--------------------------------------------------------------------------------
INDEPENDENT BANKSHARES, INC.
275,000 SHARES*
COMMON STOCK
------------------
UNDERWRITING AGREEMENT
------------------
JANUARY ___, 1997
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*Plus an option to purchase from the Company up to 41,250 additional shares to
cover over allotments.
-2-
INDEPENDENT BANKSHARES, INC.
275,000 SHARES COMMON STOCK*
UNDERWRITING AGREEMENT
January ____, 1997
Xxxxxx & Xxxxxx Incorporated
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTION. Independent Bankshares, Inc., a Texas
corporation (the "COMPANY"), proposes to issue and sell 275,000 shares ("FIRM
SHARES") of its authorized but unissued Common Stock, par value $.25 per
share ("COMMON STOCK"), to Xxxxxx & Xxxxxx Incorporated ("UNDERWRITER"). In
addition, the Company proposes to grant to the Underwriter an option to
purchase up to 41,250 additional shares of Common Stock ("ADDITIONAL SHARES")
as provided in Section 5 hereof. The Firm Shares and, to the extent such
option is exercised, the Additional Shares, are hereinafter collectively
referred to as the "SHARES."
You have advised the Company that you propose to make a public offering
of the Shares as soon as you deem advisable after the registration statement
hereinafter referred to becomes effective, if it has not yet become
effective, and the Pricing Agreement hereinafter defined has been executed
and delivered.
----------------
* Plus an option to acquire up to 41,250 additional shares to cover over
allotments.
Prior to the purchase and public offering of the Shares by the
Underwriter, the Company and the Underwriter shall enter into an agreement
substantially in the form of Exhibit A hereto ("PRICING AGREEMENT"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company and the Underwriter and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement.
The Company hereby confirms its agreement with respect to the purchase
of the Shares by the Underwriter as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-16419)
and a related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission ("COMMISSION")
by the Company and in conformity with the requirements of the Securities Act
of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "1933 ACT;" all references herein to specific
rules are rules promulgated under the 0000 Xxx); and the Company has so
prepared and has filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the date hereof. In
the event that the Company determines to rely upon Rule 430A, the Company
will prepare and file a prospectus pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule
430A. There have been or will promptly be delivered to you two signed copies
of such registration statement and amendments, including the exhibits filed
therewith, and such number of conformed copies of such registration statement
and amendments (but without exhibits) and of the related preliminary
prospectus or prospectuses and final forms of prospectus as the Underwriter
may reasonably request.
The registration statement and prospectus, as amended, on file
with the Commission at the time the registration statement became or becomes
effective, including the information deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A(b), are
hereinafter called the "REGISTRATION STATEMENT" and the "PROSPECTUS,"
respectively, except that if the prospectus filed by the Company pursuant to
Rule 424(b) differs from the prospectus on file at the time the Registration
Statement became or becomes effective, the term "PROSPECTUS" shall refer to
the Rule 424(b) prospectus from and after the time it is filed with the
Commission or transmitted to the Commission for filing. The Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder are hereinafter collectively referred to as the
"EXCHANGE ACT."
-2-
(b) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus, and each preliminary
prospectus has conformed in all material respects with the requirements of
the 1933 Act and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading in light of the circumstances under which
they were made. When the Registration Statement became or becomes effective,
and at the First Closing Date and the Second Closing Date hereinafter
defined, as the case may be, the Registration Statement, including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b), and the Prospectus and any amendments
or supplements thereto, in all material respects conformed or will in all
material respects conform to the requirements of the 1933 Act, and neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company makes no representation or warranty as to
information contained in or omitted from any preliminary prospectus, the
Registration Statement, the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter specifically for use in the
preparation thereof.
(c) The Company and each of its direct and indirect subsidiaries
Independent Financial Corp. and First State Bank, National Association
(collectively, the "Subsidiaries" and individually, a "Subsidiary"), and
Crown Park Bancshares, Inc., a Texas corporation ("CROWN PARK"), and its
subsidiary, Western National Bank ("WESTERN BANK"), have been duly
incorporated and are validly existing as corporations or banks in good
standing under the laws of their respective jurisdictions of incorporation,
with full power and authority to own or lease their properties and conduct
their businesses as described in the Prospectus; the Company's only
subsidiaries are those listed on Exhibit 21.1 of the Registration Statement;
the Company and each of its Subsidiaries, and Crown Park and its subsidiary,
are duly qualified to do business as foreign corporations under the
corporation law of, and are in good standing as such in, each jurisdiction in
which they own or lease substantial properties, have an office, or in which
substantial business is conducted and such qualification is required except
in any such case where the failure to so qualify or be in good standing would
not have a material adverse effect upon the condition (financial or
otherwise), earnings, affairs, business or prospects of the Company and its
Subsidiaries, or Crown Park and its subsidiary, as the case may be, taken as
a whole ("MATERIAL ADVERSE EFFECT"); and no proceeding of which the Company
has knowledge has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power
and authority or qualification. First State Bank, National Association., a
Subsidiary of the Company ("FIRST STATE BANK") and Western Bank are referred
to herein as the "BANKS."
-3-
(d) The Company had an authorized and outstanding capitalization
as set forth in the Prospectus under the caption "Capitalization" and the
Shares conform in all material respects to the description thereof contained
in the Prospectus. All of the issued and outstanding shares of Common Stock
have been duly authorized, validly issued and are fully paid and
non-assessable and free of preemptive or other similar rights and there are
no options, agreements, contracts or other rights in existence to acquire
from the Company any shares of Common Stock, except as set forth in the
Prospectus. Except as set forth in the Prospectus, there are no holders of
any securities of the Company having rights to the registration thereof. The
Company and Crown Park have no banking subsidiaries other than First State
Bank and Western Bank, respectively. All of the issued shares of capital
stock of Independent Financial Corp. have been duly authorized, validly
issued and is fully paid and non-assessable. Crown Park has no subsidiaries,
other than Western Bank. All of the issued shares of capital stock of each
of the Banks have been duly authorized, validly issued and is fully paid and,
subject to 12 U.S.C. Section 55 (1982), nonassessable. Each of the Company
and Crown Park, directly or indirectly, owns of record and beneficially, free
and clear of any liens, claims, encumbrances or rights of others, all of the
issued and outstanding shares of each of its respective subsidiaries, except
as referred to in the Prospectus. There are no options, agreements,
contracts or other rights in existence to purchase or acquire from the
Company or its Subsidiaries, or Crown Park or its subsidiary, any issued and
outstanding shares of the capital stock of such subsidiaries.
(e) The Shares to be sold by the Company pursuant to this
Agreement and the Pricing Agreement have been duly authorized and, when
issued and paid for in accordance with this Agreement and the Pricing
Agreement, will be validly issued, fully paid and non-assessable, the Shares
are not subject to the preemptive rights of any shareholder of the Company;
the holders of the Shares will not be subject to personal liability solely by
reason of being such holders; and all corporate actions required to be taken
for the authorization, issuance and sale of the Shares have been validly and
sufficiently taken.
