Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
for offering of
___% Capital Securities
HIGHLANDS CAPITAL TRUST I
(a Delaware Trust)
____% Capital Securities (the "Capital Securities")
(Liquidation Amount of $1,000 per Capital Security)
UNDERWRITING AGREEMENT
---------------
_________, 1997
XxXxxxxx & Company, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx Building, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Highlands Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S) 3801 et
seq.), and Highlands Bankshares, Inc., a Virginia corporation (the "Company"
and, together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with XxXxxxxx & Company, Inc. (the "Underwriter") with respect to
the sale by the Trust of _____% Capital Securities (liquidation amount of $1,000
per preferred security) of the Trust (the "Capital Securities") set forth in
Schedule A. The Capital Securities will be guaranteed on a subordinated basis by
the Company, to the extent set forth in the Prospectus (as defined herein), with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Capital Securities Guarantee") pursuant to the Guarantee Agreement, dated
as of ________, 1997, and as may be amended, (the "Guarantee Agreement"),
between the Company and Wilmington Trust Company, as trustee (the "Guarantee
Trustee"), and will be entitled to the benefits of certain backup undertakings
described in the Prospectus (as defined herein) with respect to the Company's
agreement pursuant to the Indenture (as defined herein) to pay all expenses
relating to administration of the Trust (other than payment obligations with
respect to the Capital Securities). The Capital Securities and the related
Capital Securities Guarantee are referred to herein as the "Securities."
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-2 (No. ______) and a
related preliminary prospectus for the
registration under the Securities Act of 1933, as amended (the "1933 Act") of
(i) the Capital Securities, (ii) the Capital Securities Guarantee, and (iii) the
Junior Subordinated Debt Securities (as defined below) to be issued and sold to
the Trust by the Company, have filed such amendments thereto, if any, and such
amended preliminary prospectuses as may have been required to the date hereof,
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. Such registration statement (as amended) and the
prospectus constituting a part thereof (including, in each case, all documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
__ of Form S-2 under the 1933 Act and the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations")), as from time to time amended
or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that, if any
revised prospectus shall be provided to the Underwriter by the Offerors for use
in connection with the offering of the Capital Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Offerors pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriter for such use. All references in this
Agreement to financial statements and schedules and other information that is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information that
are or are deemed to be incorporated by reference in the Registration Statement
or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act that
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Offerors understand that the Underwriter proposes to make a public
offering of the Capital Securities as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered and the Declaration (as
defined herein), the Indenture (as defined herein) and the Capital Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act"). The entire proceeds to the Trust from the sale of the Capital
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), as guaranteed
on a subordinated basis by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption thereof (the "Common Securities Guarantee" and together with the
Capital Securities Guarantee, the "Guarantees") pursuant to the Guarantee
Agreement between the Company and Guarantee Trustee, as Trustee, and will be
used by the Trust to purchase the $______ aggregate principal amount of ____%
Junior Subordinated Debt Securities due _______________ (the "Junior
Subordinated Debt Securities") issued by the Company under the Indenture (as
defined herein). The Capital Securities and the Common Securities will be issued
pursuant to the Amended and Restated Declaration of Trust of the Trust, dated as
of ______, 1997 (the "Declaration"), among the Company, as Sponsor, Xxxxxx X.
Xxxxx and Xxxxx X. Xxxxx, as trustees (the "Administrative Trustees"), and
Wilmington Trust Company, as property trustee (the "Property Trustee" and,
together with the Administrative Trustees, the
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"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Junior Subordinated Debt Securities will be
issued pursuant to an indenture, dated as of _________, 1997, between the
Company and Wilmington Trust Company, as trustee (the "Indenture Trustee"),
together with any amendments or supplements thereto, the "Indenture"), between
the Company and the Indenture Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors jointly and severally represent and warrant to the
Underwriter as of the date hereof and as of the Closing Time (as hereinafter
defined) as follows:
(i) At the time the Registration Statement became effective and
as of the date hereof, the Registration Statement complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations"), and did 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. The Prospectus, dated
the date hereof (unless the term "Prospectus" refers to a prospectus that has
been provided to the Underwriter by the Trust for use in connection with the
offering of the Securities and that differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective, in which
case, at the time it is first provided to the Underwriter for such use) and at
Closing Time referred to in Section 2 hereof, does 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 under which
they were made, not misleading; provided, however, the Offerors make no
representations or warranties as to (A) that part of the Registration Statement
which constitutes the Statements of Eligibility and Qualification (Forms T-1)
under the 1939 Act of the Indenture Trustee, the Property Trustee or the
Guarantee Trustee or (B) the information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing
to the Offerors by or on behalf of the Underwriter specifically for use in the
Registration Statement and the Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or 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 under the 1934 Act (the "1934 Act Regulations").
