EXHIBIT 1.1
$6,000,000 TRUST PREFERRED SECURITIES
Paradigm Capital Trust II
Floating Rate Cumulative Trust Preferred Securities
(Liquidation Preference of $10 Per Trust Preferred Security)
UNDERWRITING AGREEMENT
December __, 2000
Xxxxxx & Xxxxxx, Incorporated Samco Capital Markets
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx 0000 Xxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Paradigm Bancorporation, Inc., a Texas corporation (the "Company"), and
its subsidiary, Paradigm Capital Trust II, a statutory business trust organized
under the Delaware Business Trust Act (the "Delaware Act") (the "Trust"), each
(an "Offeror") and together with the Company, (the "Offerors"), propose, subject
to the terms and conditions stated herein, to issue and sell to you, each (an
"Underwriter") and together (the "Underwriters"), an aggregate of 600,000
securities of the Trust's Floating Rate Cumulative Trust Preferred Securities,
with a liquidation preference of $10.00 per trust preferred security (the "Trust
Preferred Securities") at an aggregate offering price of $6,000,000 or $10.00
per Trust Preferred Security. The Offerors propose that the Trust issue the
Trust Preferred Securities pursuant to a Trust Agreement, as amended and
restated, among First Union Trust Company, National Association ("First Union"),
as Property Trustee and Delaware Trustee, the administrative trustees named
therein (the "Administrative Trustees") and the Company (the "Trust Agreement").
The Trust Preferred Securities will be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Guarantee") pursuant to a Guarantee Agreement (the "Guarantee Agreement"), to
be dated ____________, 2000, between the Company and First Union, as trustee
(the "Guarantee Trustee"), and entitled to the benefits of certain backup
undertakings described in the Prospectus (as defined herein) with respect to the
Company's agreement pursuant to the Agreement as to Expenses and Liabilities
(the "Expense Agreement") to pay all expenses relating to administration of the
Trust.
The proceeds of the sale of the Trust Preferred Securities will be used to
purchase junior subordinated deferrable interest debentures (the "Junior
Subordinated Debentures") issued by the Company pursuant to an Indenture, to be
dated ______________, 2000, between the Company and First Union, as Indenture
trustee (the "Indenture").
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File Nos. 333-46364 and
333-46364-01) and a related preliminary prospectus for the registration of the
Trust Preferred Securities, the Guarantee and the
Junior Subordinated Debentures, under the Securities Act of 1933, as amended
(the "Act") and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations thereunder. The registration
statement, as amended, at the time it was declared effective, including the
information (if any) deemed to be part thereof pursuant to Rule 430A under the
Act, is herein referred to as the "Registration Statement." The form of
prospectus first filed by the Offerors with the Commission pursuant to Rules
424(b) and 430A under the Act is referred to herein as the "Prospectus." Each
preliminary prospectus included in the Registration Statement prior to the time
it becomes effective or filed with the Commission pursuant to Rule 424(a) under
the Act is referred to herein as a "Preliminary Prospectus." The Securities
Exchange Act of 1934, as amended, is referred to herein as the "Exchange Act."
Copies of the Registration Statement, including all exhibits and schedules
thereto, any amendments thereto and all Preliminary Prospectuses have been
delivered to you.
The Offerors hereby confirm their agreement with respect to the purchase of
the Trust Preferred Securities by the Underwriters as follows:
1) Representations and Warranties of the Offerors. The Offerors jointly and
severally represent and warrant to, and agree with, each of the Underwriters
that:
a) The Registration Statement has been declared effective under the Act,
and no post-effective amendment to the Registration Statement has been filed
with the Commission as of the date of this Agreement. No stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted, contemplated or threatened by
the Commission.
b) No action has been taken with respect to either Offeror, and, to the
best knowledge of the Offerors, no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency and no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued with respect to either Offeror that might
prevent the issuance of the Trust Preferred Securities or suspend the
effectiveness of the Registration Statement, the use of any Preliminary
Prospectus or the Prospectus or suspends the sale of the Trust Preferred
Securities in any jurisdiction in which the Trust Preferred Securities may be
sold. Every request of the Commission, or any securities authority or agency of
any jurisdiction for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) has been complied with in all material
respects.
c) The Registration Statement conforms, and the Prospectus and any
amendments or supplements thereto and any Preliminary Prospectus will conform,
in all material respects to the requirements of the Act and the Trust Indenture
Act and the rules and regulations under the Act and under the Trust Indenture
Act. Neither the Registration Statement nor any amendment thereto, and neither
the Prospectus nor any supplement thereto and any Preliminary Prospectus,
contains or will contain, as the case may be, any untrue statement of a material
fact or omits or will 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 the Offerors make no representation or warranty as to (i) information
contained in or omitted from the
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Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
Offerors by or on behalf of any Underwriter, expressly for use in the
preparation thereof or (ii) information in those parts of the Registration
Statement which constitute the Statement of Eligibility and Qualification ("Form
T-1") under the Trust Indenture Act. The Company has filed a registration
statement pursuant to Section 12(g) of the Securities and Exchange Act of 1934
to register the Trust Preferred Securities and the Debentures thereunder.
d) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act with full trust power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and is authorized to do business in each
jurisdiction in which such qualification is required, except where the failure
to so qualify would not have a material adverse effect on the Trust's condition
(financial or otherwise), earnings, business, prospects, assets, results of
operations or properties taken as a whole; the Trust has conducted and will
conduct no business other than the transactions contemplated by the Trust
Agreement and described in the Prospectus; the Trust is not a party to or
otherwise bound by any agreement other than those described in the Prospectus;
the Trust is and will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation;
and the Trust is and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Texas and is duly
registered as a financial holding company under the Bank Holding Company Act of
1956, as amended (the "BHC Act") and the Gramm Xxxxx-Xxxxxx Act ("GLB Act"), and
is supervised by the Board of Governors of the Federal Reserve System (the
"FED"). Except as set forth in the Prospectus, the Company does not directly or
indirectly own any stock or other equity interest in any corporation,
partnership, joint venture, unincorporated association or other entity other
than Paradigm Delaware Bancorporation Inc. and Paradigm Bank Texas (the "Bank").
