EXHIBIT 1.2
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1,000,000 Preferred Securities
Independent Capital Trust
______% Cumulative Trust Preferred Securities
(Liquidation Amount of $10.00 per Preferred Security)
UNDERWRITING AGREEMENT
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______________________, 1998
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Independent Bankshares, Inc., a Texas corporation (the "Company"), and its
financing subsidiary, Independent Capital Trust, a Delaware business trust (the
"Trust," and hereinafter together with the Company, the "Offerors"), propose
that the Trust issue and sell to Xxxxxx, Xxxxxxxx & Company, Incorporated (the
"Underwriter"), pursuant to the terms of this Agreement, 1,000,000 of the
Trust's ____% Cumulative Trust Preferred Securities, with a liquidation amount
of $10.00 per preferred security (the "Preferred Securities"), to be issued
under the Trust Agreement (as hereinafter defined), the terms of which are more
fully described in the Prospectus (as hereinafter defined). The aforementioned
1,000,000 Preferred Securities to be sold to the Underwriter are herein called
the "Firm Preferred Securities." Solely for the purpose of covering over-
allotments in the sale of the Firm Preferred Securities, the Offerors further
propose that the Trust issue and sell to the Underwriter, at the Underwriter's
option (the "Option"), up to an additional 15,000 Preferred Securities (the
"Option Preferred Securities") upon exercise of the over-allotment option
granted in Section 1 hereof. The Firm Preferred Securities and any Option
Preferred Securities are herein collectively referred to as the "Designated
Preferred Securities."
The Offerors hereby confirm as follows their agreement with the
Underwriter in connection with the proposed purchase of the Designated Preferred
Securities.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES;
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Offerors hereby agree that the Trust shall issue and sell to the Underwriter,
and the Underwriter agrees to purchase from the Trust, at a purchase price of
$______ per share (the "Purchase Price"), the Firm Preferred
Securities. Because the proceeds from the sale of the Firm Preferred Securities
will be used to purchase from the Company its Debentures (as hereinafter defined
and as described in the Prospectus), the Company shall pay to the Underwriter a
commission of $_____ per Firm Preferred Security purchased (the "Firm Preferred
Securities Commission").
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Trust hereby grants to the Underwriter the Option to purchase all or
any portion of the 15,000 Option Preferred Securities, and upon the exercise of
the Option in accordance with this Section 1, the Offerors hereby agree that the
Trust shall issue and sell to the Underwriter all or any portion of the Option
Preferred Securities at the same Purchase Price per share paid for the Firm
Preferred Securities. Because the proceeds from the sale of the Option Preferred
Securities will be used to purchase from the Company its Debentures, the Company
shall pay to the Underwriter a commission of $______ per Option Preferred
Security for each Option Preferred Security purchased (the "Option Preferred
Securities Commission"). The Option shall expire at 5:00 p.m. St. Louis time 30
days after the Effective Date (as hereinafter defined) and may be exercised only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Firm Preferred Securities. The Option may
be exercised in whole or in part at any time (but not more than once) by the
Underwriter giving notice (confirmed in writing) to the Trust setting forth the
number of Option Preferred Securities as to which the Underwriter is exercising
the Option and the time and date for payment and delivery of certificates for
such Option Preferred Securities. Such time and date of payment and delivery
for the Option Preferred Securities (the "Option Closing Date") shall be
determined by the Underwriter, but shall not be earlier than two nor later than
five business days after the exercise of the Option, nor in any event prior to
the Closing Date (as hereinafter defined). The Option Closing Date may be the
same as the Closing Date.
Payment of the Purchase Price and the Firm Preferred Securities
Commission and delivery of certificates for the Firm Preferred Securities shall
be made at the offices of Xxxxx & Xxxxxx LLP, or such other place as shall be
agreed to by the Underwriter and the Offerors, at 10:00 a.m., St. Louis time, on
______________________, 1998, or at such other time not more than five full
business days thereafter as the Offerors and the Underwriter shall determine
(the "Closing Date"). If the Underwriter exercises the Option to purchase any or
all of the Option Preferred Securities, payment of the Purchase Price and Option
Preferred Securities Commission and delivery of certificates for such Option
Preferred Securities shall be made on the Option Closing Date at the offices of
Xxxxx & Xxxxxx LLP, or at such other place as the Offerors and the Underwriter
shall determine. Such payments shall be made to an account designated by the
Trust by wire transfer, in same day funds, in the amount of the aggregate
Purchase Price therefor, against delivery by or on behalf of the Trust to the
Underwriter of certificates for the Designated Preferred Securities to be
purchased by the Underwriter.
The Agreement contained herein with respect to the timing of the
Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(c) and (d) promulgated under the
1934 Act (as defined herein), for a settlement date other than three or four
business days after the date of the contract, as the case may be.
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Certificates for Designated Preferred Securities to be purchased by
the Underwriter shall be delivered by the Offerors in fully registered form in
such authorized denominations and registered in such names as the Underwriter
shall request in writing not later than 12:00 noon, St. Louis time, two business
days prior to the Closing Date and, if applicable, the Option Closing Date.
Certificates for Designated Preferred Securities to be purchased by the
Underwriter shall be made available by the Offerors to the Underwriter for
inspection, checking and packaging at such office as the Underwriter may
designate in writing not later than 1:00 p.m., St. Louis time, on the last
business day prior to the Closing Date and, if applicable, on the last business
day prior to the Option Closing Date.
Time shall be of the essence, and delivery of the certificates for the
Designated Preferred Securities at the time and place specified pursuant to this
Agreement is a further condition of the obligations of the Underwriter
hereunder.
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement among
U.S Trust Company of Texas, N.A., as Property Trustee, Wilmington Trust Company,
as Delaware Trustee, the Administrative Trustees named therein (collectively,
the "Trustees"), and the Company, in substantially the form heretofore delivered
to the Underwriter, said Agreement being hereinafter referred to as the "Trust
Agreement." In connection with the issuance of the Designated Preferred
Securities, the Company proposes (i) to issue its Subordinated Debentures ( the
"Debentures") pursuant to an Indenture, to be dated as of ______________, 1998,
between the Company and U.S Trust Company of Texas, N.A., as Trustee (the
"Indenture"), and (ii) to guarantee certain payments on the Designated Preferred
Securities pursuant to a Guarantee Agreement between the Company and U.S. Trust
Company of Texas, N.A., as guarantee trustee (the "Guarantee"), to the extent
described therein.
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, the
Underwriter that:
(i) The reports filed with the Securities and Exchange
Commission (the "Commission") by the Company under the Securities Exchange
Act of 1934, as amended (the "1934 Act") and the rules and regulations
thereunder (the "1934 Act Regulations") at the time they were filed with
the Commission, complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 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, in light of the circumstances in which they were made, not
misleading.
(ii) The Offerors haave prepared and filed with the Commission
a registration statement on Form S-2 (File Numbers 333-60649 and 333-60649-
01) for the registration of, among other securities, the Designated
Preferred Securities, the Guarantee and $__________ aggregate principal
amount of Debentures Shares under the Securities Act of 1933, as amended
(the "1933 Act"), including the related prospectus subject to completion,
and one or more amendments to such registration statement may have been so
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filed, in each case in conformity in all material respects with the
requirements of the 1933 Act, the rules and regulations promulgated
thereunder (the "1933 Act Regulations") and the Trust Indenture Act of 1939
and the rules and regulations promulgated thereunder. Copies of such
registration statement, including any amendments thereto, each Preliminary
Prospectus (as defined herein) contained therein and the exhibits,
financial statements and schedules to such registration statement, as
finally amended and revised, have heretofore been delivered by the Company
to the Underwriter. After the execution of this Agreement, the Company
will file with the Commission (A) if such registration statement, as it may
have been amended, has been declared by the Commission to be effective
under the 1933 Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A of the 1933 Act Regulations ("Rule
430A") or permitted by Rule 424(b) of the 1933 Act Regulations ("Rule
424(b)") and as have been provided to and not objected to by the
Underwriter prior to (or as are agreed to by the Underwriter subsequent to)
the execution of this Agreement, or (B) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the 1933 Act, an amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective, a copy of which amendment has been furnished
to and not objected to by the Underwriter prior to (or is agreed to by the
Underwriter subsequent to) the execution of this Agreement. As used in
this Agreement, the term "Registration Statement" means such registration
statement, as amended at the time when it was or is declared effective
under the 1933 Act, including (1) all financial schedules and exhibits
thereto, (2) all documents (or portions thereof) incorporated by reference
therein filed under the 1934 Act, and (3) any information omitted therefrom
pursuant to Rule 430A and included in the Prospectus (as hereinafter
defined); the term "Preliminary Prospectus" means each prospectus subject
to completion filed with such registration statement or any amendment
thereto including all documents (or portions thereof) incorporated by
reference therein under the 1934 Act (including the prospectus subject to
completion, if any, included in the Registration Statement and each
prospectus filed pursuant to Rule 424(a) under the 0000 Xxx); and the term
"Prospectus" means the prospectus first filed with the Commission pursuant
to Rule 424(b)(1) or (4) or, if no prospectus is required to be filed
pursuant to Rule 424(b)(1) or (4), the prospectus included in the
Registration Statement, in each case including the financial schedules and
all documents (or portions thereof) incorporated by reference therein under
the 1934 Act. The date on which the Registration Statement becomes
effective is hereinafter referred to as the "Effective Date." A
registration statement with respect to the Preferred Securities and the
Guarantee has been prepared by the Offerors pursuant to and in conformity
in all material respects with the 1934 Act and the 1934 Regulations, and
has been filed with the Commission under the 1934 Act, and such
registration statement will become effective under the 1934 Act when the
Registration Statement is declared effective.
(iii) The documents incorporated by reference in the Preliminary
Prospectus or Prospectus or from which information is so incorporated by
reference, when they became effective or were filed with the Commission, as
the case may be, complied in all material respects with the requirements of
the 1934 Act and the 1934 Act Regulations,
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and when read together and with the other information in the Preliminary
Prospectus or Prospectus, as the case may be, at the time the Registration
Statement became or becomes effective and at the Closing Date and any
Option Closing Date, did not or will not, as the case may be, 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,
in light of the circumstances under which they were made, not misleading.