(iii) To the best knowledge of the Offerors, Xxxxx, Xxxxxxx &
Company, L.L.P., the accountants who certified the financial statements and
supporting schedules included in or incorporated by reference into the
Registration Statement, are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(iv) The Trust has been duly created and is validly existing and
in good standing as a business trust under the Delaware Act with the power and
authority to own property and to
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conduct its business as described in the Registration Statement and Prospectus
and to enter into and perform its obligations under this Agreement, the Capital
Securities, the Common Securities and the Declaration; 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
corporation; and the Trust is and will be treated as a consolidated subsidiary
of the Company pursuant to generally accepted accounting principles.
(v) The Common Securities have been duly authorized by the
Trust pursuant to the Declaration 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
Declaration, fully paid and non-assessable 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.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(vii) The Declaration has been duly authorized by the Company, as
Sponsor, and 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 Property Trustee, the Declaration is and will be a valid and
binding obligation of the Company, the Trust and the Administrative Trustees,
enforceable against the Company and the Administrative Trustees in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
other similar laws affecting the rights of creditors now or hereafter in effect,
and to equitable principles that may limit the right to specific enforcement of
remedies, and further subject to 12 U.S.C. 1818(b)(6)(D) (or any successor
statute) and any bank regulatory powers now or hereafter in effect and to the
application of principles of public policy (collectively, the "Permitted
Exceptions") and will conform to all statements relating thereto in the
Prospectus; and the Declaration has been duly qualified under the 1939 Act.
(viii) The Guarantee Agreement has been duly authorized by the
Company and, when validly executed and delivered by the Company, assuming due
authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Permitted Exceptions,
and each of the Guarantees and the Guarantee Agreement will conform to all
statements relating thereto contained in the Prospectus; and the trust pursuant
to the Guarantee Agreement will have been duly qualified under the 1939 Act.
(ix) The Capital Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered pursuant to
this Agreement and payment of the consideration therefor set forth in Schedule B
hereto, will be validly issued and, subject to the
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terms of the Declaration, fully paid and non-assessable undivided beneficial
interests in the Trust, will be entitled to the benefits of the Declaration and
will conform to all statements relating thereto contained in the Prospectus; the
issuance of the Capital Securities is not subject to preemptive or other similar
rights; and, subject to the terms of the Declaration, holders of Capital
Securities will be entitled to the same limitation of personal liability under
Delaware law as extended to stockholders of private corporations for profit.
(x) Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Declaration; the Declaration has been duly executed and
delivered by the Administrative Trustees and is a valid and binding obligation
of each Administrative Trustee, enforceable against such Administrative Trustee
in accordance with its terms except to the extent that enforcement thereof may
be limited by the Permitted Exceptions.
(xi) None of the Offerors is, and upon the issuance and sale of
the Capital Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus none will be, an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act").
(xii) No authorization, approval, consent or order of any court
or governmental authority or agency is necessary in connection with the issuance
and sale of the Common Securities or the offering of the Capital Securities, the
Junior Subordinated Debt Securities or the Guarantees hereunder, except such as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and the qualification of the Declaration, the Capital Securities
Guarantee Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Trust or
the Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Virginia with corporate power to own, lease and operate its properties and to
conduct its business as described in the Prospectus, to enter into and perform
its obligations under this Agreement, the Declaration, as Sponsor, the Indenture
and each of the Guarantees and to purchase, own, and hold the Common Securities
issued by the Trust; the Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended; and the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which the character or location of its properties or the
nature or the conduct of its business requires such qualification,
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except for any failures to be so qualified or in good standing which, taken as a
whole, are not material to the Company and its subsidiaries, considered as one
enterprise.
(iii) Highlands Union Bank (the "Principal Subsidiary Bank") is
a banking association formed under the laws of Virginia and authorized
thereunder to transact business; all of the issued and outstanding capital stock
of the Principal Subsidiary Bank has been duly authorized and validly issued, is
fully paid and non-assessable; and the capital stock of the Principal Subsidiary
Bank owned by the Company, directly or through subsidiaries, is owned free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(iv) The Indenture has been duly authorized by the Company
and, when validly executed and delivered by the Company, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Permitted Exceptions; the Indenture will conform to all
statements relating thereto contained in the Prospectus; and the Indenture has
been duly qualified under the 1939 Act.