(f) The execution, delivery and performance by the Company of
this Agreement and the Pricing Agreement have been duly authorized by all
necessary corporate action on the part of the Company and do not and will not
violate any provision of the Company's articles of incorporation (as amended)
or bylaws (as amended) and do not and will not constitute or result in the
breach of, or be in violation of, any of the terms or provisions of or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or its
Subsidiaries under any material agreement, franchise, license, indenture,
lease, mortgage, deed of trust, or other instrument to which the Company or
any Subsidiary is a party or by which the Company, any Subsidiary or the
property of any of them is bound or affected, or any order, judgment or
decree known to and applicable to the Company, or any law, rule or regulation
applicable to the Company or any subsidiary of any government, governmental
instrumentality, court
-4-
or regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company or any Subsidiary or any of their respective
properties, or any order of any court or governmental agency or other
regulatory authority entered in any proceeding to which the Company or any
subsidiary was or is now a party or by which it is bound. No consent,
approval, authorization or other order of or filing with, any court,
regulatory body, administrative agency or other governmental body is legally
required for the execution and delivery of this Agreement or the Pricing
Agreement by the Company or the consummation by the Company of the
transactions contemplated herein or therein, except as may be required under
or by the 1933 Act, the American Stock Exchange, Inc. or the blue sky laws of
the various jurisdictions. This Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by the Company and constitute
valid and binding obligations of the Company enforceable against the Company
in accordance with their terms except insofar as (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other laws
now or hereafter in effect relating to creditors' rights generally; (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding thereafter may be brought; and (iii) such
enforcement may be subject to any limitations under applicable law which
relate to the indemnification and contribution provisions of this Agreement.
(g) Each of Coopers & Xxxxxxx L.L.P. and Xxxxxx XxXxxx, Inc.,
P.C., who have expressed their opinion with respect to certain of the
financial statements included in the Registration Statement, are independent
accountants within the meaning of the 1933 Act with respect to both the
Company and Crown Park.
(h) The consolidated financial statements, together with the
notes thereto, of the Company and Crown Park, included in the Registration
Statement comply in all material respects with the 1933 Act and present
fairly in all material respects the consolidated financial position of the
Company and Crown Park, respectively, as of the respective dates of such
financial statements (including, without limitation, the allowance for
possible loan losses), and the consolidated results of operations and cash
flows of the Company and Crown Park for the respective periods covered
thereby, are in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed in
the Prospectus; and no other financial statements or schedules are required
to be included in the Registration Statement. The consolidated financial,
statistical and numerical information with respect to the Company and its
Subsidiaries, and the financial and statistical information with respect to
First State Bank, set forth in the Prospectus are fairly presented, were
derived from the consolidated financial statements or the books and records
of the Company and its Subsidiaries and are prepared on a basis consistent
with the audited financial statements of the Company.
-5-
(i) The PRO FORMA financial information of the Company and its
Subsidiaries included in the Registration Statement presents fairly in all
material respects the information shown therein; has been compiled on a basis
consistent with that of the audited consolidated financial statements of the
Company and its Subsidiaries and of Crown Park and its subsidiary included in
the Registration Statement; has been prepared in accordance with the
Commission's rules and guidelines with respect to PRO FORMA financial
statements; and the assumptions used in the preparation thereof are reasonable.
(j) Neither the Company nor any Subsidiary thereof, nor either Crown
Park or any subsidiary thereof, is in violation of its articles of
incorporation, articles of association, or bylaws, in each case as amended, or
in default under any consent decree, formal agreement, memorandum of
understanding or similar agreement, or in default with respect to any provision
of any lease, loan agreement, franchise, license, permit or other contractual
obligation to which it is a party or by which it or any of its properties may be
bound; there does not exist any state of facts which constitutes an event of
default by the Company as defined in such documents or which, with notice or
lapse of time or both, would constitute such an event of default, except for any
such violation or default of the articles of incorporation, articles of
association, bylaws, consent decrees, formal agreements, memoranda of
understanding or similar agreements, or any lease, loan agreement, franchise,
license, permit or other contractual obligations referred to in this
subparagraph (j) which, either individually or in the aggregate, would not have
a Material Adverse Effect.
(k) Except as disclosed in the Prospectus, (A) there is no action,
suit or proceeding before or by any court or governmental or regulatory agency
or body, domestic or foreign, or any arbitrator or arbitration panel, now
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries, or Crown Park or its subsidiary, including
without limitation proceedings relating to discrimination or environmental
matters, which would reasonably be expected to result in a Material Adverse
Effect, and (B) there is no decree, judgment, order, known to the Company, or
formal agreement or memorandum of understanding of any kind in existence
applicable to the Company or any of its Subsidiaries, or Crown Park or its
subsidiary, or any of their respective officers, employees or directors,
requiring or restraining the taking of any actions of any kind in connection
with the business of the Company and its Subsidiaries or Crown Park or its
subsidiary, respectively.
(l) Each of the Company and Crown Park is a bank holding company duly
registered with the Board of Governors of the Federal Reserve System ("FEDERAL
RESERVE BOARD") under the Bank Holding Company Act of 1956, as amended. Each
Bank is a national bank duly chartered and organized by authority of the Office
of the Comptroller of the Currency ("OCC"). The deposit accounts of each Bank
are insured by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund to the fullest extent
-6-
permitted by law, and all premiums and assessments required in connection
therewith through the date hereof have been paid by such Bank. Those deposit
accounts of each Bank insured by the Federal Deposit Insurance Corporation
through the Savings Association Insurance Fund have been insured to the
fullest extent, and all premiums and assessments required in connection
therewith have been paid by such Bank. Since January 1, 1991, each of the
Company, Crown Park and each Bank has filed all material reports and
amendments thereto that they were required to file with the Federal Reserve
Board, the OCC and any other federal or state regulatory authorities. Except
as set forth in the Prospectus, there is no unresolved material violation,
criticism or exception by any governmental or regulatory agency with respect
to any report or statement relating to any examinations of the Company or any
of its Subsidiaries. The conduct of the business of the Company and each of
its Subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, and all formal agreements,
memoranda of understanding and similar agreements with regulatory
authorities, except where the failure to be in compliance would not have a
Material Adverse Effect. Each of the Company and its Subsidiaries, and each
of Crown Park and its subsidiary, own or possess or have obtained all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own, as the case may be, and to operate
their properties and to carry on their businesses as presently conducted
except where the failure to have any such governmental licenses, permits,
consents, orders, approvals and other authorizations would not have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries,
nor Crown Park or its subsidiary, has received any written notice of
proceedings related to revocation or modification of any such licenses,
permits, consents, orders, approvals or authorizations which singly or in the
aggregate, if the subject of an unfavorable ruling or finding, would result
in a Material Adverse Effect. Except as disclosed in the Prospectus, none of
the Company, Crown Park or the Banks is currently a party or subject to any
agreement or memorandum with, or directive or order issued by, the Federal
Reserve Board, the OCC or any other federal or state regulatory authorities,
which imposes any material restrictions or requirements not generally
applicable to bank holding companies or commercial banks.
