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EXHIBIT 1
STERLING BANCSHARES, INC.
(a Texas Corporation); and
Sterling Bancshares Capital Trust I
(a Delaware statutory business trust)
$1,000,000
_____% [Cumulative] Trust Preferred Securities
UNDERWRITING AGREEMENT
May __, 1997
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY
as the Underwriters,
c/▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: , Managing Director
Ladies and Gentlemen:
Sterling Bancshares Capital Trust I (the "Trust"), a statutory
business trust organized under the Delaware Business Trust Act, 12 Del. C.
Sections 3801 et seq. (the "Delaware Act"), and Sterling Bancshares, Inc., a
Texas corporation (the "Company" and together with the Trust, the "Offerors"),
confirm their agreement (the "Agreement") with ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Incorporated ("▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company (each, an
"Underwriter", and together, the "Underwriters," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 of this
Agreement), with respect to the issuance and sale by the Trust, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of __% [Cumulative] Trust Preferred Securities (liquidation
amount $25 per preferred security) set forth in Schedule A hereto and the grant
by the Trust to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) of this Agreement to purchase all or any part
of __________ additional Preferred Securities to cover overallotments, if any.
In this Agreement, the 1,000,000 preferred securities (the
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"Initial Preferred Securities") to be purchased by the Underwriters and all or
any part of the ________ preferred securities subject to the option described
in Section 2(b) of this Agreement (the "Optional Preferred Securities") are
called, collectively, the "Preferred Securities." The Preferred Securities are
more fully described in the Prospectus (as defined below).
The Preferred Securities will be guaranteed by the Company, to the
extent set forth in the Prospectus (as defined below), with respect to
distributions and amounts payable upon liquidation or redemption (the
"Preferred Securities Guarantee") pursuant to the Preferred Securities
Guarantee Agreement (the "Preferred Securities Guarantee Agreement") to be
dated as of Closing Time (as defined below) executed and delivered by the
Company and Bankers Trust Company (the "Guarantee Trustee"), a New York banking
corporation, not in its individual capacity but solely as trustee for the
benefit of the holders from time to time of the Preferred Securities. The
Company and the Trust each understand that the Underwriters propose to make a
public offering of the Preferred Securities as soon as they deem advisable
after this Agreement has been executed and delivered, and the Declaration (as
defined in this Agreement), the Indenture (as defined in this Agreement), and
the Preferred Securities Guarantee Agreement have been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds
from the sale of the Preferred Securities will be combined with the entire
proceeds from the sale by the Trust to the Company of its common securities
(the "Common Securities") guaranteed by the Company, to the extent set forth in
the Prospectus, with respect to distributions and amounts payable upon
liquidation or redemption (the "Common Securities Guarantee" and, together with
the Preferred Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement"
and, together with the Preferred Securities Guarantee Agreement, the "Guarantee
Agreements"), to be dated as of Closing Time, executed and delivered by the
Company for the benefit of the holders from time to time of the Common
Securities, and will be used by the Trust to purchase the __% Junior
Subordinated Deferrable Interest Debentures due 2027 (the "Subordinated
Debentures") issued by the Company. The Preferred Securities and the Common
Securities will be issued pursuant to the Amended and Restated Declaration of
Trust, to be dated as of Closing Time (the "Declaration"), among the Company,
as Sponsor, Bankers Trust Company, as property trustee (the "Property
Trustee"), Bankers Trust (Delaware), as Delaware trustee (the "Delaware
Trustee"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇, as
administrative trustees (the "Administrative Trustees" and together with the
Property Trustee and the Delaware Trustee, the "Trustees"), and the holders
from time to time of
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undivided beneficial interests in the assets of the Trust. The Subordinated
Debentures will be issued pursuant to an indenture, to be dated as of Closing
Time (the "Indenture"), between the Company and Bankers Trust Company, as
debenture trustee (the "Debenture Trustee").
The Preferred Securities, the Preferred Securities Guarantee
and the Subordinated Debentures are collectively referred to in this Agreement
as the "Securities." The Indenture, the Declaration and this Agreement are
collectively referred to in this Agreement as the "Operative Documents."
Capitalized terms used in this Agreement without definition have the respective
meanings specified in the Prospectus.
The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. _____)
covering the registration of the Securities, the Preferred Securities Guarantee
and the Subordinated Debentures under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Offerors will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Offerors have elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective: (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is in this Agreement called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto,
if any, at the time it became effective and including the Rule 430A Information
and the Rule 434 Information, as applicable, is in this Agreement called the
"Registration Statement." Any registration statement filed pursuant to rule
462(b) of the 1933 Act Regulations is in this Agreement referred to as the
"Rule 462(b) Registration Statement" and after such filing the term
"Registration Statement" shall include the Rule 462(b)
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Registration Statement. The final prospectus in the form first furnished to
the Underwriters for use in connection with the offering of the Preferred
Securities is in this Agreement called the "Prospectus." If Rule 434 is relied
on, the term "Prospectus" shall refer to the preliminary prospectus dated May
__, 1997 together with the Term Sheet and all references in this Agreement to
the date of the Prospectus shall mean the date of the Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any Term Sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references to this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus.
SECTION 1. Representations and Warranties.
(a) Offerors' Representations and Warranties.
The Offerors jointly and severally represent and warrant to each Underwriter as
of the date of this Agreement and as of the Closing Time referred to in Section
2(c) of this Agreement and as of each Date of Delivery (if any) referred to in
Section 2(b) of this Agreement, and agree with each Underwriter as follows:
(i) Compliance with Registration
Requirements. The Company meets the requirements for use of Form S-3 under the
1933 Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated
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by the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Optional Preferred Securities
are purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement, if any, and any amendments and supplements
thereto complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements thereto,
at the time the Prospectus or any such amendment or supplement was issued and
at the Closing Time (and, if any Optional Preferred Securities are purchased,
at the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If Rule 434 is used, the Company will
comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply (A) to
statements in or omissions from the Registration Statement or Prospectus made
in reliance upon and in conformity with information furnished to the Trust or
the Company in writing by any Underwriter through ▇▇▇▇ ▇▇▇▇▇ expressly for use
in the Registration Statement or Prospectus and (B) that part of the
Registration Statement which shall constitute the Statements of Eligibility
(Forms T-1) under the 1939 Act.
Each preliminary prospectus and the
prospectus filed as part of the Registration Statement as originally filed or
as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
substantively identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents
incorporated or deemed to be incorporated by reference in the Registration
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Statement and Prospectus at the time they were or hereafter are filed with the
Commission complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), and, when read together with the other
information in the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing Time, do
not and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, not misleading.
(iii) Independent Accountants. The
accountants of the Company who certified the Company's historical consolidated
and pro forma combined financial statements included or incorporated by
reference in the Registration Statement and the Prospectus are independent
public accountants of the Company within the meaning of the 1933 Act and the
rules and regulations of the Commission under the 1933 Act Regulations. The
accountants of First Houston Bancshares, Inc. ("First Houston") who certified
the First Houston historical consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus are,
to the knowledge of the Company, independent public accountants of First
Houston within the meaning of the 1933 Act and the rules and regulations of the
Commission under the 1933 Act Regulations.