The Bank and any other entities owned by the Company are collectively referred
to herein as the "Subsidiaries." Each Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
or lease its properties and conduct its business as described in the Prospectus,
and is duly qualified to transact business in all jurisdictions in which the
conduct of its business or its ownership or leasing or property requires such
qualification and the failure so to qualify would have a material adverse effect
on the business or condition, financial or otherwise, of the Company and the
Subsidiaries, taken as a whole.
f) The Company has an authorized and outstanding capitalization as set
forth in the Registration Statement and the Prospectus. All outstanding shares
of capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable, and are owned, directly or
indirectly, by the Company free and clear of all liens, encumbrances and
security interests, except as set forth in the Prospectus. No options, warrants
or other rights to purchase, agreements or other obligations to issue, or other
rights to convert any obligations into, shares of capital stock or ownership
interests in any of the Subsidiaries are outstanding, and were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or
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purchase securities. There are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, the
Junior Subordinated Debentures, the common securities of the Trust to be held by
the Company (the "Common Securities") or the Trust Preferred Securities. Neither
the filing of the Registration Statement nor the registration of the Trust
Preferred Securities, the Guarantee or the Junior Subordinated Debentures gives
rise to any rights for or relating to the registration of any capital stock or
other securities of the Company or the Trust.
g) Each of this Agreement, the Indenture, the Trust Agreement, the
Guarantee Agreement and the Expense Agreement has been duly authorized, executed
and delivered by the Company and/or the Trust, as the case may be, and
constitutes a valid, legal and binding obligation of the Company and/or the
Trust, as the case may be, enforceable in accordance with its terms, except as
rights to indemnity hereunder that may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity and, with respect to Section 7 hereof
regarding indemnification, by the public policy underlying the federal or state
securities laws.
h) The execution, delivery and performance of this Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement and the Expense
Agreement and the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement, lease, franchise, license or other
agreement or instrument to which the Trust, the Company or any of the
Subsidiaries is a party or by which the Trust, the Company or any of the
Subsidiaries is bound or to which any property or assets of the Trust, the
Company or any of the Subsidiaries is subject; the Company's or any Subsidiary's
charter, Articles of Incorporation or Bylaws, the Trust Agreement or the Trust's
certificate of trust filed with the State of Delaware on July 6, 2000 (the
"Certificate of Trust") or any order, rule, regulation or decree of any court or
governmental agency or body having jurisdiction over the Company, any Subsidiary
or the Trust or having jurisdiction over any of the properties of the Company,
any Subsidiary or the Trust. No consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Expense Agreement or for the
consummation of the transactions contemplated hereby or thereby, including the
issuance or sale of the Junior Subordinated Debentures by the Company and the
Common Securities and the Trust Preferred Securities by the Trust, except such
as may be required under the Act and under state securities or blue sky laws,
all of which have been obtained or made. Each of the Company and the Trust, as
the case may be, has full power and authority to enter into this Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement and the Expense
Agreement, as the case may be, and to authorize, issue and sell the Junior
Subordinated Debentures or the Common Securities and the Trust Preferred
Securities, as the case may be, as contemplated herein and therein; and each of
the Indenture, the Trust Agreement and the Guarantee Agreement has been duly
qualified under the Trust Indenture Act and will conform in all material
respects to the statements relating thereto in the Registration Statement and
the Prospectus.
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i) The Junior Subordinated Debentures have been duly authorized by the
Company and at the Closing Date will have been duly executed by the Company and,
when authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Indenture and the Prospectus, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that enforcement
thereof may be limited by Bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity. The Debentures will be in the form contemplated by, and entitled to the
benefits of, the Indenture, will conform to the statements relating thereto in
the Prospectus, and will be owned by the Trust free and clear of any security
interest, pledge, lien, encumbrance, claim or equity.
j) The Common Securities have been duly authorized by the Trust Agreement
and, when issued and delivered by the Trust to the Company against payment
therefor as described in the Prospectus, will be validly issued and (subject to
the terms of the Trust Agreement) fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and will conform to all
statements relating thereto contained in the Prospectus; and at the Closing Date
all of the issued and outstanding Common Securities of the Trust will be
directly owned by the Company free and clear of any security interest, pledge,
lien, encumbrance, claim or equity.
k) The Trust Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered pursuant to the Trust Agreement and
this Agreement against payment of the consideration set forth herein and
therein, will be validly issued and fully paid and non-assessable undivided
beneficial interests in the Trust, will be entitled to the benefits of the Trust
Agreement and will conform to the statements relating thereto contained in the
Prospectus; and holders of Trust Preferred Securities will be entitled to the
same limitation of personal liability under Delaware law as extended to
stockholders of private corporations for profit.
l) The Indenture, the Trust Agreement, the Guarantee Agreement and the
Expense Agreement are in substantially the respective forms filed as exhibits to
the Registration Statement.
m) The Junior Subordinated Debentures and the Company's obligations
under the Guarantee Agreement are subordinated and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) of the Company.
n) Each of the Administrative Trustees of the Trust is an officer of the
Company and has been duly authorized by the Company to execute and deliver the
Trust Agreement.