(m) Each of the Company and its Subsidiaries, and each of Crown Park
and its subsidiary, have good and marketable title to all of the properties and
assets reflected as owned by them in the financial statements hereinabove
described (or described elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge, encumbrance or title defect of any kind except those,
if any, reflected in such financial statements (or described elsewhere in the
Prospectus) or which are not material to the Company and its Subsidiaries, or
Crown Park and its subsidiary, as the case may be, taken as a whole. Each of
the Company and its Subsidiaries, and each of Crown Park and its subsidiary,
hold their respective leased properties that are material to the Company and its
Subsidiaries, or Crown Park and its subsidiary, respectively, taken as a whole
under valid and binding leases.
-7-
(n) Neither the Company nor any of its Subsidiaries, nor Crown Park
or its subsidiary has taken, and none of such entities will take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(o) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (i) any material adverse change in the
condition (financial or otherwise), earnings, affairs, business or prospects of
the Company or its Subsidiaries taken as a whole, or of the earnings, affairs,
business or prospects of Crown Park or its subsidiary taken as a whole, whether
or not arising in the ordinary course of business, (ii) any material transaction
entered into, or any material liability or obligation incurred, by the Company
or its Subsidiaries or by Crown Park or its subsidiary other than in the
ordinary course of business, (iii) any change in the capital stock, or increase
in the short-term debt or long-term debt of the Company or its Subsidiaries or
of Crown Park or its subsidiary, or (iv) any dividend or distribution of any
kind declared, paid or made by the Company or Crown Park in respect of its
capital stock.
(p) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the 1933 Act which have not been described or filed as
required. The contracts so described in the Prospectus are in full force and
effect on the date hereof; and neither the Company nor any of its Subsidiaries,
nor to the knowledge of the Company, any other party, is in breach of or default
under any of such contracts.
(q) The Company together with its Subsidiaries, and Crown Park
together with its subsidiary, own and possess sufficient right, title and
interest in and to, or has duly licensed from third parties the right to use,
all trademarks, trade names, copyrights and other proprietary rights ("TRADE
RIGHTS") material to the business of the Company and each of its Subsidiaries,
or Crown Park and its subsidiary, in each case taken as a whole. None of the
Company or any of its Subsidiaries or Crown Park or its subsidiary has received
any written notice of infringement, misappropriation or conflict from any third
party as to such material Trade Rights which has not been resolved or disposed
of, and none of the Company or any of its Subsidiaries, or Crown Park or any of
its subsidiary, has infringed, misappropriated or otherwise conflicted with
material Trade Rights of any third parties, which infringement, misappropriation
or conflict would have a Material Adverse Effect.
(r) All offers and sales of equity securities prior to the date
hereof by the Company or any of its Subsidiaries, or by Crown Park or its
subsidiary, were at all relevant times either exempt from the registration
requirements of the 1933 Act and the registration
-8-
requirements of all applicable state securities or blue sky laws, or were
duly registered in accordance with the provisions thereof.
(s) Each of the Company and its Subsidiaries, and each of Crown Park
and its subsidiary, has timely filed all necessary federal and state income and
franchise tax returns required to be filed through the date hereof and have paid
all taxes shown as due thereon, and there is no tax deficiency that has been, or
to the knowledge of the Company would reasonably be expected to be, asserted
against the Company or any of its Subsidiaries or any of their properties or
assets, or against Crown Park or its subsidiary or any of their properties or
assets, that would reasonably be expected to have a Material Adverse Effect.
(t) The Company's Common Stock is registered pursuant to
Section 12(b) of the Exchange Act, and listed for trading on the American Stock
Exchange, Inc. ("AMEX"). The Company has filed an additional listing
application with the Amex with respect to the Shares, and has received
notification from the Amex that the listing of the Shares has been approved,
subject to receipt and review of a signed copy of the Agreement, the signed
opinion of Xxxxx & Xxxxxx, in the form previously filed with the Amex, and
notice of issuance or sale of the Shares.
(u) Neither the Company nor any of its Subsidiaries (and neither
Crown Park nor its subsidiary) is, and neither the Company nor any of its
Subsidiaries intends to conduct its business in a manner in which it would
become, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(v) Except as disclosed in the Prospectus, no labor dispute with the
employees of the Company or any of its Subsidiaries, or with the employees of
Crown Park and its subsidiary, is pending or, to the knowledge of the Company,
threatened that would reasonably be expected to have a Material Adverse Effect.
Each employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), for which the Company or any
Subsidiary, or Crown Park or any subsidiary, acts as sponsor within the meaning
of ERISA is and has been in all material respects operated and administered in
accordance with the provisions of ERISA and applicable law. The present value
of all benefits vested under each employee benefit plan which is subject to
Title IV of ERISA did not exceed, as of the end of the most recent plan year,
the value of the assets of the plan allocable to such vested or accrued
benefits, and no such plan or any trust created thereunder has incurred any
"accumulated funding deficiency" within the meaning of the Internal Revenue Code
("CODE") since the effective date of ERISA. No employee benefit plan or any
trust created thereunder or any trustee fiduciary or administrator thereof has
engaged in a "prohibited transaction" within the meaning of the Code or ERISA or
violated any of the fiduciary standards of ERISA, and there has been no
"reportable event" within the meaning of ERISA with respect to any such plan.
-9-
(w) Each of the Company and its Subsidiaries, and each of Crown Park
and its subsidiary, (A) makes and keeps books, records and accounts which, in
reasonable detail and in all material respects, accurately and fairly reflect
its transactions and dispositions of its assets and (B) maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations, (2) transactions are recorded as necessary (i) to
permit the preparation of financial statements in conformity with generally
accepted accounting principles consistently applied or any other criteria
applicable to such statements and (ii) to maintain accountability for assets,
(3) access to assets is permitted only in accordance with management's general
or specific authorizations and (4) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(x) Except as disclosed in the Prospectus, (A) neither the Company
nor any of its Subsidiaries, nor Crown Park or its subsidiary is presently
engaged in negotiations for the acquisition of all or a portion of the stock or
other equity interest or all or a portion of the assets of any person (including
without limitation any company, corporation, partnership, limited liability
company, partnership, joint venture or sole proprietorship), (B) has no
agreements or understandings with respect to the acquisition of all or a portion
of the stock or other equity interest or all or portion of the assets of any
specific person, and (C) there have been no inquiries, offers or solicitations
received by the Company or its Subsidiaries or Crown Park or its subsidiary that
would result in the consummation of any acquisition of the Company or any of its
Subsidiaries or Crown Park or its subsidiary, except as disclosed in the
Prospectus.
(y) Except as disclosed in the Prospectus, as of the date of the
Prospectus and as of each Closing Date, (A) no extension of credit made by
either Bank to an executive officer, director, or affiliate of the Company,
Crown Park or either of the Banks is (1) delinquent, past due, on non-accrual
status or non-performing, (2) identified as a potential problem loan on any
internal watch list" or (3) constitutes a loan that was a renewal of a loan that
was at the time of renewal delinquent, past due, on non-accrual status or non-
performing; and (B) all extensions of credit to any director or executive
officer or any member of their immediate family (1) were made in the ordinary
course of business, (2) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and (3) did not involve more than the normal
risk of collectibility or present other unfavorable features.