(iv) Financial Statements. The consolidated
historical financial statements, together with the related schedules and notes,
of the Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated
subsidiaries, at the dates indicated and the statements of income, changes in
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
in the United States applied on a consistent basis throughout the periods
involved, except as disclosed in the notes to such financial statements; the
supporting schedules, if any, included in the Registration Statement and the
Prospectus present fairly, in all material respects, the information required
to be stated therein; and the summary financial data included in the
Registration Statement and the Prospectus present fairly, in all material
respects, the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included or
incorporated by reference in the Offering Memorandum. The pro forma combined
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financial statements of the Company and the related notes thereto included in
the Registration Statement and the Prospectus present fairly the information
relating to the Company, and to the Company's knowledge, the information
relating to First Houston shown therein, have been prepared in accordance with
the rules for pro forma financial statements set forth in Regulation S-X
promulgated by the Commission ("Regulation S-X") and applicable Commission
guidelines and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The supporting schedules, if any, included
in the Registration Statement present fairly in accordance with GAAP the
information required to be restated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business.
Since the respective dates as of which information is given in the Prospectus,
except as otherwise stated therein or contemplated thereby, there has not been
(A) any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Trust or of the
Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect"), (B)
any transaction entered into by the Trust, the Company or any of its
subsidiaries, other than in the ordinary course of business, that is material
to the Trust, or the Company and its subsidiaries, considered as one
enterprise, or (C) any dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock, other than regular
dividends on the Company's common stock.
(vi) Good Standing of the Company. The
Company has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Texas and has full corporate power
and authority under such laws to own, lease and operate its properties and to
conduct its business as now being conducted and described in the Prospectus and
to enter into and perform its obligations under each of the Operative Documents
to which it is a party.
(vii) Good Standing of the Bank. Sterling
Bank (the "Bank") has been duly organized and is validly existing as a Texas
state
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banking association and continues to do business as such and has full power and
authority to conduct its business as such in each jurisdiction in which its
banking business is conducted and as described in the Prospectus; and each of
the Company and Sterling Bancorporation, Inc. is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act").
(viii) No Other Significant Subsidiaries.
There are no "significant subsidiaries" of the Company (as such term is defined
in Rule 1-102 of Regulation S-X) other than the Bank. The subsidiaries of the
Company other than the Bank considered in the aggregate as a single subsidiary,
do not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(ix) Good Standing of the Subsidiaries.
Each of the Company's subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation and has corporate power and authority to own, lease and
operate its properties and to conduct its business as now being conducted and
as described in the Prospectus; and the Company and each of its subsidiaries is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(x) Capital Stock Duly Authorized and
Validly Issued. All of the issued and outstanding capital stock of the
Company's subsidiaries has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or indirectly,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity of any kind; none of such outstanding shares of capital stock
of the Company's subsidiaries was issued in violation of any preemptive or
similar rights arising by operation of law, or under the charter or by-laws of
any such subsidiary or under any agreement to which the Company or any of its
subsidiaries is a party.
(xi) Capitalization. The authorized, issued
and outstanding capital stock of the Company as of March 31, 1997 is as set
forth in the Prospectus in the column entitled "Actual" under the caption
"Capitalization" (and there have not been any subsequent issuances of capital
stock of the Company except for subsequent issuances, if any, pursuant to any
dividend reinvestment plan, reservations, agreements, conversions, stock
dividends or employee or
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director benefit plans); the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable and none of the capital stock of the Company was issued in
violation of the preemptive rights of any shareholder of the Company.
(xii) Good Standing of the Trust. The Trust
has been duly created and is validly existing in good standing as a business
trust under the Delaware Act with the power and authority to own property and
to conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Operative Documents, as applicable, and the
Preferred Securities; the Trust is not a party to or otherwise bound by any
material agreement other than those described in the Prospectus; and the Trust
is and will be, under current law, classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation.
(xiii) Authorization of Common Securities.
The Common Securities have been duly authorized for issuance by the Trust
pursuant to the Declaration and, when issued, executed and authenticated in
accordance with the Declaration and delivered by the Trust to the Company
against payment therefor in accordance with the Common Securities Subscription
Agreement, will be validly issued and fully paid and nonassessable undivided
beneficial interests in the assets of the Trust. The issuance of the Common
Securities is not subject to preemptive or other similar rights; and at the
Closing Time all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(xiv) Authorization of Preferred Securities.
At the Closing Time, the Preferred Securities will have been duly authorized
for issuance by the Trust pursuant to the Declaration and, when issued,
executed and authenticated in accordance with the Declaration and delivered
against payment therefor as provided in this Agreement, will be validly issued
and fully paid and non-assessable undivided beneficial ownership interests in
the assets of the Trust and will conform in all material respects to the
description thereof in the Prospectus. The issuance of the Preferred
Securities will not be subject to preemptive or other similar rights.
(xv) Authorization of Agreement. This
Agreement has been duly authorized, executed and delivered by the Offerors.
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(xvi) Authorization of Declaration. The
Declaration has been qualified under the 1939 Act and has been duly authorized
by the Company and, at the Closing Time, will have been duly executed and
delivered by the Company and the Trustees, assuming due authorization,
execution and delivery of the Declaration by the Trustees, the Declaration
will, at the Closing Time, be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting creditors' rights generally, and (b) general principles of equity,
regardless of whether enforceability is considered in a proceeding at law or in
equity (collectively, the "Enforceability Exceptions").
(xvii) Authorization of Guarantees. Each of
the Guarantees has been qualified under the 1939 Act and has been duly
authorized by the Company; at the Closing Time, each of the Guarantees will
have been duly executed and delivered by the Company and will constitute a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability may be
limited by any of the Enforceability Exceptions; and the Preferred Securities
Guarantee will conform in all material respects to the description thereof in
the Prospectus.
(xviii) Authorization of Indenture. The
Indenture has been qualified under the 1939 Act and has been duly authorized by
the Company and, at the Closing Time, will have been duly executed and
delivered by the Company and will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforceability thereof may be limited by any of the
Enforceability Exceptions.
(xix) Authorization of Debentures. The
Subordinated Debentures have been duly authorized by the Company; at the
Closing Time, the Subordinated Debentures, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture and
delivered by the Company to the Trust against payment therefor as described in
the Prospectus, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforceability thereof may be limited by any of the Enforceability
Exceptions; and the Subordinated Debentures will be in the form contemplated
by, and
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entitled to the benefits of, the Indenture and will conform in all material
respects to the descriptions thereof in the Prospectus.
(xx) Authorization of Trustees. Each of the
Administrative Trustees of the Trust is an officer of the Company and has been
duly authorized by the Company to act in such capacity.
(xxi) Trust and Corporation Not Investment
Company. Neither the Trust nor the Company is, and immediately following
consummation of the transactions contemplated hereby and the application of the
net proceeds as described in the Prospectus under the caption "Use of Proceeds"
neither the Trust nor the Company will be, an "investment company" or a company
"controlled" by an "investment company" which is required to be registered
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Accuracy of Disclosure. The Operative
Documents conform in all material respects to the descriptions thereof
contained in the Prospectus.
(xxiii) Absence of Defaults and Conflicts.