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) has been issued by the Commission, nor has the
Commission, to the knowledge of the Offerors, threatened to issue such an
order or instituted proceedings for that purpose. Each Preliminary
Prospectus, at the time of filing thereof, (A) complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations
and (B) did not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty does not apply to statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Offerors by
the Underwriter expressly for inclusion in the Preliminary Prospectus or
the Prospectus (the "Underwriter's Information"). The Underwriter's
Information includes only the statements with respect to the public
offering of Designated Preferred Securities by the Underwriter set forth on
the cover page of the Prospectus, the legend concerning over-allotments and
other stabilizing activities on the inside front cover page of the
Prospectus and the first paragraph and the third sentence of the second
paragraph under the heading "Underwriting Sale of Preferred Securities" in
the Prospectus and the third paragraph under the heading "Underwriting
General" in the Prospectus.
(v) At the Effective Date and at all times subsequent thereto,
up to and including the Closing Date and, if applicable, the Option Closing
Date, the Registration Statement and any post-effective amendment thereto
(A) complied and will comply in all material respects with the requirements
of the 1933 Act, the 1933 Act Regulations, and the Trust Indenture Act (and
the rules and regulations thereunder) and (B) did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
At the Effective Date and at all times when the Prospectus is required to
be delivered in connection with offers and sales of Designated Preferred
Securities, including, without limitation, the Closing Date and, if
applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects with
the requirements of the 1933 Act, the 1933 Act Regulations and the Trust
Indenture Act (and the rules and regulations thereunder), and (B) did not
contain and will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty does not apply to the Underwriter's Information.
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(vi) (A) The Company and Azle Bancorp ("Bancorp") are duly
organized, validly existing and in good standing under the laws of the
State of Texas, with full power and authority to own, lease and operate
their properties and conduct their business as described in and
contemplated by the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and
as currently being conducted and are duly registered as bank holding
companies under the Bank Holding Company Act of 1956, as amended (the "BHC
Act").
(B) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the Delaware
Business Trust Act with the power and authority (trust and other) to own
its property and conduct its business as described in the Registration
Statement and Prospectus, to issue and sell its common securities (the
"Common Securities") to the Company pursuant to the Trust Agreement, to
issue and sell the Designated Preferred Securities, to enter into and
perform its obligations under this Agreement and to consummate the
transactions herein contemplated; the Trust has no subsidiaries and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or the ownership of its property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Trust; the Trust has conducted and will conduct no business other
than the transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement and the Trust Agreement among the
Administrative Trustees and Wilmington Trust Company dated ______________,
1998 (the "Original Trust Agreement"); at the Closing Date or any Option
Closing Date, the Trust will not be a party to or be bound by any agreement
or instrument other than the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by this Agreement and the
Trust Agreement and described in the Prospectus; the Trust is not a party
to or subject to any action, suit or proceeding of any nature; the Trust is
not, and at the Closing Date or any Option Closing Date will not be, to the
knowledge of the Offerors, classified as an association taxable as a
corporation for United States federal income tax purposes; and the Trust
is, and as of the Closing Date or any Option Closing Date will be, treated
as a consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(vii) The Company has the direct and indirect subsidiaries
identified on Exhibit A-1 hereto (the "Company Subsidiaries"), and Bancorp
has the direct and indirect subsidiaries identified on Exhibit A-2 hereto
(the "Bancorp Subsidiaries") (the Company Subsidiaries and the Bancorp
Subsidiaries are sometimes referred to herein collectively as the
"Subsidiaries" and individually as a "Subsidiary"). The Company's
Subsidiary, First State Bank, National Association, and Bancorp's
Subsidiary, Azle State Bank ("ASB"), are hereinafter referred to
collectively as the "Banks." The Company and Bancorp do not own or
control, directly or indirectly, more than 5% of any class of equity
security of any corporation, association or other entity other than the
Subsidiaries. Each Subsidiary is a bank, corporation or business trust
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization. Each such
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Subsidiary has full corporate and other power and authority to own, lease
and operate its properties and to conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and
as currently being conducted. The deposit accounts of the Banks are
insured by the Bank Insurance Fund administered by the Federal Deposit
Insurance Corporation (the "FDIC") up to the maximum amount provided by
law; and, to the knowledge of the Company, no proceedings for the
modification, termination or revocation of any such insurance are pending
or, to the knowledge of the Offerors, threatened.
(viii) Each of the Subsidiaries is duly qualified to transact
business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property or conducts its business
so as to require such qualification except where the failure to so qualify
would have a material adverse effect on the financial condition,
stockholders equity or results of operations of the Offerors, Bancorp or
the Subsidiaries, taken as a whole ("Material Adverse Effect"). All of the
issued and outstanding shares of capital stock of the Subsidiaries (A) have
been duly authorized and are validly issued, (B) are fully paid and
nonassessable except to the extent such shares may be deemed assessable
under 12 U.S.C. Section 55 or 12 U.S.C. Section 1831o, and (C) except as
disclosed in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), are owned by the Company or Bancorp,
as the case may be, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, restriction upon voting or transfer, preemptive
rights, claim or equity. Except as disclosed in the Prospectus (or if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no outstanding rights, warrants or options to acquire or
instruments convertible into or exchangeable for any capital stock or
equity securities of the Company, Bancorp or the Subsidiaries.
(ix) The capital stock of the Company and the equity securities
of the Trust conform to the description thereof contained in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) in all material respects. The outstanding shares of capital
stock and equity securities of each Offeror have been duly authorized and
validly issued and are fully paid and nonassessable, and no such shares
were issued in violation of the preemptive or similar rights of any
security holder of an Offeror; no person has any preemptive or similar
right to purchase any shares of capital stock or equity securities of the
Offerors. Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding rights, options or warrants to acquire any securities of the
Offerors, and there are no restrictions upon the voting or transfer of any
capital stock of the Company or equity securities of the Trust pursuant to
the Company's articles of incorporation or bylaws, the Trust Agreement or
any agreement or other instrument to which an Offeror is a party or by
which an Offeror is bound.
(x) (A) The Trust has all requisite power and authority to
issue, sell and deliver the Designated Preferred Securities in accordance
with and upon the terms and conditions set forth in this Agreement, the
Trust Agreement, the Registration Statement and
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the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). All corporate and trust action required to be
taken by the Offerors for the authorization, issuance, sale and delivery of
the Designated Preferred Securities in accordance with such terms and
conditions has been validly and sufficiently taken. The Designated
Preferred Securities, when delivered in accordance with this Agreement,
will be duly and validly issued and outstanding, will be fully paid and
nonassessable undivided beneficial interests in the assets of the Trust,
will be entitled to the benefits of the Trust Agreement, will not be issued
in violation of or subject to any preemptive or similar rights, and will
conform to the description thereof in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and the Trust Agreement. None of the Designated
Preferred Securities, immediately prior to delivery, will be subject to any
security interest, lien, mortgage, pledge, encumbrance, restriction upon
voting or transfer, preemptive rights, claim, equity or other defect.
(B) The Debentures have been duly and validly authorized,
and, when duly and validly executed, authenticated and issued as provided
in the Indenture and delivered to the Trust pursuant to the Trust
Agreement, will constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and will conform to the
description thereof contained in the Prospectus in all material respects.
(C) The Guarantee has been duly and validly authorized,
and, when duly and validly executed and delivered to the guarantee trustee
for the benefit of the Trust, will constitute a valid and legally binding
obligation of the Company and will conform to the description thereof
contained in the Prospectus in all material respects.
(D) The Agreement as to Expenses and Liabilities between
the Company and the Trust (the "Expense Agreement") has been duly and
validly authorized, and, when duly and validly executed and delivered by
the Company, will constitute a valid and legally binding obligation of the
Company and will conform to the description thereof contained in the
Prospectus in all material respects.
(xi) The Offerors, Bancorp and the Subsidiaries have complied
in all material respects with all federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and operation
of their properties or the conduct of their businesses as described in and
contemplated by the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and
as currently being conducted.
(xii) The Offerors, Bancorp and the Subsidiaries have all
material permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate federal,
state, local or other public authorities ("Permits") as are necessary to
own and lease their properties and conduct their businesses in the manner
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and as currently being conducted in all material
respects. All such Permits are in full force and effect and
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each of the Offerors, Bancorp and the Subsidiaries are in all material
respects complying therewith, and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination
thereof or will result in any other material impairment of the rights of
the holder of any such Permit, subject in each case to such qualification
as may be adequately disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). Such Permits
contain no restrictions that would materially impair the ability of the
Company, Bancorp or the Subsidiaries to conduct their businesses in the
manner consistent with their past practices. Neither the Offerors, Bancorp
nor any of the Subsidiaries has received notice or otherwise has knowledge
of any proceeding or action relating to the revocation or modification of
any such Permit.
(xiii) Neither the Offerors, Bancorp nor any of the Subsidiaries
is in breach or violation of its corporate articles of incorporation or
charter, by-laws or other governing documents (including without
limitation, the Original Trust Agreement) in any material respect. Neither
the Offerors, Bancorp nor any of the Subsidiaries is, and to the knowledge
of the Offerors no other party is, in violation, breach or default (with or
without notice or lapse of time or both) in the performance or observance
of any term, covenant, agreement, obligation, representation, warranty or
condition contained in (A) any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, franchise, license, Permit or
any other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, which breach, violation or default
could have a Material Adverse Effect, and to the knowledge of the Company,
no other party has asserted that the Offerors, Bancorp or any of the
Subsidiaries is in such violation, breach or default, or (B) except as
disclosed in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), any order, decree, judgment, rule or
regulation of any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors, Bancorp or the Subsidiaries or any of their respective properties
the breach, violation or default of which could have a Material Adverse
Effect
(xiv) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated by this Agreement,
the Trust Agreement, the Registration Statement and the Prospectus (or, if
the Prospectus in not in existence, the most recent Preliminary Prospectus)
do not and will not conflict with, result in the creation or imposition of
any material lien, claim, charge, encumbrance or restriction upon any
property or assets of the Offerors or the Company Subsidiaries or the
Designated Preferred Securities pursuant to, constitute a breach or
violation of, or constitute a default under, with or without notice or
lapse of time or both, any of the terms, provisions or conditions of the
articles of incorporation or by-laws of the Company or the Company
Subsidiaries, the Trust Agreement, the Guarantee, the Indenture, any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease, Permit or any other agreement or instrument to which the
Offerors or the Company Subsidiaries is a party or by which any of them or
any of their respective properties may be bound or any order, decree,
judgment, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, having
jurisdiction over the Offerors or the Company Subsidiaries or any of their
respective properties which conflict, creation, imposition, breach,
violation or default would have either singly or in the aggregate a
Material Adverse Effect. No authorization, approval,
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consent or order of or filing, registration or qualification with, any
person (including, without limitation, any court, governmental body or
authority) is required in connection with the transactions contemplated by
this Agreement, the Trust Agreement, the Indenture, the Guarantee, the
Registration Statement and the Prospectus, except for the registration of
the Designated Preferred Securities under the 1933 Act and the
qualification for listing of the Designated Preferred Securities by the
American Stock Exchange, Inc. relating to the listing of the Designated
Preferred Securities, and such as may be required under state securities
laws or Interpretations or Rules of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the purchase and distribution of
the Designated Preferred Securities by the Underwriter.