(z) Each of (i) the Agreement and Plan of Reorganization dated
July 11, 1996 between the Company and Crown Park (the "REORGANIZATION
AGREEMENT"), (ii) the Agreement and Plan of Merger dated July 11, 1996 between
First State Bank and Western Bank (the "MERGER AGREEMENT"), and (iii) the
Indemnity Agreement dated July 11, 1996 from
-10-
certain shareholders and directors of Crown Park in favor of the Company
("INDEMNITY AGREEMENT"), covering the transactions between the Company, First
State Bank, Crown Park (including its officers, directors and five percent
shareholders) and Western Bank described in the Prospectus under the caption
"The Acquisition," and the transactions contemplated thereby, have been
authorized by all necessary corporate action on the part of the Company, been
executed and delivered by the Company and the other parties thereto and
constitutes a valid and binding obligation of the Company (assuming the due
authorization, execution and delivery thereof by the other parties thereto)
enforceable against the Company in accordance with its terms, except insofar
as (Y) such agreement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other laws relating to creditors' rights
generally, and (Z) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding thereafter may be
brought.
(aa) The Company intends to apply the net proceeds from the sale of
the Shares for the purposes set forth in the Prospectus under the caption "Use
of Proceeds."
(bb) Since January 1, 1991 the Company has, and at each Closing Date
the Company will have, made all filings required to be made by it under the
Exchange Act; and at the time of filing each such filing conformed or will
conform in all material respects to the requirements of the Exchange Act, and at
the time of filing none of such filings contained or will contain an untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in lieu of the
circumstances under which they were made, not misleading.
(cc) No holder of securities of the Company has any right to require
the registration of such securities (i) pursuant to the Registration Statement
or (ii) as a result of the filing of the Registration Statement or the offering
of the Shares. Neither the Company nor any subsidiary is a party to or
otherwise bound by any agreement or instrument conferring on any person the
right to registration of any securities of the Company under the 1933 Act.
SECTION 3. REPRESENTATION AND WARRANTY OF THE UNDERWRITER. The
Underwriter represents and warrants to the Company that the information set
forth with respect to the Shares (a) on the cover page of the Prospectus with
respect to price, underwriting discount and terms of the offering and (b) under
"Underwriting" in the Prospectus constitutes the only information furnished to
the Company by and on behalf of the Underwriter for use in connection with the
preparation of the Registration Statement and such information is correct in all
material respects.
-11-
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. (a) On the basis of
the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to the Underwriter, and the Underwriter agrees to purchase from the
Company, the Firm Shares. The purchase price per share to be paid by the
Underwriter to the Company shall be the price per share set forth in the
Pricing Agreement.
Delivery of certificates for the Firm Shares to be purchased by the
Underwriter and payment therefor shall be made at the offices of Xxxxxx &
Xxxxxx Incorporated, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx (or such other place as may be agreed upon by the Company and the
Underwriter) at such time and date, not later than the third full business
day following the first date that any of the Firm Shares are released by you
for sale to the public, as you shall designate by at least 48 hours prior
written notice to the Company (the "First Closing Date"); provided, however,
that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later
of the third full business day following the first date that any of the Firm
Shares are released by you for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated. The
Underwriter shall promptly advise the Company of the making of the public
offering.
Delivery of certificates for the Firm Shares shall be made by or on
behalf of the Company to you, against payment by you of the purchase price
therefor by wire transfer to an account designated by the Company. The
certificates for the Firm Shares shall be registered in such names and
denominations as you shall have requested in writing at least two full
business days prior to the First Closing Date, and shall be made available
for checking and packaging on the business day preceding the First Closing
Date at a location in New York, New York, as may be designated by you. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriter.
(b) In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions
herein set forth, the Company hereby grants an option to the Underwriter to
purchase up to an aggregate of 41,250 Additional Shares, at the same purchase
price per share to be paid for the Firm Shares, for use solely in covering
any over allotments made by the Underwriter in the sale and distribution of
the Firm Shares. The option granted hereunder may be exercised at any time
(but not more than once), in whole or in part, within 30 days after the date
of the final Prospectus upon written notice by you to the Company setting
forth the aggregate number of Additional Shares as to which the Underwriter
is exercising the option, the names and denominations in which the
certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may
not be
-12-
earlier than the First Closing Date), being herein referred to as the "SECOND
CLOSING DATE," shall be determined by you, but if at any time other than the
First Closing Date, shall not be earlier than three nor later than ten full
business days after delivery of such notice of exercise. Certificates for
the Additional Shares will be made available at the Company's expense for
checking and packaging at 9:00 A.M., local time, on the first full business
day preceding the Second Closing Date at a location in New York, New York as
may be designated by you in writing at least two business days prior thereto.
The manner of payment for and delivery of the Additional Shares shall be the
same as for the Firm Shares as specified in Section 4(a). No Additional
Shares shall be sold and delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
(c) If the Company has elected not to rely upon Rule 430A, the
initial public offering price of the Shares and the purchase price per share
to be paid by the Underwriter for the Shares shall have each been determined
and set forth in the Pricing Agreement, dated the date hereof, and an
amendment to the Registration Statement and the Prospectus will be filed
before the Registration Statement becomes effective.
(d) If the Company has elected to rely upon Rule 430A, the
purchase price per share to be paid by the Underwriter for the Shares shall
be an amount equal to the initial public offering price, less an amount per
share to be determined by agreement between the Underwriter and the Company.
The initial public offering price per share of the Shares shall be a fixed
price to be determined by agreement between the Underwriter and the Company.
The initial public offering price per share and the purchase price, when so
determined, shall be set forth in the Pricing Agreement. In the event that
such prices have not been agreed upon and the Pricing Agreement has not been
executed and delivered by the parties thereto by the close of business on the
second business day following the date of this Agreement, this Agreement
shall terminate forthwith, without liability of any party to any other party,
unless otherwise agreed to by the Company and the Underwriter.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriter that:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective. The Company will advise you
promptly of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement (and make every reasonable effort
to obtain the withdrawal of such order as early as possible) or of the
institution of any proceedings for that purpose, or of any notification of
the suspension of qualification of the Shares for sale in any jurisdiction or
the initiation or to its knowledge threatening of any proceedings for that
purpose, and will also advise you promptly of any request of the Commission
for amendment or supplement of the Registration Statement, of any preliminary
prospectus or of the Prospectus, or for additional information,
-13-
and will not file any amendment or supplement to the Registration Statement,
to any preliminary prospectus or to the Prospectus of which you have not been
furnished with a copy prior to such filing or to which you reasonably object.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act, any event occurs as a result of
which the Prospectus, including any amendments or supplements, would include
an 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, or
if it is necessary at any time to amend the Prospectus, including any
amendments or supplements thereto and including any revised prospectus which
the Company proposes for use by the Underwriter in connection with the
offering of the Shares which differs from the prospectus on file with the
Commission at the time of effectiveness of the Registration Statement,
whether or not such revised prospectus is required to be filed pursuant to
Rule 424(b) to comply with the 1933 Act, the Company promptly will advise you
thereof and will promptly prepare and, if required pursuant to Rule 424(b),
file with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
(c) Neither the Company nor any of its Subsidiaries will, prior
to the earlier of the Second Closing Date or termination or expiration of the
related option, incur any material liability or obligation, direct or
contingent, or enter into any material transaction, other than in the
ordinary course of business, except as contemplated by the Prospectus.
