EXHIBIT 1.1
STERLING BANCSHARES, INC.
(a Texas Corporation) and
Sterling Bancshares Capital Trust III
(a Delaware statutory business trust)
$31,250,000
8.30% Cumulative Trust Preferred Securities
UNDERWRITING AGREEMENT
September 23, 2002
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
As the Underwriters,
c/x Xxxx Xxxxx Xxxx Xxxxxx Incorporated
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Managing Director
Ladies and Gentlemen:
Sterling Bancshares Capital Trust III (the "Trust"), a statutory
business trust organized under the Delaware Statutory Trust Act, 12 Del. C.
xx.xx. 3801 et seq. (the "Delaware Trust Act"), and Sterling Bancshares, Inc., a
Texas corporation (the "Company" and together with the Trust, the "Offerors"),
confirm their agreement (the "Agreement") with Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated ("Xxxx Xxxxx") and Xxxxxx, Xxxxxxxx & Company, Incorporated
("Xxxxxx Xxxxxxxx") (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, of an aggregate of 1,250,000 8.30% Cumulative Trust Preferred
Securities (liquidation amount $25 per preferred security) ("Preferred
Securities").
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 Deutsche Bank Trust
Company Americas (formerly known as 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 8.30% Junior
Subordinated Deferrable Interest Debentures due 2032 (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, Deutsche Bank Trust Company Americas (formerly known as Bankers Trust
Company), as property trustee (the "Property Trustee"), Deutsche Bank Trust
Company (Delaware) (formerly known as Bankers Trust (Delaware)), as Delaware
trustee (the "Delaware Trustee"), and Xxxxxx Xxxxxxxx, X. Xxxxxx Bridgwater and
Xxxxxx X. Xxxxxx, Xx., 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 undivided beneficial interests
in the assets of the Trust. The Subordinated Debentures will be issued pursuant
to that certain Indenture dated March 21, 2001, between the Company and Deutsche
Bank Trust Company Americas (formerly known as Bankers Trust Company), as
debenture trustee (the "Debenture Trustee"), as supplemented by a supplemental
indenture, to be dated as of the Closing Time (collectively, the "Indenture"),
between the Company and 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 previously filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3, as amended
(Nos. 333-55724, 000-00000-00 and 333-55724-02) covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus. The Offerors have filed with the
Commission a related preliminary prospectus supplement. 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, (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) or (iii) a
final prospectus in accordance with Rules 415 and 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
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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." The final prospectus and prospectus supplement 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 September 17, 2002 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 ("XXXXX").
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, and agree with, each Underwriter
as of the date of this Agreement and as of the Closing Time:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the 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 by the Commission,
and any request on the part of the Commission for additional information has
been complied with.
a. At the respective times the Registration
Statement and any post-effective amendments thereto became effective, the
Registration Statement and any amendments and supplements thereto complied 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
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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, and as of
the date of this Agreement, the Registration Statement and any amendments or
supplements thereto, as amended and supplemented, complies and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and does 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; and
b. At the time the Prospectus or any amendments
or supplements were filed, neither the Prospectus nor any amendment or
supplement thereto included an untrue statement of a material fact or omitted 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; and, as
of the date of this Agreement, as amended and supplemented, neither the
Prospectus nor any amendments or supplements thereto include or will include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in 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 to (A)
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 either of Xxxx Xxxxx or Xxxxxx Xxxxxxxx expressly for use
in the Registration Statement or Prospectus (or any supplement thereto) and (B)
that part of the Registration Statement which shall constitute the Statements of
Eligibility and Qualification (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, each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with this
offering will, at the time of such delivery, be substantively identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, 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 Statement when it
became effective and in the Registration 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. Deloitte & Touche LLP,
which has certified the Company's historical consolidated financial statements
included or incorporated by
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reference in the Registration Statement and the Prospectus, are independent
public accountants of the Company within the meaning of the 1933 Act and the
1933 Act Regulations.
(iv) Financial Statements. The consolidated historical
financial statements of the Company and its consolidated subsidiaries included
in the Registration Statement and the Prospectus, together with the related
schedules and notes, 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 shareholders' 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 consolidated 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 Registration
Statement and the Prospectus.
