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EXHIBIT 1.1
PROSPERITY BANCSHARES, INC.
1,200,000 ___% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $10 PER TRUST PREFERRED SECURITY)
UNDERWRITING AGREEMENT
__________, 1999
▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc.
As Representative of the several Underwriters named in Schedule A
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Introductory. Prosperity Bancshares, Inc., a Texas corporation (the
"Company"), and its subsidiary, Prosperity Capital Trust I (the "Trust" and,
together with the Company, the "Offerors"), a statutory business trust
organized under the Delaware Business Trust Act (the "Delaware Act"), propose,
subject to the terms and conditions stated herein, to issue and sell to the
several underwriters named in Schedule A (the "Underwriters"), who are acting
severally and not jointly, an aggregate of 1,200,000 of the Trust's ___%
Cumulative Trust Preferred Securities (liquidation amount $10 per security)
representing undivided beneficial interests in the assets of the Trust (the
"Trust Preferred Securities"). The Offerors propose that the Trust issue the
Trust Preferred Securities pursuant to a Trust Agreement, as amended and
restated among First Union Trust Company, National Association, as Property
Trustee and Delaware Trustee, the administrative trustees named therein (the
"Administrative Trustees") and the Company (the "Trust Agreement"). The Trust
Preferred Securities will be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise pursuant
to a Guarantee Agreement (the "Guarantee Agreement") between the Company and
First Union Trust Company, National Association, as trustee (the "Guarantee
Trustee"). The proceeds of the sale of the Trust Preferred Securities will be
combined with the proceeds from the sale by the Trust to the company of the
Trust's common securities (the "Common Securities") and will be used to
purchase ___% junior subordinated debentures (the "Debentures") issued by the
Company pursuant to an indenture (the "Indenture") between the Company and
First Union Trust Company, National Association, as trustee (the "Indenture
Trustee").
The Offerors have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations (the "Rules
and Regulations") of the Commission thereunder (collectively, the "Act"), and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), a
registration statement on Form S-1 (File Nos. _________ and __________)
including a prospectus, relating to the Trust Preferred Securities, the
Debentures and the Guarantee Agreement. The registration statement, as amended
at the time when it became or becomes effective, including all financial
schedules (if any) and exhibits thereto, and all of the information
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(if any) deemed to be part of the registration statement at the time of its
effectiveness pursuant to Rule 430A under the Act is hereinafter referred to as
the "Registration Statement". The prospectus in the form first provided to the
Underwriters by the Offerors in connection with the offering and sale of the
Trust Preferred Securities (whether or not required to be filed pursuant to
Rule 424(b) under the Act is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus shall be provided to the Underwriters by
the Offerors for use in connection with the offering of the Trust Preferred
Securities that differs from the Prospectus (whether of not any such revised
prospectus is required to be filed by the Offerors pursuant to Rule 424(b)),
the term "Prospectus" shall refer to the revised prospectus from and after the
time it is first provided to the Underwriters for such use. Each preliminary
prospectus included in the Registration Statement prior to the time it became
or becomes effective is herein referred to as a "Preliminary Prospectus".
The Offerors hereby confirm their agreement with the Underwriters as
follows:
2. Representations and Warranties of the Offerors. The Offerors
jointly and severally represent and warrant to, and agree with, the several
Underwriters as of the date hereof and as of the Closing Date (as hereinafter
defined) that:
(a) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus relating to
the proposed offering of the Trust Preferred Securities nor
instituted or threatened any proceedings for that purpose.
The Registration Statement, on the date it was or is declared
effective by the Commission, each Preliminary Prospectus, on
the date of the filing thereof with the Commission, and the
Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission (or if not filed,
on the date provided by the Offerors to the Underwriters in
connection with the offering and sale of the securities) and
at the Closing Date conformed or will conform with the
requirements of the Act, the Rules and Regulations and the
Trust Indenture Act and the rules and regulations thereunder.
The Registration Statement, on the date it was or is declared
effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus) and at the Closing Date did not
or will not contain an untrue statement of material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
each Preliminary Prospectus; and on the date of the filing
thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing
thereof with the Commission (or if not filed, on the date
provided by the Offerors to the Underwriters in connection
with the offering and sale of the Securities) and at the
Closing Date did not and will not include an untrue statement
of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided that the foregoing shall not
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apply to statements in or omissions from the Registration
Statement and the Prospectus made or omitted in reliance
upon, and in conformity with, information relating to the
Underwriters furnished in writing to the Offerors by or on
behalf of the Underwriters with your consent expressly for
use therein. The Offerors hereby acknowledge for all purposes
under this Agreement that (A) the statements set forth under
the caption "Underwriting" in the Prospectus and (B) the
stabilization legend on page __ of the Prospectus constitute
the only written information furnished to the Offerors by or
on behalf of the Underwriters for use in the preparation of
the Registration Statement or the Prospectus or any amendment
or supplement thereto.
(b) No action has been taken with respect to either Offeror, and,
to the best knowledge of the Offerors, no statute, rule,
regulation or order has been enacted, adopted or issued by
any governmental agency that suspends the effectiveness of
the Registration Statement, prevents or suspends the use of
any Preliminary Prospectus or the Prospectus or suspends the
sale of the Trust Preferred Securities in any jurisdiction
referred to in Section 4(g) hereof. No injunction,
restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued with
respect to either Offeror that might prevent the issuance of
the Trust Preferred Securities, suspend the effectiveness of
the Registration Statement, prevent or suspend the use of any
Preliminary Prospectus or the Prospectus or suspend the sale
of the Trust Preferred Securities in any jurisdiction
referred to in Section 4(g) hereof; and every request of the
Commission, or any securities authority or agency of any
jurisdiction, for additional information (to be included in
the Registration Statement or the Prospectus or otherwise)
has been complied with in all material respects.