(xv) The Offerors have all requisite corporate power and
authority to enter into this Agreement and this Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforcement thereof
may be limited by general principles of equity and by bankruptcy or other
laws relating to or affecting creditors' rights generally and except as any
indemnification or contribution provisions thereof may be limited under
applicable securities laws. Each of the Indenture, the Trust Agreement,
the Guarantee and the Expense Agreement has been duly authorized by the
Company, and, when executed and delivered by the Company on the Closing
Date, each of said agreements will constitute a valid and legally binding
obligation of the Company and will be enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited
by general principles of equity and by bankruptcy or other laws relating to
or affecting creditors' rights generally and except as any indemnification
or contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act and will
conform to the description thereof contained in the Prospectus in all
material respects.
(xvi) The Company, Bancorp and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to all
personal property owned by them and material to their business, in each
case free and clear of all security interests, liens, mortgages, pledges,
encumbrances, restrictions, claims, equities and other defects except such
as are referred to in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or such as do not
materially affect the value of such property in the aggregate and do not
materially interfere with the use made or proposed to be made of such
property; and all of the leases under which the Company, Bancorp or the
Subsidiaries hold real or personal property are valid, existing and
enforceable leases and in full force and effect with such exceptions as are
not material and do not materially interfere with the use made or proposed
to be made of such real or personal property by the Company, and neither
the Company, Bancorp nor any of the Subsidiaries is in default in any
material respect of any of the terms or provisions of any material leases.
(xvii) PricewaterhouseCoopers L.L.P., who have certified certain
of the consolidated financial statements of the Company and the Company
Subsidiaries, including the notes thereto, included by incorporation by
reference or otherwise in the Registration
10
Statement and Prospectus, are independent public accountants with respect
to the Company, Bancorp and the Subsidiaries as required by the 1933 Act
and the 1933 Act Regulations. Ernst & Young LLP, who have certified certain
of the financial statements of ASB, including the notes thereto, included
in the Registration Statement and Prospectus, are independent public
accountants with respect to the Company, Bancorp and the Subsidiaries as
required by the 1933 Act and the 1933 Act Regulations. Xxxxxxx, Xxxxxxx &
Xxxxxxx, who have certified certain of the consolidated financial
statements of Bancorp and the Bancorp Subsidiaries, including the notes
thereto, included in the Registration Statement and Prospectus, are
independent public accountants with respect to the Company, Bancorp and the
Subsidiaries as required by the 1933 Act and the 1933 Act Regulations.
(xviii) (A) The consolidated financial statements, including
the notes thereto, included by incorporation by reference or otherwise in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) with respect to the
Company, Bancorp and the Subsidiaries, comply in all material respects with
the 1933 Act and the 1933 Act Regulations and present fairly the
consolidated financial position of the entities covered thereby as of the
dates indicated and the consolidated results of operations, cash flows and
changes in shareholders' equity of the entities covered thereby for the
periods specified and have been prepared in conformity with generally
accepted accounting principles. The selected and summary consolidated
financial data concerning the Company, Bancorp and the Subsidiaries
included in the Registration Statement and the Prospectus (or such
Preliminary Prospectus) comply in all material respects with the 1933 Act
and the 1933 Act Regulations, present fairly the information set forth
therein, and have been compiled on a basis consistent with that of the
consolidated financial statements of the Company, Bancorp and the
Subsidiaries in the Registration Statement and the Prospectus (or such
Preliminary Prospectus). The other financial, statistical and numerical
information included in the Registration Statement and the Prospectus (or
such Preliminary Prospectus) complies in all material respects with the
1933 Act and the 1933 Act Regulations, presents fairly the information
shown therein, and to the extent applicable has been compiled on a basis
consistent with the financial statements of the Company, Bancorp and the
Subsidiaries included in the Registration Statement and the Prospectus (or
such Preliminary Prospectus).
(B) The pro forma financial information of the Company
and the Company Subsidiaries included in the Registration Statement
presents fairly in all material respects the information shown therein, has
been compiled on a basis consistent with that of the audited consolidated
financial statements of the Company, Bancorp and the Subsidiaries included
in the Registration Statement, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and the assumptions used in the preparation thereof are
reasonable.
(xix) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
except as otherwise stated therein:
11
(A) neither the Offerors, Bancorp nor any of the
Subsidiaries has sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree except for such loss or interference or labor
dispute or court or a governmental action, order or decree as would
not have a Material Adverse Effect;
(B) there has not been any material adverse change in the
Offerors, Subsidiaries, and Bancorp taken as a whole, or any
development which is reasonably likely to have a Material Adverse
Effect;
(C) neither the Offerors, Bancorp nor any of the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any material transactions, other than in
the ordinary course of business which is material to the Offerors,
Subsidiaries, or Bancorp taken as a whole;
(D) neither the Offerors nor Bancorp has declared or paid
any dividend, and neither the Offerors, Bancorp nor any of the
Subsidiaries has become delinquent in the payment of principal or
interest on any outstanding borrowings; and
(E) there has not been any change in the capital stock,
equity securities, long-term debt, obligations under capital leases
or, other than in the ordinary course of business, short-term
borrowings of the Offerors, Bancorp or the Subsidiaries.
(xx) Except as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no charge, investigation, action, suit or
proceeding is pending or, to the knowledge of the Offerors, threatened,
against or affecting the Offerors, Bancorp or the Subsidiaries or any of
their respective properties before or by any court or any regulatory,
administrative or governmental official, commission, board, agency or other
authority or body, or any arbitrator, wherein an unfavorable decision,
ruling or finding would reasonably be expected to have a material adverse
effect on the consummation of this Agreement or the transactions
contemplated herein or a Material Adverse Effect or which is required to be
disclosed in the Registration Statement or the Prospectus (or such
Preliminary Prospectus) and is not so disclosed.
(xxi) There are no contracts or other documents required to be
filed as exhibits to the Registration Statement by the 1933 Act or the 1933
Act Regulations which have not been filed as exhibits or incorporated by
reference to the Registration Statement, or that are required to be
summarized in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) that are not so summarized.
(xxii) Neither the Offerors nor Bancorp has taken, directly or
indirectly, any action designed to result in or which has constituted or
which would reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the
12
Offerors to facilitate the sale or resale of the Designated Preferred
Securities, and the Offerors have no knowledge that any such action has
been taken or will be taken by any affiliate of the Offerors or Bancorp.
(xxiii) The Offerors, Bancorp and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service marks,
trade names and other rights necessary to conduct the businesses now
conducted by them in all material respects or as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and neither the Offerors, Bancorp nor the
Subsidiaries have received any notice of infringement or conflict with
asserted rights of others with respect to any patents, copyrights,
trademarks, service marks, trade names or other rights which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, and the Offerors do not know
of any basis for such infringement or conflict.
(xxiv) Except as adequately disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), no labor dispute involving the Company, Bancorp or the
Subsidiaries exists or, to the knowledge of the Company, is imminent which
would reasonably be expected to have a Material Adverse Effect which is
required to be disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). Neither the Company,
Bancorp nor any of the Subsidiaries have knowledge of any existing or
threatened labor dispute by the employees of any of its principal suppliers
or contractors which would reasonably be expected to have a Material
Adverse Effect.
(xxv) The Company, Bancorp and the Subsidiaries have timely and
properly prepared and filed all necessary federal, state, local and foreign
tax returns which are required to be filed and have paid all taxes shown as
due thereon and have paid all other taxes and assessments to the extent
that the same shall have become due, except such as are being contested in
good faith or where the failure to so timely and properly prepare and file
would not have a Material Adverse Effect. The Company has no knowledge of
any tax deficiency which has been or might be assessed against the Company,
Bancorp or the Subsidiaries which, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
(xxvi) Each of the material contracts, agreements and instruments
described or referred to in the Registration Statement or the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and each contract, agreement and instrument filed as an exhibit
to the Registration Statement is in full force and effect and is the legal,
valid and binding agreement of the Offerors, Bancorp or the Subsidiaries,
enforceable in accordance with its terms, except (1) to the extent set
forth in the Prospectus (or such Preliminary Prospectus (2) as the
enforcement thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights
generally (3) to the extent such unenforceability would not have a Material
Adverse Effect or (4) with respect to any indemnification or contribution
provision thereof may be limited by applicable securities laws. Except as
disclosed in the Prospectus (or such Preliminary
13
Prospectus), to the knowledge of the Offerors, no other party to any such
agreement is (with or without notice or lapse of time or both) in breach or
default in any material respect thereunder.
(xxvii) No relationship, direct or indirect, exists between or
among theOfferors, Bancorp or the Subsidiaries, on the one hand, and the
directors, officers, trustees, shareholders, customers or suppliers of the
Offerors, Bancorp or the Subsidiaries, on the other hand, which is required
to be described in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus)
which is not adequately described therein.
(xxviii) No person has the right to request or require the
Offerors or the Company Subsidiaries to register any securities for
offering and sale under the 1933 Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale of the
Designated Preferred Securities except as adequately disclosed in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxix) The Designated Preferred Securities have been approved for
listing on the American Stock Exchange, Inc. subject to official notice of
issuance.
(xxx) Except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no contractual encumbrances or restrictions or
material legal restrictions required to be described therein, on the
ability of the Subsidiaries (A) to pay dividends or make any other
distributions on its capital stock or to pay any indebtedness owed to the
Offerors or Bancorp, (B) to make any loans or advances to, or investments
in, the Offerors or Bancorp or (C) to transfer any of its property or
assets to the Offerors or Bancorp.
(xxxi) Neither the Offerors nor Bancorp is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxxii) The Offerors have not distributed and will not distribute
prior to the Closing Date any prospectus in connection with the offering
contemplated hereby, other than a Preliminary Prospectus, the Prospectus,
the Registration Statement and the other materials permitted by the 1933
Act and the 1933 Act Regulations and supplied to the Underwriter.