o) The financial statements, together with the related notes and
schedules, contained in the Registration Statement and Prospectus and any
Preliminary Prospectus, present fairly the consolidated financial position,
results of operations, shareholders' equity and cash flows of the Company and
its consolidated Subsidiaries on the basis stated therein at the indicated dates
and for the indicated periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made, except as otherwise
stated therein. The selected financial and statistical data included in the
Registration
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Statement present fairly the information shown therein on the basis stated in
the Registration Statement and have been compiled on a basis consistent with the
financial statements presented therein.
p) The pro forma financial statements and other pro forma information
included in the Prospectus present fairly the information shown therein, have
been prepared in accordance with generally accepted accounting principles and
the Commission's rules and guidelines with respect to pro forma financial
statements and other pro forma information, have been properly compiled on the
pro forma basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate under the circumstances.
q) Except as disclosed in the Registration Statement, there is no action
or proceeding pending or, to the knowledge of the Trust or the Company,
threatened or contemplated against any of the Trust, the Company or any
Subsidiary before any court or administrative or regulatory agency which, if
determined adversely to the Trust, the Company or such Subsidiary would,
individually or in the aggregate, result in a material adverse change in the
business or condition (financial or otherwise), results of operations,
shareholders' equity or prospects of the Trust, the Company or such Subsidiary,
taken as a whole.
r) The Company and the Subsidiaries have good and marketable title to all
properties and assets reflected as owned in the financial statements hereinabove
described (or as described as owned in the Prospectus), in each case free and
clear of all liens, encumbrances and defects, except such as are described in
the Prospectus or do not substantially affect the value of such properties and
assets and do not materially interfere with the use made and proposed to be made
of such properties and assets by the Company and the Subsidiaries; and any real
property and buildings held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and the Subsidiaries.
s) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, (i) there has not
been any material adverse change, or any development involving a prospective
material adverse change, in or affecting the condition, financial or otherwise,
of the Trust, the Company and the subsidiaries taken as a whole, or the business
affairs, management, financial position, shareholders' equity or results of
operations of the Trust, the Company and the Subsidiaries, taken as a whole,
whether or not occurring in the ordinary course of business, including, without
limitation, any material increase in the amount or number of classified assets
of the Bank, any significant decrease in net interest margin for any month or
any material decrease in the volume of loan originations, the amount of deposits
or the amount of loans, (ii) there has not been any transaction not in the
ordinary course of business entered into by the Trust, the Company or any of the
Subsidiaries which is material to the Trust, the Company and the Subsidiaries,
taken as a whole, other than transactions described or contemplated in the
Registration Statement, (iii) the Trust, the Company and the Subsidiaries have
not incurred any material liabilities or obligations, which are not in the
ordinary course of business or which could result in a material reduction in the
future earnings of the Trust, the Company and the
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Subsidiaries, (iv) the Trust, the Company and the Subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance, (v) since December 31, 1999, there has not been any
change in the capital stock of the Company or the Subsidiaries (other than
described in the Prospectus), or any material increase in the short-term or
long-term debt (including capitalized lease obligations) of the Company and the
Subsidiaries, taken as a whole, and (vi) since December 31, 1999, there has not
been any declaration or payment of any dividends or any distributions of any
kind with respect to the capital stock of the Company or the Subsidiaries other
than any dividends or distributions described or contemplated in the Prospectus.
t) There is no document, instrument, agreement, transaction or
understanding of the Company, the Trust or any Subsidiary, of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not described or
filed as required.
u) Neither the Company nor any of the Subsidiaries is in violation of its
respective charter, Articles of Incorporation or Association or Bylaws; the
Trust is not in violation of the Trust Agreement or its Certificate of Trust;
and none of the Trust, the Company, or the Subsidiaries is in violation of or
otherwise in default under any statute, or any rule, regulation, order,
judgment, decree or authorization of any court or governmental or administrative
agency or body having jurisdiction over the Trust, the Company or any of the
Subsidiaries or any of their properties, or any indenture, mortgage, deed of
trust, loan agreement, lease, franchise, license or other agreement or
instrument to which the Trust, the Company or any of the Subsidiaries is a party
or by which any of them are bound or to which any property or assets of the
Trust, the Company or any of the Subsidiaries is subject, which violation or
default would have a material adverse effect on the business, condition
(financial or otherwise), results of operations, shareholders' equity or
prospects of the Trust, the Company and the Subsidiaries, taken as a whole.
v) The Administrative Trustees on behalf of the Trust, the Company and
each of the Subsidiaries holds and is operating in compliance with all licenses,
approvals, certificates and permits from governmental and regulatory
authorities, foreign and domestic, which are necessary to the conduct of its
business as described in the Prospectus. Without limiting the generality of the
foregoing, the Company has all necessary approvals of the FED to own the stock
of the Subsidiaries. None of the Trust, the Company or any Subsidiary has
received notice of or has knowledge of any basis for any proceeding or action
relating specifically to the Trust, the Company or the Subsidiaries for the
revocation or suspension of any such consent, authorization, approval, order,
license, certificate or permit or any other action or proposed action by any
regulatory authority having jurisdiction over the Trust, the Company or the
Subsidiaries that would have a material adverse effect on the Trust, the Company
or any Subsidiary.
w) Except as disclosed in the Registration Statement and the Prospectus,
no transaction has occurred between or among the Company or its subsidiaries, on
the one hand, and any of the Company's officers or directors or any affiliate or
affiliates of any such officer or director, on the other hand, that is required
to be so disclosed, including, but not limited to, any outstanding loans,
advances or guaranties of indebtedness by the Company or its subsidiaries to or
for the benefit of
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any affiliates of the Company, or any of the officers or directors of the
Company, or any family member of any of them.
