EXHIBIT 1
350,000 Shares
GUARANTY BANCSHARES, INC.
Common Stock
UNDERWRITING AGREEMENT
May __, 1998
HOEFER & ARNETT INCORPORATED
353 Sacramento Street, 10th Floor
San Francisco, California 94111
Ladies and Gentlemen:
Guaranty Bancshares, Inc., a Texas corporation (the "Company"), proposes,
subject to the terms and conditions of this Underwriting Agreement (the
"Agreement"), to issue and sell 350,000 shares (the "Shares") of common stock,
par value $1.00 per share (the "Common Stock"), of the Company to Hoefer &
Arnett Incorporated (the "Underwriter").
The Company and the Underwriter hereby agree to the following matters with
respect to the purchase and sale of the Shares:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
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represents and warrants to the Underwriter that:
a. The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Act"), a registration statement
on Form S-1 (No. 333-48959), including a preliminary prospectus, and
certain amendments thereto, relating to the Shares. The Company will next
file with the Commission a final prospectus in accordance with Rules 430A
and 424(b) under the Act. As filed, the final prospectus shall include all
Rule 430A Information (as defined below). There have been or will promptly
be delivered to the Underwriter and its counsel three signed copies of such
registration statement and amendments, three copies of each exhibit filed
therewith, and conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus
or prospectuses and final forms of prospectus. The term "Registration
Statement" as used in this Agreement shall mean such registration statement
at the time such registration statement becomes effective and, in the event
any amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as so
amended; provided, however, that such term shall also include all Rule 430A
Information deemed to be included in such registration statement at the
time such registration statement becomes effective as provided by Rule
430A, provided that if the Company files a registration statement under the
Act to register a portion of the Shares and relies on Rule 462(b) for such
registration statement to
become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration Statement"
herein shall be deemed to be to both the registration statement referred to
above (No. 333-48959) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the Act. The term
"Prospectus" as used in this Agreement shall mean: (X) the prospectus
relating to the Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act; or (Y) if no filing
pursuant to Rule 424(b) under the Act is required, the form of final
prospectus included in the Registration Statement at the time the
Registration Statement becomes effective. The term "Rule 430A Information"
as used in this Agreement shall mean information with respect to the Shares
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A under the Act.
The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder are hereinafter collectively referred to
as the "Exchange Act."
b. The Registration Statement has been declared effective by the
Commission under the Act. The Commission has not issued any order
preventing or suspending the effectiveness of the Registration Statement
and no proceedings for such purpose have been instituted or are pending, or
to the best knowledge of the Company, are contemplated or threatened by the
Commission.
c. Each preliminary prospectus when filed complied in all material
respects with the requirements of the Act. The Registration Statement and
the Prospectus comply, and on the Closing Date (as hereinafter defined) the
Prospectus will comply, in all material respects, with the provisions of
the Act; on the Effective Date, the Registration Statement did not contain
any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and the Prospectus did not and, on
the Closing Date will not, contain any untrue statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties in this
paragraph (c) shall apply to statements in, or omission from, the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information concerning the Underwriter set forth herein or
otherwise furnished in writing to the Company by or on behalf of the
Underwriter expressly for use in the Registration Statement or the
Prospectus.
d. There are no contracts or other documents of a character required
to be described in the Registration Statement or to be filed as exhibits to
the Registration Statement which have not been described or filed as
required.
e. Arnold, Walker, Arnold & Co., P.C., who have expressed their
opinion with respect to certain of the financial statements of the Company
included in the Registration Statement, are independent public accountants
within the meaning of the Act.
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f. The consolidated financial statements, together with the notes
thereto, of the Company included in the Registration Statement comply in
all material respects with the Act and present fairly in all material
respects the consolidated financial position of the Company as of the dates
indicated (including, without limitation, the allowance for possible loan
losses), and the consolidated results of operations, cash flows and changes
in financial position of the Company for the respective periods covered
thereby are in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except to
the extent disclosed therein.
g. The Company has been duly organized and 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, lease and operate its properties
and conduct its business as described in the Prospectus. The Company is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except in any such case in which the failure to so qualify or be in good
standing would not have a material adverse effect upon the business of the
Company, 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.
h. The Company does not own any capital stock of, or other securities
evidencing an equity interest in, any corporation, partnership or other
entity, other than as set forth in this paragraph. Guaranty Financial
Corp., Inc., a Delaware corporation, is a wholly owned subsidiary of the
Company. Guaranty Financial Corp., Inc., in turn, owns 100 percent of the
outstanding shares of Guaranty Bank, Mt. Pleasant, Texas, a Texas
corporation and state bank (the "Bank"), and Guaranty Company, Inc., an
inactive Texas corporation. The Bank, in turn, owns 90 percent of the
outstanding shares of Guaranty Leasing Co., Inc., a Texas corporation, a
16.67 percent membership interest in BSC Securities L.C., a Texas limited
company, and a 16.67 percent membership interest in IBS, L.C., a Texas
limited company. For purposes of this Agreement, Guaranty Financial Corp.,
Inc., the Bank, Guaranty Company, Inc., Guaranty Leasing Company, Inc., BSC
Securities L.C. and IBS, L.C. are subsidiaries of the Company. There are
no persons or entities which have the right to acquire any shares of
capital stock of the Bank or the Company's other subsidiaries.
