Shareholders; or
(b) If the Letter Agreement is terminated pursuant to paragraph 1 of the
Letter Agreement and the Public Offering is not completed, in which case
the maximum amount required to be paid by the Selling Shareholders under
this section 5.1 is the lesser of (i) $92,500 plus any SEC registration fee
applicable to the Subject Shares, or (ii) 76% of the sum of Direct Expenses
incurred in the period beginning on the date of this Agreement and ending
on the date of termination of this Agreement and $25,000.
5.2 The Selling Shareholders' obligation to make the payment of Direct Expenses
to the Company under this Article 5 is joint and several.
5.4. In the event the Public Offering is completed and all proceeds are
distributed to the Selling Shareholders and the Company in accordance with this
Agreement, the Selling Shareholders, on the one hand, and the Company, on the
other hand, each hereby mutually releases the other from any and all claims and
causes of action of whatsoever form and nature that may have existed between
them as of the date of distribution of such proceeds. In the event the Public
Offering is not completed and/or this Agreement terminates for any reason, the
Selling Shareholders and the Company each reserves their respective rights to
pursue any and all legal remedies against each other.
ARTICLE 6
TERMINATION
6.1. This Agreement may be terminated as provided below:
(a) By mutual consent of the Company and the Selling Shareholders,
evidenced by their written agreement;
(b) By the Company or the Selling Shareholders if the Closing Date under
the Underwriting Agreement (the "Closing Date") is not held before July 7,
1999, provided that the right to terminate under this Section 6.1 (b) will
not be available to the Selling Shareholders if a Selling Shareholder's
breach of one or more of the Selling Agreements was the cause for the delay
in the Closing Date, and shall not be available to the Company if the
Company's Breach of one or more of the Selling Agreements was the cause of
the delay in the Closing Date.
(c) By the Selling Shareholders, upon delivery of written notice from the
Selling Shareholders of a material breach by the Company, provided that (i)
the Selling Shareholders previously have provided notice in accordance with
this Agreement to the Company of that breach, and (ii) the breach has not
been substantially cured within thirty days of that notice or has not been
waived by the Selling Shareholders.
(d) By the Company, upon delivery of written notice of a material breach
by a Selling Shareholder, provided that (i) the Company previously has
provided notice in accordance with this Agreement to the Selling
Shareholders of that breach, and (ii) the breach has not been substantially
cured within thirty days of that notice or has not been waived by the
Company.
(e) By the Company or the Selling Shareholders, if the Underwriter has
advised the Company or the Selling Shareholders in writing that it has
terminated the Letter Agreement or the Underwriting Agreement, provided
that the right to terminate under this Section 6.1(e) will not be available
to the Selling Shareholders if a Selling Shareholder's breach of one or
more of the Selling Agreements has been the cause of, or has resulted in,
the Underwriter's termination of the Letter Agreement or the Underwriting
Agreement, and shall not be available to the Company, if its breach of one
or more of the Selling Agreements has been the cause of, or has resulted
in, the Underwriter's termination of the Letter Agreement or the
Underwriting Agreement.
6.3 No termination will act to impair the limitation of liability provided to
the Underwriter under Article 4 of this Agreement.
6.4 Each of the Selling Shareholders agrees that it will not encourage, assist,
cooperate with, or participate in any attempt by any party to cause a change in
control of the Company during the period beginning on the date of this Agreement
and ending on (i) if this Agreement is terminated other than because of a breach
of any of the Selling Agreements by one or more Selling Shareholders and the
Public Offering is not completed, the date of such termination, or (ii) if the
Public Offering is completed, the second anniversary of this Agreement.
6.5 The Company represents and warrants that it does not contemplate any sale
of control of the Company or any change in its strategy of independent
operation. The Company agrees that, if the Public Offering is completed pursuant
to this Agreement and its Board of Directors shall agree or agree in principle
to any sale of control to any party prior to the Closing Date of the Public
Offering, it shall not enter into an agreement with such party for such a change
in control that does not obligate the acquiror to pay to the Selling
Shareholders, for each share sold by them in the Public Offering, the difference
between the per share sales price in the Public Offering and the value received
by shareholders of the common stock of the Company in such sale of control in
cash or other consideration as is received by such shareholders in such change
in control.
6.6 The provisions of Section 4.3 and Articles 5 and 6 of this Agreement,
including, without limitation, the definitions used therein, will survive
termination of this Agreement for a period of two years following such
termination.
ARTICLE 7
OTHER PROVISIONS
7.1 Any notices or other communications required or permitted by this Agreement
will be sufficiently given if sent by registered mail or certified mail, postage
prepaid, addressed:
If to the Selling Shareholders, to each of the Selling Shareholders at the
respective addresses shown on Exhibit I to this Agreement, with a copy to:
Xxxxxx X. Xxxxxx, Esquire
Bright & Xxxxxx, P.C.
Two Leadership Square
Suite 810
211 North Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx, Esquire
Xxxxx & Xxxxxxx, P.C.
1800 Mid-America Tower
00 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
If to the Company, to:
Xxxxxx X. XxXxxxxxx
Chairman of the Board
Southwest Bancorp, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxxx, Esquire
Xxxxxxx, Xxxxx & Xxxxx, L.L.P.
Suite 300
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
If to the Underwriter, to:
Xxxx X. Xxxxxx
Xxxxxx Xxxxxxxx & Company, Incorporated
000 Xxxxx Xxxxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxxxxx X. Xxxxxxxx, Esquire
Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx Xxxxx, Xxxxxxxx 00000-0000
or such other address provided in writing by the party. Any notice or
communication made as required by this section will be deemed to have been given
three business days after the date of mailing, except that a change in address
will not be deemed given until it is actually received. Notices also may be
given by telegram, facsimile transmission, or hand delivery, and, in that event,
will be deemed to be given as of the date they are actually received.
7.2 This Agreement shall be construed to reflect the intention of the parties
to the extent allowed by law. If any of the provisions contained in this
Agreement shall be held illegal or unenforceable by a court with appropriate
jurisdiction, no other provision of this Agreement shall be affected by such a
holding.
7.3 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Oklahoma, without regard to its
conflict of laws principles. This Agreement shall not be assigned, pledged or
transferred in any way by any party without the prior written consent of the
other parties. This Agreement supersedes all prior agreements between the
parties with respect to the subject matter hereof. No change, alteration or
modification hereof may be made except in writing, signed by each of the Selling
Shareholders, the Company, and the Underwriter. No act or failure to act by any
party shall be deemed to constitute a waiver of any breach by any other party of
any provision of this Agreement, nor shall the waiver by any party of any such
breach be construed or operate as a waiver of any subsequent breach. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original. Each of the parties agrees that a signed copy of a
counterpart delivered by facsimile shall constitute valid execution of this
Agreement or the Letter Agreement.
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first hereinabove written.
SOUTHWEST BANCORP, INC. XXXXXX, XXXXXXXX & COMPANY,
INCORPORATED, Solely as to Article 4
By: /s/ Xxxxxx X. XxXxxxxxx By: /s/ Xxxxxxx Xxxxxx
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Its: Chairman of the Board Its: First Vice President
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SELLING SHAREHOLDERS:
ESTATE OF XXXX X. XXXX
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Co-Executor
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Co-Executor
INDIVIDUALS:
/s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