(c) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with
full trust power and authority to own property and to conduct
its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations
under this Agreement, the Trust Preferred Securities, the
Common Securities and the Trust Agreement and is authorized
to do business in each jurisdiction in which such
qualification is required, except where the failure to so
qualify would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations
of the Offerors and the Subsidiaries (as hereinafter defined)
taken as a whole. The Trust has conducted and will conduct no
business other than the transactions contemplated by the
Trust Agreement and described in the Prospectus. The Trust is
not a party to or otherwise bound by any agreement other than
those described in the Prospectus. The Trust is and will be
classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a
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corporation. The Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(d) The Company has been duly organized and is validly existing
and in good standing under the laws of Texas and is duly
registered as a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended ("BHCA"),
supervised by the Board of Governors of the Federal Reserve
System ("FRB"). Except as otherwise noted in the financial
statements, the Company does not directly or indirectly own
any stock or other equity interest in any corporation,
partnership, joint venture, unincorporated association or
other entity other than First Prosperity Bank, a Texas state
bank (the "Bank") and Prosperity Holdings, Inc. ("Holdings")
(the Bank and Holdings being collectively referred to herein
as the "Subsidiaries"). Each Subsidiary has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation. Each of the Offerors and each Subsidiary has
the power and authority, corporate or otherwise, to own or
lease its properties and conduct its business as described in
the Prospectus, and is duly qualified to transact business in
all jurisdictions in which the conduct of its business or its
ownership or leasing of property requires such qualification
and the failure so to qualify would have a material adverse
effect on the business or condition, financial or otherwise,
of the Offerors and the Subsidiaries, taken as a whole; and
no proceeding of which the Offerors have knowledge has been
instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification. All outstanding shares
of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and
non-assessable, and are owned, directly or indirectly, by the
Company free and clear of all liens, encumbrances and
security interests, except as otherwise noted to you. Except
as provided in the Registration Statement, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any
obligations into, shares of capital stock or ownership
interests in any of the Subsidiaries are outstanding.
(e) The Company owns directly or indirectly 100 percent of the
issued and outstanding capital stock of each of its
Subsidiaries, free and clear of any claims, liens,
encumbrances or security interests and all of such capital
stock has been duly authorized and validly issued and is
fully paid and nonassessable.
(f) The issued and outstanding shares of capital stock of the
Company as set forth in the Prospectus have been duly
authorized and validly issued, are fully paid and
nonassessable, and conform to the description thereof
contained in the Prospectus.
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(g) The Debentures have been duly authorized by the Company and
at the Closing Date will have been duly executed by the
Company and, when authenticated in the manner provided in the
Indenture and delivered 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 as enforceability of
the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general equity principles,
will be in the form contemplated by, and entitled to the
benefits of, the Indenture and will conform in all material
respects to the statements relating thereto in the
Prospectus.
(h) The Common Securities have been duly authorized by the Trust
and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued and (subject
to the terms of the Trust Agreement) fully paid and
nonassessable undivided beneficial interests in the assets of
the Trust and will conform to all statements relating thereto
contained in the Prospectus. The issuance of the Common
Securities is not subject to preemptive or other similar
rights. At the Closing Date 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 equity.
(i) The Trust Preferred Securities have been duly authorized by
the Trust Agreement and, when issued and delivered pursuant
to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and
non-assessable undivided beneficial interests in the Trust,
will be entitled to the benefits of the Trust Agreement and
will in all material respects conform to the statements
relating thereto contained in the Prospectus. The issuance of
the Trust Preferred Securities is not subject to preemptive
or other similar rights. Holders of Trust Preferred
Securities will be entitled to the same limitation of
personal liability under Delaware law as extended to
stockholders of a private corporation for profit.
(j) The Indenture, the Trust Agreement, the Guarantee Agreement
and the Agreement as to Expenses and Liabilities (the
"Expense Agreement") are in substantially the respective
forms filed as exhibits to the Registration Statement.
(k) The Company's obligations under the Guarantee Agreement are
subordinate and junior in right of payment to all Senior
Indebtedness (as defined in the Indenture) of the Company.
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(l) The Debentures are subordinate and junior in right of payment
to all Senior Indebtedness of the Company.
(m) Each of the Administrative Trustees is an employee of the
Company and has been duly authorized by the Company to
execute and deliver the Trust Agreement.
(n) Each of this Agreement, the Indenture, the Trust Agreement,
the Guarantee Agreement and the Expense Agreement has been
duly authorized, executed and delivered by the Company and/or
the Trust, as the case may be, and constitutes a legal, valid
and binding obligation of the Company and/or the Trust, as
the case may be, enforceable in accordance with its terms,
except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general equity principles. Each Offeror has full power and
authority to enter into this Agreement, the Indenture, the
Trust Agreement, the Guarantee Agreement and the Expense
Agreement, as the case may be, and, in the case of the Trust,
to authorize, issue and sell the Trust Preferred Securities
as contemplated by this Agreement, and each of the Indenture
and the Trust Agreement has been duly qualified under the
Trust Indenture Act and will conform in all material respects
to the statements relating thereto in the Registration
Statement and the Prospectus.
(o) The execution, delivery and performance of this Agreement,
the Indenture, the Trust Agreement, the Guarantee Agreement
and the Expense Agreement and the consummation of the
transactions contemplated hereby or thereby will not, alone
or upon notice or the passage of time or both, (A) require
any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other
governmental body or third party (except such as may be
required under the Act and the securities or blue sky laws of
the various states or by the National Association of
Securities Dealers, Inc. ("NASD")), (B) result in the
creation or imposition of any lien, charge or encumbrance
upon any of the properties or assets of either Offeror
pursuant to the terms and provisions of any agreement, lease,
contract, permit, license, franchise agreement, mortgage,
loan agreement, debenture, note, deed of trust, bond,
indenture or other evidence of indebtedness or any other
instrument or obligation (collectively, "Obligations and
Instruments") to which any of them is a party or by which any
of them or any of their respective properties or assets is
bound or affected, (C) conflict with or constitute a breach
or default under any Obligation or Instrument to which either
Offeror is a party or by which either of them or any of their
respective properties or assets is bound (except for such
creation, conflict, breach or default as would not have a
material adverse effect upon the condition (financial or
otherwise) or results of operations of the Offerors and the
Subsidiaries taken as a whole), or conflict with or result in
a breach or
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violation of any of the terms and provisions of the Company's
charter or by-laws, the Trust's Trust Agreement or its
Certificate of Trust, or (D) assuming compliance with the Act
and all applicable state securities or Blue Sky laws, violate
or conflict with any statute, judgment, decree, order, rule
or regulation (collectively, "Laws") applicable to the
Company or any of its properties or assets (except for such
violation or conflict as could not have a material adverse
effect upon the condition (financial or otherwise) or results
of operations of the Offerors and the Subsidiaries taken as a
whole). No action, suit or proceeding before any court or
arbitrator or any governmental body, agency or official
(domestic or foreign) is pending against or, to the best
knowledge of the Offerors, threatened against either Offeror,
that, if adversely determined, could reasonably be expected
to in any manner invalidate this Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement.