(v) The Junior Subordinated Debt Securities have been duly
authorized by the Company and have been duly executed by the Company and, when
authenticated in the manner provided for 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 to the extent that enforcement thereof may be
limited by the Permitted Exceptions, will be in the form contemplated by, and
subject to the Permitted Exceptions entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
(vi) The Company's obligations under the Guarantees are
subordinate and junior in right of payment to all liabilities of the Company and
are pari passu with _______________.
(vii) The Junior Subordinated Debt Securities are subordinated
and junior in right of payment to all "Senior Debt" (as defined in the
Indenture) of the Company.
(viii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and compliance by
the Company with its obligations hereunder will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or the
Principal Subsidiary Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or the Principal
Subsidiary Bank is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or the Principal Subsidiary
Bank is subject (except for conflicts, breaches and defaults which would not,
individually or in the aggregate, be materially adverse to the Company and its
subsidiaries taken as a whole or materially adverse to the transactions
contemplated by this Agreement), nor will such action result in any material
violation of the
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provisions of the articles of incorporation or by-laws of the Company, or any
applicable law, administrative regulation or administrative or court decree.
(c) Each certificate signed by any officer of the Company and
delivered to the Underwriter shall be deemed to be a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
(d) The Trust represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the a
condition, financial or otherwise, or in the earnings or business affairs of the
Trust, whether or not arising in the ordinary course of business, and (B) there
have been no transactions entered into by the Trust, other than in the ordinary
course of business, which are material with respect to the Trust.
(ii) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the best
knowledge of the Trust, threatened, against or affecting the Trust that is
required to be disclosed in the Prospectus, other than actions, suits or
proceedings which are not reasonably expected, individually or in the aggregate,
to have a material adverse effect on the condition, financial or otherwise, or
in the earnings or business affairs of the Trust, whether or not arising in the
ordinary course of business; and there are no transactions, contracts or
documents of the Trust that are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations that have
not been so filed.
(iii) The Trust possesses adequate certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies to conduct the business now operated by it, and the Trust has not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding would materially and
adversely affect the condition, financial or otherwise, or in the earnings or
business affairs of the Trust.
(iv) The execution, delivery and performance of this
Agreement, the Declaration, the Guarantee Agreement and the Guarantees, the
issuance and sale of the Capital Securities and the Common Securities, and the
consummation of the transactions contemplated herein and therein and compliance
by the Trust with its obligations hereunder and thereunder have been duly
authorized by all necessary action (corporate or otherwise) on the part of the
Trust and do not and will not result in any violation of the Declaration or
Certificate of Trust and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust under (A) any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the Trust
is a party or by which it may be bound or to which any of its properties may be
subject or (B) any existing applicable law, rule,
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regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust, or any of its properties (except for conflicts, breaches, violations or
defaults which would not, individually or in the aggregate, be materially
adverse to the Trust, or materially adverse to the transactions contemplated by
this Agreement).
(e) Each certificate signed by any Trustee of the Trust and
delivered to the Underwriter or counsel for the Underwriter shall be deemed to
be a representation and warranty by the Trust to the Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY; CLOSING.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Trust
agrees to issue and sell the Capital Securities through the Underwriter, as
agent for the Trust, to the public and the Underwriter agrees to use its best
efforts to sell the Capital Securities as agent for the Trust, at the price per
share set forth on Schedule B (the "Public Offering Price"). The Company agrees
to pay the Underwriter a commission for Capital Securities sold through the
Underwriter in the public offering as set forth on Schedule B (the "Selling
Commission"). The Underwriter may reject any offer to purchase the Capital
Securities made through the Underwriter in whole or in part, and any such
rejection shall not be deemed a breach of the Underwriter's agreement contained
herein.
(b) It is understood that, after the Registration Statement becomes
effective, you propose to sell the Capital Securities to the public as agent for
the Trust upon the terms and conditions set forth in the Prospectus. The escrow
procedures established by the Underwriter shall comply with Commission Rule
15c2-4 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All subscribers to whom the Underwriter directly sells Capital
Securities shall be instructed to make their check for payment of the Capital
Securities payable to "Highlands Capital Trust I Escrow Account." In addition,
the Underwriter shall comply with Rule 15c2-4. The Underwriter shall transmit
all funds that it receives from subscribers to Wilmington Trust Company, the
escrow agent (the "Escrow Agent") by noon of the next business day following
receipt thereof. Only broker/dealers who are either (i) members in good standing
of the National Association of Securities Dealers, Inc. (the "NASD") that are
registered with the NASD and maintain net capital pursuant to Rule 15c3-1
promulgated under the Exchange Act of not less than $25,000 or (ii) dealers with
their principal places of business located outside the United States, its
territories and its possessions and not registered as brokers or dealers under
the Exchange Act, who have agreed not to make any sales within the United
States, its territories or its possessions or to persons who are nationals
thereof or residents therein shall be designated selected dealers by the
Underwriter. The Underwriter shall require all selected dealers to comply with
Rule 15c2-4.