The Trust is not in violation of the trust certificate of the Trust filed with
the State of Delaware (the "Trust Certificate") or the Declaration, and neither
the Company nor any of its subsidiaries is in violation of its charter or
by-laws; none of the Trust, the Company or any of its subsidiaries is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to which
it is a party or by which it or any of them may be bound, or to which any of
its property or assets is subject (collectively, "Agreements and Instruments")
except for such defaults under Agreements and Instruments that would not result
in a Material Adverse Effect; and (A) the execution, delivery and performance
of the Operative Documents by the Trust or the Company, as the case may be, (B)
the issuance, sale and delivery of the Preferred Securities, the Subordinated
Debentures, the Preferred Securities Guarantee and the Common Securities
Guarantee, (C) the consummation of (x) the transactions contemplated by the
Operative Documents and (y) the merger (the "Merger") of First Houston with and
into SBI Acquisition Corporation ("SBIAC"), a wholly-owned subsidiary of the
Company pursuant to the Agreement and Plan of Merger (the "Merger Agreement")
dated as of March 18, 1997 by and among the Company, SBIAC and First Houston
(collectively, the "Merger
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Parties"), and (D) compliance by the Offerors with the terms of the Operative
Documents to which they are a party have been duly authorized by all necessary
corporate action on the part of the Company and, with respect to the matters
described in sub-clauses (A), (B), (C)(x) and (D) of this Agreement, at the
Closing Time, will have been duly authorized by all necessary action on the
part of the Trust, and none of the actions referred to in sub-clauses (A)
through (C) above violate, conflict with or constitute a breach of or, default
or Repayment Event (as defined below), and will not, whether with or without
the giving of notice or passage of time or both, violate, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any security interest, mortgage, pledge, lien,
charge, encumbrance or equitable right upon any property or assets of the
Trust, the Company or any of the Company's subsidiaries pursuant to, the
Agreements and Instruments (except for such conflicts, violations, breaches or
defaults or liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its subsidiaries or the
Declaration or the Trust Certificate or violation by the Company or any of its
subsidiaries of any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government authority, agency or
instrumentality or court, domestic or foreign, including, without limitation,
the Board of Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Texas Department of Banking, the Office of the
Comptroller of the Currency, and the Federal Deposit Insurance Corporation
(each, a "Governmental Entity"). As used in this Agreement, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Trust, the Company or any of
the Company's subsidiaries.
(xxiv) Absence of Labor Dispute. No labor
dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, has been threatened, which may reasonably be
expected to result in a Material Adverse Effect.
(xxv) Absence of Proceedings. Except as
disclosed in the Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or brought by any Governmental Entity now pending, or, to
the knowledge of the Trust or the Company, threatened, against the Trust or the
Company or any of its subsidiaries or of which any of their respective property
or assets is the
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subject, which, individually or in the aggregate, in the reasonable judgment of
the Trust or the Company might result in a Material Adverse Effect, or which in
the reasonable judgment of the Company might materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated by the Operative Documents or the performance by the Trust or the
Company of its obligations hereunder or thereunder.
(xxvi) Absence of Further Requirements. No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that have
been made or obtained, is necessary or required for the performance by the
Company or the Trust of their respective obligations under each of the
Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative Documents (including
the Merger).
(xxvii) Possession of Licenses and Permits.
The Trust, the Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate Governmental Agencies necessary to conduct
the business now operated by them; the Trust, the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Trust, the Company nor any subsidiary of the Company has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, in the reasonable judgment of the
Company, is likely to result in a Material Adverse Effect.
(xxviii) Accuracy of Exhibits. There are no
agreements, contracts or documents which are required to be described in the
Registration Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xxix) Title to Property. The Company and
its subsidiaries have good and indefeasible title to all of their respective
fee owned properties, in each case free and clear of all liens, encumbrances
and defects,
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except as stated in the Prospectus including the documents incorporated therein
by reference or to the extent the failure to have such title or the existence
of such liens, encumbrances or defects would not have a Material Adverse
Effect; and all of the leases and subleases material to the business of the
Trust, and the Company and its subsidiaries considered as one enterprise, and
under which the Offerors or any of the subsidiaries of the Company holds
leasehold interests in any of the properties described in the Prospectus, are
in full force and effect, and neither the Offerors nor any of the Company's
subsidiaries has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Offerors or any of the
Company's subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of such corporation to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxx) Regulation M. The Company has not
taken and will not take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Preferred Securities.
(xxxi) Authorization of Merger Agreement.
The Merger Agreement has been duly authorized, executed and delivered by each
of the Company and SBIAC and, assuming due authorization, execution and
delivery thereof by First Houston, constitutes a valid, legal and binding
agreement of the Company and SBIAC, enforceable against the Company and SBIAC
in accordance with its terms except to the extent enforceability may be limited
by the Enforceability Exceptions and except that enforcement of rights to
indemnification and contribution contained therein may be limited by applicable
federal or state laws or the public policy underlying such laws.
(b) Certificates. Any certificate signed by any
Trustee of the Trust or any duly authorized officer of the Company or any
subsidiary of the Company in such person's capacity as such officer and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Trust or the Company, as the case may be, to
the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
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(a) Initial Preferred Securities. On the basis
of the representations and warranties contained in this Agreement and subject
to the terms and conditions set forth in this Agreement, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the purchase
price of $25 per Initial Preferred Security, the number of Initial Preferred
Securities set forth in Schedule A opposite the name of that Underwriter, plus
any additional number of Initial Preferred Securities which such Underwriter
may become obligated to purchase pursuant to the provisions of Section 10 of
this Agreement, subject, in each case, to such adjustments among the
Underwriters as they in their sole discretion shall make to eliminate any sales
or purchases of fractional securities. As compensation to the Underwriters for
their commitments under this Agreement and because the proceeds of the sale of
the Preferred Securities will be used to purchase the Subordinated Debentures,
the Company hereby agrees to pay at the Closing Time and at any Date of
Delivery to the Underwriters by wire transfer of immediately available funds a
commission of $______ per Preferred Security purchased by the Underwriters.
(b) Optional Preferred Securities. In addition, on the
basis of the representations and warranties in this Agreement contained and
subject to the terms and conditions set forth in this Agreement, the Trust
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to _______ Optional Preferred Securities at the price per share set
forth in the immediately preceding paragraph. The option hereby granted will
expire 30 days after the date of this Agreement and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Preferred Securities upon notice by the Underwriters to the Trust
setting forth the number of Optional Preferred Securities as to which the
Underwriters are then exercising the option and the time and date of payment
and delivery for such Optional Preferred Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Underwriters, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Optional Preferred Securities, each of the
Underwriters, acting severally and not jointly, will purchase and the Trust
agrees to sell to the Underwriters that proportion of the total number of
Optional Preferred Securities to be sold by the Trust which the number of
Initial Preferred Securities set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Preferred Securities,
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subject in each case to such adjustments as the Underwriters in their
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and
delivery of certificates for the Initial Preferred Securities shall be made at
the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in New York, New York,
or at such other place as shall be agreed upon by the Underwriters and the
Offerors, at 9:30 a.m., (Eastern time) on the third business day (or, if
pricing occurs after 4:30 p.m. (Eastern time) on any given day, the fourth
business day) after the date of this Agreement (unless postponed in accordance
with the provisions of Section 10 of this Agreement), or such other time not
later than ten (10) business days after such date as shall be agreed upon by
the Underwriters and the Offerors (such time and date of payment and delivery
being in this Agreement called the "Closing Time").