(p) The accountants who have expressed their opinions with
respect to certain of the financial statements and schedules
included in the Registration Statement are independent
accountants as required by the Act.
(q) The financial statements, together with the related notes and
schedules, contained in the Registration Statement and
Prospectus present fairly the consolidated financial
position, results of operations, shareholders' equity and
cash flows of the Company and its consolidated Subsidiaries
on the basis stated therein at the indicated dates and for
the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved, and all adjustments necessary for a fair
presentation of results for such periods have been made,
except as otherwise stated therein. The selected financial
and statistical data included in the Registration Statement
present fairly the information shown therein on the basis
stated in the Registration Statement and have been compiled
on a basis consistent with the financial statements presented
therein.
(r) Neither the Company nor any Subsidiary is in violation of its
charter. The Trust is not in violation of the Trust Agreement
or its certificate of trust filed with the State of Delaware
on October __, 1999 (the "Certificate of Trust"). Neither
Offeror nor any Subsidiary is in default under any consent
decree, or in default with respect to any material provision
of any Obligation or Instrument to which it is a party; and
there does not exist any state of facts which constitutes an
event of default as defined in such documents or which, with
notice or lapse of time or both, would constitute such an
event of default, in each case, except for defaults which
neither singly nor in the aggregate are material to the
Offerors and the Subsidiaries taken as a whole.
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(s) There are no material legal or governmental proceedings
pending, or to the Offerors' knowledge, threatened to which
either Offeror or any Subsidiary is or may be a party or of
which material property owned or leased by either Offeror or
any Subsidiary is or may be the subject, or related to
environmental or discrimination matters which are not
disclosed in the Prospectus.
(t) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to
purchase any of the Company's capital stock except as
disclosed in the Prospectus. Neither the filing of the
Registration Statement nor the offering or sale of the
Debentures or the Trust Preferred Securities as contemplated
by this Agreement gives rise to any rights for or relating to
the registration of any shares of capital stock of the
Company.
(u) The Offerors and the Subsidiaries have good and marketable
title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere
in the Prospectus), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those, if any,
reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Offerors and the
Subsidiaries taken as a whole. The Offerors and the
Subsidiaries hold their respective leased properties under
valid and binding leases.
(v) Neither Offeror has taken or will take, directly or
indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result,
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise, in stabilization or
manipulation of the price of the Trust Preferred Securities.
(w) Since the respective dates as of which information is given
in the Registration Statement, as it may be amended or
supplemented, (A) there has not been any material adverse
change, or any development involving a prospective material
adverse change, in or affecting the condition, financial or
otherwise, of either Offeror or any Subsidiary, or the
business affairs, management, financial position,
shareholders' equity or results of operations of either
Offeror or any Subsidiary, whether or not occurring in the
ordinary course of business, (B) there has not been any
transaction not in the ordinary course of business entered
into by either Offeror or any of the Subsidiaries which is
material to the Offerors and the Subsidiaries, taken as a
whole, other than transactions described or contemplated in
the Registration Statement, (C) the Offerors and the
Subsidiaries have not incurred any material liabilities or
obligations, which are not in the ordinary course of business
or which could result in a material reduction in the future
earnings of the Offerors and the Subsidiaries, (D) the
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Offerors and the Subsidiaries have not sustained any material
loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance, (E) there has
not been any change in the capital stock of the Company or
the Subsidiaries (other than upon the exercise of options and
warrants described in the Registration Statement), or any
material increase in the short-term or long-term debt
(including capitalized lease obligations) of the Offerors and
the Subsidiaries, taken as a whole, and (F) there has not
been any declaration or payment of any dividends or any
distributions of any kind with respect to the capital stock
of the Company or the Subsidiaries other than any dividends
or distributions described or contemplated in the
Registration Statement.
(x) There is no document or transaction of a character required
to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required.
(y) The Offerors and the Subsidiaries own and possess all right,
title and interest in and to, or have duly licensed from
third parties, all patents, patent rights, trade secrets,
inventions, know-how, trademarks, trade names, copyrights,
service marks and other proprietary rights ("Trade Rights")
material to the business of the Offerors and the Subsidiaries
taken as a whole. Neither of the Offerors nor any of the
Subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to such
material Trade Rights which has not been resolved or disposed
of and neither of the Offerors nor any of the Subsidiaries
has infringed, misappropriated or otherwise conflicted with
material Trade Rights of any third parties, which
infringement, misappropriation or conflict would have a
material adverse effect upon the condition (financial or
otherwise) or results of operations of the Offerors and the
Subsidiaries taken as a whole.
(z) The conduct of the business of the Offerors and the
Subsidiaries is in compliance in all respects with applicable
federal, state, local and foreign Laws, except where the
failure to be in compliance would not have a material adverse
effect upon the condition (financial or otherwise) or results
of operations of the Offerors and the Subsidiaries taken as a
whole.
(aa) Each of the Offerors and each Subsidiary has filed all
necessary federal and state income and franchise tax returns
and has paid all taxes shown as due thereon, and there is no
tax deficiency that has been, or to the knowledge of the
Offerors might be, asserted against either Offeror or any
Subsidiary or any of their respective properties or assets
that would or could be expected to have a material adverse
effect upon the condition
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(financial or otherwise) or results of operations of the
Offerors and the Subsidiaries taken as a whole.
(bb) The Offerors have filed an application to list the Trust
Preferred Securities on the Nasdaq National Market and have
received notification that the listing has been approved,
subject to notice of issuance of the Trust Preferred
Securities, as the case may be.
(cc) Neither of the Offerors nor any Subsidiary is an "investment
company", a company "controlled" by an "investment company"
or an "investment adviser" within the meaning of the
Investment Company Act of 1940, as amended ("Investment
Company Act").
(dd) The deposit accounts of the Bank are insured by the Federal
Deposit Insurance Corporation (the "FDIC") to the fullest
extent provided by law. No proceeding for the termination of
such insurance is pending or is threatened. Neither of the
Offerors nor any Subsidiary has received or is subject to any
directive or order from the FDIC, the FRB the Texas
Department of Banking or any other regulatory authority to
make any material change in the method of conducting their
respective businesses that has not been complied with in all
material respects.