(c) The Underwriter shall direct the Escrow Agent to make payment
for the Capital Securities sold hereunder by wire transfer or certified or bank
cashier's check drawn to the order of the Trust in next day funds. Such payment
is to be made at the offices of __________, at 10:00 a.m. local time, on or
about _____, 1997, or at such other time, date and place as you and the Trust
shall agree upon, such time and date being herein referred to as the "Closing
Time." The certificates for the Capital Securities will be delivered in such
denominations and in such registrations as the Underwriter requests
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in writing not later than the third (3rd) full business day prior to the Closing
Time, and will be made available for inspection by the Underwriter at least
twenty-four (24) hours prior to the Closing Time. Such certificates will be
delivered to the Escrow Agent by 12:00 p.m. on the day prior to the Closing
Time, along with addressed labels to be used to mail the certificates to the
purchasers thereof. The Trust shall direct the Escrow Agent to deliver (i)
payment of the portion of the Selling Commission due to the Underwriter by wire
transfer or certified or bank cashier's check drawn to the order of the
Underwriter in next day funds, to the Underwriter at the Closing Time and (ii)
payment of the portion of the Selling Commission due to each selected dealer by
wire transfer or certified or bank cashier's check drawn to the order of such
selected dealer in next day funds, to each selected dealer at the Closing Time.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly
and severally covenants with the Underwriter as follows:
(a) The Offerors will notify the Underwriter promptly, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (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 the initiation of any proceedings for that purpose.
The Offerors 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) The Offerors will give the Underwriter notice of their intention
to file or prepare (i) any amendment to the Registration Statement (including
any post-effective amendment), (ii) any amendment or supplement to the
Prospectus (including any revised prospectus which the Offerors propose for use
by the Underwriter in connection with the offering of the Capital Securities
which differs from the prospectus on file at the Commission at the time the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), or
(iii) any document that would as a result thereof be incorporated by reference
in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Underwriter with copies of any such amendment, supplement or
other document within a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment, supplement or
other document or use any such prospectus to which the Underwriter or counsel
for the Underwriter shall reasonably object. Subject to the foregoing, the
Offerors will file the Prospectus pursuant to Rule 424(b) and Rule 430A under
the Act not later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement.
(c) The Offerors will deliver to the Underwriter as many signed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) as
the Underwriter may reasonably request and will also deliver
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to the Underwriter a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for the Underwriter.
(d) The Offerors will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the respective applicable rules and regulations of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Capital Securities, any event
shall occur as a result of which the Prospectus as then amended or supplemented
will include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading or if it shall be
necessary to amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors will,
subject to paragraph (b) above, promptly prepare and file with the Commission
such amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance and the Offerors will furnish to the
Underwriter a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriter,
to qualify the Capital Securities (and the Capital Securities Guarantee) and the
Junior Subordinated Debt Securities for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the United States
as the Underwriter may designate; provided, however, that none of the Offerors
shall be obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified.
(g) The Company will make generally available to its security
holders and to the Underwriter as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (which
need not be audited) of the Company and its subsidiaries, covering an applicable
period beginning not later than the first day of the Company's fiscal quarter
next following the "Effective Date" (as defined in Rule 158(c) under the Act) of
the Registration Statement, which will satisfy the provisions of Section 11(a)
of the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offerors' obligations under this Agreement,
and will pay: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Capital Securities, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants and
counsel to the Underwriter, (iv) the qualification of the Capital Securities,
the Capital Securities Guarantee and the Junior Subordinated Debt Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including fees and expenses incurred in connection with the preparation of any
blue sky survey, (v) the printing and delivery to
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the Underwriter of copies of the Registration Statement as originally filed and
of each amendment thereto, of each preliminary prospectus, and of the Prospectus
and any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriter of copies of any blue sky survey, (vii) the fee of the National
Association of Securities Dealers, Inc., if applicable, (viii) 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
Junior Subordinated Debt Securities, (ix) the fees and expenses of the Property
Trustee, and the Guarantee Trustee, including the fees and disbursements of
counsel for the Property Trustee in connection with the Declaration and the
Certificate of Trust; (x) the cost and charges of any transfer agent or
registrar, and (xi) the cost of qualifying the Capital Securities with DTC.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9 hereof, the Company shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations
of the Underwriter hereunder are subject to the accuracy of the representations
and warranties of the Offerors herein contained or in certificates of officers
of the Company, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the Underwriter, at a
later time and date, not later, however, than 5:30 P.M. on the first business
day following the date hereof, or at such later time and date as may be approved
by the Underwriter; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the 1933
Regulations and in accordance with Section 3(b) and prior to Closing Time the
Offerors shall have provided evidence satisfactory to the Underwriter of such
timely filing.