(v) No Material Adverse Change in Business. Since the
date of the latest audited financial statements included in the Prospectus and
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 and the Company's preferred 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 each of the Company and Sterling
Bancorporation, Inc., a Delaware corporation ("Bancorporation") is duly
registered as a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended ("BHCA") 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.
Each of the Company and Bancorporation has full corporate power and authority 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 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.
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(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 Bancorporation, the Bank and Sterling Capital
Mortgage Company, a Texas corporation ("SCMC"). The subsidiaries of the Company
other than the Bank or SCMC 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.
a. Each of the Company's subsidiaries other than
the Bank, the Trust, Sterling Bancshares Capital Trust I ("Trust I"), Sterling
Bancshares Capital Trust II ("Trust II") and Sterling Bancshares Statutory Trust
One ("Trust One") has been duly organized and is validly existing as a
corporation or limited partnership, as the case may be, in good standing under
the laws of the jurisdiction of its incorporation or organization and has
corporate or partnership 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 corporate 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.
b. Each of Trust I, Trust II and Trust One has
been duly created and is validly existing and in good standing as a statutory
trust under the laws of the jurisdiction of its organization and has the power
and authority to own its properties and to conduct its business as now being
conducted.
(x) Capital Stock Duly Authorized and Validly Issued.
All of the issued and outstanding capital stock of the Company's corporate
subsidiaries has been duly authorized and validly issued, is fully paid and
non-assessable and the shares owned by the Company, directly or indirectly, are
held 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 corporate 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 June 30, 2002 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 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 no shares were issued in violation of the
preemptive rights of any holder thereof.
(xii) Good Standing of the Trust. The Trust has been duly
created and is validly existing in good standing as a statutory trust under the
Delaware Trust Act with the power and authority to own its properties and to
conduct its business as described in the
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Prospectus and to enter into and perform its obligations under the Operative
Documents, as applicable, and the Common and 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. At the Closing
Time, the Common 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 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 nonassessable undivided beneficial 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.
(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 and, 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. The Preferred
Securities Guarantee 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.
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(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,
assuming due authorization and delivery of the Indenture by the Debenture
Trustee, 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 Subordinated 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 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 Company 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 certificate of trust 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 bylaws;
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 the transactions contemplated by the Operative Documents 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 applicable matters described in
sub-clauses (A), (B), (C) and (D) of this
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Section 1(a)(xxiii), at the Closing Time, will have been duly authorized by all
necessary action on the part of the Trust, and subject to such consents as have
already been obtained, 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), under 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 bylaws 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 Texas Department of Banking, 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 the Company or any of
its subsidiaries or of which any of their respective property or assets is the
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.
(xxvii) Possession of Licenses and Permits. The Trust, the
Company and its subsidiaries possess all permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the businesses now operated by them; the
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Trust, the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, and all of the Governmental
Licenses are valid and in full force and effect, except, in each case, where the
failure to possess or to so comply with such Governmental License or where the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect, individually or in the aggregate; 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 of a character described in Item 601 of Regulation S-K
promulgated by the Commission 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, other than the agreements, contracts or
documents to be filed following the Closing Time on the Company's Current Report
on Form 8-K as contemplated by the Registration Statement.
(xxix) Title to Property. The Company and its
subsidiaries have good and marketable title to all of their respective fee owned
properties, in each case free and clear of all liens, encumbrances and defects,
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, 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 cause or result in, or
which constitutes, or might be reasonably be expected to cause, result in, or
constitute, stabilization or manipulation of the price of the Preferred
Securities.
(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 the
Underwriters 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.
(a) 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,
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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 Preferred Security, the number of Preferred
Securities set forth in Schedule A opposite the name of that Underwriter, plus
any additional number of 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 to the Underwriters by wire transfer of
immediately available funds a commission of $0.9375 per Preferred Security sold,
other than sales aggregating no more than $250,000 to such persons identified by
the Company and provided to the Underwriters in writing on or before the date
hereof, with respect to which the Company hereby agrees to pay at the Closing
Time by wire transfer of immediately available funds a commission of $0.4375 per
Preferred Security.