(ee) Neither of the Offerors nor any Subsidiary does any business,
directly or indirectly, with the government of Cuba or with
any person or entity located in Cuba.
(ff) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for
assets; (C) access to records is permitted only in accordance
with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(gg) Other than as contemplated by this Agreement and as disclosed
in the Registration Statement, neither Offeror has incurred
any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions
contemplated hereby.
(hh) No report or application filed by the Company or any of its
Subsidiaries with the FDIC or the FRB, as of the date it was
filed, contained an untrue statement of a material fact or
omitted to state a material fact required to
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be stated therein or necessary to make the statements therein
not misleading when made or failed to comply with the
applicable requirements of the FDIC or the FRB, as the case
may be.
(ii) The Offerors and the Subsidiaries hold such permits,
licenses, franchises and authorizations of governmental or
regulatory authorities or third parties ("Permits") as are
necessary to own, lease and operate their respective
properties and assets and to conduct their respective
businesses, except where the failure to have any such Permit
would not have a material adverse effect upon the condition
(financial or otherwise) or results of operations of the
Offerors and the Subsidiaries taken as a whole. The Offerors
and the Subsidiaries have fulfilled and performed all of
their respective material obligations with respect to such
Permits, and no event has occurred that allows, or after
notice or lapse of time or both, would allow revocation or
termination thereof or result in any other material
impairment of the rights of the holder of any such Permit.
(jj) Deloitte & Touche LLP, the accounting firm that has certified
or reviewed, or shall certify or review, the financial
statements and supporting schedules filed or to be filed with
the Commission as part of the Registration Statement and the
Prospectus, is an independent public accounting firm with
respect to the Offerors and the Subsidiaries as required by
the Act.
(kk) The Offerors have not distributed and will not distribute any
prospectus or other offering material in connection with the
offering and sale of the Trust Preferred Securities other
than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by the
Company.
(ll) The Offerors expect that the Trust Preferred Securities will
qualify as "tier 1" capital (as defined in 12 C.F.R. Part 325
and subject to the limitations set forth therein).
39. Purchase, Sale and Delivery of Trust Preferred Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Trust agrees to issue
and sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Trust, at a purchase price per Trust Preferred
Security of $10.00, the number of Trust Preferred Securities set forth opposite
the name of such Underwriter on Schedule A hereto. As compensation to the
Underwriters for their commitments hereunder and in view of the fact that the
proceeds of the sale of the Trust Preferred Securities (together with the
proceeds from the sale by the Trust to the Company of the Common Securities)
will be used to purchase the Debentures, the Company hereby agrees to pay at
the Closing Date to the Underwriters a commission per Trust Preferred Security
equal to $0.375 per Trust Preferred Security, or $450,000 in the aggregate.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted
under Rule 15c6-1 under the Exchange Act (or the third business day if required
under Rule 15c6-1 under the
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Exchange Act or unless postponed in accordance with the provisions of Section
10) following the date the Registration Statement becomes effective, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriters and the Offerors, the Offerors will deliver to you at
the offices of counsel for the Underwriters or through the facilities of The
Depository Trust Company for the accounts of the several Underwriters,
certificates representing the Trust Preferred Securities to be sold by them,
respectively, against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer or otherwise, to
the Company. Such time of delivery and payment is herein referred to as the
"Closing Date." The certificates for the Trust Preferred Securities so to be
delivered will be in such denominations and registered in such names as you
request by notice to the Offerors prior to 10:00 A.M., Chicago Time, on the
second business day preceding the Closing Date, and will be made available at
the Company's expense for checking and packaging by the Representative at 10:00
A.M., Chicago Time, on the business day preceding the Closing Date. Payment for
the Trust Preferred Securities so to be delivered shall be made at the time and
in the manner described above at the offices of counsel for the Underwriters.
You have advised the Offerors that each Underwriter has authorized you
to accept delivery of its Trust Preferred Securities, to make payment and to
receipt therefor. You, individually and not as the Representative of the
Underwriters, may make payment for any Trust Preferred Securities to be
purchased by any Underwriter whose funds shall not have been received by you by
the Closing Date for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
40. Covenants of the Company. The Offerors jointly and severally
covenant and agree that:
(a) They will, if the Registration Statement has not heretofore
become effective under the Act, file an amendment to the
Registration Statement or, if necessary pursuant to Rule 430A
under the Act, a post-effective amendment to the Registration
Statement, as soon as practicable after the execution and
delivery of this Agreement, and will use their best efforts
to cause the Registration Statement or such post-effective
amendment to become effective at the earliest possible time;
and the Offerors will comply fully and in a timely manner
with the applicable provisions of Rule 424(b) and Rule 430A
under the Act.
(b) They will advise you promptly and, if requested by you,
confirm such advice in writing, (i) when the Registration
Statement has become effective, if and when the Prospectus is
sent for filing pursuant to Rule 424 under the Act and when
any post-effective amendment to the Registration Statement
becomes effective, (ii) of the receipt of any comments from
the Commission that relate to the Registration Statement or
requests by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or
for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of
the
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Registration Statement, or of the suspension of qualification
of the Trust Preferred Securities for offering or sale in any
jurisdiction, or the initiation or, to the best knowledge of
the Offerors, threat of any proceedings for such purpose by
the Commission or any state securities commission or other
regulatory authority, and (iv) of the happening of any event
or information becoming known during the period referred to
in paragraph (e) below that makes any statement of a material
fact made in the Registration Statement untrue or that
requires the making of any additions to or changes in the
Registration Statement (as amended or supplemented from time
to time) in order to make the statements therein not
misleading or that makes any statement of a material fact
made in the Prospectus (as amended or supplemented from time
to time) untrue or that requires the making of any additions
to or changes in the Prospectus (as amended or supplemented
from time to time) in order to make the statements therein,
not misleading; if at any time the Commission shall issue or
institute proceedings (or threaten to institute any such
proceedings) to issue any stop order suspending the
effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall
issue or institute proceedings (or threaten to institute
proceedings) to issue an order suspending the qualification
or exemption of the Securities under any state securities or
blue sky laws, the Offerors shall use best efforts to obtain
the withdrawal or lifting of such order at the earliest
possible time;
(c) They will furnish to you without charge one signed copy of
the Registration Statement as first filed with the Commission
and of each amendment to it, including all exhibits filed
therewith, and will furnish to you and each Underwriter
designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to
it, without exhibits, as you may reasonably request.