(b) At Closing Time the Underwriter shall have received:
(1) The favorable opinion of Williams, Mullen, Christian & Xxxxxxx,
P.C., counsel for the Company, dated as of the Closing Time, to the following
effect:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Virginia, has the
corporate power and authority to own its properties, conduct its business as
described in the Prospectus and perform its obligations under this Agreement,
and is duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended; the Principal Subsidiary Bank is a banking association
formed under the laws of Virginia and authorized thereunder to transact
business.
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(ii) Except for those jurisdictions specifically enumerated in
such opinion, neither the Company nor the Principal Subsidiary Bank is required
to be qualified or licensed to do business as a foreign corporation in any
jurisdiction.
(iii) All the outstanding shares of capital stock of the
Principal Subsidiary Bank have been duly and validly authorized and issued and
are fully paid and non-assessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Principal Subsidiary
Bank are owned, directly or indirectly, by the Company free and clear of any
perfected security interest and, to the best knowledge of such counsel, any
other security interests, claims, liens or encumbrances.
(iv) To the best knowledge of such counsel, there is no
pending threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract, or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required.
(v) The Registration Statement has become effective under the
1933 Act; to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened; the Registration Statement,
the Prospectus and each amendment thereof or supplement thereto (other than the
financial statements and other financial and statistical information contained
therein or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with the offering,
issuance or sale of the Capital Securities, the Capital Securities Guarantee and
the Junior Subordinated Debt Securities through the Underwriter, except (a) such
as may be required under the 1933 Act and the 1933 Act Regulations and such as
may be required under the blue sky or insurance laws of any jurisdiction, and
(b)the qualification of the Declaration, the Guarantee Agreement and the
Indenture under the 1939 Act.
(viii) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and has been duly
qualified under the 1939 Act.
(ix) The Guarantee Agreement has been duly authorized,
executed and delivered by the Company, and assuming it is duly authorized,
executed and delivered by the Guarantee Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be
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limited by the Permitted Exceptions; and the Guarantee Agreement has been duly
qualified under the 0000 Xxx.
(x) The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by the
Indenture Trustee, is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Permitted Exceptions; the Indenture
has been duly qualified under the 1939 Act; and the Indenture conforms to the
description thereof in the Prospectus.
(xi) The Junior Subordinated Debt Securities have been duly
authorized and executed by the Company and, when authenticated by the Trustee in
the manner provided in the Indenture and delivered against payment therefor,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Permitted Exceptions; and the Junior
Subordinated Debt Securities conform to the description thereof in the
Prospectus.
(xii) Neither the Company nor the Trust is, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus neither will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the 1940 Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving certain matters of Delaware law upon the opinion of Xxxxxxxx, Xxxxxx &
Finger, special Delaware counsel to the Offerers, which shall be delivered in
accordance with Section 5(b)(2)hereto; and (B) as to matters of fact, to the
extent deemed proper, on the representations and warranties of the Offerors
contained herein or in the Declaration, the Indenture and the Guarantee
Agreement of even date herewith, between the Company and the Trust covering the
Common Securities and on certificates of responsible officers of the Company and
its subsidiaries and public officials.
(2) The favorable opinion of Xxxxxxxx, Xxxxxx & Finger, Special
Delaware counsel to the Offerors, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the formation
and valid existence of the Trust as a business trust have been made; the Trust
has all necessary power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement, the Capital
Securities and the Common Securities; the Trust is duly qualified and in good
standing as a foreign company in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse effect on the Trust;
and the Trust is not a party to or otherwise bound by any agreement other than
those described in the Prospectus.
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(ii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Declaration is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Permitted Exceptions.
(iii) The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable beneficial interests in the assets of the Trust,
and the issuance of the Common Securities is not subject to preemptive or other
similar rights.
(iv) The Capital Securities have been duly authorized by the
Declaration and are validly issued and, subject to the terms of the Declaration,
when delivered to and paid for by the Underwriter pursuant to this Agreement,
will be validly issued, fully paid and non-assessable beneficial interests in
the assets of the Trust; the holders of the Capital Securities will, subject to
the terms of the Declaration, be entitled to the same limitation of personal
liability under Delaware law as is extended to stockholders of private
corporations for profit; and the issuance of the Capital Securities is not
subject to preemptive or other similar rights.