(xxxiii) The Company, Bancorp and each of the Subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with
management's general or specific authorizations, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization, and (D) the
recorded accounts for assets is
14
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect thereto.
(xxxiv) The Company, Bancorp and the Subsidiaries maintain
insurance covering in all material respects their properties, personnel and
business. Such insurance insures against such losses and risks as, in the
judgment of the executive officers of the Company, are adequate to protect
in all material respects the Offerors, Bancorp and the Subsidiaries and
their businesses. Neither the Company, Bancorp nor any of the Subsidiaries
has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made
in order to continue such insurance. All such insurance is outstanding and
duly in force on the date hereof and will be outstanding and duly in force
on the Closing Date, with such exceptions as would not have a Material
Adverse Effect.
(xxxv) All of the representations and warranties of the Company
contained in the Reorganization Agreement and any Ancillary Agreement are
true and correct in all material respects, and the Company has no reason to
believe that (A) any of the representations and warranties of Bancorp
contained in the Reorganization Agreement and any Ancillary Agreement are
not true and correct in all material respects, or (B) that any condition to
consummation of the transactions contemplated by the Reorganization
Agreement and the Ancillary Agreements will not be satisfied or that such
transactions will not close as contemplated in the Reorganization Agreement
and the Ancillary Agreements.
3. OFFERING BY THE UNDERWRITER. After the Registration Statement becomes
effective or, if the Registration Statement is already effective, after this
Agreement becomes effective, the Underwriter shall, subject to the terms and
conditions hereof, offer the Firm Preferred Securities for sale to the public
upon the terms and conditions set forth in the Prospectus. The Underwriter may
from time to time thereafter reduce the public offering price and change the
other selling terms, provided the proceeds to the Trust shall not be reduced as
a result of such reduction or change. Because the NASD is expected to view the
Preferred Securities as interests in a direct participation program, the
offering of the Preferred Securities is being made in compliance with the
applicable provisions of Rule 2810 of the NASD's Conduct Rules.
The Underwriter may reserve and sell such of the Designated Preferred
Securities purchased by the Underwriter as the Underwriter may elect to dealers
chosen by it (the "Selected Dealers") at the public offering price set forth in
the Prospectus less the applicable Selected Dealers' concessions set forth
therein, for re-offering by Selected Dealers to the public at the public
offering price. The Underwriter may allow, and Selected Dealers may re-allow, a
concession set forth in the Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors jointly and severally
covenant with the Underwriter as follows:
(a) The Offerors shall use their best efforts to cause the
Registration Statement and any amendments thereto, if not effective at the time
of execution of this Agreement, to become effective as promptly as possible. If
the Registration Statement has become or becomes effective
15
pursuant to Rule 430A and information has been omitted therefrom in reliance on
Rule 430A, then the Offerors will prepare and file in accordance with Rule 430A
and Rule 424(b) copies of the Prospectus or, if required by Rule 430A, a post-
effective amendment to the Registration Statement (including the Prospectus)
containing all information so omitted.
(b) The Offerors shall notify the Underwriter immediately, and
confirm such notice in writing:
(i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, has become effective, or when the
Prospectus or any supplement to the Prospectus or any amended Prospectus
has been filed;
(ii) of the receipt of any comments or requests from the
Commission relating to the Registration Statement or the Prospectus;
(iii) of any request of the Commission to amend or supplement
the Registration Statement, any Preliminary Prospectus or the Prospectus or
for additional information; and
(iv) of the issuance by the Commission or any state or other
regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, or suspending the
qualification of any of the Designated Preferred Securities for offering or
sale in any jurisdiction or the institution or threat of institution of any
proceedings for any of such purposes. The Offerors shall use their best
efforts to prevent the issuance of any such stop order or of any other such
order and, if any such order is issued, to cause such order to be withdrawn
or lifted as soon as possible.
(c) The Offerors shall furnish to the Underwriter, from time to time
without charge, as soon as available, as many copies as the Underwriter may
reasonably request of (i) the registration statement as originally filed and of
all amendments thereto, including exhibits, whether filed before or after the
Registration Statement becomes effective, (ii) all exhibits and documents
incorporated therein or filed therewith, (iii) all consents and certificates of
experts in executed form, (iv) each Preliminary Prospectus and all amendments
and supplements thereto, and (v) the Prospectus, and all amendments and
supplements thereto.
(d) During the time when a prospectus is required to be delivered
under the 1933 Act, the Offerors shall comply to the best of their ability with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Designated
Preferred Securities as contemplated herein and in the Trust Agreement and the
Prospectus. The Offerors shall not file any amendment to the registration
statement as originally filed or to the Registration Statement and shall not
file any amendment thereto or make any amendment or supplement to any
Preliminary Prospectus or to the Prospectus of which the Underwriter shall not
previously have been advised in writing and provided a copy a reasonable time
prior to the proposed filings thereof or to which the Underwriter or counsel for
the Underwriter shall object. If it is necessary, in the Company's reasonable
opinion or in the
16
reasonable opinion of the Company's counsel, to amend or supplement the
Registration Statement or the Prospectus in connection with the distribution of
the Designated Preferred Securities, the Offerors shall forthwith amend or
supplement the Registration Statement or the Prospectus, as the case may be, by
preparing and filing with the Commission (provided the Underwriter or counsel
for the Underwriter does not reasonably object), and furnishing to the
Underwriter, such number of copies as the Underwriter may reasonably request of
an amendment or amendments of, or a supplement or supplements to, the
Registration Statement or the Prospectus, as the case may be (in form and
substance reasonably satisfactory to the Underwriter and counsel for the
Underwriter). If any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus to correct an untrue statement of a material
fact or to include a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or if for
any reason it is necessary at any time to amend or supplement the Prospectus to
comply with the 1933 Act and the 1933 Act Regulations, the Offerors shall,
subject to the second sentence of this subsection (d), forthwith amend or
supplement the Prospectus by preparing and filing with the Commission, and
furnishing to the Underwriter, such number of copies as the Underwriter may
reasonably request of an amendment or amendments of, or a supplement or
supplements to, the Prospectus (in form and substance reasonably satisfactory to
the Underwriter and counsel for the Underwriter) so that, as so amended or
supplemented, the Prospectus shall not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(e) The Offerors shall cooperate with the Underwriter and counsel for
the Underwriter in order to qualify the Designated Preferred Securities for
offering and sale under the securities or blue sky laws of such jurisdictions
within the United States of America as the Underwriter may reasonably request
and shall continue such qualifications in effect so long as may be advisable for
distribution of the Designated Preferred Securities; provided, however, that the
Offerors shall not be required to qualify to do business as a foreign
corporation or file a general consent to service of process in any jurisdiction
in connection with the foregoing. The Offerors shall file such statements and
reports as may be required by the laws of each jurisdiction in which the
Designated Preferred Securities have been qualified as above. The Offerors will
notify the Underwriter immediately of, and confirm in writing, the suspension of
qualification of the Designated Preferred Securities or threat thereof in any
jurisdiction.
(f) The Offerors shall make generally available to their security
holders in the manner contemplated by Rule 158 of the 1933 Act Regulations and
furnish to the Underwriter as soon as practicable, but in any event not later
than 16 months after the Effective Date, a consolidated earnings statement of
the Offerors conforming with the requirements of Section 11(a) of the 1933 Act
and Rule 158.
(g) The Offerors shall use the proceeds from the sale of the
Designated Preferred Securities to be sold by the Trust hereunder in the manner
specified in the Prospectus under the caption "Use of Proceeds."
(h) For five years from the Effective Date, the Offerors shall
furnish to the Underwriter copies of all reports and communications (financial
or otherwise) furnished by the Offerors to the holders of the Designated
Preferred Securities as a class, copies of all reports and
17
financial statements filed with or furnished to the Commission (other than
portions for which confidential treatment has been obtained from the Commission)
or with or any other national securities exchange or self-regulatory
organization, and such other documents, reports and information concerning the
business and financial condition of the Offerors as the Underwriter may
reasonably request, other than such documents, reports and information for which
the Offerors has the legal obligation not to reveal to the Underwriter.
(i) For a period of 90 days from the Effective Date, the Offerors
shall not, without the Underwriter's prior written consent, directly or
indirectly offer, sell, contract to sell or otherwise dispose of Designated
Preferred Securities other than pursuant to this Agreement, any other beneficial
interests in the assets of the Trust or any securities of the Trust or the
Company that are substantially similar to the Designated Preferred Securities or
the Debentures, including any guarantee of such beneficial interests or
substantially similar securities, or securities convertible into or exchangeable
for or that represent the right to receive any such beneficial interest or
substantially similar securities.
(j) The Offerors shall use their best efforts to cause the Designated
Preferred Securities to become listed on the American Stock Exchange, Inc., or
in lieu thereof another national securities exchange or self-regulatory
organization, and to remain so listed for at least five years from the Effective
Date or for such shorter period as may be specified in a written consent of the
Underwriter, provided this shall not prevent the Company from redeeming the
Designated Preferred Securities pursuant to the terms of the Trust Agreement.
If the Designated Preferred Securities are exchanged for Debentures, the Company
will use its best efforts to have the Debentures promptly listed on the American
Stock Exchange, Inc. or another organization on which the Designated Preferred
Securities are then listed, and to have the Debentures promptly registered under
the 1934 Act.
(k) Subsequent to the date of this Agreement and through the date
which is the later of (i) the day following the date on which the Underwriter's
Option to purchase the Option Preferred Securities shall expire or (ii) the day
following the Option Closing Date with respect to any Option Preferred
Securities that the Underwriter shall elect to purchase, except as described in
or contemplated by the Prospectus, neither the Offerors, Bancorp nor any of the
Subsidiaries shall take any action (or refrain from taking any action) which
will result in the Offerors, Bancorp or the Subsidiaries incurring any material
liability or obligation, direct or contingent, or enter into any material
transaction, except in the ordinary course of business, and there will not be
any material change in the financial position, capital stock, or any material
increase in long-term debt, obligations under capital leases or short-term
borrowings (except for repurchase agreements in the ordinary course of business
consistent with past practice) of the Offerors and the Company Subsidiaries, or
Bancorp and the Bancorp Subsidiaries, as the case may be, on a consolidated
basis.