(d) They will not file any amendment or supplement to the
Registration Statement, whether before or after the time when
it becomes effective, or make any amendment or supplement to
the Prospectus of which you shall not previously have been
advised and provided a copy a reasonable period of time prior
to the filing thereof or to which you or your counsel shall
reasonably object, and they will prepare and file with the
Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the
Prospectus that may be necessary or advisable in connection
with the distribution of the Securities by you in your or
your counsel's opinion, and will use best efforts to cause
the same to become effective as promptly as possible.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as a
prospectus is required by the Act to be delivered in
connection with the sales by an underwriter or a dealer (in
the
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opinion of your counsel), they will furnish to each
Underwriter and dealer without charge as many copies of the
Prospectus (and any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably
request for the purposes contemplated by the Act, and the
Offerors consent to the use of the Prospectus and any
amendment or supplement thereto by any Underwriter or any
dealer, both in connection with the offering or sale of the
Securities and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in
connection therewith.
(f) If during the period specified in paragraph (e) any event
shall occur or information become known as a result of which
in the opinion of your counsel it becomes necessary to amend
or supplement the Prospectus in order to make the statements
therein as of the date the Prospectus is delivered to a
purchaser, in light of the circumstances under which such
statements were made, not misleading, or it is necessary to
amend or supplement the Prospectus to comply with any law,
forthwith to prepare and, subject to paragraph (d) above,
they will file with the Commission at the sole expense of the
Company an appropriate amendment or supplement to the
Prospectus so that the statements of any material facts in
the Prospectus, as so amended and supplemented, will not when
it is so delivered, in light of the circumstances under which
such statements are made, be misleading, or so that the
Prospectus will comply with law and it will furnish to the
Underwriters and to such dealers as the Underwriters shall
specify, at the sole expense of the Company, such number of
copies thereof as such Underwriters or dealers may reasonably
request.
(g) Prior to any public offering of the Trust Preferred
Securities, they will cooperate with you and counsel for the
Underwriters in connection with the registration or
qualification of the Trust Preferred Securities for offer and
sale by the several Underwriters and by dealers under the
state securities or blue sky laws of such jurisdictions as
you may request (provided that the Offerors shall not be
obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to take
any action which would subject them to general consent to
service of process in any jurisdiction in which they are not
now so subject), and the Offerors will continue such
qualification in effect so long as required by law for the
distribution of the Trust Preferred Securities and will file
such consents to service of process or other documents as may
be necessary in order to effect such registration or
qualification (provided that the Offerors shall not be
obligated to take any action that would subject it to general
consent to service of process in any jurisdiction in which
they are not now so subject);
(h) They will make generally available to their security holders,
as soon as it is practicable to do so, but in any event not
later than 18 months after the effective date of the
Registration Statement, an earnings statement (which
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need not be audited) in reasonable detail, covering a period
of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings
statement shall satisfy the requirements of Section 1l(a) of
the Act and Rule 158 thereunder and will advise you in
writing when such statement has been so made available.
(i) During the period of five years after the date of this
Agreement, they will furnish to you a copy (i) as soon as
practicable after the filing thereof, of each report filed by
either of the Offerors with the Commission, any securities
exchange or the NASD; (ii) as soon as practicable after the
release thereof, of each material press release in respect of
either of the Offerors; (iii) as soon as available, of each
report of the Company mailed to shareholders; and (iv) as
soon as available, such other publicly available information
concerning the Offerors as you may reasonably request.
(j) They will use the net proceeds received by them from the sale
of the Trust Preferred Securities and the Debentures in the
manner specified in the Prospectus and will file such reports
with the Commission with respect to the application of the
proceeds therefrom as may be required in accordance with Rule
463 under the Act and will furnish you copies of any such
reports as soon as practicable after the filing thereof.
(k) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom
in reliance upon Rule 430A, then immediately following the
execution of this Agreement, they will prepare, and file or
transmit for filing with the Commission in accordance with
such Rule 430 and Rule 424(b), copies of an amended
Prospectus, or, if required by such Rule 430A, a
post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information
so omitted.
(l) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq
National Market.
13. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective as to all of its
provisions or is terminated, the Offerors agree to pay (i) all costs, fees and
expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Offerors' obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Offerors and of the Offerors' independent
accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein
and this Agreement, (ii) all costs, fees and expenses (including legal fees and
disbursements not to exceed $5,000 of counsel for the
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Underwriters) incurred by the Underwriters in connection with qualifying or
registering all or any part of the Trust Preferred Securities for offer and
sale under blue sky laws, including the preparation of a blue sky memorandum
relating to the Trust Preferred Securities and clearance of such offering with
the NASD; and (iii) all fees and expenses of the Property Trustee, the Delaware
Trustee and the Indenture Trustee, printing of the certificates for the Trust
Preferred Securities and all transfer taxes, if any, with respect to the sale
and delivery of the Trust Preferred Securities to the several Underwriters.
14. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Trust Preferred
Securities on the Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Offerors herein set forth as
of the date hereof and as of the Closing Date, to the accuracy of the
statements of officers or trustees of the Offerors made pursuant to the
provisions hereof, to the performance by the Offerors of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than
1:00 P.M., Chicago Time, on the first full business day after
the date of this Agreement, or such later time as shall have
been consented to by you but in no event later than 1:00
P.M., Chicago Time, on the third full business day following
the date hereof; and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose
shall have been instituted or shall be pending or, to the
knowledge of the Offerors or you, shall be contemplated by
the Commission. If the Company has elected to rely upon Rule
430A, the information concerning the price-related
information shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed period
and the Offerors will provide evidence satisfactory to the
Representative of such timely filing (or a post-effective
amendment providing such information shall have been filed
and declared effective in accordance with the requirements of
Rules 430A and 424(b)).
(b) The Trust Preferred Securities shall have been qualified for
sale under the blue sky laws of such states as shall have
been specified by the Representative.