x) The Company and the Subsidiaries are in compliance with all applicable
federal and state laws and regulations that regulate the business of banking,
including, without limitation, the Federal Deposit Insurance Act, the BHC Act,
the GLB Act, the Federal Reserve Act and all other applicable laws and
regulations where the failure to comply would have a material and adverse effect
on the financial condition, earnings or business of the Company or any of the
Banks or Subsidiaries.
y) Xxxxxx & Xxxxxxx Company, P.C. and Xxxxx Xxxxxxxx LLP, which have
certified certain of the financial statements filed with the Commission as part
of the Registration Statement, are independent public accountants as required by
the Act and the rules and regulations thereunder.
z) The Offerors have not taken and will not take, directly or indirectly,
any action designed to, or which has constituted, or which might reasonably be
expected to cause or result in, stabilization or manipulation of the price of
the Trust Preferred Securities.
aa) The Offerors' registration statement pursuant to Section 12(g) of the
Exchange Act with respect to the Trust Preferred Securities, has been declared
effective by the Commission; the Trust Preferred Securities have been approved
for quotation and trading, upon notice of issuance, on the Over The Counter
Bulletin Board under the symbol "_____________"
bb) The Offerors have not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Trust Preferred Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by the
Company.
cc) The deposit accounts of the Bank are insured by the Federal Deposit
Insurance Corporation (the "FDIC") to the fullest extent provided by law. No
proceeding for the termination of such insurance is pending or is threatened.
Neither the Company nor any Subsidiary has received or is subject to any
directive or order from the FED, the FDIC, the Texas Department of Banking, or
any other regulatory authority to make any material change in the method of
conducting their respective businesses that has not been complied with in all
material respects.
dd) Neither the Offerors nor any of their affiliates does any business,
directly or indirectly, with the government of Cuba or with any person or entity
located in Cuba.
ee) The Trust, the Company and the Subsidiaries have filed all federal,
state, local and foreign tax returns or reports required to be filed, and have
paid in full all taxes indicated by said returns or reports and all assessments
received by it or any of them to the extent that such taxes have become due and
payable, except where the Trust, the Company and the Subsidiaries are contesting
in good faith such taxes and assessments. The Company and the Subsidiaries have
also filed all required applications, reports, returns and other documents and
information with all state and federal banking authorities and agencies.
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ff) The Trust, the Company and each of the Subsidiaries owns or licenses
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and other similar rights necessary for the conduct of
their businesses as described in the Prospectus. Neither the Trust, the Company
nor any of the Subsidiaries has any knowledge of any infringement of any
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, inventions,
trade secrets or other similar rights of others, and none of the Trust, the
Company or any of the Subsidiaries has received any notice or claim of conflict
with the asserted rights of others with respect to any of the foregoing.
gg) None of the Trust, the Company or any of the Subsidiaries is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or an "investment
adviser" within the meaning of the Investment Advisers Act of 1940, as amended
and will conduct its business in a manner so as not to become an "investment
company" or "investment advisor."
hh) The Company and its Subsidiaries maintain, and the Trust will
maintain, a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (C) access to records is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
ii) Other than as contemplated by this Agreement and as disclosed in the
Registration Statement, the Company has not incurred any liability for any
finder's or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
jj) No report or application filed by the Company or any of its
subsidiaries with the Fed, the FDIC or the Texas Division of Banking, as of the
date it was filed, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading when made or failed to comply with the
applicable requirements of the Fed, the FDIC or the Texas Department of Banking,
as the case may be.
kk) The maximum amount of proceeds from the sale of the Trust Preferred
Securities that may constitute "Tier 1" capital, under and subject to applicable
regulatory restrictions on the amount thereof that can be included in Tier 1
capital, will constitute Tier 1 capital.
ll) The Offerors meet all of the requirements for the use of Form SB-2 to
register the Trust Preferred Securities, the Guarantee and the Common Securities
under the Act.
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mm) Any certificate signed by or on behalf of the Trust or the Company
and delivered to the Underwriters or counsel to the Underwriters shall be deemed
to be a representation and warranty of the Trust or the Company to each
Underwriter as to the matters covered thereby.
2) Purchase, Sale and Delivery of Trust Preferred Securities.
a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Trust
agrees to issue and sell to each Underwriter, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Trust, at a purchase
price per Preferred Security of $10.00, the number of Trust Preferred Securities
set forth opposite the name of such Underwriter in Schedule A hereto. As
compensation to the Underwriters for their commitments hereunder and in view of
the fact that the proceeds of the sale of the Trust Preferred Securities
(together with the entire proceeds from the sale by the Trust to the Company of
the Common Securities) will be used to purchase the Junior Subordinated
Debentures, the Company hereby agrees to pay at the Closing Date to the
Representative a commission of $0.35 per Trust Preferred Security sold by the
Trust hereunder other than sales indentified by the Company and provided to the
Representative in writing as of the date hereof in which case there shall be no
commission.
b) The Trust Preferred Securities will be delivered by the Company to the
Representative against payment of the purchase price therefor at the offices of
___________________, or such other location as may be mutually acceptable, at
_____ a.m. Houston, Texas time on the fourth full business day following the
date of this Agreement (or on the third business day if required under Rule
15c6-1 under the Exchange Act) or such other time and date as the Underwriters
and the Company may agree upon in writing, such time and date of delivery being
herein referred to as the "Closing Date." The purchase price shall be payable
by wire transfer of immediately available funds to an account to be designated
by the Trust at least two business days preceding the Closing Date. The
Underwriters' commission shall be payable by wire transfer of immediately
available funds to an account to be designated by the Underwriters at least two
business days preceding the Closing Date. Delivery of the Trust Preferred
Securities may be made by credit through full fast transfer to the accounts at
The Depository Trust Company designated by you. Certificates representing the
Trust Preferred Securities, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days'
prior notice to the Company shall be prepared and will be made available for
checking and packaging, not later than 12:00 noon., California time, on the
business day next preceding the Closing Date at the offices of Xxxxxx & Xxxxxx,
Incorporated., 000 X. 0xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, or such other
location as may be mutually acceptable.
c) It is understood that any Underwriter may (but shall not be obligated
to) make payment to the Company on behalf of the other Underwriter for the Trust
Preferred Securities to be purchased by such Underwriter. Any such payment shall
not relieve such other Underwriter of any of its obligations hereunder. Nothing
herein contained shall constitute the Underwriters an unincorporated association
or partner with either or both Offerors.