(b) Payment. Payment of the purchase price for, and delivery
of certificates for the Preferred Securities shall be made at the offices of
Xxxxxxx & Xxxxx, L.L.P., Houston, Texas, or at such other place as shall be
agreed upon by the Underwriters and the Offerors, at 8:30 a.m., (Central 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").
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 Xxxx Xxxxx, for its account, to accept delivery of, receipt for, and
make payment of the Purchase Price for, the Preferred Securities which it has
agreed to purchase. Xxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Preferred Securities to be purchased by any Underwriter whose
funds have not been received by the Closing Time but such payment shall not
relieve such Underwriter from its obligations hereunder.
(c) The trust shall deliver the Preferred Securities against
payment of the purchase price in the form of one or more global securities in
such denominations and registered in such names as the Underwriters may request
in writing at least one business day before the Closing Time. The global
security to be deposited by the Trust with The Depository Trust Company ("DTC")
will be available for examination by the Underwriters, and the list of
purchasers of the Preferred Securities who will be recorded in the DTC book
entry system will be available for examination in Houston, Texas by the
Underwriters and the Company at least one (1) business day before the Closing
Time.
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SECTION 3. Covenants of the Offerors. The Offerors jointly and
severally covenant and agree with each of the Underwriters 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, under
the 1933 Act, and will notify the Underwriters promptly, 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) under the 1933 Act, 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, 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.
(c) Delivery of Registration Statements. The Offerors have
delivered 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 Underwriters
will be substantively identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to
each Underwriter, without charge, such number of copies of the preliminary
prospectus, the Prospectus and any amendments and supplements thereto and
documents incorporated by reference therein, as such Underwriter may reasonably
request, and the Offerors hereby consent
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to the use of such copies for purposes permitted by the 1933 Act. The Offerors
will furnish to each Underwriter, without charge, as promptly as possible
following the date of this Agreement and from time to time thereafter 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 XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors
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 in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Offerors 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 Offerors 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; 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.
(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
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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 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 Prospectus in order that the 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
Prospectus by preparing and furnishing to the Underwriters an amendment or
amendments of, or a supplement or supplements to, the Prospectus (in form and
substance satisfactory in the reasonable opinion of counsel for the
Underwriters) so that, as so amended or supplemented, or the 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) DTC. The Offerors will cooperate with the Underwriters and
use their commercially reasonable efforts to permit the Preferred Securities to
be eligible for clearance and settlement through the facilities of DTC.
(j) 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 the heading, "Use
of Proceeds."
(k) The Nasdaq National Market. The Company will use its
commercially reasonable efforts to effect the quotation of the Preferred
Securities on the Nasdaq National Market and will file with the Nasdaq National
Market all documents and notices required by the Nasdaq National Market of
companies that have securities that are traded in the over-the-counter market
and quotations for which are reported by the Nasdaq National Market. If the
Subordinated Debentures are distributed in exchange for the Preferred
Securities, the Company will use its commercially reasonable efforts to effect
the quotation of the Subordinated Debentures on the Nasdaq National Market or
such other automated quotation system or national securities exchange on which
the Preferred Securities are then listed.
(l) Restriction on Sale of Securities. During a period of 120
days from the date of the Prospectus, neither the Company nor the Trust will,
without the prior written consent of Xxxx Xxxxx, (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 otherwise transfer or dispose of any Preferred Securities or
Subordinated Debentures (or any equity or debt securities, either of which is
substantially similar to the Preferred Securities or Subordinated Debentures,
respectively) of the Company, or any securities convertible into or exercisable
or exchangeable for Preferred Securities or Subordinated Debentures (or any
equity or debt securities, either of which is substantially similar to the
Preferred Securities or Subordinated Debentures, 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
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equity or debt securities, either of which is substantially similar to the
Preferred Securities or Subordinated Debentures, respectively) 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, either of which is 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.