(c) The legality and sufficiency of the authorization, issuance
and sale of the Trust Preferred Securities hereunder, the
execution and delivery of this Agreement and all corporate
proceedings and other legal matters incident thereto, and the
form of the Registration Statement and the Prospectus (except
financial statements) shall have been approved by counsel for
the Underwriters exercising reasonable judgment, and no
Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of material
fact, or omits to state a fact that in your opinion is
material and is
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required to be stated therein or is necessary to make the
statements therein not misleading.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any material change, or any
material development involving a prospective change, in or
affecting particularly the business or properties of the
Offerors or the Subsidiaries, whether or not arising in the
ordinary course of business, that, in your judgment, makes it
impractical or inadvisable to proceed with the public
offering or purchase of the Trust Preferred Securities as
contemplated hereby.
(e) There shall have been furnished to you, as Representative of
the Underwriters, on the Closing Date, except as otherwise
expressly provided below:
(i) An opinion of Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P.,
Houston, Texas, counsel for the Company, addressed
to the Underwriters and dated the Closing Date, to
the effect that:
(1) The Company has been duly organized and is
validly existing and in good standing under the laws of
Texas. Each Subsidiary has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation. Each of the Offerors
and each Subsidiary has the power and authority, corporate or
otherwise, to own or lease its properties and conduct its
business as described in the Prospectus, and is duly
qualified to transact business in all jurisdictions in which
the conduct of its business or its ownership or leasing of
property requires such qualification and the failure so to
qualify would have a material adverse effect on the business
or condition, financial or otherwise, of the Offerors and the
Subsidiaries, taken as a whole.
(2) Each Offeror has all necessary power and
authority, corporate, trust or otherwise, to enter into and
perform this Agreement, the Indenture, the Trust Agreement,
the Guarantee Agreement and the Expense Agreement, as
applicable, and to effect the transactions contemplated
hereby or thereby. The performance of the Offerors'
respective obligations hereunder and under the Indenture, the
Trust Agreement, the Guarantee Agreement and the Expense
Agreement, as applicable, have been duly authorized by all
necessary action. This Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Expense Agreement
have been duly executed and delivered by and on behalf of the
Trust and/or the Company, as applicable, and, assuming due
authorization, execution and delivery of such agreements by
the other parties thereto, constitute legal, valid and
binding agreements of the Trust and/or the Company, as
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applicable, enforceable in accordance with their respective
terms, except as enforceability of the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general applicability
relating to or affecting creditors' rights generally and by
general equity principles. No approval, consent, order,
authorization, designation, declaration or filing by or with
any regulatory, administrative or other governmental body or,
to the best of such counsel's knowledge, after due inquiry,
third party, is necessary in connection with the execution
and delivery of this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement or the Expense Agreement
and the consummation of the transactions contemplated herein
or therein or as contemplated by the Prospectus (other than
as may be required by the Trust Indenture Act, the NASD or as
required by state securities or blue sky laws, as to which
such counsel need express no opinion) except such as have
been obtained or made, with counsel specifying the same.
(3) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
"Capitalization." All of the shares of outstanding capital
stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and were not issued
in violation of any preemptive rights or, to the best of such
counsel's knowledge, other rights to subscribe for or
purchase securities. Except as set forth in the Registration
Statement and the Prospectus, to the best of such counsel's
knowledge, no options, warrants or other rights to convert
any obligation into, or exchange any securities for, shares
of capital stock or ownership interests in the Company are
outstanding.
(4) To the best of such counsel's knowledge, after
due inquiry, neither the filing of the Registration Statement
or any amendment thereto nor the offer and sale of the
Securities to the Underwriters as contemplated by this
Agreement gives rise to any rights, nor do any rights exist,
for or relating to the registration under the Act of any
securities of either Offeror.
(5) The Registration Statement has become effective
under the Act, the Prospectus has been filed as required by
this Agreement, if necessary, and to the best of such
counsel's knowledge: (a) after telephonic inquiry of the
Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and (b) no
proceedings for that purpose are pending or have been
initiated or threatened by the Commission. The Registration
Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant
to Rule 430A, if applicable), the Prospectus and each
amendment or supplement thereto (except for the financial
statements and other statistical or financial data included
therein, as to which such counsel need express no
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opinion) comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(6) The descriptions in the Registration Statement
and Prospectus of contracts, instruments and other documents
filed as exhibits to the Registration Statement, and the
description of legal and governmental proceedings, are
accurate in all material respects, and such counsel does not
know of any proceedings required to be described in the
Prospectus that are not described, or of any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that were not
described and filed as required.
(7) Neither the filing of the Registration Statement
or any amendment nor the execution and performance of this
Agreement, the Indenture, the Trust Agreement the Guarantee
Agreement or the Expense Agreement, nor the consummation of
the transactions contemplated herein or therein, will
contravene any of the provisions of, or result in a default
under (nor, to the best of such counsel's knowledge, has any
event occurred which with notice or lapse of time, or both,
would constitute a breach or default under), any Obligations
and Instruments to which the Trust or the Company is a party
or by which their property is bound (except for such
contravention or default which would not have a material
adverse effect on the business or condition, financial or
otherwise, of the Offerors and the Subsidiaries, taken as a
whole), or violate any of the provisions of the charter or
by-laws of the Company or the Certificate of Trust of the
Trust, or violate any Laws known to such counsel.
(8) Neither of the Offerors nor any Subsidiary is an
"investment company", a company "controlled" by an
"investment company" or an "investment adviser" within the
meaning of the Investment Company Act.
(9) The statements in the Prospectus under the
caption "Description of the Trust Preferred Securities,"
"Description of the Debentures," "Description of the
Guarantee" and "Relationship among the Trust Preferred
Securities, the Debentures and the Guarantee," insofar as
such statements constitute matters of law applicable to the
Offerors or summaries of documents, fairly present the
information required to be included therein in all material
respects.
(10) All of the issued and outstanding Common
Securities of the Trust are owned by the Company, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(11) Each of the Indenture, the Trust Agreement and
the Guarantee Agreement has been duly qualified under the
Trust Indenture Act.
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(12) The Debentures are subordinate and junior in
right of payment to all Senior Indebtedness of the Company.
(13) No Tax Event, Capital Treatment Event or
Investment Company Event (each as defined in the Indenture)
has occurred.
(14) The statements set forth in the Prospectus
under the caption "Federal Income Tax Consequences"
constitute a fair and accurate summary of the matters
addressed therein, based upon current law and the assumptions
stated or referred to therein.