3) Offering by Underwriters. It is understood that the several Underwriters
propose to make a public offering of the Trust Preferred Securities as soon as
the Underwriters deem it advisable to do
10
so. The Trust Preferred Securities are to be initially offered to the public at
the initial public offering price set forth in the Prospectus. The Underwriters
may from time to time thereafter change the public offering price and other
selling terms.
4) Covenants of the Offerors. The Offerors jointly and severally covenant and
agree with the several Underwriters that:
a) The Company and the Administrative Trustees on behalf of the Trust will
prepare and timely file with the Commission under Rule 424(b) under the Act a
Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A under the
Act, and will not file any amendment to the Registration Statement or supplement
to the Prospectus of which the Underwriters shall not previously have been
advised and furnished with a copy and as to which the Underwriters shall have
reasonably objected in writing promptly after reasonable notice thereof or which
is not in compliance with the Act or the rules and regulations thereunder.
b) The Offerors will advise the Underwriters promptly and, if requested
by the Underwriters, will confirm such advice in writing (i) when any post-
effective amendment to the Registration Statement is filed or becomes effective,
and of the filing of any final prospectus or supplement or amendment to the
Prospectus, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or Prospectus or any Preliminary Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Trust Preferred Securities or the Debentures
for offering or sale in any jurisdiction, or the initiation or contemplation of
any proceeding for such purposes, and (iv) of the happening of any event which
makes any statement made in the Registration Statement or Prospectus (as then
amended or supplemented) untrue in any material respect or which requires the
making of any additions to or changes in the Registration Statement or
Prospectus (as then amended or supplemented) in order to make the statements
therein not misleading or to amend or supplement the Prospectus to comply with
the Act or any other law. The Company will provide the Underwriter with copies
of the form of Prospectus in such numbers as the Underwriter may reasonably
request and file or transmit for filing with the Commission such Prospectus in
accordance with Rule 424(b) of the Act by the close of business in San
Francisco, California on the business day immediately succeeding the date
hereof.
c) The Offerors will advise the Underwriters promptly of any request of
the Commission for amendment of the Registration Statement or for supplement to
the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus, of the suspension of the qualification
of the Trust Preferred Securities for offering or sale in any jurisdiction, or
of the institution or threatening of any proceedings for that purpose, and the
Offerors will use their best efforts to prevent the issuance of any such stop
order preventing or suspending the use of the Prospectus or suspending such
qualification and to obtain as soon as possible the withdrawal thereof.
11
d) The Offerors will prepare and file with the Commission, promptly upon
the Underwriters' reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus that may be necessary or advisable in
connection with the distribution of the Trust Preferred Securities by the
Underwriter in the Underwriters' or its counsel's opinion, and the Company will
use its best efforts to cause the same to become effective as promptly as
possible.
e) The Offerors will cooperate with the Underwriters and their counsel in
order to qualify the Trust Preferred Securities for sale under the securities
laws of such jurisdictions as the Underwriters may reasonably have designated
and to continue such qualifications in effect for so long as the Underwriters
may reasonably request for distribution of the Trust Preferred Securities (or
obtain exemptions from the application of such laws), provided that neither
Offeror shall be required to qualify as a foreign corporation in any
jurisdiction where it is not now so qualified. The Offerors will, from time to
time, prepare and file such statements, reports and other documents as may be
requested by the Underwriters for that purpose.
f) The Offerors will furnish the Underwriters with as many copies of any
Preliminary Prospectus as the Underwriters may reasonably request and, during
the period when delivery of a prospectus is required under the Act, the Offerors
will furnish the Underwriters with as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Underwriters may, from
time to time, reasonably request. The Offerors will deliver to the
Underwriters, at or before the Closing Date, such number of signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Underwriters such number of conformed copies
of the Registration Statement, without exhibits, and of all amendments thereto,
as the Underwriters may reasonably request.
g) If, during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, any event shall occur as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not misleading, or if for
any other reason it shall be necessary at any time to amend or supplement the
Prospectus to comply with any law, the Offerors promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein in
light of the circumstances when it is so delivered, not misleading, or so that
the Prospectus will comply with law, and deliver, without charge, to the dealers
(whose names and addresses will be furnished by the Underwriters to the Company)
to whom Trust Preferred Securities have been sold by the Underwriters or to
other dealers, any amendments or supplements to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will comply with
the standards set forth in this sentence.
h) The Company consents to the use of such Prospectus (and of any
amendments or supplements thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions described in the
preliminary Blue Sky memorandum in which the Trust Preferred Securities are
lawfully offered by the Underwriter and by all dealers to whom the Trust
12
Preferred Securities may be sold, both in connection with the offering of sale
of the Trust Preferred Securities and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection therewith. In case
the Underwriters are required to deliver a Prospectus (and any amendment or
supplement thereto) more than nine months after the first date upon which the
Trust Preferred Securities are offered to the public, the Company will, upon
request, but at the expense of the Underwriter, promptly prepare and furnish the
Underwriter with reasonable quantities of a Prospectus complying with Section
10(a)(3) of the Act.