(l) Neither Offerors nor Bancorp shall take, directly or indirectly,
any action designed to result in or which has constituted or which would
reasonably be expected to (i) cause or result in stabilization or manipulation
of the price of any security of the Offerors to facilitate the sale or resale of
the Designated Preferred Securities or (ii) otherwise violate the Commission's
Regulation M.
18
(m) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Offerors will not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the
Offerors, Bancorp, the Subsidiaries or the offering of the Designated Preferred
Securities without the Underwriter's prior written consent.
5. PAYMENT OF EXPENSES. Whether or not this Agreement is terminated or
the sale of the Designated Preferred Securities to the Underwriter is
consummated, the Company covenants and agrees that it will pay or cause to be
paid (directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement, including:
(a) the preparation, printing, filing, delivery and shipping of the
initial registration statement, the Preliminary Prospectus or Prospectuses, the
Registration Statement and the Prospectus and any amendments or supplements
thereto, and the printing, delivery and shipping of this Agreement and any other
underwriting documents (including, without limitation, selected dealers
agreements) and the certificates for the Designated Preferred Securities;
(b) all fees, expenses and disbursements of the counsel and
accountants for the Offerors and Bancorp;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Preferred Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as the
Underwriter may request, including all filing fees and fees and disbursements of
counsel to the Underwriter in connection therewith, including, without
limitation, in connection with the preparation of the Preliminary and Final Blue
Sky Memoranda and any legal investment surveys and any supplements thereto (all
such fees and expenses in this subparagraph (c) (the "Preferred Blue Sky Fees");
provided, however, such Preferred Blue Sky Fees together with the Blue Sky Fees
(as defined in the Underwriting Agreement dated the date hereof between the
parties hereto and relating to the issuance and sale of 320,000 shares of the
Company's Common Stock (the "Common Stock Underwriting Agreement") shall not
exceed $3,000 in the aggregate;
(d) all fees and expenses incurred in connection with filings made
with the NASD;
(e) any applicable fees and other expenses incurred in connection
with the listing of the Designated Preferred Securities and, if applicable, the
Guarantee and the Debentures on the American Stock Exchange, Inc.;
(f) the cost of furnishing to the Underwriter copies of the initial
registration statements, any Preliminary Prospectus, the Registration Statement
and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar and the
fees and disbursements of counsel to any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes) incurred
in connection with the printing, issuance and delivery of the Designated
Preferred Securities to the Underwriter;
19
(i) all expenses incident to the preparation, execution and delivery
of the Trust Agreement, the Indenture, the Guarantee and the Expense Agreement;
and
(j) all other costs and expenses incident to the performance of the
obligations of the Company hereunder and under the Trust Agreement that are not
otherwise specifically provided for in this Section 5; provided, however, that
the Underwriter shall pay its own costs and expenses, including (A) the costs
and expenses of its counsel, (B) the Blue Sky Fees which are not paid by the
Company pursuant to Section 5(c) above, (C) the expenses of advertising any
offering of the Designated Preferred Securities made by the Underwriter and (D)
stabilization costs, if any
If the sale of Designated Preferred Securities contemplated by this
Agreement is not completed due to the termination of this Agreement pursuant to
the terms hereof the Company will pay the Underwriter its accountable out-of-
pocket expenses in connection herewith or in contemplation of the performance of
the Underwriter's obligations hereunder, including without limitation travel
expenses, reasonable fees, expenses and disbursements of counsel or other out-
of-pocket expenses incurred by the Underwriter in connection with any discussion
of the offering of the Designated Preferred Securities or the contents of the
Registration Statement, any investigation of the Offerors and the Subsidiaries,
or any preparation for the marketing, purchase, sale or delivery of the
Designated Preferred Securities, in each case following presentation of
reasonably detailed invoices therefor; provided, however, that if the sale of
the Designated Preferred Securities is not completed, the Company will in no
event be obligated to pay in excess of $50,000 of such fees and expenses without
prior approval by the Company.
If the sale of Designated Preferred Securities contemplated by this
Agreement is completed, the Company shall not be responsible for payment of fees
or disbursements of counsel to the Underwriter other than in accordance with
paragraph (c) above, or for the reimbursement of any expenses of the
Underwriter.
6. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Firm Preferred Securities and, following
exercise of the Option granted by the Offerors in Section 1 of this Agreement,
the Option Preferred Securities, are subject, in the Underwriter's reasonable
discretion, to the accuracy of and compliance with the representations and
warranties and agreements of the Offerors herein as of the date hereof and as of
the Closing Date (or in the case of the Option Preferred Securities, if any, as
of the Option Closing Date), to the accuracy of the written statements of the
Offerors made pursuant to the provisions hereof, to the performance by the
Offerors of their covenants and obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement or any amendment thereto filed
prior to the Closing Date has not been declared effective prior to the time of
execution hereof, the Registration Statement shall become effective not later
than 10:00 a.m., St. Louis time, on the first business day following the time of
execution of this Agreement, or at such later time and date as the Underwriter
may agree to in writing. If required, the Prospectus and any amendment or
supplement thereto shall have been timely filed in accordance with Rule 424(b)
and Rule 430A under the 1933 Act and
20
Section 4(a) hereof. No stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto shall have been
issued under the 1933 Act or any applicable state securities laws and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to the knowledge of the Offerors or the Underwriter, shall be contemplated by
the Commission or any state authority. Any request on the part of the Commission
or any state authority for additional information (to be included in the
Registration Statement or Prospectus or otherwise) shall have been disclosed to
the Underwriter and complied with to the satisfaction of the Underwriter and to
the satisfaction of counsel for the Underwriter.
(b) The Underwriter shall not have advised the Company in writing at
or before the Closing Date (and, if applicable, the Option Closing Date) that
the Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of a fact which, in the Underwriter's opinion, is material or omits to state a
fact which, in the Underwriter's opinion, is material and is required to be
stated therein or is necessary to make statements therein (in the case of the
Prospectus or any amendment or supplement thereto, in light of the circumstances
under which they were made) not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Trust Agreement, and the
Designated Preferred Securities, and the authorization and form of the
Registration Statement and Prospectus, other than financial statements and other
financial data, and all other legal matters relating to this Agreement and the
transactions contemplated hereby or by the Trust Agreement shall be satisfactory
in all material respects to counsel to the Underwriter, and the Offerors and the
Subsidiaries shall have furnished to such counsel all documents and information
relating thereto that they may reasonably request to enable them to pass upon
such matters.
(d) Xxxxx & Xxxxxx, LLP, counsel to the Offerors, shall have
furnished to the Underwriter its signed opinion, dated the Closing Date or the
Option Closing Date, as the case may be, in form and substance satisfactory to
counsel to the Underwriter as to the matters set forth in as Exhibit B hereto.
(e) Xxxxxxxx Xxxxx, special Delaware counsel to the Offerors, shall
have furnished to the Underwriter its signed opinion, dated as of Closing Date
or the Option Closing Date, as the case may be, in form and substance
satisfactory to such counsel, 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 Business Trust Act
and, under the Trust Agreement and the Delaware Business Trust Act, has the
trust power and authority to conduct its business as described in the
Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Trust and the Trustees, and is enforceable against the
Company, as depositor, and the Trustees, in accordance with its terms.
(iii) Under the Trust Agreement and the Delaware Business Trust
Act, the execution and delivery of this Agreement by the Trust, and the
performance by the Trust
21
of its obligations thereunder, have been authorized by all requisite trust
action on the part of the Trust.
(iv) The Designated Preferred Securities have been duly
authorized by the Trust Agreement, and when issued and sold in accordance
with the Trust Agreement, the Designated Preferred Securities will be,
subject to the qualifications set forth in paragraph (v) below, fully paid
and nonassessable beneficial interests in the assets of the Trust and
entitled to the benefits of the Trust Agreement. The form of certificates
to evidence the Designated Preferred Securities has been approved by the
Trust and is in due and proper form and complies with all applicable
requirements of the Delaware Business Trust Act.
(v) Holders of Designated Preferred Securities, as beneficial
owners of the Trust, will be entitled to the same limitation on personal
liability extended to shareholders of private, for-profit corporations
organized under the General Corporation Law of the State of Delaware. Such
opinion may note that the holders of Designated Preferred Securities may be
obligated to make payments as set forth in the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the Designated
Preferred Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, and the consummation of the
transactions contemplated by this Agreement, do not violate (a) the Trust
Agreement, or (b) any applicable Delaware law, rule or regulation.
Such opinion may state that it is limited to the laws of the State of
Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
(f) Xxxxx, Rice & Xxxxxxxx, X.X., counsel to the Underwriter, shall
have furnished to the Underwriter its signed opinion, dated the Closing Date or
the Option Closing Date, as the case may be, with respect to the sufficiency of
all corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Preferred Securities, the Registration Statement, the
Prospectus and such other related matters as the Underwriter may reasonably
request and there shall have been furnished to such counsel such documents and
other information as they may request to enable them to pass on such matters.
In giving such opinion, Xxxxx, Rice & Xxxxxxxx, X.X. may rely as to matters of
fact upon statements and certifications of officers of the Offerors and of other
appropriate persons and may rely as to matters of law, other than law of the
United States and the State of Missouri, upon the opinions of Xxxxx & Xxxxxx,
LLP, and Pricket Xxxxx described herein.
22
(g) On the date of this Agreement and on the Closing Date (and, if
applicable, any Option Closing Date), the Underwriter shall have received from
PricewaterhouseCoopers LLP, Ernst & Young LLP and Xxxxxxx, Xxxxxxx & Xxxxxxx,
L.L.P. letters, dated the date of this Agreement and the Closing Date (and, if
applicable, the Option Closing Date), respectively, in form and substance
satisfactory to the Underwriter, confirming that, with respect
PricewaterhouseCoopers LLP, they are independent public accountants with respect
to the Company and the Company Subsidiaries (for purposes of this Section 6(g)
only, the "Company") within the meaning of the 1933 Act and the 1933 Act
Regulations, and, with respect to Ernst & Young LLP and Xxxxxxx, Xxxxxxx &
Xxxxxxx, L.L.P., they are independent public accountants with respect to Bancorp
and the Bancorp Subsidiaries (for purposes of this Section 6(g) only, "Bancorp")
within the meaning of the 1933 Act and the 1933 Act Regulations, and stating in
effect that:
(i) In their opinion, the consolidated financial statements of
the Company or Bancorp, as the case may be, audited by them and included in
the Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations.