(v) The Common Securities, the Capital Securities and the
Declaration conform in all material respects to all statements relating thereto
contained in the Prospectus.
(vi) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(vii) This Agreement has been duly authorized, executed and
delivered by the Trust.
(viii) The execution, delivery and performance of this
Agreement, the Declaration, the Capital Securities and the Common Securities;
the consummation of the transactions contemplated herein and therein; and the
compliance by the Trust with its obligations hereunder and thereunder do not and
will not result in any violation of the Declaration or Certificate of Trust, and
do not and will not conflict with, or result in, a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or any other agreement or instrument known to such counsel to which the Trust is
a party or by which it may be bound or to which any of its properties may be
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition,
financial or otherwise, or in the earnings or business affairs of the Trust, (B)
any existing applicable law, rule or regulation (other than the securities or
blue sky laws of the various states, as to which such counsel need express no
opinion) or (C) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust or any of its properties.
-14-
(3) The favorable opinion, dated as of Closing Time, of Xxxxxxxx,
Xxxxxx & Finger, counsel to Wilmington Trust Company, as Property Trustee under
the Declaration, Guarantee Trustee under the Capital Securities Guarantee
Agreement, and Indenture Trustee under the Indenture, in form and substance
satisfactory to the Underwriter, to the effect that:
(i) Wilmington Trust Company is a Delaware banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of the Declaration.
(ii) The execution, delivery and performance by the Indenture
Trustee of the Indenture and the execution, delivery and performance by the
Property Trustee of the Declaration and the execution, delivery and performance
by the Guarantee Trustee of the Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Indenture Trustee, the
Property Trustee and the Guarantee Trustee, respectively. The Indenture, the
Declaration and the Guarantee Agreement have been duly executed and delivered by
the Indenture Trustee, the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations of the
Indenture Trustee, the Property Trustee and the Guarantee Trustee, respectively,
enforceable against the Indenture Trustee, the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their terms, except as
enforcement thereof may be limited by the Permitted Exceptions.
(iii) The execution, delivery and performance of the Indenture,
the, Declaration and the Guarantee Agreement by the Indenture Trustee, Property
Trustee and the Guarantee Trustee, respectively, does not conflict with or
constitute a breach of the Certificate of Incorporation or Bylaws of the
Indenture Trustee, Property Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Indenture Trustee, the Property
Trustee and the Guarantee Trustee of the Indenture, the Declaration and the
Guarantee Agreement, respectively.
(4) The favorable opinion of Williams, Mullen, Christian & Xxxxxxx,
P.C., tax counsel to the Company and the Trust, as to certain Federal tax
matters set forth in the Prospectus under "United States Income Taxation."
(5) Williams, Mullen, Christian & Xxxxxxx, P.C. shall also provide a
written statement that nothing has come to their attention that has caused them
to believe that the Registration Statement (except for financial statements and
schedules and other financial or statistical data included or incorporated by
reference, therein, as to which counsel need make no statement), at the time it
became effective or as of the date of their respective opinions, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus (except for
-15-
financial statements and schedules and other financial or statistical data
included or incorporated by reference therein, as to which counsel need make no
statement), as at the date hereof or at Closing Time, 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.
(6) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a ____ Vice President of the
Company and of the chief financial or chief accounting officer of the Company
and a certificate of the Trustee of the Trust, and dated as of Closing Time, to
the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Trust and the Company have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(7) At the Closing Time, Xxxxx, Xxxxxxx & Company, L.L.P. shall have
furnished to the Underwriter a letter or letters (which may refer to letters
previously delivered to the Underwriter), dated as of the Closing Time, in form
and substance satisfactory to the Underwriter, confirming that the response, if
any, to Item 10 of the Registration Statement is correct insofar as it relates
to them and stating in effect that:
(i) They are independent accountants within the meaning of
the 1933 Act and the 1934 Act and the1933 Act Regulations and the 1934 Act
Regulations.
(ii) In their opinion, the consolidated financial statements
of the Company and its subsidiaries audited by them and included or incorporated
by reference in the Registration Statement and Prospectus comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations with respect to registration statements on Form
S-2 and the 1934 Act and the 1934 Act Regulations.