i. The Bank has been duly organized and is validly existing as a
Texas corporation in good standing under the laws of the State of Texas,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus. The
Bank is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except in any such case in which the failure to so qualify or be in good
standing would not have a material adverse effect upon its business, and no
proceeding of which the Company has
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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.
j. The Company's subsidiaries other than the Bank have been duly
organized and are validly existing as Texas corporations or Texas limited
companies, as the case may be, in good standing under the laws of the State
of Texas, with full power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as
described in the Prospectus. The Company's subsidiaries other than the
Bank are duly qualified to do business as foreign entities and are in good
standing in each jurisdiction in which the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except in any such case in which the failure
to so qualify or be in good standing does not have a material adverse
affect on their respective businesses, 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.
k. The Company has an authorized and outstanding capitalization as
set forth in the Prospectus under the actual column under the caption
"Capitalization." All of the issued and outstanding shares of Common Stock
have been duly authorized, validly issued and are fully paid and non-
assessable and are free of preemptive or other similar rights and except as
set forth in the Prospectus, there are no options, agreements, contracts or
other rights in existence to acquire from the Company any shares of Common
Stock.
l. The Shares to be sold by the Company pursuant to this Agreement
have been duly authorized and, when issued and paid for in accordance with
this Agreement, will be validly issued, fully paid and non-assessable; the
holders of the Shares will not be subject to personal liability by reason
of being such holders; except as set forth in the Prospectus, there are no
holders of securities of the Company having rights, contractual or
otherwise, to registration thereof or preemptive rights to purchase Common
Stock; all corporate actions required to be taken for the authorization,
issuance, and sale of the Shares have been validly and sufficiently taken.
m. 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 (A) any material adverse change in
the condition (financial or otherwise), earnings, affairs or business of
the Company and its subsidiaries, taken as a whole, whether or not arising
in the ordinary course of business; (B) any material transaction entered
into, or any material liability or obligation incurred, by the Company or
its subsidiaries other than in the ordinary course of business; (C) any
change in the capital stock or material increase in the short-term debt or
long-term debt of the Company or its subsidiaries; or (D) any dividend or
distribution of any kind declared, paid or made by the Company, except
dividends paid in accordance with past practices, on its capital stock.
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n. The Company and its subsidiaries have good and marketable title to
all properties and assets reflected as owned in the financial statements
hereinabove described (or described elsewhere in the Prospectus), free and
clear of all liens, charges, encumbrances or restrictions of any kind,
except such as are referred to in such financial statements or the
Prospectus or which are not material to the Company and its subsidiaries;
all of the leases and subleases material to their respective businesses or
under which the Company and its subsidiaries hold properties are in full
force and effect; and the Company has received no notice of any material
claim of any sort which has been asserted by anyone adverse to the rights
of the Company or its subsidiaries as owner or as lessee or sublessee under
any of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or its subsidiaries to the continued possession
of the leased or subleased premises under any such lease or sublease.
o. The Company and its subsidiaries are not in default in the
observance of any provision of their respective articles of incorporation
or association, bylaws or other governing documents, in each case as
amended, or in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which any of them is a party
or by which any of them or any of their properties may be bound, the effect
of which could be materially adverse to the condition (financial or
otherwise), earnings, affairs or business of the Company or its
subsidiaries.
p. The execution, delivery and performance of this Agreement, the
issuance and delivery of the Shares, the consummation of the transactions
contemplated herein and in the Registration Statement have been duly
authorized by all necessary corporate action and will not result in any
violation of the articles of incorporation or bylaws of the Company, and
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge, encumbrance or restriction of any kind upon
any property or assets of the Company under any material contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company is a party or by which the Company or its
properties is bound, or any existing applicable law, rule, regulation, or
any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, known to the Company and
having jurisdiction over the Company or its properties. No approval,
authorization or consent of any court, regulatory body, administrative
agency or other governmental body having jurisdiction over the Company is
required in connection with the sale of the Shares to the Underwriter,
except such as may be required under the Act, state securities or Blue Sky
laws or from the clearance of the offering with the National Association of
Securities Dealers, Inc. (the "NASD").
q. Other than the Notices of Beginning of Administrative Proceeding
received from the Internal Revenue Service relating to the Company's
leveraged leasing activities ("IRS Notices"), there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic
or foreign, or any arbitrator or arbitration panel,
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now pending or, to the knowledge of the Company, threatened against or
affecting the Company or its subsidiaries which could reasonably be
expected to result in any material adverse change to the condition
(financial or otherwise), earnings, affairs or business of the Company or
its subsidiaries; and there is no decree, judgment or order of any kind
known to the Company in existence against or restraining the Company or its
subsidiaries or their officers, employees or directors, from taking any
actions of any kind in connection with their respective businesses.