In addition, if any or all of the Optional Preferred
Securities are purchased by the Underwriters, then payment of the purchase
price for, and delivery of certificates for, such Optional Preferred Securities
shall be made at the above-mentioned offices, or at such other place as shall
be agreed upon by the Underwriters and the Offerors on each Date of Delivery as
specified in the notice from the Underwriters to the Offerors.
Payment shall be made to the Trust by wire transfer of
immediately available funds, to the order of the Trust, to a bank designated by
the Company, against delivery to the Underwriters of certificates for the
Preferred Securities to be purchased by them. It is understood that each
Underwriter has authorized ▇▇▇▇ ▇▇▇▇▇, for its account, to accept delivery of,
receipt for, and make payment of the Purchase Price for, the Initial Preferred
Securities and the Optional Preferred Securities, if any, which it has agreed
to purchase. ▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Preferred Securities or the Optional Preferred
Securities, if any, to be purchased by any Underwriter whose funds have not
been received by the Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial Preferred Securities and the Optional Preferred Securities, if any,
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least one business day before the Closing Time or the
relevant Date of
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Delivery, as the case may be. All such certificates shall be made available
for examination and packaging by the Underwriters in New York, New York not
later than 10:00 a.m. on the last business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Offerors. The Offerors jointly and
severally covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company and the Trust, subject to Section 3(b) of this
Agreement, will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus, or of
the suspension of the qualification of the Preferred Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company and the Trust will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company and the Trust will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company and the Trust will
give the Underwriters notice of their intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act or otherwise,
will furnish the Underwriters with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Underwriters or counsel for
the Underwriters shall reasonably object.
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(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Underwriters and counsel for the Underwriters,
without charge, two signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Underwriters, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto furnished to
the Underwrites will be substantively identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Offerors, as promptly
as possible, will furnish to the Underwriters, without charge, such number of
copies of the preliminary prospectus, the Final Prospectus and any amendments
and supplements thereto and documents incorporated by reference therein as the
Underwriters may reasonably request, and the Company and the Trust hereby
consent to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be substantively
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company and the Trust will comply with the 1933 Act and the 1933 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 act to be delivered in
connection with sales of the Preferred Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus
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in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company and the Trust will promptly prepare and file with the
Commission, subject to Section 3(b) of this Agreement, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company and the Trust
will each use its best efforts, in cooperation with the Underwriters, to
qualify the Preferred Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Underwriters may
reasonably designate and to maintain such qualifications in effect for a period
of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement; provided,
however, that neither the Company nor the Trust shall be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Preferred Securities have been so qualified, the Company and the
Trust will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Notice and Effect of Material Events. The Offerors
will immediately notify the Underwriters, and confirm such notice in writing,
of (x) any filing made by the Offerors of information relating to the offering
of the Preferred Securities with any securities exchange or any other
regulatory body in the United States, and (y) prior to the completion of the
distribution of the Preferred Securities by the Underwriters as evidenced by a
notice in writing from the Underwriters to the Offerors, any Material Adverse
Effect, which (i) makes any statement in the Prospectus false or misleading or
(ii) is not disclosed in the Prospectus. In such event or if during such time
any event shall occur as a result of
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which it is necessary, in the reasonable opinion of the Company, its counsel or
the Underwriters or counsel to the Underwriters, to amend or supplement the
Final Prospectus in order that the Final Prospectus not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances then existing, the Company will forthwith amend or supplement the
Final Prospectus by preparing and furnishing to the Underwriters an amendment
or amendments of, or a supplement or supplements to, the Final Prospectus (in
form and substance satisfactory in the reasonable opinion of counsel for the
Underwriters) so that, as so amended or supplemented, the Final Prospectus will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a Subsequent Purchaser,
not misleading.
(i) Ratings. The Offerors shall take all reasonable
action necessary to enable Duff & ▇▇▇▇▇▇ Credit Rating Co. ("Duff & ▇▇▇▇▇▇") to
provide its credit rating of the Preferred Securities.
(j) DTC. The Offerors will cooperate with the
Underwriters and use their reasonable commercial efforts to permit the
Preferred Securities to be eligible for clearance and settlement through the
facilities of DTC.
(k) Use of Proceeds. The Trust will use the net proceeds
received by it from the sale of the Preferred Securities, and the Company will
use the net proceeds received by it from the sale of the Subordinated
Debentures, in the manners specified in the Prospectus under "Use of Proceeds."
(l) Listing. The Company will use its best efforts to
effect the listing of the Preferred Securities on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). If the Subordinated
Debentures are distributed on the occurrence of a Tax Event (as defined in the
Prospectus), the Company will use its best efforts to effect the listing of the
Subordinated Debentures on NASDAQ on such other exchange where the Preferred
Securities are listed.
(m) Restriction on Sale of Securities. During a period
of 180 days from the date of the Prospectus, neither the Company nor the Trust
will, without the prior written consent of ▇▇▇▇ ▇▇▇▇▇, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or other-
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wise transfer or dispose of any Preferred Securities or Subordinated Debentures
(or any equity or debt securities substantially similar to the Preferred
Securities or Subordinated Debentures, respectively) or any capital stock of
the Company, or any securities convertible into or exercisable or exchangeable
for Preferred Securities or Subordinated Debentures (or any equity or debt
securities substantially similar to the Preferred Securities or Subordinated
Debenture, respectively) or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of Preferred Securities or
Subordinated Debentures (or any equity or debt securities substantially similar
to the Preferred Securities or Subordinated Debentures, respectively) or any
capital stock of the Company, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Preferred Securities
or Subordinated Debentures (or any equity or debt securities substantially
similar to the Preferred Securities or Subordinated Debentures, respectively)
or such other securities, in cash or otherwise. The foregoing sentence shall
not apply to the Preferred Securities or Subordinated Debentures to be sold
hereunder.
(n) Reporting Requirements. The Company and the Trust,
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
(o) Furnish Reports. For and during the period ending
three years after the effective date of the Registration Statement, the Company
will furnish to the Underwriters copies of all reports and other communications
(financial or otherwise) furnished by the Company to its securityholders
generally and copies of any reports or financial statements furnished to or
filed by the Company with the Commission or any national securities exchange on
which any class of securities of the Company may be listed.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company, as borrower under the
Subordinated Debentures, will pay all expenses incident to the performance of
its, and the Trust's, obligations under this Agreement, including (i) the
preparation, printing and any filing of the Registration Statement (including
financial statements
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and any schedules or exhibits and any document incorporated therein by
reference) and of each amendment or supplement thereto, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, the Operative
Documents and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Preferred Securities, (iii) the
preparation, issuance and delivery of the certificates for the Preferred
Securities to the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance, or delivery of the
Preferred Securities to the Underwriters, (iv) the fees and disbursements of
the Company's counsel, accountants and other advisors, (v) rating agency fees,
(vi) the fees and expenses of any trustee appointed under any of the Operative
Documents, including the fees and disbursements of counsel for such trustees in
connection with the Operative Documents, (vii) the fees and disbursements of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, (viii)
the qualification of the Preferred Securities under securities laws in
accordance with the provisions of Section 3(f) of this Agreement, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, if any, (ix) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, if any,
(x) the preparation, printing and delivery supplement thereto, if any, (xi) the
fees and expenses of any transfer agent or registrar for the Preferred
Securities, (xii) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the terms
of the sale of the Preferred Securities, (xiii) the fees and expenses incurred
in connection with the listing of the Preferred Securities and, if applicable,
the Subordinated Debentures on NASDAQ, (xiv) the fees and expenses of the
Indenture Trustee, including the fees and disbursements of counsel for the
Indenture Trustee in connection with the Indenture and the Subordinated
Debentures, (xv) the fees and expenses of the Delaware Trustee and the Property
Trustee, including the fees and disbursements of counsel for the Delaware
Trustee and Property Trustee in connection with the Declaration and the
Certificate of Trust, (xvi) the fees and expenses of the Guarantee Trustee,
(xvii) any fees and expenses in connection with the rating of the Preferred
Securities and the Subordinated Debentures and (xviii) the cost and charges of
qualifying the Preferred Securities with the Depositary Trust Company.