i) The Offerors will make generally available to their security holders,
as soon as it is practicable to do so, but in any event not later than 18 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 thereunder and will advise you in writing when
such statement has been so made available.
j) The Company will, for five years from the Closing Date:
i) deliver to each Underwriter, as soon as they are available, copies
of its annual report and copies of all other documents, reports and information
furnished by the Company to any class of its security holders or filed with any
securities exchange pursuant to the requirements of such exchange or with the
Commission pursuant to the Act or the Exchange Act and such other information
that the Underwriters may reasonably request from time to time. The Company will
deliver to each Underwriter similar reports with respect to significant
subsidiaries, as that term is defined in the rules and regulations under the
Act, which are not consolidated in the Company's financial statements.
ii) If at any time, during such five year period, described above, the
Company shall cease filing with the Commission, periodic reports and current
reports on Forms 10-K, 10-Q and 8-K or other similar forms, the Company will
forward to its shareholders generally and to the Underwriters (i) as soon as
practicable after the end of each fiscal year, copies of a balance sheet and
statements of income and retained earnings of the Company as of the end of and
for such fiscal year, certified by independent public accountants, and (ii) as
soon as practicable after the end of each quarterly fiscal period, except for
the last quarterly fiscal period in each fiscal year, a summary statement (which
need not be certified) of income and retained earnings of the Company for such
period, which shall also be made publicly available.
k) The Company will not, prior to the Closing Date, incur any
material liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business, except as
contemplated in the Prospectus.
l) The Offerors will apply the net proceeds from the sale of the
Junior Subordinated Debentures and the Trust Preferred Securities substantially
in accordance with the purposes set forth under "Use of Proceeds" in the
Prospectus and will file such reports with the Commission with respect to the
application of the proceeds therefrom as may be required under Rule 463 under
the
13
Act and will furnish the Underwriter copies of any such reports as soon as
practicable after the filing thereof.
m) The Offerors will comply with all registration, filing and
reporting requirements of the Exchange Act and the Over The Counter Bulletin
Board.
5) Costs and Expenses.
a) The Company will pay (directly or by reimbursement) all costs,
expenses and fees incident to the performance of the obligations of the Offerors
under this Agreement, including, without limiting the generality of the
foregoing, the following:
i) accounting fees of the Offerors;
ii) fees and disbursements of counsel for the Offerors;
iii) cost of preparing, printing and filing of the Registration
Statement, Preliminary Prospectuses and the Prospectus and any amendments and
supplements thereto and the printing, mailing and delivery to the Underwriters
and dealers of copies thereof and of this Agreement, the Selected Dealers
Agreement, any blue sky memorandum, if deemed necessary by the Underwriters,
after consultation with the Offerors, and any supplements or amendments thereto
(except as provided below);
iv) filing fees of the Commission;
v) filing fees and expenses (including legal fees and disbursements
of counsel for the Underwriters) incident to securing any required review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Trust Preferred Securities;
vi) fees and expenses of the Indenture Trustee, including the fees and
disbursements of counsel for the Indenture Trustee in connection with the
Indenture and Junior Subordinated Debentures; the fees and expenses of the
Property Trustee and the Delaware Trustee, including the fees and disbursements
of counsel for the Property Trustee and the Delaware Trustee in connection with
the Trust Agreement and the Certificate of Trust; the fees and expenses of the
Guarantee Trustee, including the fees and disbursements of counsel for the
Guarantee Trustee in connection with the Guarantee and Guarantee Agreement;
listing fees, if any, transfer taxes and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Trust Preferred Securities under state securities or Blue
Sky laws;
vii) costs of preparing certificates representing Junior Subordinated
Debentures or Trust Preferred Securities;
14
viii) costs and fees of any registrar or transfer agent and all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 5.
b) In addition, the Offerors will pay all travel and lodging expenses
incurred by management of the Offerors in connection with any informational
"road show" meetings held in connection with the offering and will also pay for
the preparation of all materials used in connection with such meetings. The
Offerors shall pay for any of the Underwriters' expenses, including, but not
limited to, fees and expenses of counsel to the Underwriters, up to $30,000,
except if the Offerors terminate the Offering because of failure of the
Underwriters to perform their obligations hereunder, in which case, the
Underwriters will pay their own fees and expenses. If the Company terminates
the Offering on the basis of the allegation that the Underwriters' failed to
perform their obligations hereunder, the Company will bear the burden of proving
the Underwriters' failure to perform its obligations hereunder in the event of
litigation or if the matter is not submitted to litigation, an independent third
party, acceptable to the Underwriters, must determine, based on competent
evidence that the Underwriters failed to perform their obligations hereunder.
If this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Underwriters pursuant to Sections 9(a) or 9(b) hereof, or by reason of any
failure, refusal or inability on the part of the Offerors to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on either of their parts to be performed, unless such failure
to satisfy said condition or to comply with said terms shall be due to the
default or omission of any Underwriter, then the Offerors promptly upon request
by the Underwriters shall reimburse the several Underwriters for all actual,
accountable out-of-pocket expenses, up to $30,000, including fees and
disbursements of counsel reasonably incurred in connection with investigating,
marketing and proposing to market the Trust Preferred Securities or in
contemplation of performing their obligations hereunder; but the Offerors shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Trust
Preferred Securities.
c) Upon successful completion of the offering contemplated by this
Agreement, the Offerors will pay all reasonable and customary costs, expenses
and fees incident to tombstone advertisements of the offering and incurred with
the approval of the Company.