(m) Reporting Requirements. The Company and the Trust, during
the period when the Prospectus is required to be delivered in connection with
sales of the Preferred Securities under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to Sections 13,
14 or 15 of the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
(n) Furnish Reports. For and during the period ending three
years from the effective date of the Registration Statement, the Company will
furnish, upon request, to the Underwriters copies of all reports and other
communications (financial or other) furnished by the Company to its shareholders
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, covenants and agrees with the Underwriters that, whether or not the
transactions contemplated by this Agreement are consummated, the Company will
pay or cause to be paid 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 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, closing documents (and
any compilations thereof) 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, if any;
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(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) all expenses in connection with 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;
(viii) the preparation, filing, 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;
(ix) the fees and expenses of any transfer agent or
registrar for the Preferred Securities;
(x) 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;
(xi) the fees and expenses incurred in connection with
the listing of the Preferred Securities and, if applicable, the Subordinated
Debentures on the Nasdaq National Market;
(xii) 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;
(xiii) 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;
(xiv) the fees and expenses of the Guarantee Trustee;
(xv) any fees and expenses in connection with the
rating of the Preferred Securities and the Subordinated Debentures;
(xvi) the cost and charges of qualifying the Preferred
Securities with the DTC; and
(xvii) all travel and lodging expenses incurred by the
Underwriters in connection with this Offering and any informational "road show"
meetings held in connection with the Offering and all expenses related to the
preparation of all materials used in connection with such meetings.
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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
9(a)(i) or (iii) of this Agreement, the Company shall reimburse the Underwriters
for all of their actual accountable out-of-pocket expenses, including all the
reasonable fees and disbursements of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for
the Underwriters. If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 9(a)(ii), (iv) or (v) of this
Agreement, the Company shall reimburse the Underwriters for one-half (1/2) of
their actual accountable out-of-pocket expenses, including one-half (1/2) of the
reasonable fees and disbursements of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for
the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Preferred Securities
at the Closing Time 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 of this Agreement, to the
performance by the Offerors of their obligations hereunder, and to the following
additional conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at the Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefore initiated or threatened by the Commission, and
any request on the part of the Commission of 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 430A 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) Certificate of Executive Officers. At the Closing Time, there
shall not have been, since the date of this Agreement or since the date of the
latest audited financial statements incorporated by reference 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 Financial Officer or the chief
accounting officer of the Company, dated as of the Closing Time, to the effect
that (i) there has been no such Material Adverse Effect with respect to the
Company, (ii) the representations and warranties made by the Company 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 Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time.
(c) Certificate of Administrative Trustee. At the Closing Time,
there shall not have been, since the date of this Agreement or since the date of
the latest audited financial statements incorporated by reference in the
Prospectus, any Material Adverse Effect, and the Underwriters shall have
received 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 with respect to the Trust, (ii) the representations and warranties made
by the Trust in Section 1 this Agreement were true and correct when made and are
true and correct with the same force and
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effect as though expressly made at and as of the Closing Time, and (iii) the
Trust has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Time.
(d) 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 Xx. Xxxxx X. Xxxxxxx, Esq., General Counsel and Secretary
of the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters.
(e) 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 Xxxxxxx & Xxxxx L.L.P., Houston, Texas, counsel for the
Offerors, substantially in the form of Exhibit A to this Agreement. 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.
(f) Opinion of Special Counsel for Deutsche Bank Trust Company
Americas (formerly known as Bankers Trust Company). At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxxx & Xxxxxx, counsel to Deutsche Bank Trust Company Americas
(formerly known as 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.
(g) Opinion of Special Tax Counsel for the Offerors. At the
Closing Time, the Underwriters shall have received the opinion, dated as of the
Closing Time, of Xxxxxxx & Xxxxx 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 "Material 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.
(h) Opinion of Counsel for Underwriters. At the Closing Time, the
Underwriters shall have received the opinion, dated as of the Closing Time, of
Xxxxxxxxx & Xxxxxxxxx, L.L.P., 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.