r. The Company and its subsidiaries own or possess or have obtained
all material 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, and the Company has received no notice of proceedings related to
revocation or modification of any such licenses, permits, consents, orders,
approvals or authorizations which individually or in the aggregate, if the
subject of an unfavorable ruling or finding, would be materially adverse to
the condition (financial or otherwise), earnings, affairs or business of
the Company or its subsidiaries.
s. The conduct of the business of the Company and its subsidiaries is
in compliance with all applicable federal, state and local laws and
regulations that regulate or are concerned in any way with the business of
the Company or the Bank, where the effect of the failure to comply would be
materially adverse to the condition (financial or otherwise), earnings,
affairs or business of the Company or the Bank.
t. The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all right, title and interest in or to, or have duly
licensed from third parties, all patents, trademarks, service marks,
copyrights, trade names, trade secrets and other proprietary rights ("Trade
Rights") material to the business now or proposed to be conducted by them,
and the Company has received no notice of, and has no knowledge of,
infringement of or conflict with asserted rights of others with respect to
any such Trade Rights which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would be materially
adverse to the condition (financial or otherwise), earnings, affairs or
business of the Company or its subsidiaries.
u. The Company has filed all tax returns required to be filed and has
paid all taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any tax returns being
contested in good faith or which are not material to the Company and other
than the IRS Notices there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company or any of
its properties or assets that would or could reasonably be expected to have
a material adverse affect upon the condition (financial or otherwise) or
results of operations of the Company.
v. This Agreement has been duly executed and delivered by the
Company.
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w. The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register its Common Stock thereunder,
has filed an application to list the Shares for quotation on The Nasdaq
National Market and has received notification that the Shares have been
authorized for quotation on The Nasdaq National Market, subject to notice
of issuance or sale, as the case may be.
x. The Company and its subsidiaries are not and do not intend to
conduct their business in a manner in which any of them would become an
"investment company" as defined in Section 3(a) of the Investment Company
Act of 1940, as amended (the "Investment Company Act").
y. All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times either exempt from the registration
requirements of the Act and the registration requirements of all applicable
state securities or blue sky laws or were duly registered in accordance
with the provisions thereof.
z. The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company.
aa. Except as disclosed in the Registration Statement and the
Prospectus, no transaction has occurred between or among the Company or its
subsidiaries, on the one hand, and any of the Company's officers or
directors or any affiliate or affiliates of any such officer or director,
on the other hand, that is required to be so disclosed, including, but not
limited to, any outstanding loans, advances or guaranties of indebtedness
by the Company or its subsidiaries to or for the benefit of any affiliates
of the Company, or any of the officers or directors of the Company, or any
family member of any of them.
bb. The Company and its subsidiaries have not, directly or
indirectly, at any time (A) made any contributions to any candidate for
foreign political office, or if made, failed to disclose fully any such
contribution made in violation of law, or (B) made any payment to any
state, federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments or
contributions required or allowed by applicable law. The Company's
internal accounting controls and procedures are sufficient to cause the
Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
cc. The Company and its subsidiaries do no business with the
government of Cuba or with any person or entity located in Cuba, which
would require compliance with Florida Statute Section 517.075.
dd. The Company and the Bank are in compliance with all applicable
federal and state laws and regulations that regulate the business of
banking, including, without
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limitation, the National Bank Act, the Federal Deposit Insurance Act, the
Bank Holding Company Act, the Federal Reserve Act and all other applicable
laws and regulations where the failure to comply would have a material and
adverse effect on the financial condition, earnings or business of the
Company or the Bank.
SECTION 2. AGREEMENT TO SELL AND PURCHASE. On the basis of the
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representations, warranties and agreements of the Company herein contained and
subject to the terms and conditions set forth herein, (i) the Company hereby
agrees to issue and sell to the Underwriter and the Underwriter agrees to
purchase the Shares. The purchase price per share to be paid by the Underwriter
to the Company shall be $___________, except for shares the purchaser of which
was introduced to the Underwriter by the Company and who is listed on Exhibit A
hereto as amended from time to time as agreed by the Company and the
Underwriter, for which the price shall be $_________ per share.
SECTION 3. DELIVERY OF AND PAYMENT FOR THE SHARES.
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a. Delivery to the Underwriter of the Shares shall be made against
payment therefor at 9:00 a.m., San Francisco, California, time, on the
fourth full business day following the date of this Agreement (the "Closing
Date") at the offices of Hoefer & Arnett Incorporated, 353 Sacramento
Street, 10th Floor, San Francisco, California 94111. The place of the
closing and the Closing Date may be varied by agreement between the
Underwriter and the Company.
b. Certificates for the Shares shall be registered in such names and
in such denominations as the Underwriter shall request upon at least 48
hours prior notice to the Company preceding the Closing Date. Such
certificates shall be made available to the Underwriter at the office of
The Depository Trust Company, New York, New York, for inspection and
packaging not later than at least 24 hours prior to the Closing Date. The
certificates evidencing the Shares shall be delivered to the Underwriter on
the Closing Date, with any transfer taxes thereon duly paid by the Company
for the Underwriter, against payment of the purchase price therefor by
certified or official company check or checks payable in Chicago Clearing
House (next day) funds to the order of the Company, or, at the option of
the Company, by wire transfer in federal (same day) funds for which the
Company will pay one day's interest at the broker call rate as reported in
The Wall Street Journal on the business day immediately prior to the
Closing Date, subject to change by written agreement of the Company and the
Underwriter.