(iii) On the basis of procedures (but not in accordance with
generally accepted auditing standards) consisting of:
(a) Reading the minutes of the meetings of the
shareholders, the board of directors, executive committee and audit committee of
the Company and the boards of directors and executive committees of its
subsidiaries as set forth in the minute books through a specified date not more
than five business days prior to the date of delivery of such letter;
-16-
(b) Performing the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
on the unaudited condensed consolidated interim financial statements of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Registration Statement and Prospectus and reading the unaudited interim
financial data, if any, for the period from the date of the latest balance sheet
included or incorporated by reference in the Registration Statement and
Prospectus to the date of the latest available interim financial data; and
(c) Making inquiries of certain officials of the
Company who have responsibility for financial and accounting matters regarding
the specific items for which representations are requested below; nothing has
come to their attention as a result of the foregoing procedures that caused them
to believe that:
(1) the unaudited condensed consolidated
interim financial statements, included or incorporated by reference in the
Registration Statement and Prospectus, do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and the
1934 Act Regulations thereunder;
(2) any material modifications should be made
to the unaudited condensed consolidated interim financial statements, included
or incorporated by reference in the Registration Statement and Prospectus, for
them to be in conformity with generally accepted accounting principles;
(3)(i) at the date of the latest available interim
financial data and at the specified date not more than five business days prior
to the date of the delivery of such letter, there was any change in the capital
stock or the long-term debt (other than scheduled repayments of such debt) or
any decreases in shareholders' equity of the Company and the subsidiaries on a
consolidated basis as compared with the amounts shown in the latest balance
sheet included or incorporated by reference in the Registration Statement and
the Prospectus or (ii) for the period from the date of the latest available
financial data to a specified date not more than five business days prior to the
delivery of such letter, there was any change in the capital stock or the
long-term debt (other than scheduled repayments of such debt) or any decreases
in shareholders' equity of the Company and the subsidiaries on a consolidated
basis, except in all instances for changes or decreases which the Registration
Statement and Prospectus discloses have occurred or may occur, or Xxxxx, Xxxxxxx
& Company, L.L.P. shall state any specific changes or decreases.
(iv) The letter shall also state that Xxxxx, Xxxxxxx &
Company, L.L.P. has carried out certain other specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by the Underwriter
and agreed to by Xxxxx, Xxxxxxx & Company, L.L.P., and has found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
-17-
In addition, at the time this Agreement is executed, Xxxxx, Xxxxxxx &
Company, L.L.P., shall have furnished to the Underwriter a letter dated the date
of this Agreement, in form and substance satisfactory to the Underwriter, to the
effect set forth in this subsection 8.
(8) At Closing Time, the National Association of Securities Dealers,
Inc. ("NASD") shall have confirmed in writing that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and except that
Sections 1, 7, and 8 shall survive any such termination and will remain in full
force and effect.
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors jointly and severally agree to indemnify and hold
harmless the Underwriter and each of its partners, officers, directors, and
employees and each person, if any, who controls the Underwriter within the
meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or
liabilities, and any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales of
the Capital Securities), joint or several, which arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, or any amendment or supplement
thereto, including information deemed to be part of the Registration Statement
pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, (B) the
Prospectus and any amendment or supplement thereto, or (C) any application or
other document, any amendment or supplement thereto, executed by the Offerors or
based upon information furnished by or on behalf of the Offerors filed in any
jurisdiction in order to qualify the Capital Securities under the securities or
blue sky laws thereof (each, an "Application") or (ii) the omission or alleged
omission to state in the Registration Statement, or any amendment or supplement
thereto, the Prospectus or any amendment or supplement thereto, or any
Application, a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse as incurred the
Underwriter and each such controlling person for any legal and other expenses
incurred in investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither of the Offerors
shall be liable to the Underwriter in any such case to the extent that any such
loss, claim, damage or liability arises out of, or is based upon, any untrue
statement or alleged untrue statement made in the Prospectus, including any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of the
Underwriter specifically for inclusion and actually included therein; and
provided further that, as to any Prospectus that has been amended or
supplemented as provided herein, this indemnity agreement shall not inure to the
benefit of the
-18-
Underwriter, on account of any loss, claim, damage, liability or action arising
out of the sale of Capital Securities to any person by the Underwriter if (A)
the Underwriter failed to send or give a copy of the final Prospectus as so
amended or supplemented to that person at or prior to the confirmation of the
sale of such Capital Securities to such person in any case where such delivery
is required by the 1933 Act, and (B) the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in any preliminary Prospectus was corrected in an amendment or supplement
thereto (but only if the sale to such person occurred after the Offerors
provided the Underwriter and the Underwriter received copies of such amendment
or supplement for distribution). This indemnity agreement will be in addition to
any liability which the Offerors may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company,
the Trust, the Trustees and each of the Company's directors, each of its
officers and each person, if any, who controls the Company or the Trust within
the meaning of the 1933 Act or the 1934 Act, to the same extent as the foregoing
indemnity from the Offerors to the Underwriter, but only with reference to
written information relating to such underwriter furnished to the Offerors by
the Underwriter and specifically included in the Prospectus. This indemnity
shall be in addition to any liability which such Underwriter may otherwise have.