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(b) Termination of Agreement. If this Agreement is
terminated by the Underwriters in accordance with the provisions of Section 5
or Section 10 of this Agreement, the Company shall reimburse the Underwriters
for all of its actual accountable out-of-pocket expenses, including the
reasonable fees and disbursements of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 of this
Agreement or in certificates of any Trustee of the Trust, officer of the
Company or any of its subsidiaries delivered pursuant to the provisions this
Agreement, to the performance by the Offerors of their obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430(a) or, if the Company has elected
to rely upon Rule 434, a Term Sheet shall have been filed with the Commission
in accordance with Rule 424(b)).
(b) Opinion of In-house Counsel for the Company. At the
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of the Closing Time, of ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq., General Counsel and
Secretary of the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters.
(c) Opinion of Outside Counsel for Offerors. At the
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of the Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., Houston, Texas, counsel for
the Offerors, substantially in the form of Exhibit A to this Agreement. Such
counsel
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may state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of Trustees of the
Trust, officers of the Company and its subsidiaries and certificates of public
officials.
(d) Opinion of Special Counsel for Bankers Trust Company.
At the Closing Time, the Underwriters shall have received the opinion, dated as
of the Closing Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to Bankers Trust Company, as
Property Trustee under the Declaration, Guarantee Trustee under the Preferred
Securities Guarantee Agreement and Debenture Trustee under the Indenture, in
form and substance reasonably satisfactory to counsel for the Underwriters.
(e) Opinion of Special Tax Counsel for the Offerors. At
the Closing Time, the Underwriters shall have received an opinion, dated as of
the Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., Houston, Texas, special tax
counsel to the Offerors, in form and substance reasonably satisfactory to
counsel for the Underwriters and substantially to the effect that (i) the Trust
will be classified for United States federal income tax purposes as a grantor
trust and not as an association taxable as a corporation, and (ii) the
statements set forth in the Prospectus under the caption "Certain Federal
Income Tax Consequences" constitute a fair and accurate summary of the
anticipated United States federal income tax consequences of the ownership and
disposition of the Preferred Securities under current law. Such opinion may be
conditioned on, among other things, the initial and continuing accuracy of the
facts, financial and other information, covenants and representations set forth
in certificates of officers of the Company and other documents deemed necessary
for such opinion.
(f) Opinion of Counsel for Underwriters. At the Closing
Time, the Underwriters shall have received the favorable opinion, dated as of
the Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel
for the Underwriters, in form and substance reasonably satisfactory to the
Underwriters. Such counsel may state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of Trustees of the Trust, officers of the Company and its
subsidiaries and certificates of public officials.
(g) Certificates. At the Closing Time, there shall not
have been, since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus, any Material Adverse Effect, and
the Underwriters shall have received a certificate of the Chairman, the Chief
Executive Officer, the President or any Vice President of the Company and of
the Chief
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Financial Officer or the chief accounting officer of the Company and a
certificate of an Administrative Trustee of the Trust, dated as of the Closing
Time, to the effect that (i) there has been no such Material Adverse Effect,
(ii) the representations and warranties in Section 1 this Agreement were true
and correct when made and are true and correct with the same force and effect
as though expressly made at and as of the Closing Time, and (iii) the Offerors
have complied with all agreements and satisfied all conditions on their part to
be performed or satisfied at or prior to the Closing Time.
(h) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Underwriters shall have received from Deloitte
& Touche LLP (the "Accountants"), a letter dated such date, in form and
substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information included in the Prospectus.
(i) Bring-down Comfort Letter. At the Closing Time, the
Underwriters shall have received from the Accountants a letter dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (h) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(j) Maintenance of Rating. At the Closing Time, the
Preferred Securities shall be rated at least BB by Duff & ▇▇▇▇▇▇, and the Trust
shall have delivered to the Underwriters a letter dated the Closing Time, from
Duff & ▇▇▇▇▇▇, or other evidence satisfactory to the Underwriters, confirming
that the Preferred Securities have such a rating; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned
to the Preferred Securities or the rating assigned to any of the Company's
other debt securities of the Company by any nationally recognized statistical
rating organization, and no such organization shall have publicly announced
that it has under surveillance or review its rating of any of the Preferred
Securities or any other securities of the Company.
(k) Lender's Consent and Waiver. At the Closing Time,
the Underwriters shall have received a letter from ▇▇▇▇▇ Fargo Bank N.A. (the
"Lender") consenting to (A) the issuance of the Subordinated Debentures and the
Preferred Securities; (B) the execution and delivery of the Guarantees; and (C)
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the performance by the Company of its obligations thereunder and the
transactions contemplated thereby and waiving the Lender's rights with respect
to the Company's compliance or non-compliance with [Section 6] of the loan
agreement dated November 24, 1993 between the Company, the Bank and the Lender
(as from time to time amended).
(l) Approval of Listing. At the Closing Time, the
Preferred Securities shall have been approved for listing on NASDAQ.
(m) Conditions to purchase of Optional Preferred
Securities. In the event that the Underwriters exercise their option provided
in Section 2(b) this Agreement to purchase all or any portion of the Optional
Preferred Securities, the representations and warranties of the Company and the
Trust contained in this Agreement and the statements in any certificates
furnished by the Company and any Trustee hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery, the
Underwriters shall have received:
(i) Opinion of In-House Counsel for the Company.
The favorable opinion of ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq., General Counsel and
Secretary of the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Optional Preferred Securities to be
purchased on such Date of Delivery and otherwise to the same effects
as the opinion required by Section 5(b) of this Agreement.
(ii) Opinion of Outside Counsel for Offerors. The
favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Offerors,
in form and substance reasonably satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Optional
Preferred Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
of this Agreement.
(iii) Opinion of Special Counsel for Bankers Trust
Company. The favorable opinion, dated such Date of Delivery, of
▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to Bankers Trust Company, as Property Trustee
under the Declaration, Guarantee Trustee under the Preferred
Securities Guarantee Agreement and Debenture Trustee under the
Indenture, in form and substance reasonably satisfactory to counsel
for the Underwriters, relating to the Optional Preferred Securities to
be Purchased on such Date of Deliv-
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ery and otherwise to the same effect as the opinion required by Section
5(d) of this Agreement.