SECTION 4. AGREEMENTS OF THE COMPANY. The Company covenants and agrees
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with the Underwriter that:
a. The Company will advise the Underwriter promptly and, if requested
by the Underwriter, will confirm such advice in writing, (i) when any post-
effective amendment to the Registration Statement is filed or becomes
effective, and of the filing of any final prospectus or supplement or
amendment to the Prospectus, (ii) of any request by
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the Commission for amendments or supplements to the Registration Statement
or Prospectus or any Preliminary Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation or contemplation of any proceeding for such purposes, and
(iv) within the period of time referred to in paragraph (g) below, of the
happening of any event which makes any statement made in the Registration
Statement or Prospectus (as then amended or supplemented) untrue in any
material respect or which requires the making of any additions to or
changes in the Registration Statement or Prospectus (as then amended or
supplemented) in order to make the statements therein not misleading or to
amend or supplement the Prospectus to comply with the Act or any other law.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company elects not to rely on Rule 434, the Company
will provide the Underwriter with copies of the form of Prospectus in such
numbers as the Underwriter may reasonably request and file or transmit for
filing with the Commission such Prospectus in accordance with Rule 424(b)
of the Act, by the close of business in San Francisco on the business day
immediately succeeding the date hereof.
b. The Company will prepare and file with the Commission, in
accordance with Rule 430A and Rule 424(b) under the Act, copies of an
amended Prospectus, or, if required by Rule 430A, a post-effective
amendment to the Registration Statement (including an amended Prospectus)
containing all information so omitted.
c. The Company will, prior to the Closing Date, not 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 in the Prospectus.
d. The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which
the Underwriter shall not previously have been advised or to which the
Underwriter shall promptly after being so advised reasonably object in
writing.
e. On the effective date of the Registration Statement and thereafter
from time to time during such period as in the opinion of counsel for the
Underwriter a prospectus relating to the Shares is required by law to be
delivered in connection with offers or sales of the Shares by the
Underwriter or a dealer, the Company will deliver to the Underwriter and
each dealer, without charge, as many copies of the Registration Statement
and the Prospectus (and of any amendment or supplement to such documents)
as they may reasonably request. During such period, if any event occurs
which in the judgment of the Company, or in the opinion of counsel for the
Underwriter, should be set forth in the Prospectus in order to ensure that
no part of the Prospectus includes an untrue statement of a material fact
or omits to state a material fact necessary in order to make the
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statements therein, in the light of the circumstances at the time the
Prospectus is delivered to a purchaser, not misleading, the Company will
forthwith prepare, submit to the Underwriter, file with the Commission and
deliver, without charge to the dealers (whose names and addresses will be
furnished by the Underwriter to the Company) to whom shares have been sold
by the Underwriter or to other dealers any amendments or supplements to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will comply with the standards set forth in this sentence.
The Company consents to the use of such Prospectus (and of any amendments
or supplements thereto) in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions described in the
preliminary Blue Sky memorandum in which the Shares are lawfully offered by
the Underwriter and by all dealers to whom Shares may be sold, both in
connection with the offering or sale of the Shares and for such period of
time thereafter as the Prospectus is required by law to be delivered in
connection therewith. In case the Underwriter is required to deliver a
Prospectus (and any amendment or supplement thereto) more than nine months
after the first date upon which the Shares are offered to the public, the
Company will, upon request, but at the expense of the Underwriter, promptly
prepare and furnish the Underwriter with reasonable quantities of a
Prospectus complying with Section 10(a)(3) of the Act.
f. The Company will cooperate with the Underwriter and counsel for
the Underwriter in connection with the registration or qualification of the
Shares for offer and sale by the Underwriter and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriter may
designate, will continue such registrations or qualifications in effect so
long as reasonably required for the distribution of the Shares and will
file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided
that in no event shall the Company be obligated to (i) qualify to do
business in any jurisdiction where it is not now so qualified, (ii) file
any general consent to service of process, or (iii) take any action that
would subject it to income taxation in any jurisdiction where it is not so
qualified.