6) Conditions of Obligations of the Underwriters. The several obligations of
the Underwriters to purchase the Trust Preferred Securities on the Closing Date
are subject to the condition that all representations and warranties of the
Offerors contained herein are true and correct, at and as of the Closing Date
and the condition that each Offeror shall have performed all of its covenants
and obligations hereunder and to the following additional conditions:
a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 4(a) hereof;
no stop order suspending the effectiveness of the Registration Statement, as
amended from time to time, or any part thereof shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
Commission; and
15
all requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Underwriters.
b) The Underwriters shall have received on the Closing Date the opinion
of Xxxxxxxxx & Xxxxxxxxx, L.L.P., Houston, Texas, counsel for the Offerors,
dated the Closing Date, addressed to the Underwriters, to the effect that:
i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Prospectus. The holders of the
Company's outstanding securities are not entitled to any preemptive or other
rights to subscribe for the Junior Subordinated Debentures or the Trust
Preferred Securities under the Company's Articles of Incorporation or Bylaws
and, to the knowledge of such counsel, no such or similar rights exist under any
other agreement or arrangement. The Company has authorized and outstanding
capital stock as described in the Prospectus.
ii) Each Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in the Prospectus.
The outstanding capital stock of each such Subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and is owned, directly or
indirectly, by the Company, free and clear of all liens, encumbrances and
security interests, other than security interests specifically disclosed in the
Prospectus. To the knowledge of such counsel, no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into capital stock or ownership interests in any
Subsidiary are outstanding.
iii) All of the issued and outstanding shares of the capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable, were offered and sold in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive rights or of rights to subscribe for or purchase securities.
iv) All of the issued and outstanding Common Securities of the Trust
are owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
v) The Trust Agreement, the Indenture, the Guarantee, the Form T-1
Statement of Eligibility of First Union to act as trustee under the Indenture,
the Form T-1 Statement of Eligibility of First Union to act as trustee under the
Trust Agreement, and the Form T-1 Statement of Eligibility of First Union to act
as trustee under the Guarantee Agreement have been duly qualified under the
Trust Indenture Act.
vi) The Junior Subordinated Debentures are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by the Company
and, when authenticated by the Indenture Trustee in the manner provided for in
the Indenture and delivered against payment therefor, will constitute valid and
binding obligations of the Company, enforceable
16
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
vii) The Junior Subordinated Debentures are subordinate and junior in
right of payment to all "Senior Indebtedness" (as defined in the Indenture) of
the Company.
viii) The form of certificate for the Trust Preferred Securities to be
delivered hereunder is in due and proper form, and when duly countersigned by
the Trust's transfer agent and delivered to the Underwriters against payment of
the agreed consideration therefore in accordance with the provisions hereof, the
Trust Preferred Securities represented thereby will be duly authorized and
validly issued, fully paid and non-assessable and free of preemptive rights and,
to the knowledge of such counsel, will be free of any security interest, claim,
lien, encumbrance or adverse interest of any nature, or rights of first refusal
in favor or, shareholders with respect to any of the Trust Preferred Securities
or the issuance or sale thereof, other than as disclosed in the Prospectus.
ix) Under current law, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation; accordingly, for United States federal income tax purposes
each beneficial owner of Trust Preferred Securities will be treated as owning an
undivided beneficial interest in the Junior Subordinated Debentures, and stated
interest on the Junior Subordinated Debentures generally will be included in
income by a holder of Trust Preferred Securities at the time such interest
income is paid or accrued in accordance with such holder's regular method of tax
accounting.
x) For federal income tax purposes, (i) the Junior Subordinated
Debentures will constitute indebtedness of the Company and (ii) the interest on
the Junior Subordinated Debentures will be deductible by the Company on an
economic accrual basis in accordance with Section 163(e) of the Internal Revenue
Code of 1986, as amended, and Treasury Regulation Section 1.163-7.
xi) To the best of such counsel's knowledge and information after due
inquiry, the Trust is not required to be authorized to do business in any other
jurisdiction, except where the failure to be so authorized would not have a
material adverse effect on the Trust's condition (financial or otherwise),
earnings, business, prospects, assets, results of operations or properties taken
as a whole and the Trust is not a party to or otherwise bound by any material
agreement other than those described in the Prospectus.
xii) The Trust Agreement has been duly executed and delivered by the
Administrative Trustees.
xiii) To the best of such counsel's knowledge and information after due
inquiry, the Offerors are not in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or any other instrument of
which either of them is a party or by which either of them may be bound, or to
which any of the property or assets of the Offerors is subject.
17
xiv) The Company has full corporate power and authority and the Trust
has full trust power and authority to enter into this Agreement, the Indenture,
the Trust Agreement, the Guarantee Agreement and the Expense Agreement, as
applicable, and to issue the Junior Subordinated Debentures or the Common
Securities and Trust Preferred Securities, as the case may be, and to effect the
transactions contemplated by this Agreement, the Indenture, the Trust Agreement,
the Guarantee Agreement and the Expense Agreement, as applicable, and each of
this Agreement, the Indenture, the Trust Agreement, the Guarantee Agreement and
the Expense Agreement have been duly authorized, executed and delivered by the
Company and the Trust, as applicable, and constitutes a valid, legal and binding
obligation of the Company and the Trust, as applicable, enforceable in
accordance with its terms (except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity).