(15) To the best of such counsel's knowledge and
information after due inquiry, the Trust is not required to
be authorized to do business in any other jurisdiction, and
the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Offerors, representatives of the
independent public accountants of the Company and
representatives of the Underwriters and their counsel, at
which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and
the Prospectus (except as set forth above) and has not made
any independent check or verification thereof, on the basis
of the foregoing (relying as to materiality upon the
statements of officers and other representatives of the
Company), no facts have come to such counsel's attention that
lead such counsel to believe that either the Registration
Statement or any amendment (including any post-effective
amendment) thereto at the time such Registration Statement or
amendment became effective, and as of the Closing Date,
contained or contains 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, in light
of the circumstances under which they were made, not
misleading, or that the Prospectus or any amendment or
supplement thereto as of their respective dates and as of the
Closing Date contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, except that such counsel need
express no opinion with respect to the financial statements,
schedules and other financial data included in the
Registration Statement or the Prospectus.
(ii) An opinion of __________, dated the Closing Date,
addressed to the Underwriters, counsel for the Property Trustee under
the Trust Agreement, the Indenture Trustee under the Indenture and the
Guarantee Trustee under the Guarantee Agreement, to the effect that:
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(1) First Union Trust Company, National Association,
is duly incorporated and is validly existing in good standing
as a banking corporation under the laws of the State of
Delaware.
(2) First Union Trust Company, National Association
has the power and authority to execute, deliver and perform
its obligations under the Indenture, the Trust Agreement and
the Guarantee Agreement.
(3) Each of the Indenture, the Trust Agreement and
the Guarantee Agreement has been duly authorized, executed
and delivered by First Union Trust Company, National
Association, and constitutes a legal, valid and binding
obligation of it, enforceable against it in accordance with
their respective terms.
(4) The execution, delivery and performance by First
Union Trust Company, National Association of the Indenture,
Trust Agreement and the Guarantee Agreement do not conflict
with or constitute a breach of the charter or by-laws of
Bankers Trust Company or Bankers Trust (Delaware), as the
case may be.
(5) No consent, approval or authorization of, or
registration with or notice to, any governmental authority or
agency of the State of Delaware or the United States
governing the banking or trust powers of First Union Trust
Company, National Association is required for the execution,
delivery or performance by it of the Indenture, the Trust
Agreement or the Guarantee Agreement.
(iii) An opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to the Offerors, dated
the Closing Date, to the effect that:
(1) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Act, and all filings required as of the date hereof
under the Delaware Act with respect to the creation and valid
existence of the Trust as a business trust have been made.
(2) Under the Trust Agreement and the Delaware Act,
the Trust has the trust power and authority to own property
and to conduct its business, all as described in the
Prospectus.
(3) The Trust Agreement constitutes a valid and
binding obligation of the Company and each of the Property
Trustee and the Administrative Trustees, and is enforceable
against the Company and each of the Property Trustee and the
Administrative Trustees in accordance with its terms.
(4) Under the Trust Agreement and the Delaware Act,
the Trust has the trust power and authority (i) to execute
and deliver, and to perform its obligations under, this
Agreement, and (ii) to issue, and to perform its
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obligations under, this Agreement, and (iii) to issue, and to
perform its obligations under, the Trust Preferred Securities
and the Common Securities.
(5) Under the Trust Agreement and the Delaware Act,
the execution and delivery by the trust of this Agreement,
and the performance by it of its obligations hereunder, have
been duly authorized by all necessary trust action on the
part of the Trust.
(6) The Trust Preferred Securities and the Common
Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and fully paid and
non-assessable undivided beneficial interests in the assets
of the Trust. The respective holders of the Trust Preferred
Securities and the Common Securities, as beneficial owners of
the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General
Corporation Law of the State of Delaware.
(7) Under the Trust Agreement and the Delaware Act,
the issuance of the Trust Preferred Securities and the Common
Securities is not subject to preemptive or similar rights.
(8) The issuance and sale by the Trust of the Trust
Preferred Securities and the Common Securities, the purchase
by the Trust of the Debentures, the execution, delivery and
performance by the Trust of this Agreement, the consummation
by the Trust of the transactions contemplated by this
Agreement and compliance by the Trust with its obligations
under this Agreement do not violate (A) any of the provisions
of the Certificate of Trust or the Trust Agreement, or (B)
any applicable Delaware law or administrative regulation.
(iv) Such opinion of Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Chicago, Illinois, counsel for the Underwriters,
dated the Closing Date, with respect to such matters as you may
reasonably require.
(v) A certificate of the chief executive officer and
the principal financial officer of the Company, dated the Closing
Date, to the effect that:
(1) the representations and warranties of the
Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best
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knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated
under the Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(vi) A certificate of the Administrative Trustees,
dated the Closing Date, to the effect that:
(1) the representations and warranties of the
Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best knowledge of the respective signers,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Trust as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(vii) In connection with the execution of this
Agreement and on the Closing Date, a "cold comfort" letter from
Deloitte & Touche LLP, dated as of each such date, in form and
substance satisfactory to you, with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus. There shall not have been
any change or decrease specified in the letters referred to in this
subparagraph which makes it impractical or inadvisable in the judgment
of the Representative to proceed with the public offering or purchase
of the Trust Preferred Securities as contemplated hereby.
(viii) Such further certificates and documents as the
Representative may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the
Underwriters, which approval shall not be unreasonably withheld. The Offerors
shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request.
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If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement
at your election will terminate upon notification to the Offerors without
liability on the part of any Underwriter or the Offerors, except for the
expenses to be paid or reimbursed by the Company pursuant to Sections 5 and 7
hereof and except to the extent provided in Section 9 hereof.
7. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Trust Preferred Securities on the Closing Date is not
consummated because any condition of the Underwriters' obligations hereunder is
not satisfied or because of any refusal, inability or failure on the part of
either Offeror to perform any agreement herein or to comply with any provision
hereof, unless such failure to satisfy such condition or to comply with any
provision hereof is due to the default or omission of any Underwriter, the
Offerors jointly and severally agree to reimburse you and the other
Underwriters upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
you and them in connection with the proposed purchase and the sale of the Trust
Preferred Securities. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 5
and Section 9 shall at all times be effective and shall apply.
8. Effectiveness of Registration Statement. You and the Offerors will
use your and their best efforts to cause the Registration Statement to become
effective, if it has not yet become effective, and to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting
thereof.