g. For a period of five years after the date hereof:
i. the Company will furnish to the Underwriter (A) as soon as
available a copy of each report of the Company of general interest
mailed to any class of its security holders (B) copies of all periodic
reports and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K and any amendment thereto or such other similar forms as
may be designated by the Commission, and (C) from time to time, such
other information concerning the Company as the Underwriter may
reasonably request;
ii. if at any time during such five-year period the Company
shall cease filing with the Commission the periodic reports and
current reports on Forms 10-K, 10-Q and 8-K or other similar forms
referred to in clause (g)(i) above, the Company will forward to its
shareholders generally and the Underwriter (A) as
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soon as practicable after the end of each fiscal year copies of a
balance sheet and statements of income and retained earnings of the
Company as of the end of and for such fiscal year, certified by
independent public accountants, and (B) as soon as practicable after
the end of each quarterly fiscal period, except for the last quarterly
fiscal period in each fiscal year, a summary statement (which need not
be certified) of income and retained earnings of the Company for such
period, which shall also be made publicly available; and
iii. the Company will furnish to the Underwriter and to the
NASD, and by issuance of a press release, on the date of declaration,
notice of all dividends, including the amount and medium of payment,
the record date (which shall be not less than ten days subsequent to
the declaration date) and the payment date (which shall be not less
than ten days subsequent to the record date).
h. The Company will make generally available to its security holders
an earnings statement of the Company, which need not be audited, covering a
12-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and the rules and
regulations promulgated thereunder (including Rule 158).
i. The Company will not sell, contract to sell or otherwise dispose
of any Common Stock or rights to purchase Common Stock for a period of 120
days after the date of the Prospectus without the prior written consent of
the Underwriter (other than the issuance of shares of Common Stock pursuant
to the Company's stock option plan(s) and certain other employment benefit
arrangements of the Company in an aggregate amount not to exceed 5 percent
of the Shares). The Company will also use its best efforts to obtain
similar agreements from each of its executive officers and directors and
all persons who own at least 5 percent of the Common Stock after the
consummation of the Offering.
j. The Company will apply the net proceeds from the sale of the
Shares to be sold by it under this Agreement for the purposes set forth in
the Prospectus under the caption "Use of Proceeds."
SECTION 5. PAYMENT OF EXPENSES.
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a. Except as provided in Sections 4(e) and 5(b) hereof, and in the
following sentence, the Underwriter will bear its own expenses including
expenses of Underwriter's counsel. All other expenses relating to the
offering circular and underwriting documents, including all printing
expenses; all filing fees with the SEC and the National Association of
Securities Dealers, Inc.; and all filing fees and expenses for
qualification under the blue sky laws of states designated by the
Underwriter will be borne by the Company. The
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Company will be responsible for the fees and expenses of its counsel and
accountants and its own travel and roadshow expenses.
b. In the event that the Underwriter determines to terminate the
proposed offering because (i) an adverse development shall occur which
materially and adversely affects the business, financial condition, assets,
results of operations or prospects of the Company and the Bank, considered
as one enterprise; and (ii) the Prospectus does not comply with all
applicable laws and regulations; then the Company shall reimburse the
Underwriter for accountable out-of-pocket expenses, which shall include
reasonable travel and related expenses and reasonable fees and
disbursements of counsel, but shall not include hourly or other fixed rates
for time spent on the project by representatives or staff of Underwriter or
reimbursement of Underwriter for normal office expenses incurred in the
ordinary course of business. In the event that the Company determines to
terminate its proposed offering because the offering price is not
satisfactory to the Company or if the Underwriter determines to terminate
the proposed offering for reasons other than as stated in the preceding
sentence, the Underwriter will be responsible for its own out-of-pocket
expenses. Any such termination shall be without liability of any party to
any other party except that the provisions of this section, Section 4(e),
Section 5(a) and Section 7 shall at all times be effective and shall apply.
SECTION 6. CONDITION OF THE UNDERWRITER'S OBLIGATIONS. The obligation
------------------------------------------
of the Underwriter to purchase the Shares hereunder is subject to the following
conditions:
a. The price of the Shares and any price-related or other information
previously omitted from the effective Registration Statement pursuant to
such Rule 430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) within the prescribed time period and on or prior
to the Closing Date, the Company shall have provided evidence satisfactory
to the Underwriter of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for the purpose shall have been instituted or
shall be pending or, to the knowledge of' the Company, shall be
contemplated by the Commission and there shall not have come to the
attention of the Underwriter any facts that would cause them to believe
that the Prospectus, at the time it was required to be delivered to
purchasers of the Shares, contained any untrue statement of material fact
or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which there were
made, not misleading.
b. Subsequent to the effective date of the Registration Statement (i)
there shall not have occurred any material adverse change, or any
development involving a material adverse change, in or affecting
particularly the business or properties of the Company or its subsidiaries,
taken as a whole, not contemplated by the Prospectus, which, in the
Underwriter's opinion, would materially adversely affect the market for the
Shares
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or make it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares, as contemplated herein and in the Prospectus, or to
attempt to enforce contracts for the purchase of Shares, and (ii) the
business and operations of the Company shall not have been adversely
affected by strike, fire, flood, accident or other calamity (whether or not
insured).