(d) The Company will not declare or pay any dividend or make any
other distribution upon the Common Stock payable to shareholders of record on
a date prior to the earlier of the Second Closing Date or termination or
expiration of the related option, except as contemplated by the Prospectus.
(e) Not later than 90 days after the close of the period covered
thereby, the Company will make generally available to its security holders an
earnings statement (which need not be audited) covering a period of at least
12 months beginning after the effective date of the Registration Statement,
which will satisfy the provisions of the last paragraph of Section 11(a) of
the 1933 Act and Rule 158 thereunder.
(f) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an Underwriter
or dealer, the Company will furnish to you at its expense (and consents to
the use thereof), subject to the provisions of subsection (b) hereof, copies
of the Registration Statement, the Prospectus, each preliminary prospectus
and all amendments and supplements to any such documents in each
-14-
case as soon as available and in such quantities as you may reasonably
request, for the purposes contemplated by the 1933 Act.
(g) The Company will cooperate with the Underwriter in
qualifying or registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate in writing, and will continue such
qualifications in effect so long as reasonably required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not currently qualified or where it would be subject
to taxation as a foreign corporation.
(h) During the period of three years after the date of the
Pricing Agreement, the Company will furnish to the Underwriter a copy (i) as
soon as practicable after the filing thereof, of each report filed by the
Company with the Commission, any securities exchange or the National
Association of Securities Dealers, Inc. ("NASD") and (ii) as soon as
available, of each report of the Company mailed to any class of its
securityholders.
(i) The Company will use the net proceeds received by it from
the sale of the Shares in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(j) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in reliance upon
Rule 430A, then immediately following the execution and delivery of the
Pricing Agreement, the Company will prepare, and file or transmit for filing
with the Commission in accordance with such Rule 430A and Rule 424(b), copies
of an amended prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended prospectus),
containing all information so omitted.
(k) The Company will comply with all of the provisions of each
undertaking contained in the Registration Statement.
(l) The Company will not, without the prior written consent of
the Underwriter, which consent shall not be unreasonably withheld, sell,
contract to sell or otherwise dispose of any equity security of the Company
(including shares of Common Stock) for a period of 120 days after the
effective date of the Registration Statement, other than (i) Common Stock
issued and sold to the Underwriter pursuant to this Agreement, (ii) Common
Stock issued upon exercises of outstanding stock options and (iii) Common
Stock issued upon conversion of the Company's outstanding Series C Preferred
Stock, as described in the Prospectus. The Company will cause each of its
executive officers and directors, and certain beneficial owners of five
percent of the Company's Common Stock, except for the Independent Bankshares,
Inc. Employee Stock Ownership/401(k) Plan, to
-15-
deliver to the Underwriter on or before the date of this Agreement an
agreement satisfactory in form and substance to the Underwriter and its
counsel, whereby each agrees, for a period of 120 days after the effective
date of the Registration Statement, not to offer, sell or otherwise dispose
of any shares of Common Stock without the prior written consent of the
Underwriter ("LOCK-UP LETTER").
SECTION 6. PAYMENT OF EXPENSES. (a) The Company will pay, or reimburse
if paid by the Underwriter, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the performance by the Company of its obligations under
this Agreement and the Pricing Agreement, including, without limiting the
generality of the foregoing, (i) preparation, printing, filing and
distribution (including postage, air freight charges and charges for counting
and packaging) of the Registration Statement, each preliminary prospectus,
the Prospectus, each amendment and/or supplement to any of the foregoing, and
this Agreement and the Selected Dealers Agreement; (ii) the furnishing to the
Underwriter and dealers as provided herein of copies of the foregoing
materials (provided, however, that any such copies furnished by the Company
more than nine months after the first date upon which the Shares are offered
to the public shall be at the expense of the Underwriter or dealer so
requesting as provided in paragraphs 5(b) above); (iii) the registrations or
qualifications referred to in paragraph 5(g) above (including reasonable fees
and disbursements of counsel in connection therewith) and expenses of
printing and delivering to the Underwriter copies of the preliminary and
final Blue Sky memoranda; (iv) the review of the terms of the public offering
of the Shares by the NASD (including the filing fees paid to the NASD in
connection therewith); (v) the performance by the Company of its other
obligations under this Agreement, including the fees of the Company's counsel
and accountants; (vi) the issuance of the Shares and the preparation and
printing of the stock certificates representing the Shares including any
stamp taxes payable in connection with the original issuance of the Shares;
and (vii) the furnishing to the Underwriter of copies of all reports and
information required by Section 5(h) above, including costs of shipping and
mailing. It is understood however, that the Company shall not be required to
pay or to reimburse the Underwriter for costs or expenses that the
Underwriter may incur, except as provided in this Section 6 and Section 8
hereof, and that the Underwriter will pay its own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers
they may make.
(b) If the sale to the Underwriter of the Firm Shares on the
First Closing Date is not consummated because (i) this Agreement is
terminated by the Underwriter in accordance with the provisions of Section
10(i) hereof, (ii) any condition of the Underwriter's obligations hereunder
is not satisfied, or (iii) of any refusal, inability or failure on the part
of the Company to perform any agreement herein or to comply with any
provision hereof (unless such failure to satisfy such condition or to comply
with any provision hereof
-16-
is due to the default or omission of the Underwriter), the Company agrees to
reimburse you upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by you and them in connection with the proposed purchase and the
sale of the Shares up to a maximum of $50,000.
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITER. The
obligations of the Underwriter to purchase and pay for the Firm Shares on the
First Closing Date and the Additional Shares on the Second Closing Date shall
be subject to the accuracy in all material respects of the representations
and warranties on the part of the Company herein set forth as of the date
hereof and as of the First Closing Date and the Second Closing Date, as the
case may be, to the accuracy of the statements of the Company made pursuant
to the provisions hereof, to the performance in all material respects by the
Company of its obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become effective
either prior to the execution of this Agreement or not later than 5:00 P.M.,
Eastern Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 5:00 P.M., Eastern Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the Second
Closing Date, as the case may be, 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 shall be pending or, to the
knowledge of the Company or you, shall be contemplated by the Commission. If
the Company has elected to rely upon Rule 430A, the information concerning
the initial public offering price of the Securities and price-related
information shall have been transmitted to the Commission for filing pursuant
to Rule 424(b) within the prescribed period and the Company will provide
evidence satisfactory to the Underwriter of such timely filing (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rules 430A and
424(b)).
(b) The Shares shall have been qualified for sale under the blue
sky laws of such states as shall have been specified by you.
(c) The validity and form of the certificates representing the
Shares, the execution and delivery of this Agreement, the Pricing Agreement,
and all corporate proceedings and other legal matters incident thereto shall
have been approved by your counsel.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any material adverse change, or any development
that would involve a material adverse change, in or affecting the business or
properties of the Company and its Subsidiaries, or Crown Park and its
subsidiary, in each case taken as a whole, whether or not
-17-
arising in the ordinary course of business, which, in your reasonable
judgment, makes it impractical to proceed with the public offering or
delivery of the Shares as contemplated hereby or to attempt to enforce
contracts for the purchase of the Shares.