The Offerors acknowledge that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information furnished in
writing by the Underwriter for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party otherwise than under
subsection (a) or (b) of this Section 7 or to the extent that the indemnifying
party was not adversely affected by such omission. In case any such action is
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that 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 one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with
-19-
such action the indemnifying party shall not be liable for the expenses of more
than one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the lead
Underwriter in the case of paragraph (a) of this Section 7, representing the
indemnified parties under such paragraph (a) who are parties to such action or
actions), or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, which will not be unreasonably
withheld, unless such indemnified party waived its rights under this Section 7
in writing in which case the indemnified party may effect such a settlement
without such consent.
(d) The Company agrees to indemnify the Trust against all losses,
claims, damages or liabilities due from the Trust under Section 7(a) hereof.
(e) If the indemnification provided for in the preceding paragraphs
of this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under paragraph (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then the
Offerors or the Underwriter shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Offerors and
the Underwriter may be subject in such proportion so that the Underwriter is
responsible for that portion represented by the percentage that the total
discounts and/or commissions received by the Underwriter bears to the sum of
such discounts and/or commissions and the purchase price of the Capital
Securities specified in Schedule B hereto and the Offerors are responsible for
the balance; provided, however, that (y) in no case shall the Underwriter be
responsible for any amount in excess of the total discounts and/or commissions
received by it with respect to the Capital Securities sold under this Agreement
and (z) 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 person who controls the Underwriter within the meaning of the
1933 Act shall have the same rights to contribution as the Underwriter, and each
person who controls either of the Offerors within the meaning of either the 1933
Act or the 1934 Exchange Act, each officer or trustee of the Offerors who shall
have signed the Registration Statement and each director or trustee of the
Offerors shall have the same rights to contribution as the Offerors, subject in
each case to clause (y) of this paragraph (e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(e), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
-20-
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Capital Securities to the purchasers therefor.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the
Offerors, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Capital Securities or to enforce
contracts for the sale of the Capital Securities, or (iii) if trading in any
securities of the Company or the Trust has been suspended or materially limited
by the Commission or the applicable exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or on the NASDAQ National
Market, has been suspended, limited or restricted or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or such system or by order of the Commission,
the NASD or any governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York, Virginia or Delaware authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and except that Sections 1, 7, and 8 shall survive
any such termination and will remain in full force and effect.
SECTION 10. [INTENTIONALLY OMITTED]
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
Underwriter shall be directed to XxXxxxxx & Company, 000 Xxxx Xxxxxx, First
Xxxxxxxx Xxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
XxXxxxxx. Notices to the Trust and the Company shall be directed to them at
Highlands Bankshares, Inc., 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Underwriter and the Trust, the Company 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
Underwriter and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
21
Sections 6 and 7 and their heirs and legal Underwriter, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriter and the
Trust and the Company and their respective successors, and said controlling
persons and officers, directors and trustees and their heirs and legal
Underwriter, and for the benefit of no other person, firm or corporation. No
purchaser of Capital Securities from the Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed
by and construed in accordance with the laws of the State of Virginia applicable
to agreements made and to be performed in said State. Except as otherwise set
forth herein, specified times of day refer to City of Richmond time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one
or more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Trust and the Company in accordance with its
terms.
Very truly yours,
HIGHLAND BANKSHARES, INC.
By: ______________________________
Title:
HIGHLANDS CAPITAL TRUST I
By: ______________________________
Title: Trustee
By: ______________________________
Title: Trustee
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CONFIRMED AND ACCEPTED,
as of the date first above written:
XxXXXXXX & COMPANY, INC.
By:_____________________________
Xxxxxxx X. XxXxxxxx, Xx.
President
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SCHEDULE A
Name of Underwriter Number of Capital Securities
------------------- ----------------------------
Total
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SCHEDULE B
Underwriting Agreement dated ____________, 199_
Registration Statement No. 333-
Underwriter:
Address of Underwriter:
Title, Purchase Price and Description of Securities:
Title:
1. The initial public offering price per security for the Capital
Securities, determined as provided in said Section 2, shall be
_____________.
2. The compensation per Capital Securities to be paid by the Company
to the Underwriter in respect of its commitments hereunder shall be
________.
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