c. The Underwriter shall have received from Bracewell & Patterson,
L.L.P., counsel for the Company, a favorable opinion dated the Closing Date
and satisfactory to the Underwriter and the Underwriter's counsel to the
effect that:
i. The Company and the Bank have been duly incorporated and are
validly existing as corporations in good standing under the laws of
the State of Texas, both with full power and authority to own, lease
and operate their respective properties and conduct their business as
described in the Prospectus. The Company and the Bank are duly
qualified to do business and are in good standing in each jurisdiction
where the ownership or leasing of their properties or the conduct of
their business requires such qualification, except in any such case
where the failure to so qualify or be in good standing would not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) or results of operations of the
Company.
ii. The issued and outstanding capital stock of the Company has
been duly authorized and validly issued and is fully paid and non-
assessable and free of preemptive rights.
iii. The authorized capitalization of the Company consists
entirely of 15,000,000 shares of preferred stock, $5.00 par value
("Preferred Stock"), issuable in series, 165,456 of which are issued
and outstanding as Series A Preferred Stock, and 50,000,000 shares of
Common Stock, of which 2,548,280 were outstanding on the date of the
Prospectus, all of which conform to the descriptions thereof in the
Prospectus.
iv. The form of certificate for the Shares to be delivered
hereunder is in due and proper form, and when duly countersigned by
the Company's transfer agent and delivered to the Underwriter against
payment of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Shares represented thereby will be
duly authorized and validly issued, fully paid and nonassessable and
free of preemptive rights and, to the knowledge of such counsel, will
be free of any security interest, claim, lien, encumbrance or adverse
interest of any nature, or rights of first refusal in favor of,
shareholders with respect to any of the Shares or the issuance or sale
thereof, pursuant to the articles of incorporation or bylaws of the
Company and, to such counsel's knowledge other than as disclosed in
the Prospectus, there are no contractual preemptive rights, rights of
first refusal, rights of co-sale or other similar rights which exist
with
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respect to any of the Shares or the issuance and sale thereof; and the
Shares to be sold hereunder have been qualified for inclusion on The
Nasdaq National Market, subject to notice of issuance.
v. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity, and
except that such counsel need express no opinion as to those
provisions relating to indemnities for liabilities under the Act.
vi. No authorization, approval, order or consent of any
governmental authority or agency is required for the valid issuance
and sale of the Shares, except such as may be required under the Act
or state securities laws as to which such counsel need express no
opinion.
vii. The execution, delivery and performance by the Company of
this Agreement and the issue and sale of the Shares will not conflict
with or result in a breach of any of the provisions of, or constitute
a default under (A) the Company's articles of incorporation or bylaws
or any agreement, franchise, license, indenture, mortgage, deed of
trust or other instrument or agreement known to such counsel to which
the Company is a party or by which the Company is bound or to which
its properties are subject or (B) so far as known to such counsel, any
statute, order, rule or regulation applicable to the Company of any
court or other governmental authority or body having jurisdiction over
the Company or its properties.
viii. The Registration Statement has become effective under the
Act, and, to the 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 under the Act.
ix. 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) as amended or
supplemented (except for the financial statements and notes thereto,
the financial statement schedules and other statistical or financial
data included therein, as to which such counsel need express no
opinion) and the Prospectus and any supplements or amendments thereto
(except for the financial statements and notes thereto, the financial
statement 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 Act and
the rules promulgated thereunder and nothing has come to the attention
of such counsel that would cause such counsel to believe that the
Registration Statement (including the information deemed to be part of
the
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Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable) as amended or supplemented (except for the
financial statements and notes thereto, the financial statement
schedules and other statistical or financial data included therein, as
to which such counsel need express no opinion) at the time it became
effective, and at the Closing Date, contained any untrue statement of
a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that, as of its date, the Prospectus or any
amendment or supplement thereto (except for the financial statements
and notes thereto, the financial statement schedules and other
statistical or financial data included therein, as to which such
counsel need express no opinion) included or includes any untrue
statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. [If used,
the Rule 434 Prospectus conforms to the requirements of Rule 434 of
the Act.]
x. The statements in the Prospectus in the sections captioned
"Description of Securities of the Company," and "Supervision and
Regulation" in each case insofar as such statements constitute matters
of law, summaries of law or legal conclusions have been reviewed by
counsel and accurately present and summarize, in all material
respects, the matters described herein.
xi. To the knowledge of such counsel there are no statutes or
regulations or any pending or threatened litigation or governmental
proceedings against the Company required to be described in the
Prospectus which are not so described, nor of any contracts or
documents of a character required to be described in or filed as a
part of the Registration Statement which are not described or filed as
required.
xii. To such counsel's knowledge, except as disclosed in the
Prospectus, no person has the right, contractual or otherwise, to
cause the Company to register pursuant to the Act any shares of
capital stock of the Company upon the issuance and sale of the Shares
to be sold by the Company to the Underwriter pursuant to this
Agreement.
xiii. Neither the Company nor the Bank is an "investment
company" or a person "controlled by" an "investment company" within
the meaning of the Investment Company Act.
xiv. To such counsel's knowledge, all offers and sales of the
Company's capital stock prior to the date hereof were at all relevant
times exempt from the registration requirements of the Act and were
duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws.