(e) There shall have been furnished to you on the First Closing
Date or the Second Closing Date, as the case may be:
(i) An opinion of Xxxxx & Xxxxxx, Dallas, Texas, counsel
for the Company, addressed to you and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) Each of the Company and Crown Park is validly
existing as a corporation in good standing under the laws of the
State of Texas with full corporate power and authority to own or
lease its properties and conduct its business as described in the
Prospectus; each of the Company and Crown Park is a bank holding
company duly registered with the Federal Reserve Board; and to our
knowledge, due to the nature of the business of the Company and
Crown Park and the character of their properties, neither the
Company nor Crown Park is required to qualify to do business in any
other jurisdiction.
(2) Each Bank is a national bank chartered and organized
by authority of the OCC, validly existing and in good standing under
the laws of the United States of America. Each subsidiary of the
Company or Crown Park other than the Banks is validly existing as
a corporation in good standing under the laws of its state of
incorporation with full corporate power and authority to own or
lease its properties and conduct its business as described in the
Prospectus; and to our knowledge, due to the nature of the business
and the character of the properties owned by each subsidiary of the
Company or Crown Park is such that no subsidiary of either the Company
or Crown Park is required to qualify to do business in any other
jurisdiction.
(3) The Company has an authorized capitalization as set
forth in the Prospectus and the Shares conform, in all material
respects, to the description thereof contained in the Prospectus.
(4) No consent, approval, authorization or other order
of or filing with, any court, regulatory body, administrative agency
or other governmental body is legally required
-18-
for the execution, delivery and performance of this Agreement by
the Company, except as may be required under or by the 1933 Act,
the Amex or the blue sky laws of the various jurisdictions.
(5) Each of this Agreement and the Pricing Agreement
have been duly and validly authorized and executed by the Company and
constitutes a valid and binding obligation of the Company except only
insofar as (i) such agreement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other laws relating to
creditors' rights generally, (ii) the remedy of specific performance
and injunctive and other equitable relief may be subject to equitable
defenses, and (iii) such enforcement may be subject to any limitations
under applicable federal securities laws relating to indemnification
and contribution.
(6) The Registration Statement has become effective
under the 1933 Act, and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission under the
1933 Act, and the Registration Statement (including the information
deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b), if applicable), the
Prospectus and each amendment or supplement thereto (except for the
financial statements, related schedules and other statistical or
financial data included therein as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the 1933 Act; and the Shares to be issued to the
Underwriter have been approved for listing on the Amex upon official
notice of issuance.
(7) To such counsel's knowledge, there are no contracts
or documents required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed, as required, and such contracts and
documents as are summarized in the Registration Statement or
Prospectus are fairly summarized in all material respects; and to the
knowledge of such counsel, there are no statutes or regulations or any
legal or governmental proceedings pending or threatened, required to
be described in the Prospectus which are not described as required.
(8) All of the issued and outstanding shares of the
Company's capital stock have been duly authorized, validly issued and
are fully paid and non-assessable and free of preemptive or other
similar rights under the Texas Business Corporation Act, and to such
counsel's knowledge
-19-
there are no options, agreements, contracts or other rights in
existence to acquire from the Company any shares of Common Stock,
except as set forth in the Prospectus. Except as set forth in the
Prospectus, to such counsel's knowledge there are no holders of
any securities of the Company having rights to the registration
thereof under the Registration Statement or by reason of the filing
of the Registration Statement. The Company has no subsidiary which
conducts business as a bank under the laws of the State of Texas or
Federal law, other than First State Bank. All of the capital stock
of Independent Financial Corp. has been duly authorized, validly
issued and is fully paid and non-assessable. All of the outstanding
capital stock of each of the Banks has been duly authorized and
validly issued and is fully paid and, subject to 12 U.S.C. Section 55
(1982), nonassessable. The Company, directly or indirectly, owns of
record, free and clear of any liens, claims, encumbrances,
shareholders agreements, voting agreements or any other agreements
affecting the Company's right to vote, hypothecate or otherwise
dispose of, all of the issued and outstanding shares of each of its
Subsidiaries, except as described in the Prospectus. To such counsel's
knowledge, there are no options, agreements, contracts or other rights
in existence to purchase or acquire from the Company or its
Subsidiaries any issued and outstanding shares of such subsidiaries.
(9) The Shares to be sold by the Company pursuant to this
Agreement and the Pricing Agreement have been duly authorized and,
when issued and paid for in accordance with this Agreement and the
Pricing Agreement, will be validly issued, fully paid and non-
assessable; the holders of the Shares will not be subject to personal
liability under the Texas Business Corporation Act solely by reason of
being such holders; the Shares are not subject under the Texas
Business Corporation Act to the preemptive rights of any shareholder
of the Company.
(10) The statements in the Prospectus under the captions
"Regulation and Supervision" and "Description of Capital Stock,"
insofar as they constitute a summary of certain laws or documents
referred to therein, provide an accurate summary of such laws and
documents, are correct in all material respects.
(11) To the best of such counsel's knowledge, neither the
Company nor any subsidiary is in violation of its respective charter
or by-laws. To the best of such counsel's knowledge, neither the
Company nor any subsidiary is in breach of or otherwise in default in
the performance of any material obligation, agreement or condition
contained in any bond,
-20-
debenture, note, indenture, loan agreement or any other material
contract, lease or other instrument to which it is subject or by
which any of them may be bound, or to which any of the material
property or assets of the Company or any of its subsidiaries is
subject.
(12) The execution, delivery and performance by the
Company of this Agreement and the Pricing Agreement have been duly
authorized by all necessary corporate action and do not and will
not violate any provision of the Company's articles of incorporation
(as amended) or bylaws (as amended) and do not and will not result
in the breach of, or violate, any of the terms or provisions of or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or its Subsidiaries under any material agreement,
franchise, license, indenture, lease, mortgage, deed of trust, or
other instrument known to such counsel to which the Company or any
Subsidiary is a party or by which the Company, any Subsidiary or
the property of any of them may be bound or affected, or, to such
counsel's knowledge, any law, order, judgment, decree, rule or
regulation applicable to the Company or any Subsidiary of any
government, governmental instrumentality, court or regulatory body,
administrative agency or other governmental body having jurisdiction
over the Company or any Subsidiary or any of their respective
properties, or any order of any court or governmental agency or
other regulatory authority entered in any proceeding to which the
Company or any Subsidiary was or is now a party or by which it is
bound.
(13) There is no material legal proceeding pending or,
to such counsel's knowledge, threatened against the Company except
as disclosed in the Prospectus.
(14) Neither the Company nor any of its subsidiaries is
an "investment company" or an entity "controlled by an investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(15) To such counsel's knowledge, except as have been
heretofore waived, there are no persons with registration or similar
rights to have any securities of the Company registered pursuant to
the Registration Statement.
-21-
(16) Each of the Reorganization Agreement, the Merger
Agreement and the Indemnity Agreement, and the transactions
contemplated thereby, has been authorized by all necessary corporate
action on the part of the Company, has been executed and delivered by
the Company and the other parties thereto and constitutes a valid and
binding obligation of the Company (assuming the due authorization,
execution and delivery thereof by the other parties thereto)
enforceable against the Company in accordance with its terms, except
insofar as (i) such agreement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other laws relating to
creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding thereafter may be brought.