9. Indemnification. (a) The Offerors jointly and severally agree to
indemnify and hold harmless each Underwriter, each officer and director thereof
and each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such person may become subject
under the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A,
if applicable, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse
each Underwriter and each such person for any legal or other expenses
reasonably incurred by such Underwriter or such person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Offerors will not be liable in any such case to the
extent that (i) any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Offerors by or
on behalf of any Underwriter through the Representative, specifically for use
therein; or (ii) if such statement or omission was contained
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or made in any Preliminary Prospectus and corrected in the Prospectus and (1)
any such loss, claim, damage or liability suffered or incurred by any
Underwriter or person resulted from an action, claim or suit by any person who
purchased Trust Preferred Securities which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the Prospectus to such person at or prior to the confirmation
of the sale of such Trust Preferred Securities in any case where such delivery
is required by the 193 Act. In addition to their other obligations under this
Section 9(a), the Offerors agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in this Section 9(a), they will reimburse the
Underwriters on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Offerors'
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Offerors may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Offerors and each of their trustees, officers and directors who signed the
Registration Statement, and each person, if any, who controls the Offerors
within the meaning of the Act or the Exchange Act, against any losses, claims,
damages or liabilities to which the Offerors, or any such person may become
subject under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with Section 4 of this Agreement or any other written information
furnished to the Offerors by such Underwriter through the Representative
specifically for use in the preparation thereof; and will reimburse any legal
or other expenses reasonably incurred by the Offerors or any such person in
connection with investigating or defending any such loss, claim, damage,
liability or action. In addition to their other obligations under this Section
9(b), the Underwriters agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 9(b), they will reimburse the Offerors on a monthly
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Offerors for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
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(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying
parties may have conflicting interests which would make it inappropriate for
the same counsel to represent both of them, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defense
and otherwise to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed such counsel in connection with the assumption of legal defense in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, approved by the Representative in
the case of paragraph (a) representing all indemnified parties not having
different or additional defenses or potential conflicting interest among
themselves who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable
to an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors and
the Underwriters from the offering of the Trust Preferred Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Offerors and
the Underwriters in
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connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Offerors and
the Underwriters shall be deemed to be in the same proportion in the case of
the Offerors as the total price paid to the Offerors for the Trust Preferred
Securities by the Underwriters (net of underwriting discount but before
deducting expenses), and in the case of the Underwriters as the underwriting
discount received by them bears to the total of such amounts paid to the
Offerors and received by the Underwriters as underwriting discount in each case
as contemplated by the Prospectus. The relative fault of the Offerors and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the 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 amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Trust Preferred Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section are several in proportion to their
respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of
this Agreement.
10. Default of Underwriters. It shall be a condition to the agreement
and obligation of the Offerors to sell and deliver the Trust Preferred
Securities hereunder, and of each Underwriter to purchase the Trust Preferred
Securities hereunder, that, except as hereinafter in this paragraph provided,
each of the Underwriters shall purchase and pay for all Trust Preferred
Securities agreed to be purchased by such Underwriter hereunder upon tender to
the Representative of all such Trust Preferred Securities in accordance with
the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Trust Preferred Securities hereunder on the Closing
Date and the aggregate number of Trust Preferred Securities which such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10 percent of the total number of Trust Preferred Securities which the
Underwriters are obligated to purchase on the Closing Date, the Representative
may make arrangements satisfactory to the Offerors for the purchase of such
Trust Preferred Securities by other persons, including any of the Underwriters;
but if no such arrangements are made by such date, the nondefaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the
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Trust Preferred Securities which such defaulting Underwriters agreed but failed
to purchase on such date. If any Underwriter or Underwriters so default and the
aggregate number of Trust Preferred Securities with respect to which such
default or defaults occur is more than the above percentage and arrangements
satisfactory to the Representative and the Offerors for the purchase of such
Trust Preferred Securities by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of
any nondefaulting Underwriter or the Offerors, except for the expenses to be
paid by the Offerors pursuant to Section 5 hereof and except to the extent
provided in Section 9 hereof.
In the event that Trust Preferred Securities to which a default
relates are to be purchased by the nondefaulting Underwriters or by another
party or parties, the Representative or the Company shall have the right to
postpone the Closing Date for not more than seven business days in order that
the necessary changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
11. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by you prior to the Closing Date, if (i) trading in securities on
the New York Stock Exchange shall have been suspended or minimum prices shall
have been established on such exchange, (ii) a banking moratorium shall have
been declared by Texas or United States authorities, (iii) there shall have
been any change in financial markets or in political, economic or financial
conditions which, in the opinion of the Representative, either renders it
impracticable or inadvisable to proceed with the offering and sale of the Trust
Preferred Securities on the terms set forth in the Prospectus or materially and
adversely affects the market for the Trust Preferred Securities, or (iv) there
shall have been an outbreak of major armed hostilities between the United
States and any foreign power which in the opinion of the Representative makes
it impractical or inadvisable to offer or sell the Trust Preferred Securities.
Any termination pursuant to this Section 11 shall be without liability on the
part of any Underwriter to the Offerors or on the part of the Offerors to any
Underwriter (except for expenses to be paid or reimbursed pursuant to Section 5
hereof and except to the extent provided in Section 9 hereof).
12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Offerors and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Offerors or
any of its or their trustees, partners, principals, members, officers or
directors or any controlling person and will survive delivery of and payment
for the Trust Preferred Securities sold hereunder.
13. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters will be mailed, delivered or telegraphed and confirmed
to you c/▇ ▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇; if sent to
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the either of the Offerors will be mailed, delivered or telegraphed and
confirmed to the such Offeror at its principal offices.
14. Successors. This Agreement and the Pricing Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 11, and
no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Trust Preferred Securities
as such from any of the Underwriters merely by reason of such purchase.
15. Partial Unenforceability. If any section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
such determination shall not affect the validity or enforceability of any other
section, paragraph or provision hereof.
16. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Offerors and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
PROSPERITY BANCSHARES, INC.
By
-----------------------------------
Name:
Title:
PROSPERITY CAPITAL TRUST I
By
-----------------------------------
Name:
Title: Administrative Trustee
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇ ▇▇▇▇▇▇ INVESTMENTS, INC.
Acting as Representative of the several
Underwriters named in Schedule A
By
---------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: First Vice President
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SCHEDULE A
NUMBER OF TRUST
PREFERRED SECURITIES
UNDERWRITER TO BE PURCHASED
----------- --------------------
▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc.
TOTAL 1,200,000
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1