(iv) Opinion of Special Tax Counsel for the
Offerors. The favorable opinion, dated such Date of Delivery, of
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., special tax counsel to the Offerors, in form
and substance reasonably satisfactory to counsel for the Underwriters,
relating to the Optional Preferred Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(e) of this Agreement.
(v) Opinion of Counsel for the Underwriters. The
favorable opinion, dated such Date of Delivery, of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, relating to
the Optional Preferred Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(f) of this Agreement.
(vi) Certificates. Certificates, dated such Date of
Delivery, of the Chairman, the Chief Executive Officer, the President
or any Vice President of the Company and of the Chief Financial
Officer of the Company and a certificate of an Administrative Trustee
of the Trust, confirming that the certificates delivered at the
Closing Time pursuant to Section 5(g) this Agreement remain true and
correct as of such Date of Delivery.
(vii) Bring-down Comfort Letter. A letter from the
Accountants dated such Date of Delivery, in form and substance
satisfactory to the Underwriters, substantially in the same form and
substance as the letter furnished to the Underwriters pursuant to
Section 5(h) this Agreement, except that the specified date referred
to shall be a date not more than five days prior to such Date of
Delivery.
(n) Additional Documents. At the Closing Time, counsel
for the Underwriters shall have been furnished such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Preferred Securities as in this Agreement
contemplated, or in order to evidence the accuracy of any of the
representations or warranties of the Offerors, or the fulfillment of any of the
conditions, contained in this Agreement; and all proceedings taken by the
Offerors in connection with the issuance and sale
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of the Preferred Securities as contemplated in this Agreement shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(o) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Underwriters by notice to
the Offerors at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as provided
in Section 4 this Agreement and except that Sections 7 and 8 this Agreement
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Offerors agree
to jointly and severally indemnify and hold harmless: (x) each of the
Underwriters; (y) each person, if any, who controls (within the meaning of
Section 15 of the 1933 Act or Section 20 of the ▇▇▇▇ ▇▇▇) any Underwriter (each
such person, a "controlling person"); and (z) the respective partners,
directors, officers, employees and agents of any Underwriter or any controlling
person as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or the omission or
alleged omission therefrom a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or arising out of any
untrue statement of a material fact contained in any preliminary prospectus or
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid by each such indemnified person in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission; provided that
(subject to Section
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6(d) below) any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense whatsoever, as
incurred (including subject to Section 6(c), the fees and disbursements of
counsel chosen by ▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under
(i) or (ii) above; provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished to
the Offerors by any Underwriter through ▇▇▇▇ ▇▇▇▇▇ and its counsel expressly
for use in the Registration Statement (or any supplement or amendment thereto),
including the Rule 430A Information an the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). The foregoing indemnity with respect to any untrue statement or
alleged untrue statement contained in or omission or alleged omission from a
preliminary prospectus shall not inure to the benefit of the Underwriter (or
any person controlling such Underwriter) from whom the person asserting any
loss, liability, claim, damage or expense purchases any of the Preferred
Securities which are the subject thereof if (A) the Company shall sustain the
burden of proving that such person was not sent or given a copy of the
Prospectus (or the Prospectus as amended or supplemented) at or prior to the
written confirmation of the sale of such Securities to such person, and (B) the
untrue statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented) and
the Company has previously furnished copies thereof to such Underwriter.
(b) Indemnification of Offerors, Directors and Officers.
Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, its directors, officers, the Trust, each of the Trustees
and each person, if any, who controls the Trust, any of the Trustees or the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 6(a) above, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A
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30
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Offerors by such Underwriter through ▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. If an indemnifying party so elects within
a reasonable time after receipt of such notice, an indemnifying party,
severally or jointly with any other indemnifying parties receiving such notice,
may assume the defense of such action with counsel chosen by it and reasonably
acceptable to the indemnified parties defendant in such action, provided,
however, that if (i) representation of such indemnified party by the same
counsel would present a conflict of interest or (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and any such indemnified party reasonably
determines that there may be legal defenses available to such indemnified party
which are different from or in addition to those available to such indemnifying
party, then in the case of clauses (i) and (ii) of this Section 6(c) such
indemnifying party and counsel for each indemnifying party or parties shall not
be entitled to assume such defense. If either (A) an indemnifying party is not
entitled to assume the defense of such action as a result of the proviso to the
preceding sentence or (B) an indemnifying party is entitled under the preceding
sentence to assume the defense of such action but fails to do so in accordance
with the provisions of this paragraph within a reasonable time after the
indemnifying party was given notice of commencement of the action, then, in
either case: (x) counsel selected by the indemnified party or parties shall be
entitled to conduct such defense and (y) such indemnifying party or parties
must reimburse all the fees and expenses of such counsel for the indemnified
party or parties as they are incurred. Notwithstanding the preceding sentence,
the indemnifying party or parties may participate, at its own expense, in the
defense of any such action. If an indemnifying party assumes the defense of
such action, in accordance with and as permitted by the provisions of this
paragraph, such indemnifying parties shall not be liable for any fees and
expenses of counsel for
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31
the indemnified parties incurred thereafter in connection with such action. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one firm of attorneys (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any one action
or separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. Such firm of attorneys shall
be designated in writing, in the case where the indemnified parties are any of
the parties indemnified pursuant to Section 6(a) above, by ▇▇▇▇ ▇▇▇▇▇ and, in
the case where the indemnified parties are any of the parties indemnified
pursuant to Section 6(b) above, by the Company. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 of this Agreement (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to the extent
specified in this Section 6 to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) Settlement without Consent if Failure to Reimburse.
Notwithstanding the last sentence of Section 6(c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any
such settlement effected without its consent if such indemnifying party (1)
reimburses such indemnified party in accordance with such request to the extent
it considers reasonable and (2) provides written notice
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32
to the indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
SECTION 7. Contribution. In order to provide for just and
equitable contribution in circumstances under which the indemnification
provided for in Section 6 of this Agreement is for any reason held to be
unenforceable by an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Offerors on the one hand and the Underwriters on the other hand from the
offering of the Preferred Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Offerors, on the one
hand, and of the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Offerors on the one hand
and the Underwriters on the other hand in connection with the offering of the
Preferred Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Preferred Securities pursuant to this Agreement (before deducting expenses but
after deducting the compensation paid to the Underwriters pursuant to Section
2(c) of this Agreement) received by the Offerors and the total commission
received by the Underwriters, bear to the aggregate initial offering price of
the Preferred Securities.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statements of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro
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33
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Preferred Securities purchased by
it and distributed to the public were offered to the public exceeds the amount
of any damages which that Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each controlling person and
the respective partners, directors, officers, employees and agents of any
Underwriter or any controlling person of any Underwriter shall have the same
rights to contribution as that Underwriter, and each officer and director of
the Company, and each person, if any, who controls (within the meaning of
Section 15 of the 1933 Act or Section 20 of the ▇▇▇▇ ▇▇▇) the Company shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are not joint
but several in proportion to the number of Securities set forth against their
respective names in Schedule A to this Agreement.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or trustees of the
Trust submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or controlling person, or by or on behalf of the Trust or the Company, and
shall survive delivery of the Preferred Securities to the Underwriters.