In rendering such opinion, such counsel may rely, provided
that the opinion shall state that you and they are entitled to so
rely, as to factual matters on certificates of the officers and
employees of, and accountants for, the Company. Such opinion may
contain such other qualifications and assumptions as are reasonably
acceptable to counsel for the Underwriter.
In addition, counsel shall state that they have participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
and representatives of the Underwriter and its counsel, at which the
contents of the Registration Statement, the Prospectus and related
matters were discussed and, although such counsel is not passing upon,
and does not assume any responsibility for, the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus and has not made any independent check or
verification thereof, on the basis of the foregoing (relying as to
factual matters upon the statements of officers and other
representatives of the Company), no facts have come to such counsel's
attention that have led them to believe that the Registration
Statement (other than financial statements, the notes thereto and
related schedules and other financial, statistical and accounting data
included therein or omitted therefrom, as to which such counsel need
express no belief), as amended or supplemented, if applicable, at the
time such Registration Statement or any post-effective amendment
became effective, 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 (other than
information omitted therefrom in reliance on Rule 430A under the 1933
Act),
-22-
or that the Prospectus (other than financial statements, the notes
thereto and related schedules and other financial, statistical and
accounting data included therein or omitted therefrom, as to which
such counsel need express no view) as amended or supplemented, if
applicable, as of its date and the First Closing Date or the Second
Closing Date, as applicable, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading in light of the circumstances
under which they were made.
(ii) Such opinion or opinions of Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
counsel for the Underwriter, dated the First Closing Date or the Second
Closing Date, as the case may be, to such matters as you may reasonably
require.
(iii) A certificate of the Company executed by the chief
executive officer and the principal financial officer of the Company, dated
the First Closing Date or the Second Closing Date, as the case may be, to
the effect that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct, in all
material respects, as of the date of this Agreement and as of the
First Closing Date or the Second Closing Date, as the case may be, and
the Company has complied, in all material respects, with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as part of the Registration Statement or any amendment thereto;
no stop order suspending the effectiveness of the Registration
Statement has been issued; and to the best knowledge of the respective
signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the 1933 Act.
The delivery of the certificate provided for in this
subsection shall be and constitute a representation and warranty of
the Company as to the facts required in the immediately foregoing
paragraphs (1) and (2) of this subsection to be set forth in said
certificate.
(iv) At the time the Pricing Agreement is executed and also on
the First Closing Date and the Second Closing Date, as the case may be,
there shall be delivered to you letters addressed to you and the Board of
Directors of the Company
-23-
from Coopers & Xxxxxxx L.L.P. and Xxxxxx XxXxxx, Inc., independent
accountants, the first one to be dated the date of the Pricing Agreement,
the second one to be dated the First Closing Date and the third one (in
the event of a second closing) to be dated the Second Closing Date, to
the effect set forth in Exhibit B.
(v) All conditions to the consummation of the transactions
among the Company, Crown Park, First State Bank, Western Bank and the
directors and shareholders of Crown Park described in the Prospectus under
the caption "The Acquisition" shall have been satisfied in a manner
satisfactory to the Underwriter in its reasonable discretion.
(vi) The Underwriter shall have received a Lock-Up Letter from
each executive officer and director of the Company.
(vii) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for the Underwriter. The
Company shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any condition to the Underwriter's obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of the Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Section 6 hereof and except to the
extent provided in Section 8 hereof.
SECTION 8. INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the meaning of the 1933 Act or the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all expenses
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the 1933 Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any untrue statement of a material fact
contained in any preliminary prospectus or the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
-24-
required to be stated therein or necessary to make the statements therein not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations and warranties of the Company contained herein or any
failure of the Company to perform its respective obligations hereunder or under
law, except insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or
allegation thereof which has been made therein or omitted therefrom in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of the Underwriter expressly for use therein; provided, however,
that the indemnification contained in this paragraph with respect to any
preliminary prospectus shall not inure to the benefit of the Underwriter (or of
any person controlling the Underwriter) with respect to any action or claim
arising from the sale of the Shares by the Underwriter brought by any person who
purchased Shares from the Underwriter to the extent it is determined by a court
of competent jurisdiction in a final non-appealable decision that (i) a copy of
the Prospectus (as amended or supplemented if any amendment or supplements
thereto shall have been furnished to the Underwriter prior to the written
confirmation of the sale involved) shall not have been given or sent to such
person by or on behalf of the Underwriter with or prior to the written
confirmation of the sale involved and (ii) the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus (as amended or supplemented if amended or supplemented as aforesaid).
In addition to its other obligations under this Section 8(a), the Company agrees
that, as an interim measure during the pendency of any such claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 8(a), it will promptly reimburse the Underwriter for all reasonable
legal expenses as they are incurred in connection with investigating or
defending such claim, action, investigation, inquiry or other proceeding. To
the extent that any such interim reimbursement payment is held by a court of
competent jurisdiction to have been improper, each recipient thereof will
promptly return it to the Company.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who sign the Registration
Statement and each person controlling the Company within the meaning of the 1933
Act and the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriter, but only with respect to information relating to the
Underwriter furnished in writing to the Company by or on behalf of the
Underwriter expressly for use in the Registration Statement, the Prospectus or
any preliminary prospectus, or any amendment thereof or supplement thereto.
(c) If any action or claim shall be brought against any indemnified
party under this Section 8, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8,
promptly notify the indemnifying party in writing of the commencement thereof.
No indemnification shall be available to any party
-25-
who shall fail to give notice as provided in this Section 8(c) if the party
to whom notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to give such
notice, but otherwise the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to an indemnified party
under this Section 8. In case any such action is brought against an
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party. Upon receipt of notice from the indemnifying party
to such indemnified party of its election to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnifying party has
agreed in writing to pay such fees and expenses, (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the named parties to any such action
(including any impleaded party) include such indemnified party and the
indemnifying party and such indemnified party shall have been advised in
writing by counsel having experience in securities litigation that there may
be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party (in which case if
such indemnified party notifies the indemnifying party, the indemnifying
party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of not more than one separate firm of attorneys for all
such indemnified parties) and which, in the opinion of such counsel, would
make it impractical to have common representation. The indemnifying party
shall not be liable for any settlement of any such action effected without
its written consent, but if settled with its written consent, or if there
shall be a final judgment for the plaintiff in any such action and the time
for filing all appeals has expired, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from
and against any loss or liability by reason of such settlement or judgment.
(d) (i) If the indemnification provided for in this Section 8 is
unavailable as a matter of law to an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses (A) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriter from the offering of the Shares or (B) if the
allocation provided by clause (A) above is not permitted by applicable law, in
such proportion as is
-26-
appropriate to reflect not only the relative benefits referred to in clause (A)
above but also the relative fault of the Company and of the Underwriter in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriter shall be deemed to be in the same proportion, in
the case of the Company, as the total price paid to the Company for the
Shares by the Underwriter (net of underwriting discounts and commissions but
before deducting expenses), and, in the case of the Underwriter, as the
underwriting commissions received by it, bears to the total of such amounts
paid to the Company and received by the Underwriter as underwriting
commissions in each case as contemplated by the Prospectus. The relative
fault of the Company and of the Underwriter 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
relates to information supplied by the Company or by the Underwriter and the
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omissions.