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In rendering such opinion, such counsel may state that it is relying upon
the certificate of the officers of the Company and the transfer agent for the
Common Stock, as to the number of shares of Common Stock at any time or times
outstanding, and that insofar as its opinion under clause (x) above relates to
the accuracy and completeness of the Prospectus and Registration Statement, it
is based upon a general review with the Company's representatives and
independent accountants of the information contained therein, without
independent verification by such counsel of the accuracy or completeness of such
information. Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of officers of the Company
and its subsidiaries and of state officials, in which case its opinion is to
state that it is so doing and copies of such opinions or certificates are to be
attached to the opinion unless such opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to the Underwriter
otherwise.
d. The Underwriter shall have received on the Closing Date a
favorable opinion dated the Closing Date from Rothgerber Johnson & Lyons
LLP, counsel for the Underwriter, as to such matters as the Underwriter may
reasonably require.
e. On the Closing Date, the Underwriter shall have received letters
addressed to the Underwriter and dated the date hereof and the Closing Date
from Arnold, Walker, Arnold & Co., P.C., in a form and substance reasonably
satisfactory to the Underwriter. There shall not have been any change or
decrease specified in the letters referred to in this paragraph which makes
it impractical or inadvisable in the judgment of the Underwriter to proceed
with the public offering or purchase of the Shares as contemplated hereby.
f. (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission at or prior to the Closing Date; (ii) there shall not
have been any change in the capital stock of the Company nor any material
increase in the short- or long-term debt of the Company or its subsidiaries
from that set forth or contemplated in the Registration Statement; (iii)
there shall not have been, since the respective dates as to which
information is given in the Registration Statement and the Prospectus,
except as may otherwise be set forth or contemplated in the Registration
Statement and the Prospectus, any material adverse change in the financial
condition or results of operations of the Company or its subsidiaries taken
as a whole; (iv) the Company and its subsidiaries shall not have incurred
any material liabilities or obligations, direct or contingent (whether or
not in the ordinary course of business), other than those reflected in the
Registration Statement; and (v) all of the representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof and the Closing Date as if
made on and as of each such date and the Underwriter shall have received a
certificate, dated the Closing Date and signed by the chief executive
officer and the principal financial officer (or such other officers as are
acceptable to the Underwriter) to the effect set forth in this Section 6(f)
and in Section 6(g) hereof.
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g. The Company shall not have failed at or prior to the Closing Date
to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with
by it at or prior to the Closing Date.
h. Within 24 hours after the Registration Statement becomes
effective, or within such longer period as to which the Underwriter shall
have consented, the Shares shall have been qualified for sale or exempted
from such qualification under the securities laws of such jurisdictions as
the Underwriter shall have designated and such qualification or exemption
shall continue in effect to and including the Closing Date.
i. Prior to the Closing Date, the Company shall have furnished to the
Underwriter or the Underwriter's counsel such further information,
certificates and documents as the Underwriter or the Underwriter's counsel
may reasonably request.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
a. The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
the Act or the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, whatsoever (including any
investigation, legal or other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted) to which the Underwriter, or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as arising
out of or based upon any untrue statement or alleged 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
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading and will reimburse the Underwriter
for any legal or other expenses reasonably incurred by the Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred, except insofar as such losses, claims, damages or
liabilities 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 relating to
the Underwriter furnished in writing to the Company by 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 if (i) a copy of the Prospectus (as
amended or supplemented if any amendments 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
-17-
preliminary prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid).
b. If any action or claim shall be brought against the Underwriter or
any person controlling the Underwriter, in respect of which indemnity may
be sought against the Company, the Underwriter shall promptly notify the
Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses.
The Underwriter or any such person controlling the Underwriter shall have
the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Underwriter or such controlling person unless (i) the
Company has agreed in writing to pay such fees and expenses, (ii) the
Company has failed to assume the defense and employ counsel, or (iii) the
named parties to any such action (including any impleaded party) included
the Underwriter or controlling person and the Company and the Underwriter
or controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from
or additional to those available to the Company and which may also result
in a conflict of interest (in which case if the Underwriter or controlling
person notifies the Company, the Company shall not have the right to assume
the defense of such action on behalf of the Underwriter or controlling
person, it being understood, however, that the Company shall not, 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 more than one separate firm of attorneys for the Underwriter
and any such controlling persons, which firm shall be designated in writing
by the Underwriter). The Company shall not be liable for any settlement or
any such action effected without the written consent of the Company, but if
settled with the written consent of the Company, 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 Company agrees to indemnify and hold harmless
the Underwriter and any such controlling person from and against any loss
or liability by reason of such settlement or judgment.
c. The Underwriter will indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and any person
controlling the Company within the meaning of the Act or 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 the Underwriter
expressly for use in the Registration Statement, the Prospectus or any
preliminary prospectus. If any action or claim shall be brought or
asserted against the Company, any of its directors, any such officer, or
any such controlling person based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against the Underwriter, the Underwriter shall have the
rights and duties given to the Company pursuant to Section 7(b) hereof
(except that if the Company shall have assumed the defense thereof, the
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but
-18-
the fees and expenses of such counsel shall be at the expense of the
Underwriter), and the Company, its directors, any such officer, and any
such controlling person shall have the rights and duties given to the
Underwriter by Section 7(b) hereof.