(ii) On the basis of the procedures specified by the American
Institute of Certified Public Accountants as described in SAS No. 71,
"Interim Financial Information," inquiries of officials of the Company or
Bancorp, as the case may be, responsible for financial and accounting
matters, and such other inquiries and procedures as may be specified in
such letter, which procedures do not constitute an audit in accordance with
U.S. generally accepted auditing standards, nothing came to their attention
that caused them to believe that, if applicable, the unaudited interim
consolidated financial statements of the Company or Bancorp, as the case
may be, included in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of the
1933 Act and 1933 Act Regulations or are not in conformity with U.S.
generally accepted accounting principles applied on a basis substantially
consistent, except as noted in the Registration Statement, with the basis
for the audited consolidated financial statements of the Company or
Bancorp, as the case may be included in the Registration Statement.
(iii) On the basis of limited procedures, not constituting an
audit in accordance with U.S. generally accepted auditing standards,
consisting of a reading of the unaudited interim financial statements and
other information referred to below, a reading of the latest available
unaudited condensed consolidated financial statements of the Company or
Bancorp, as the case may be, inspection of the minute books of the Company
or Bancorp, as the case may be, since the date of the latest audited
financial statements of the Company or Bancorp, as the case may be,
included or incorporated by reference in the Registration Statement,
inquiries of officials of the Company or Bancorp, as the case may be,
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock of the Company or Bancorp, as the case may
be, any increase in the consolidated debt of
23
the Company or Bancorp, as the case may be, any decreases in
consolidated total assets or shareholders equity of the Company or
Bancorp, as the case may be, or any changes, decreases or increases in
other items specified by the Underwriter, in each case as compared
with amounts shown in the latest unaudited interim consolidated
statement of financial condition of the Company or Bancorp, as the
case may be, included in the Registration Statement except in each
case for changes, increases or decreases which the Registration
Statement specifically discloses, have occurred or may occur or which
are described in such letter; and
(B) for the period from the date of the latest unaudited
interim consolidated financial statements of the Company or Bancorp,
as the case may be, included in the Registration Statement to the
specified date referred to in Clause (iii)(A), there were any
decreases in the consolidated interest income, net interest income, or
net income of the Company or Bancorp, as the case may be, or in the
per share amount of net income of the Company or Bancorp, as the case
may be, or any changes, decreases or increases in any other items
specified by the Underwriter, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Underwriter, except in each case
for increases or decreases which the Registration Statement discloses
have occurred or may occur, or which are described in such letter;
(iv) In addition to the audit referred to in their report
included in the Registration Statement and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Underwriter which are derived
from the general accounting records and consolidated financial statements
of the Company or Bancorp, as the case may be, which appear in the
Registration Statement and have compared such amounts, percentages and
financial information with the accounting records and the material derived
from such records and consolidated financial statements of the Company or
Bancorp, as the case may be, and have found them to be in agreement.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases as specified in Clauses (iii)(A)
or (iii)(B), above, or any exceptions from such agreement specified in Clause
(iv) above, it shall be a further condition to the obligations of the
Underwriter that the Underwriter shall have determined, after discussions with
officers of the Company, responsible for financial and accounting matters, that
such changes, decreases, increases or exceptions as are set forth in such
letters do not (x) reflect a material adverse change in the items specified in
Clause (iii)(A) above as compared with the amounts shown in the latest unaudited
consolidated statement of financial condition of the Company or Bancorp, as the
case may be, included in the Registration Statement, (y) reflect a material
adverse change in the items specified in Clause (iii)(B) above as compared with
the corresponding periods of the prior year or other period specified by the
Underwriter, or (z) reflect a material change in items specified in Clause (iv)
above from the amounts shown in the Preliminary Prospectus distributed by the
Underwriter in connection with the offering contemplated hereby or from the
amounts shown in the Prospectus.
24
(h) At the Closing Date and, if applicable, the Option Closing Date,
the Underwriter shall have received certificates of the chief executive officer
and the chief financial and accounting officer of the Company, which
certificates shall be deemed to be made on behalf of the Company dated as of the
Closing Date and, if applicable, the Option Closing Date, evidencing
satisfaction of the conditions of Section 6(a) and stating that (i) the
representations and warranties of the Offerors set forth in Section 2(a) hereof
are accurate as of the Closing Date and, if applicable, the Option Closing Date,
and that the Offerors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to such
Closing Date and, if applicable, the Option Closing Date, (ii) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there has not been any material adverse change in the
condition (financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Offerors, Bancorp and the Subsidiaries on a
consolidated basis, (iii) since such dates there has not been any material
transaction entered into by the Offerors or the Subsidiaries other than
transactions in the ordinary course of business, (iv) they have carefully
examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue dates,
contained, and the Prospectus as amended or supplemented at such Closing Date
(and, if applicable, the Option Closing Date), contains any untrue statement of
a material fact, or omits to state 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; and (v) covering such
other matters as the Underwriter may reasonably request. The officers'
certificate of the Company shall further state that no stop order affecting the
Registration Statement is in effect or, to their knowledge, threatened.
(i) At the Closing Date and, if applicable, the Option Closing Date,
the Underwriter shall have received a certificate of an authorized
representative of the Trust to the effect that to the best of his or her
knowledge based upon a reasonable investigation, the representations and
warranties of the Trust in this Agreement are true and correct as though made on
and as of the Closing Date (and, if applicable, the Option Closing Date), the
Trust has complied with all the agreements and satisfied all the conditions
required by this Agreement to be performed or satisfied by the Trust on or prior
to the Closing Date and since the most recent date as of which information is
given in the Prospectus, except as contemplated by the Prospectus, the Trust has
not incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of business
and there has not been any material adverse change in the condition (financial
or otherwise) of the Trust.
(j) On the Closing Date, the Underwriter shall have received duly
executed counterparts of the Trust Agreement, the Guarantee, the Indenture and
the Expense Agreement.
(k) The NASD, upon review of the terms of the public offering of the
Designated Preferred Securities, shall not have objected to the Underwriter's
participation in such offering.
(l) Prior to the Closing Date and, if applicable, the Option Closing
Date, the Offerors shall have furnished to the Underwriter and counsel for the
Underwriter all such other documents, certificates and opinions as they have
reasonably requested.
25
(m) On or prior to the Closing Date, (1) the Company shall have
completed its acquisition of Bancorp and any other transactions contemplated by
the Reorganization Agreement and (2) the Company shall have completed the
offering of 320,000 shares of its common stock as provided in that certain
Underwriting Agreement between the Underwriter and the Company of even date
herewith relating to the sale of such common stock.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriter. The Offerors shall furnish the
Underwriter with conformed copies of such opinions, certificates, letters and
other documents as the Underwriter shall reasonably request.
If any of the conditions referred to in this Section 6 shall not have
been fulfilled when and as required by this Agreement, this Agreement and all of
the Underwriter's obligations hereunder may be terminated by the Underwriter on
notice to the Company at, or at any time before, the Closing Date or the Option
Closing Date, as applicable. Any such termination shall be without liability of
the Underwriter to the Offerors.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless the Underwriter, each of its directors, officers and agents, and each
person, if any, who controls the Underwriter within the meaning of the 1933 Act,
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and reasonable attorney fees and expenses),
joint or several, arising out of or based (i) upon any untrue statement or
alleged untrue statement of a material fact made by the Company or the Trust
contained in Section 2(a) of this Agreement (or any certificate delivered by the
Company or the Trust pursuant to Sections 6(h), 6(i) or 6(l) hereof) or the
registration statement as originally filed or the Registration Statement, any
Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, (ii) upon any blue sky application or other document executed by the
Company or the Trust specifically for that purpose or based upon written
information furnished by the Company or the Trust filed in any state or other
jurisdiction in order to qualify any of the Designated Preferred Securities
under the securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application"), (iii) any omission
or alleged omission to state a material fact in the registration statement as
originally filed or the Registration Statement, the Preliminary Prospectus or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application required to be stated therein, in light of the circumstances under
which they were made, or necessary to make the statements therein not
misleading, and against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and attorney fees), joint
or several, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(iv) the enforcement of this indemnification provision or the contribution
provisions of Section 7(d); and shall reimburse each such indemnified party for
any reasonable legal or other expenses as incurred, but in no event less
26
frequently than 30 days after each invoice is submitted, incurred by them in
connection with investigating or defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, however, that the Offerors shall not be liable in any such case to the
extent, but only to the extent, that any such losses, claims, damages,
liabilities and expenses arise out of or are based upon any untrue statement or
omission or allegation thereof that has been made therein or omitted therefrom
in reliance upon and in conformity with the Underwriter's Information; provided,
that the indemnification contained in this paragraph with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriter (or of
any person controlling the Underwriter) to the extent any such losses, claims,
damages, liabilities or expenses directly results from the fact that the
Underwriter sold Designated Preferred Securities to a person to whom there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus (as amended or supplemented if any amendments or supplements
thereto shall have been furnished to the Underwriter consistent with the
provisions hereof), if required by law, and if such loss, claim, damage,
liability or expense would not have arisen but for the failure to give or send
such person such document. The foregoing indemnity agreement is in addition to
any liability the Company or the Trust may otherwise have to any such
indemnified party.
(b) The Underwriter agrees to indemnify and hold harmless each
Offeror, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls an Offeror within the meaning of
the 1933 Act, to the same extent as required by the foregoing indemnity from the
Company to the Underwriter, but only with respect to the Underwriter's
Information or information related to the Underwriter furnished in writing to an
Offeror through the Underwriter by or on its behalf expressly for use in a Blue
Sky Application. The foregoing indemnity agreement is in addition to any
liability which the Underwriter may otherwise have to any such indemnified
party.