(ii) The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (d)(i). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in subsection (d)(i) shall
be deemed to include, subject to the limitations set forth in this Section 8(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), the Underwriter shall not
be required to contribute any amount in excess of the amount of the total
underwriting commissions received by the Underwriter in connection with the
Shares underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company set forth in
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 any person
controlling the Underwriter, the Company or its directors or officers (or any
person controlling any such person), (ii) acceptance of any Shares and payment
therefor or hereunder and (iii) any termination of this Agreement. A successor
or assign of the Underwriter, the Company or its directors or officers and their
legal and personal representatives (or of any person controlling an Underwriter
or the Company) shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
-27-
SECTION 9. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 6, 8 and 10 and as to all other provisions upon
execution and delivery of the Pricing Agreement.
SECTION 10. DEFAULT BY THE UNDERWRITER. (a) If the Underwriter shall
default in its obligation to purchase Shares or Additional Shares hereunder at
the First Closing Date or the Second Closing Date, as the case may be, you may
in your discretion arrange for yourself or for another party or parties to
purchase such Shares or Additional Shares, as the case may be, to which such
default relates on the terms contained herein. If you do not arrange for the
purchase of such Shares or Additional Shares, as the case may be, within one
business day after the occurrence of a default relating to the Shares or the
Additional Shares, as the case may be, then the Company shall be entitled to a
further period of one business day within which to procure another party or
parties satisfactory to you to purchase such Shares or Additional Shares, as the
case may be, on such terms. If you or the Company do not arrange for the
purchase of the Shares or the Additional Shares, as the case may be, to which
such default or defaults relate as provided in this Section 10(a), this
Agreement may be terminated by you or by the Company without liability on the
part of the Company (except that the provisions of Sections 6, 8 and 10 shall
survive termination) or the Underwriter, but nothing in this Agreement shall
relieve a defaulting Underwriter of its liability to the Company for any damages
occasioned by its default hereunder or limit the remedies of the Company with
respect to any such default.
(b) If the Shares or Additional Shares to which such default or
defaults relate are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the First Closing Date or
the Second Closing Date, as the case may be, for a reasonable period but not in
any event more than seven days in order to effect whatever changes may thereby
be made necessary to the Registration Statement or the Prospectus or in any
other documents and arrangements with respect to the Shares or the Additional
Shares, and the Company agrees to prepare and file promptly any amendment or
supplement to the Registration Statement or the Prospectus which in the opinion
of counsel for the Underwriter or counsel for the other purchasing Underwriter
may thereby be made necessary.
SECTION 11. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may also be
terminated by you in your absolute discretion, without liability on your part to
the Company, by notice given to the Company if prior to the First Closing Date
or, with respect to the Additional Shares, on or prior to any later date on
which the Additional Shares are to be purchased, as the case may be, (i) there
has been, since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus any material adverse change in the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company
-28-
and its subsidiaries, or Crown Park and its subsidiaries, considered as a
whole, whether or not arising in the ordinary course of business; or (ii)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the National Association of Securities Dealers Automated
Quotation System shall have been suspended, or if there is a significant
decline in the value of securities generally on such exchanges or such
market, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities generally shall have been required
on either of such exchanges or on such market, by the exchanges, market or by
order of the Commission or any other governmental authority having
jurisdiction; or (iii) a general moratorium on savings bank, savings and loan
association or commercial banking activities in the United States or in the
State of New York or the State of Texas shall have been declared by either
federal or state authorities; or (iv) 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 good faith judgment, impracticable or inadvisable to market the Shares
or to enforce contracts for the purchase of Shares. Notice of such
cancellation shall be given to the Company by telegraph, telephone or
facsimile but shall be subsequently confirmed by letter.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
termination of this Agreement or investigation made by or on behalf of the
Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, and will survive delivery of and payment
for the Shares sold hereunder.
SECTION 13. NOTICES. All communications hereunder will be in writing and,
if sent to the Underwriter will be mailed, delivered or telegraphed and
confirmed to Xxxxxx & Xxxxxx Incorporated, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to Bracewell & Xxxxxxxxx, L.L.P.,
000 Xxxxxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxx X.
Xxxxxxxx; if sent to the Company will be mailed, delivered or telegraphed and
confirmed to the Company at its corporate headquarters with a copy to Xxxxx &
Xxxxxx, 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X.
Xxxxxxx.
SECTION 14. SUCCESSORS. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representative and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 8,
and no other person will have any right or obligation
-29-
hereunder. The term "successors" shall not include any purchaser of the
Shares as such from the Underwriter merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 16. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
California.
-30-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the Underwriter, all in
accordance with its terms.
Very truly yours,
INDEPENDENT BANKSHARES, INC.
By:
----------------------------------
Xxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXX & XXXXXX INCORPORATED
By:
---------------------------
Xxxx X. Xxxxxxx
Partner
-31-
EXHIBIT A
INDEPENDENT BANKSHARES, INC.
275,000 Shares Common Stock*
PRICING AGREEMENT
January ____, 1997
Xxxxxx & Xxxxxx Incorporated
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated January ___, 1997
(the "UNDERWRITING AGREEMENT") relating to the sale by the Company and the
purchase by Xxxxxx & Xxxxxx Incorporated (the "UNDERWRITER"), of the above
Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Underwriter as follows:
1. The initial public offering price per share for the Shares shall be
$___.
2. The purchase price per share for the Shares to be paid by the
Underwriter shall be $___ being an amount equal to the initial public offering
price set forth above less $___ per share; provided, however, that the purchase
price per share to be paid by the Underwriter for the 30,000 shares reserved for
sale to certain persons, as more fully described in the Registration Statement,
-----------------------
* Plus an option to acquire up to 41,250 additional shares to cover
overallotments.
-32-
shall be $____ being an amount equal to the initial public offering price set
forth above less $____ per share.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement between the Company and the Underwriter, all in
accordance with its terms.
Very truly yours,
INDEPENDENT BANKSHARES, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXX & XXXXXX INCORPORATED
By:
------------------------------------
Xxxx X. Xxxxxxx
Partner
-33-
EXHIBIT B
Comfort Letter of Coopers & Xxxxxxx L.L.P.
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and any
supplementary financial information and schedules (and all pro forma financial
information) of the Company and its subsidiaries included in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1995, a reading of minutes of meetings of the shareholders and directors of the
Company and its subsidiaries since December 31, 1995, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and its subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or that such unaudited financial statements are not
fairly presented in accordance with generally accepted accounting principles,
and (ii) at a specified date not more than five days prior to the date thereof
in the case of the first letter and not more than two business days prior to the
date thereof in the case of the second and third letters, there was any change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries on a consolidated basis or any
decrease in consolidated shareholders' equity as compared with amounts shown on
the latest unaudited balance sheet of the Company included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and not more than two business days prior to the date thereof in the case of the
second and third letters, there were any decreases, as compared with the
corresponding period of the prior year, in consolidated net interest income,
consolidated noninterest income or in the total or per share amounts of net
earnings, except, in all instances, for changes or decreases which the
Prospectus discloses have occurred or may occur or which are set forth in such
letter.
(4) They have carried out specified procedures, which have been agreed to
by the Underwriters, with respect to certain information in the Prospectus
specified by the Underwriters, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and its subsidiaries.
-34-