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34
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may
terminate this Agreement, by notice to the Offerors, at any time at or prior to
the Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any Material Adverse Effect, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis, or
any change or development involving a prospective change in national political,
financial or economic conditions, in each case the effect of which is such as
to make it, in the judgment of the Underwriters, impracticable to market the
Preferred Securities or to enforce contracts for the sale of the Preferred
Securities, or (iii) if trading in any securities of the Company has been
suspended or limited by the Commission, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market
has been suspended or limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, Texas or New
York authorities.
(b) Liabilities. If this Agreement is terminated
pursuant to this Section, such termination shall be without liability of any
party to any other party except as provided in Section 4 of this Agreement, and
provided further that Sections 1, 6 and 7 of this Agreement shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If
one of the Underwriters fails at the Closing Time or a Date of Delivery to
purchase the Preferred Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the non-defaulting
Underwriter shall have the right, within 24 hours of the Closing Time, to make
arrangements for it or any person(s) selected by it as substitute
Underwriter(s) to purchase all or some of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms set forth in this Agreement;
if, however, the non-defaulting Underwriter shall not have completed such
arrangements within such 24-hour period, then this Agreement shall terminate
without liability on the part of the non-defaulting Underwriter. No action
taken pursuant to this Section 10 shall
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35
relieve the defaulting Underwriter from liability in respect of its default.
If any such default does not result in a termination of this Agreement, either
the Underwriters or the Company shall have the right to postpone the Closing
Time or Date of Delivery for a period not exceeding five days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. In this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Incorporated, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention:
________________, Managing Director, with a copy to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. Notices to the Offerors shall be directed to Sterling
Bancshares, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇, with a copy to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, Attention: G. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
SECTION 12. Parties. This Agreement shall inure to the
benefit of and be binding upon the Underwriters and the Offerors and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 1, 6 and
7 of this Agreement and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained in this Agreement. This Agreement and all conditions and
provisions of this Agreement are intended to be for the sole and exclusive
benefit of the Underwriters and the Offerors and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Preferred Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
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SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. EACH OF THE COMPANY AND THE
TRUST HEREBY IRREVOCABLY: (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION
WITH ANY SUIT, ACTION OR PROCEEDING BY ANY UNDERWRITER, OR ITS SUCCESSORS,
CONTROLLING PERSONS, PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS RELATED
TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY; (B) WAIVES ANY
DEFENSE OF LACK OF PERSONAL JURISDICTION; AND (C) AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT. EACH OF THE COMPANY AND THE TRUST IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THIS SECTION 13 SHALL NOT PRECLUDE ANY SUIT, ACTION OR
PROCEEDING BY THE COMPANY OR THE TRUST AGAINST ANY UNDERWRITER OR ITS
SUCCESSORS, CONTROLLING PERSONS, PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES OR
AGENTS RELATED TO THIS AGREEMENT IN ANY OTHER COURT OF COMPETENT JURISDICTION.
SECTION 14. Effect of Headings. The Article and Section
headings in this Agreement are for convenience only and shall not affect the
construction of this Agreement.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart of this
Agreement, whereupon this instrument, along with all counterparts, will become
a binding agreement between the Underwriters and the Offerors in accordance
with its terms.
Very truly yours,
STERLING BANCSHARES, INC.
By
-------------------------------------------
Title:
STERLING BANCSHARES CAPITAL TRUST I
By
-------------------------------------------
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY
acting on behalf of themselves
By:__________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
By:__________________________________
Authorized Signatory
38
SCHEDULE A
Capital Number of Preferred
Name of Underwriter Securities
------------------- -------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Incorporated
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company
---------
Total: 1,000,000
39
EXHIBIT A
[Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. ("A&K"), counsel for the Offerors,
pursuant to Section 5(c)]
"Agreements and Instruments" may be defined in the A&K Opinion to mean
the documents exhibited to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
[R]: indicates where A&K may rely, to the extent A&K deem proper, upon
the opinion of the Company's General Counsel delivered pursuant to Section 5(a)
(the "G.C. Opinion") or certificates of officers of the Company and its
subsidiaries or of Trustees of the Trust.
1. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Texas and has full
corporate power and authority under such laws to own, lease and operate its
properties and to conduct its business as now being conducted and as described
in the Prospectus and to enter into and perform its obligations under each of
the Operative Documents to which it is a party. Each of the Company and
Sterling Bancorporation, Inc., a second-tier bank holding company incorporated
under the laws of the State of Delaware, is duly registered as a bank holding
company under the Bank Holding Company Act.
2. (i) The Bank is duly organized and validly existing as a Texas state
chartered banking association and continues to do business as such and has full
power and authority to conduct business as such in each jurisdiction in which
its banking business is conducted; and (ii) each of the Company's subsidiaries
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease, and operate its properties and to
conduct its business as described in the Prospectus.
3. The Company and each of its subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of its
ownership or leasing of property or conduct of business, except where the
failure to so qualify or be in good standing would not have a Material Adverse
Effect.
4. Except as otherwise disclosed in the Registration Statement or
Prospectus, all of the issued and outstanding capital stock of the Company's
subsidiaries has been duly authorized and validly issued and is fully paid and
nonassessable, and is owned by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity of any kind, and
none of
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such outstanding shares of capital stock was issued in violation of any
preemptive or similar rights arising by operation of law, or under the charter
or by-laws of any such subsidiary or under [in the case of the G.C. Opinion]
any agreement to which the Company or any of its subsidiaries is a party [and
in the case of the A&K Opinion] the Agreements and Instruments.
5. At the date indicated (i) the outstanding capital stock of the
Company consists of 7,966,222 shares of common stock, par value $1.00 per
share, and 88,380 shares of preferred stock, par value $1.00 per share [R],
(ii) all of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable, and
(iii) the stockholders of the Company have no preemptive rights [in the case of
the A&K Opinion] under the charter and by-laws of the Company.
6. Each of the Operative Documents has been duly authorized, executed,
and delivered by the Company and the Trust, as applicable, and constitutes a
valid and binding agreement of the Company and the Trust, as applicable,
enforceable against the Company and the Trust, as applicable, in accordance with
its terms, except to the extent that enforceability thereof may be limited by
the Enforceability Exceptions. The Indenture has been duly qualified under the
1939 Act.
7. The Subordinated Debentures have been duly authorized for issuance
by the Company, and the Subordinated Debentures, when executed, authenticated
and delivered in the manner provided for in the Indenture and paid for in
accordance with the Debenture Subscription Agreement will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, except to
the extent that enforceability thereof may be limited by the Enforceability
Exceptions.
8. The conditions precedent set forth in the Indenture to
authentication by the Trustee of the Subordinated Debentures to be issued to
the Trust have been complied with [R].
9. Each of the Preferred Securities Guarantee and the Common Securities
Guarantee has been duly authorized by the Company, and each of the Preferred
Securities Guarantee and the Common Securities Guarantee has been duly executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforceability thereof may be limited by the
Enforceability Exceptions. The Preferred Stock Securities Guarantee has been
duly qualified under the 1939 Act.
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10. [In the case of the G.C. Opinion only] Neither the Company nor any
of its subsidiaries is in default in the performance of any of the Agreements
and Instruments, except for such defaults under Agreements and Instruments that
would not result in a Material Adverse Effect.