(c) If any action or claim shall be brought or asserted against any
indemnified party or any person controlling an indemnified party in respect of
which indemnity may be sought from the indemnifying party, such indemnified
party or controlling person shall promptly notify the indemnifying party in
writing, and the indemnifying party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all expenses; provided, however, that the failure so to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under such paragraph, and further, shall
only relieve it from liability under such paragraph to the extent prejudiced
thereby. Any indemnified party or any such controlling person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it that
are different from or in addition to those available to the indemnifying party
(in
27
which case, if such indemnified party or controlling person notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party
or such controlling person) it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time and for all
such indemnified parties and controlling persons, which firm shall be designated
in writing by the indemnified party and shall be reasonably satisfactory to the
indemnifying party. Each indemnified party and each controlling person, as a
condition of such indemnity, shall use reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. The indemnifying
party shall not be liable for any settlement of any such action effected without
its written consent, but if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
An indemnifying party shall not, without the prior written consent of
each indemnified party, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the 1933 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes a release of each such
indemnified party reasonably satisfactory to each such indemnified party and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding or unless the indemnifying party shall confirm in a
written agreement with each indemnified party, that notwithstanding any federal,
state or common law, such settlement, compromise or consent shall not alter the
right of any indemnified party or controlling person to indemnification or
contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriter on the other from the offering of the Designated Preferred
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Offerors on the one hand and the Underwriter on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The benefits received by the Underwriter on the one
hand and the Offerors on the other shall be deemed to be allocated pro rata on
the basis of the total underwriting discounts, commissions and compensation
received by the Underwriter relative to the total net proceeds from the offering
of the Designated Preferred Securities (before deducting expenses) received by
the Offerors, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Offerors on the one hand and of the
28
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. Each Offeror and the Underwriter agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the first sentence of
this paragraph (d) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Designated Preferred Securities underwritten by the
Underwriter and distributed to the public were offered to the public exceeds the
amount of any damages that the 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 paragraph (d), 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 an Offeror within
the meaning of the 1933 Act, each officer and trustee of an Offeror and each
director of an Offeror shall have the same rights to contribution as the
Offerors subject in each case to the preceding paragraph. The obligations of
the Offerors under this paragraph (d) shall be in addition to any liability
which the Offerors may otherwise have and the obligations of the Underwriter
under this paragraph (d) shall be in addition to any liability that the
Underwriter may otherwise have.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Offerors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or by or on behalf of the Offerors, or such
directors, trustees or officers (or any person controlling an Offeror), (ii)
acceptance of any Designated Preferred Securities and payment therefor hereunder
and (iii) any termination of this Agreement. A successor of the Underwriter or
of an Offeror, such directors, trustees or officers (or of any person
controlling the Underwriter or an Offeror) shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section 7.
(f) The Company agrees to indemnify the Trust against any and all
losses, claims, damages or liabilities that may become due from the Trust under
this Section 7.
8. TERMINATION. The Underwriter shall have the right to terminate this
Agreement at any time at or prior to the Closing Date or, with respect to the
Underwriter's obligation to purchase the Option Preferred Securities, at any
time at or prior to the Option Closing Date, without liability on the part of
the Underwriter to the Offerors, if:
29
(a) Either Offeror shall have failed, refused, or been unable to
perform any agreement on its part to be performed under this Agreement, or any
of the conditions referred to in Section 6 shall not have been fulfilled, when
and as required by this Agreement;
(b) The Offerors, Bancorp or any of the Subsidiaries shall have
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree which in the
judgment of the Underwriter materially impairs the investment quality of the
Designated Preferred Securities;
(c) There has been since the respective dates as of which information
is given in the Registration Statement or the Prospectus, any materially adverse
change in, or any development which is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors, Bancorp and the
Subsidiaries on a consolidated basis, whether or not arising in the ordinary
course of business;
(d) There has occurred any outbreak of hostilities or other calamity
or crisis or material change in general economic, political or financial
conditions, or internal conditions, the effect of which on the financial markets
of the United States is such as to make it, in the Underwriter's reasonable
judgment, impracticable to market the Designated Preferred Securities or enforce
contracts for the sale of the Designated Preferred Securities;
(e) Trading generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Stock Market's National Market shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, by any of
said exchanges or market system or by the Commission or any other governmental
authority;
(f) A banking moratorium shall have been declared by either federal
or Texas authorities; or
(g) Any action shall have been taken by any government in respect of
its monetary affairs which, in the Underwriter's reasonable judgment, has a
material adverse effect on the United States securities markets.
The Offerors shall have the right to terminate this Agreement at any
time at or prior to the Closing Date or, with respect to the sale of the Option
Preferred Securities, at any time at or prior to the Option Closing Date, if a
Tax Event, Investment Company Event or a Capital Treatment Event, as such terms
are defined in the Registration Statement, shall have occurred.
If this Agreement shall be terminated pursuant to this Section 8, the
Offerors shall not then be under any liability to the Underwriter except as
provided in Sections 5 and 7 hereof.
30
9. CERTAIN DEFINITIONS. The following terms shall have the following
meanings:
"Business day." Means any day on which the American Stock Exchange, Inc.
is open for trading.
"Knowledge." Whenever a phrase herein is qualified by "the knowledge of
the Company," or a similar phrase, it is intended to refer to the actual
knowledge, after reasonable inquiry, of the directors and executive officers of
the Company.
"Threatened." Any matter or thing will be deemed to have been "threatened"
when used herein with respect to any party if that party has received notice, in
writing, from the person whom the threat is attributable, or such person's
agent, which makes specific reference to and clearly identifies the matter or
thing being threatened.
10. EFFECTIVE DATE OF AGREEMENT. If the Registration Statement is not
effective at the time of execution of this Agreement, this Agreement shall
become effective on the Effective Date at the time the Commission declares the
Registration Statement effective. The Company shall immediately notify the
Underwriter when the Registration Statement becomes effective.
If the Registration Statement is effective at the time of execution of
this Agreement, this Agreement shall become effective at the earlier of 11:00
a.m. St. Louis time, on the first full business day following the day on which
this Agreement is executed, or at such earlier time as the Underwriter shall
release the Designated Preferred Securities for initial public offering. The
Underwriter shall notify the Offerors immediately after it has taken any action
which causes this Agreement to become effective.
Until such time as this Agreement shall have become effective, it may
be terminated by the Offerors, by notifying the Underwriter, or by the
Underwriter, by notifying either Offeror, except that the provisions of Sections
5 and 7 shall at all times be effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
representations, warranties, indemnities, agreements and other statements of the
Offerors and their officers and trustees set forth in or made pursuant to this
Agreement and the agreements of the Underwriter contained in Section 7 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Offerors or controlling persons of
either Offeror, or by or on behalf of the Underwriter or controlling persons of
the Underwriter or any termination or cancellation of this Agreement and shall
survive delivery of and payment for the Designated Preferred Securities.
12. NOTICES. Except as otherwise provided in this Agreement, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if delivered by hand, mailed by registered or certified
mail, return receipt requested, or transmitted by any standard form of
telecommunication and confirmed. Notices to either Offeror shall be sent to 000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxx, Chief
Financial Officer (with a copy to Xxxxx & Xxxxxx, LLP, 0000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000,
31
Attention: Xxxxxx X. Xxxxxxx); and notices to the Underwriter shall be sent to
Xxxxxx, Xxxxxxxx & Company, Incorporated, 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx.
Xxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxx (with a copy to Xxxxx, Rice &
Xxxxxxxx, X.X., 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxx, Esq.).
Any such notices and other communications shall take effect at the
time of receipt thereof (except in the case of any such notice or other
communication given via standard from of telecommunication and confirmed wherein
it shall take effect at the time of confirmation thereof).
13. PARTIES. The Agreement herein set forth is made solely for the
benefit of the Underwriter and the Offerors and, to the extent expressed,
directors, trustees and officers of the Offerors, any person controlling the
Offerors or the Underwriter, and their respective successors and assigns. No
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser,
in its status as such purchaser, from the Underwriter of the Designated
Preferred Securities.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Missouri, without giving effect to the choice of law or conflicts of
law principles thereof.
15. FACSIMILE EXECUTION AND COUNTERPARTS. This Agreement may be executed
by facsimile and in one or more counterparts, and when a counterpart has been
executed by each party hereto all such counterparts taken together shall
constitute one and the same Agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
shall become a binding agreement between the Company, the Trust and you in
accordance with its terms.
Very truly yours,
INDEPENDENT BANKSHARES, INC.
By:
-----------------------------------------------
Print Name:
---------------------------------------
Its:
----------------------------------------------
INDEPENDENT CAPITAL TRUST
By:
-----------------------------------------------
Print Name:
---------------------------------------
32
Its: Administrative Trustee
----------------------------------------------
CONFIRMED AND ACCEPTED,
as of _____________________, 1998.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
By:
-------------------------------------
Print Name:
-----------------------------
Its:
------------------------------------
33
EXHIBIT A-1 COMPANY SUBSIDIARIES
Independent Financial Corp.
First State Bank, National Association
New Azle, Inc.
Independent Capital Trust
EXHIBIT A-2 BANCORP SUBSIDIARIES
Azle Holdings, Inc.
Azle State Bank
35.
EXHIBIT B XXXXX & XXXXXX LLP OPINION MATTERS
(i) The Company has been duly incorporated under the laws of
the State of Texas. Each of the Company and Bancorp is validly existing and
in good standing under the laws of the State of Texas, and is duly
registered as a bank holding company under the BHC Act. Each of the
Subsidiaries is duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each of the Company,
Bancorp and the Subsidiaries has full corporate power and authority to own
or lease its properties and to conduct its business as such business is
described in the Prospectus and is currently conducted in all material
respects. To counsel's knowledge, all outstanding shares of capital stock
of the Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable except to the extent such shares may be deemed
assessable under 12 U.S.C. Sections 55 and 1831o and, to the counsel's
knowledge, except as disclosed in the Prospectus, there are no outstanding
rights, options or warrants to purchase any such shares or securities
convertible into or exchangeable for any such shares .
(ii) The capital stock, Debentures and Guarantee of the Company
and the equity securities of the Trust conform to the description thereof
contained in the Prospectus in all material respects. To such counsel's
knowledge, the capital stock of the Company authorized and issued as of
June 30, 1998 is as set forth under the caption "Capitalization" in the
Prospectus, has been duly authorized and validly issued, and is fully paid
and nonassessable. To the best of such counsel's knowledge, there are no
outstanding rights, options or warrants to purchase, no other outstanding
securities convertible into or exchangeable for, and no commitments, plans
or arrangements to issue, any shares of capital stock of the Company or
equity securities of the Trust, except as described in the Prospectus.