d. (i) If the indemnification provided for in this Section 7 is
unavailable as a matter of law to any indemnified party under this
Section 7 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 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 appropriate to reflect not
only the relative benefits referred to in clause (A) above but also
the relative fault of the Company and 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 discount but before deducting expenses), and in the case
of the Underwriter as the underwriting discount received by it, bears
to the total of such amounts paid to the Company and received by the
Underwriter as underwriting discount, in each case as contemplated by
the Prospectus. The relative fault of the Company and 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 parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in this section shall be
deemed to include, subject to the limitations set forth in this
section, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim.
(ii) The Company and the Underwriter agree that the determination
of contribution pursuant to this section based on pro rata allocation
or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph would not be just and equitable. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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e. The indemnity and contribution agreements contained in this
Section 7 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 the Company), (ii) acceptance of any
Shares and payment therefor 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 the Underwriter or the Company) shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this section.
SECTION 8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
---------------------------
effective immediately as to Sections 5, 7, 8 and 9 and as to all other
provisions at 10:00 a.m., San Francisco time, on the day following the date upon
which this Agreement is executed and delivered, unless such a day is a Saturday,
Sunday or holiday (and in that event this Agreement shall become effective at
such hour on the business day next succeeding such Saturday, Sunday or holiday).
SECTION 9. TERMINATION OF AGREEMENT. The Underwriter shall have the
------------------------
right to terminate this Agreement at any time prior to the Closing Date by
notice to the Company from the Underwriter, without liability (other than with
respect to Section 7) on the Underwriter's part to the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed
hereunder, (ii) any other condition to the obligations of the Underwriter
hereunder as provided in Section 6 is not fulfilled when and as required in any
material respect, (iii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASD Automated Quotation System
shall have been suspended or materially limited, or minimum prices shall have
been established on any such exchange by the Commission, or by such exchange or
other regulatory body or governmental authority having jurisdiction, (iv) a
general Banking moratorium shall have been declared by federal or Texas state
authorities, (v) there is a material outbreak or escalation of armed hostilities
involving the United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Underwriter's reasonable judgment, to make it inadvisable
or impracticable to proceed with the public offering or delivery of the Shares
on the terms and in the manner contemplated in the Prospectus as supplemented or
amended prior to the occurrence of such event, (vi) in the Underwriter's
reasonable opinion any material adverse change shall have occurred since the
respective dates as of which information is given in the Registration Statement
or the Prospectus (as supplemented or amended prior to the occurrence of such
event) in the condition (financial or other) of the Company whether or not
arising in the ordinary course of business other than as set forth in the
Prospectus as supplemented or amended prior to the occurrence of such event, or
(vii) there shall have been such a material adverse change in general economic,
political or financial conditions or if the effect of international conditions
on the financial markets in the United States shall be such as, in the
Underwriter's reasonable opinion, makes it inadvisable or impracticable to
-20-
proceed with the delivery of the Shares as contemplated hereby. Notice of such
cancellation shall be given to the Company by telecopy or telephone but shall be
subsequently confirmed by letter.
SECTION 10. NOTICES. Except as otherwise provided in Section 9 hereof,
-------
notice given pursuant to any of the provisions of this Agreement shall be in
writing and shall be delivered (a) if to the Company, at the office of the
Company at 100 West Arkansas, P.O. Box 1158, Mt. Pleasant, Texas 75456,
Attention: Arthur B. Scharlach, Jr., President; with a copy to Bracewell &
Patterson, L.L.P., 711 Louisiana Street, Suite 2900, Houston, Texas 77002,
Attention: William T. Luedke IV; or (b) if to the Underwriter, at the offices
of Hoefer & Arnett Incorporated, 353 Sacramento Street, 10th Floor, San
Francisco, California 94111, Attention: Steven J. Didion; with a copy to
Rothgerber Johnson & Lyons LLP, 1200 17th Street, Suite 3000, Denver, Colorado
80202-5839, Attention: Herbert H. Davis III, Esq., or in any case to such other
address as the person to be notified may have requested in writing.
SECTION 11. SUCCESSORS. The Agreement is made solely for the benefit
----------
of the Underwriter, the Company, their directors and officers and other
controlling persons referred to in Section 7 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser from the Underwriter of any of
the Shares in his status as such purchaser.
SECTION 12. 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 13. APPLICABLE LAW. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of Texas.
SECTION 14. COUNTERPARTS. This Agreement may be signed in various
------------
counterparts which together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
GUARANTY BANCSHARES, INC.
By:
-------------------------------------
Name: Arthur B. Scharlach, Jr.
Title: President
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Accepted and delivered as of
the date first written above
HOEFER & ARNETT INCORPORATED
By:
-----------------------------
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