11. The execution and delivery of each of the Operative Documents by
the Trust or the Company, as applicable, the issuance, sale and delivery of the
Preferred Securities, the Subordinated Debentures, the Preferred Securities
Guarantee and the Common Securities Guarantee and the consummation by the
Company and the Trust, as applicable, of the transactions contemplated by the
Operative Documents: (A) do not and will not violate or result in any violation
of the charter or by-laws of the Company or any of the Company's subsidiaries,
and (B) do not and will not violate 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 security interest, mortgage, pledge, lien, encumbrance,
claim or equity of any kind upon any property or assets of the Company, the
Trust or any of the Company's subsidiaries under (i) any of the Agreements and
Instruments, (ii) any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company, the Trust, any of
the Company's subsidiaries or any of their respective properties, including,
without limitation, the Board of Governors of the Federal Reserve System, the
Texas Department of Banking and the Federal Deposit Insurance Corporation, or
(iii) the Certificate of Trust or the Declaration.
12. To our knowledge, there are no statutes or regulations, or any
pending or threatened legal or governmental proceedings, required to be
described in the Prospectus that are not described as required [R] [in the case
of the G.C. Opinion:], nor any contracts or documents of a character required
to be described or referred to in the Prospectus that are not described or
referred to as required.
13. The statements in the Prospectus under the captions "Sterling
Bancshares Capital Trust I," "Description of Preferred Securities,"
"Description of Subordinated Debentures," "Description of Guarantee" and
"Relationship Among the Preferred Securities, the Subordinated Debentures and
the Guarantee," to the extent such statements constitute matters of law or
legal conclusions, have been reviewed by us and are accurate and fairly present
the information disclosed therein in all material respects.
14. [In the case of the G.C. Opinion] The descriptions in the
Prospectus of the statutes, regulations, legal or governmental proceedings,
contracts, and other documents therein described are accurate in all material
respects and fairly discuss in all material respects the information required
to be shown.
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[In the case of the A&K Opinion] To the best of our knowledge, there are no
statutes or regulations that are required to be described in the Prospectus
that are not described as required.
15. The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectus, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which
[we] [I] need express no opinion) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations. If Rule 434
has been relied upon, the Prospectus was not "materially different," as such
term is used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective.
16. The documents incorporated by reference in the Prospectus (except
for the financial statements and other financial or statistical data included
therein or omitted therefrom, as to which such counsel shall express no
opinion, and except to the extent that any statement therein is modified or
superseded in the Prospectus), as of the dates they were filed with the
Commission and as of the date of the Underwriting Agreement, complied as to
form in all material respects to the requirements of the 1934 Act and 1934 Act
Regulations.
17. The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of [our] [my]
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
18. Neither the Trust nor the Company is, or immediately following
consummation of the transactions contemplated by the Underwriting Agreement and
the application of the net proceeds as described in the Prospectus under "Use
of Proceeds" will be, an "investment company" or an entity "controlled" by an
"investment company" (as such terms are defined in the ▇▇▇▇ ▇▇▇) and neither
the Company nor the Trust is required to be registered as an "investment
company" under the 1940 Act.
19. The Trust has been duly created and is validly existing and in
good standing as a statutory business trust under the Delaware Act.
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20. Under the Delaware Act and the Declaration, the Trust has the
power and authority to (i) execute and deliver, and to perform its obligations
under, the Operative Documents to which it is a party, (ii) issue and perform
its obligations under the Preferred Securities and the Common Securities,
(iii) purchase and hold the Subordinated Debentures and (iv) own property and
conduct its business as described in the Prospectus; to our knowledge the Trust
is not a party to or otherwise bound by any material agreement other than those
described in the Prospectus[; and the Trust is, and will be, under current law,
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation].
21. To our knowledge, the Trust is not in violation of the Trust
Certificate or the Declaration, and neither the Company nor any Designated
Subsidiary is in violation of its charter or bylaws; to our knowledge none of
the Trust, the Company or any subsidiary of the Company is in default in the
performance of any of the Agreements and Instruments, except for such defaults
under Agreements and Instruments that would not result in a Material Adverse
Effect [R].
22. The Declaration has been duty authorized, executed and delivered
by the Administrative Trustees, constitutes a valid and binding obligation of
the Administrative Trustees and, assuming due authorization, execution and
delivery of the Declaration by the Property Trustee and the Delaware Trustee,
is enforceable against the Administrative Trustees in accordance with its
terms, except to the extent that enforceability thereof may be limited by the
Enforceability Exceptions. The Declaration has been duly qualified under the
1939 Act.
23. The Preferred Securities have been duly authorized for issuance by
the Trust, and when duly issued, executed and authenticated in accordance with
the Declaration and delivered and paid for in accordance with the Underwriting
Agreement, will represent fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will entitle the holders thereof to
the benefits of the Declaration, except to the extent that enforceability
thereof may be limited by the Enforceability Exceptions. The form of
certificate used to evidence the Preferred Securities complies in all material
respects with all applicable statutory requirements, with any applicable
requirements of the charter and by-laws of the Company and the requirements of
the Nasdaq National Market.
24. The issuance of the Preferred Securities is not subject to
preemptive rights under the Delaware Act or the Declaration.
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25. The holders of the Preferred Securities will be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the Delaware General Corporation Law.
Such counsel may bring to the attention of the Underwriters in this paragraph,
however, that the holders of the Capital Securities may be obligated, pursuant
to the Declaration, to (a) provide indemnity and/or security in connection
with, and pay taxes or governmental charges arising from, transfers of
Preferred Securities and (b) provide security and indemnity in connection with
requests of or directions to the Property Trustee to exercise its rights and
powers under the Declaration.
26. The Common Securities have been duly authorized for issuance by
the Trust and, when issued, executed and authenticated in accordance with the
Declaration and delivered and paid for in accordance with the Common Securities
Subscription Agreement, will be validly issued, representing undivided
beneficial ownership interests in the assets of the Trust. The issuance of the
Common Securities is not subject to preemptive rights under the Delaware Act or
the Declaration.
27. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency having jurisdiction over the Company, the Trust, the
Company's subsidiaries, or their respective properties, including, without
limitation, the Board of Governors of the Federal Reserve System, the Texas
Department of Banking and the Federal Deposit Insurance Corporation, is
necessary or required for the performance by the Company or the Trust of their
obligations under the Operative Documents, as applicable, or the consummation
by the Company and the Trust of the transactions contemplated by the Operative
Documents.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Offerors, representatives of the independent public accountants for the
Offerors, and the Underwriters at which the contents of the Prospectus
(including the documents incorporated therein by reference) and related matters
were discussed and, on the basis of the foregoing, no facts have come to the
attention of such counsel that would lead such counsel to believe that the
Registration Statement or any amendment to the Registration Statement,
including the Rule 430A Information and Rule 434 Information (if applicable)
and the documents incorporated therein by reference(, except for the financial
statements and schedules and other financial information included therein,
incorporated by reference therein or excluded therefrom, as to which such
counsel need express no statement), at the time such Registration Statement or
any such 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 or that the
Prospectus or any amendment or supplement thereto (except for financial
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statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which [we] [I] need make no
statement), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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