(iii) The issuance, sale and delivery of the Designated
Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement and the Indenture have been duly authorized by
all necessary actions of the Offerors. All of the Designated Preferred
Securities have been duly and validly authorized and, when delivered in
accordance with this Agreement, will be duly and validly issued, fully paid
and nonassessable, and will conform to the description thereof in the
Registration Statement, the Prospectus and the Trust Agreement in all
material respects. Such counsel has been advised that the Designated
Preferred Securities have been approved for listing on the American Stock
Exchange, Inc. subject to official notice of issuance. There are no
preemptive or other rights to subscribe for or to purchase, and, other than
as disclosed in the Prospectus, no restrictions upon the voting or transfer
of, any shares of capital stock or equity securities of the Offerors or the
Company Subsidiaries pursuant to the corporate articles of incorporation or
charter, by-laws or other governing documents (including without
limitation, the Trust Agreement) of the Offerors or the Company
Subsidiaries, or, to counsel's knowledge, any agreement or other instrument
to which either Offeror or any of the Company Subsidiaries is a party or by
which either Offeror or any of the Company Subsidiaries may be bound.
36.
(iv) The Offerors have all requisite corporate and trust power,
as applicable, to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal, valid and
binding obligations of the Offerors enforceable in accordance with its
terms, except as the enforcement hereof or thereof may be limited by
general principles of equity and by bankruptcy or other laws relating to or
affecting creditors' rights generally, and except as the indemnification
and contribution provisions hereof may be limited under applicable laws and
certain remedies may not be available in the case of a non-material breach.
(v) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act, has been
duly authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity.
(vi) The Debentures have been duly authorized, executed,
authenticated and delivered by the Company, are entitled to the benefits of
the Indenture and are legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to
the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and of general principles of equity.
(vii) The Expense Agreement has been duly authorized, executed
and delivered by the Company, and is a valid and legally binding obligation
of the Company enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium
and other laws affecting the rights and remedies of creditors generally and
of general principles of equity.
(viii) To such counsel's knowledge, neither the Offerors, Bancorp
nor any of the Subsidiaries is in breach or violation of, or default under,
with or without notice or lapse of time or both, its corporate charter, by-
laws or governing document (including without limitation, the Trust
Agreement). The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement and the
Trust Agreement do not and will not conflict with, result in the creation
or imposition of any material lien, claim, charge, encumbrance or
restriction upon any property or assets of the Offerors or the Company
Subsidiaries or the Designated Preferred Securities pursuant to, or
constitute a material breach or violation of, or constitute a material
default under, with or without notice or lapse of time or both, any of the
terms, provisions or conditions of the articles of incorporation or
charter, by-laws or governing document (including without limitation, the
Trust Agreement) of the Offerors or the Company Subsidiaries, or to
counsel's knowledge, any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, franchise, license
37.
or any other agreement or instrument to which the Offerors or the Company
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound or any order, decree, judgment, franchise, license,
Permit, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, known to such
counsel having jurisdiction over the Offerors or the Company Subsidiaries
or any of their respective properties which, in each case, is material to
the Offerors and the Company Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing, registration or
qualification with, any person (including, without limitation, any court,
governmental body or authority) is required under Texas law in connection
with the transactions contemplated by this Agreement in connection with the
purchase and distribution of the Designated Preferred Securities by the
Underwriter.
(ix) To counsel's knowledge, holders of securities of the
Offerors either (A) do not have any right that, if exercised, would require
the Offerors to cause such securities to be included in the Registration
Statement or (B) have waived such right. To counsel's knowledge, neither
the Offerors nor any of the Subsidiaries is a party to any agreement or
other instrument which grants rights for or relating to the registration of
any securities of the Offerors.
(x) Except as set forth in the Registration Statement and the
Prospectus, to counsel's knowledge, (i) no action, suit or proceeding at
law or in equity is pending or threatened in writing to which the Offerors,
Bancorp or the Subsidiaries is or may be a party, and (ii) no action, suit
or proceeding is pending or threatened in writing against or affecting the
Offerors, Bancorp or the Subsidiaries or any of their properties, before or
by any court or governmental official, commission, board or other
administrative agency, authority or body, or any arbitrator, wherein an
unfavorable decision, ruling or finding could reasonably be expected to
have a material adverse effect on the consummation of this Agreement or the
issuance and sale of the Designated Preferred Securities as contemplated
herein or a Material Adverse Effect or which is required to be disclosed in
the Registration Statement or the Prospectus and is not so disclosed.
(xi) No authorization, approval, consent or order of or filing,
registration or qualification with, any person (including, without
limitation, any court, governmental body or authority) is required in
connection with the transactions contemplated by this Agreement, the Trust
Agreement, the Registration Statement and the Prospectus, except such as
have been obtained under the 1933 Act, the Trust Indenture Act, the
American Stock Exchange, Inc. relating to the listing of the Designated
Preferred Securities and except such as may be required under state
securities laws or Interpretations or Rules of the NASD in connection with
the purchase and distribution of the Designated Preferred Securities by the
Underwriter.
(xii) The Registration Statement and the Prospectus and any
amendments or supplements thereto and any documents incorporated therein by
reference (other than the financial statements or other financial data
included therein or omitted
38.
therefrom and Underwriter's Information, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations as of their
respective dates of effectiveness.
(xiii) To counsel's knowledge, there are no contracts,
agreements, leases or other documents of a character required to be
disclosed in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not so disclosed or filed.
(xiv) The statements under the captions "Description of the
Preferred Securities," "Description of the Subordinated Debentures,"
"Description of the Guarantee," "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee," "Certain
Federal Income Tax Consequences," "ERISA Considerations," "Pending
Acquisition," "Regulation and Supervision," "Certain Relationships and
Related Transactions," and "Description of Capital Stock" and in the
Prospectus or incorporated therein by reference, insofar as such statements
constitute a summary of legal and regulatory matters, documents or
instruments referred to therein, are accurate descriptions of the matters
summarized therein in all material respects and fairly present the
information called for with respect to such legal matters, documents and
instruments, other than financial and statistical data, as to which said
counsel shall not be required to express any opinion or belief.
(xv) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made within the time period required by Rule 424(b); to counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order are pending
or threatened by the Commission.
(xvi) Except as described in or contemplated by the Prospectus,
to such counsel's knowledge, there are no contractual encumbrances or
restrictions, or material legal restrictions, required to be described
therein on the ability of the Company Subsidiaries (A) to pay dividends or
make any other distributions on its capital stock or to pay indebtedness
owed to the Offerors, (B) to make any loans or advances to, or investments
in, the Offerors or (C) to transfer any of its property or assets to the
Offerors.
(xvii) To counsel's knowledge, (A) the business and operations
of the Offerors, Bancorp and the Subsidiaries comply in all material
respects with all statutes, ordinances, laws, rules and regulations
applicable thereto and which are material to the Offerors and the Company
Subsidiaries, or Bancorp and the Bancorp Subsidiaries, as the case may be,
on a consolidated basis, except in those instances where non-compliance
would not materially impair the ability of the Company and the Company
Subsidiaries, or Bancorp and the Bancorp Subsidiaries, as the case may be,
to conduct their business, and (B) the Offerors, Bancorp and the
Subsidiaries possess and are operating in all material respects in
compliance with the terms, provisions and conditions of all Permits that
are
39.
required to conduct their businesses as described in the Prospectus and
that are material to the Offerors and the Company Subsidiaries, or Bancorp
and the Bancorp Subsidiaries, as the case may be, on a consolidated basis,
except in those instances where the loss thereof or non-compliance
therewith would not have a Material Adverse Effect; to counsel's knowledge,
all such Permits are valid and in full force and effect, and, to counsel's
knowledge, no action, suit or proceeding is pending or threatened which may
lead to the revocation, termination, suspension or non-renewal of any such
Permit, except in those instances where the loss thereof or non-compliance
therewith would not materially impair the ability of the Offerors or the
Company Subsidiaries, or Bancorp and the Bancorp Subsidiaries, as the case
may be, to conduct their businesses.
(xviii) Each of the Reorganization Agreement and the
Ancillary Agreements, and the transactions contemplated thereby, has
been authorized by all necessary corporate action on the part of the
Company and/or the Company Subsidiaries, has been executed and
delivered by the Company and/or the Company Subsidiaries and the other
parties thereto and constitutes a valid and binding obligation of the
Company and/or the Company Subsidiaries (assuming the due
authorization, execution and delivery thereof by the other parties
thereto) enforceable against the Company and/or the Company
Subsidiaries in accordance with its terms, except as the enforcement
hereof or thereof may be limited by general principles of equity and
by bankruptcy or other laws relating to or affecting creditors' rights
generally.
In giving the above opinion, such counsel may state (1) that, insofar
as such opinion involves factual matters, they have relied upon certificates of
officers of the Offerors and Bancorp including, without limitation, certificates
as to the identity of any and all material contracts, indentures, mortgages,
deeds of trust, loans or credit agreements, notes, leases, franchises, licenses
or other agreements or instruments, and all material permits, easements,
consents, licenses, franchises and government regulatory authorizations for
purposes of paragraphs (viii), (xiii) and (xvii) hereof, (2) that its opinion is
limited to matters governed by the federal laws of the United State of America
and the laws of the State of Texas and (3) that it has, to the extent it deems
proper, relied upon written statements or certificates of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the Subsidiaries.
and upon certificates of public officials. In giving such opinion, such counsel
may rely upon the opinion of Pricket Xxxxx described herein as to matters of
Delaware law.
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with certain officers and representatives of the
Offerors and with their independent public accountants and with the Underwriter
and counsel for the Underwriters, at which conferences such counsel made
inquiries of such officers, representatives and accountants and discussed the
contents of the Registration Statement and Prospectus and the documents
incorporated therein by reference (without taking further action to verify
independently the
40.
statements made in the Registration Statement and the Prospectus, and without
assuming responsibility for the accuracy or completeness of such statements,
except to the extent expressly provided above) and such counsel has no reason to
believe (A) that the Registration Statement or any amendment thereto (except for
the financial statements, notes thereto and the related schedules and other
financial, accounting and statistical data included therein or omitted therefrom
or the Underwriter's Information, as to which such counsel need express no
opinion), at the time the Registration Statement or any such amendment became
effective, contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (B) that the Prospectus or any amendment or supplement
thereto or the documents incorporated therein by reference (except for the
financial statements, the notes thereto and the related schedules and other
financial, accounting and statistical data included therein or omitted therefrom
or the Underwriter's Information, as to which such counsel need express no
opinion), at the time the Registration Statement became effective (or, if the
term "Prospectus" refers to the prospectus first filed pursuant to Rule 424(b)
of the 1933 Act Regulations, at the time the Prospectus was issued), at the time
any such amended or supplemented Prospectus was issued, at the Closing Date and,
if applicable, the Option Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or (C) that
there is any amendment to the Registration Statement required to be filed that
has not already been filed.
41.