(i) 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,
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containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Prospectus.
(j) 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.
(k) Approval of Listing. At the Closing Time, the Preferred
Securities shall have been approved for quotation and inclusion on the Nasdaq
National Market.
(l) 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 of the Preferred Securities as contemplated in this Agreement
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(m) Termination of Agreement. If any condition specified in
this Section 5 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 6 and 7 of 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: (1) each of the Underwriters;
(2) each person, if any, who controls (within the meaning of Section 15 of the
1933 Act or Section 20 of the 0000 Xxx) any Underwriter (each such person, a
"controlling person"); and (3) 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 of 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
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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 referred to in clause (i) of this Section 6(a), or any such alleged
untrue statement or omission referred to in clause (i) of this Section 6(a);
provided that (subject to Section 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 Xxxx Xxxxx), 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 referred to in clause (i) of
this Section 6(a), or any such alleged untrue statement or omission referred to
in clause (i) of this Section 6(a), to the extent that any such expense is not
paid under (i) or (ii) above; provided, however, that the indemnity agreement
set forth in this Section 6(a) 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
Xxxx Xxxxx 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 Preferred Securities to
such person, and (B) the untrue statement contained in or omission from a
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 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
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the Offerors by such Underwriter through Xxxx Xxxxx (or its counsel) 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 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 Xxxx Xxxxx 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
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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 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 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
-22-
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 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 0000 Xxx) 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 0000 Xxx) 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.
SECTION 9. Termination of Agreement.
(a) Termination; General. Notwithstanding anything herein
contained, 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, since the time of execution of this Agreement, there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation
-23-
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, since the time
of execution of this Agreement, trading in any securities of the Company has
been suspended or limited by the Commission or the Nasdaq National Market, or
(iv) if, since the time of execution of this Agreement, 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
(v) 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 9, such termination will 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 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 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 Xxxx Xxxxx Xxxx Xxxxxx Incorporated, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (facsimile no.: 410-454-5299),
Attention: Xxxx X. Xxxxxxx, Managing Director, with a copy to Xxxxxxxxx &
Xxxxxxxxx, L.L.P., 000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (facsimile
no.: 713-221-1212), Attention: Xxxxxxx X. Xxxxxx XX, Esq. Notices to the
Offerors shall be directed to Sterling Bancshares, Inc., 0000 Xxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (facsimile no.: 713-849-5498), Attention: X. Xxxxxx
Bridgwater, with a copy to Xxxxxxx & Xxxxx L.L.P., Waterway Plaza Two, Suite
200, 00000 Xxxxxxxx Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx 00000 (facsimile no.:
713-238-7286), Attention: Xxxxxxx X. XxXxxxxx, Esq.
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SECTION 12. Successors and Assigns. 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.
SECTION 13. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES.
SECTION 15. Effect of Headings. The Article and Section headings
in this Agreement are for convenience only and shall not affect the construction
of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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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 /s/ X. Xxxxxx Bridgwater
______________________________________
Name: X. Xxxxxx Bridgwater
Title: President and Chief
Executive Officer
STERLING BANCSHARES CAPITAL TRUST III
By /s/ Xxxxxx Xxxxxxxx
______________________________________
Name: Xxxxxx Xxxxxxxx
Title: Administrative Trustee
By /s/ X. Xxxxxx Bridgwater
______________________________________
Name: X. Xxxxxx Bridgwater
Title: Administrative Trustee
By /s/ Xxxxxx X. Xxxxxx, Xx.
______________________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXX XXXXX XXXX XXXXXX, INCORPORATED
For itself and as the Representative of the several
Underwriters named in Schedule A hereto:
By: /s/ Xxxx X. Xxxxxxx
__________________________________
Name: Xxxx X. Xxxxxxx
Title: Managing Director
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SCHEDULE A
Number of Preferred
Name of Underwriter Securities to be Purchased
------------------- --------------------------
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 750,000
Xxxxxx, Xxxxxxxx & Company, Incorporated 500,000
-------
Total: 1,250,000
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