xv) The execution, delivery and performance of this Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement, the Trust Preferred
Securities, the Common Securities, the Junior Subordinated Debentures and the
Expense Agreement and the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation
(except that such counsel need express no opinion regarding any Blue Sky or
state securities laws), any lease, contract, indenture, mortgage, loan agreement
or other agreement or instrument known to such counsel to which the Company, the
Trust or any Subsidiary is a party or by which it is bound or to which any of
its property is subject, the Company's or any Subsidiary's charter, articles of
incorporation or bylaws, or the Trust's Certificate or any permit, judgment,
order or decree known to such counsel of any court or governmental agency or
body having jurisdiction over the Company, the Trust or any Subsidiary or any of
their respective properties, except for any breach, violation or default which
would not have a material adverse effect on the Company or the Trust.
xvi) No consent, approval, authorization, order of, designation,
declaration or filing by or with, any court or any regulatory, administrative or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Indenture, the Trust Agreement, the Guarantee
Agreement, the Expense Agreement, the Common Securities, the Trust Preferred
Securities, or the Junior Subordinated Debentures, or for the consummation of
the transactions contemplated hereby or thereby (other than as may be required
by federal or state laws governing banks or bank holding companies, the NASD, or
by state securities and blue sky laws, as to which such counsel need express no
opinion), including the issuance or sale of the Junior Subordinated Debentures
by the Company and the Common Securities and Trust Preferred Securities by the
Trust, except (a) such as may be required under the Act, which have been
obtained or made, or under state securities or blue sky laws, (b) such
agreements, instruments or obligations with respect to which valid consents or
waivers have been obtained by the Trust, the Company or any of the Subsidiaries,
and (c) the qualification of the Trust Agreement, the Guarantee Agreement and
the Indenture under the Trust Indenture Act and the regulations thereunder, all
of which have been effected.
18
xvii) The filing of the Registration Statement and the registration of
the Junior Subordinated Debentures, the Guarantee and the Trust Preferred
Securities under the Act does not give rise to any rights for or relating to the
registration of any shares of capital stock or other securities of the Company.
xviii) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order proceedings with respect
thereto have been instituted or are pending or threatened by the Commission.
xix) The Registration Statement, the Prospectus and each amendment or
supplement, thereto comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder (except that
such counsel need express no opinion as to the financial statements and related
financial schedules contained in the financial statements, Registration
Statement, the Prospectus and each amendment or supplement thereto).
xx) The statements (A) in the Prospectus under the caption "Federal
Income Tax Consequences," (B) in the Prospectus under the caption "Supervision
and Regulation" and (C) in the Registration Statement in Item 24, insofar as
such statements constitute a summary of matters of law, are accurate summaries
and fairly present the information called for with respect to such matters.
xxi) Such counsel does not know of any contracts, agreements,
documents or instruments required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus which are
not so filed or described as required; and insofar as any statements in the
Registration Statement or the Prospectus constitute summaries of any contract,
agreement, document or instrument to which the Trust, the Company or any
Subsidiary is a party, such statements are accurate summaries and fairly present
the information called for with respect to such matters.
xxii) Such counsel knows of no legal or governmental proceeding,
pending or threatened, before any court or administrative body or regulatory
agency, to which the Trust, the Company or any of the Subsidiaries is a party or
to which any of the properties of the Trust, the Company or any of the
Subsidiaries is subject that are required to be described in the Registration
Statement or Prospectus and are not so described, or statutes or regulations
that are required to be described in the Registration Statement or the
Prospectus that are not so described (other than applicable federal and state
laws and regulations relating to banks and bank holding companies ("Banking
Laws"), as to which counsel need express no opinion).
xxiii) Neither the Company nor the Trust is, and immediately upon
completion of the sale of Trust Preferred Securities contemplated hereby,
neither the Company nor the Trust will be, an "investment company" or a company
"controlled" by an investment company or an "investment advisor" under the
Investment Company Act of 1940, as amended.
19
xxiv) To the best of such counsel's knowledge and information, after
due inquiry, neither the Company nor any of the Subsidiaries is in violation of
its respective charter, Articles of Incorporation or Bylaws.
xxv) The Bank has been duly chartered to conduct the business of
Banking in its state of domicile and the Company has all necessary power and
authority to own the Bank. The Company and the Bank have all necessary consents
and approvals under applicable Banking Laws to own their respective assets and
carry on their respective businesses as currently conducted.
xxvi) Such counsel knows of no legal or governmental proceeding,
pending or threatened, before any court or administrative body or regulatory
agency, to which the Company or any of the Subsidiaries is a party or to which
any of the properties of the Company or any of the Subsidiaries is subject that
are required to be described in the Registration Statement or Prospectus and are
not so described, or statutes or regulations that are required to be described
in the Registration Statement or the Prospectus that are not so described.
xxvii) The execution and delivery of this Agreement, the Indenture,
the Trust Agreement, the Guarantee Agreement and the Expense Agreement and the
consummation of the transactions herein and therein contemplated do not and will
not conflict with or result in a violation of or default under any Banking Laws,
or any permit, judgment, decree or order known to such counsel, or any lease,
contract, indenture, mortgage, loan agreement or other agreement or other
instrument or obligation known to such counsel to which the Company, the Trust
or the Bank is a party or by which the Company, the Trust or the Bank or any of
its respective properties is bound.
xxviii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body under Banking Laws is necessary in connection with the
execution and delivery of this Agreement, the Indenture, the Trust Agreement,
the Guarantee Agreement and the Expense Agreement and the consummation of the
transactions herein and therein contemplated, except such as have been obtained
or made, specifying the same.
xxix) The maximum portion of the proceeds from the sale of the Trust
Preferred Securities set forth under applicable regulatory limitations on the
amount thereof that can be included in Tier 1 capital (as defined in 12 C.F.R.
Part 325), will constitute "Tier 1" capital.
xxx) Such counsel shall also state that on the basis of such
counsel's review and participation in conferences in connection with the
preparation of the Registration Statement and the Prospectus, such counsel has
no reason to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Offerors prior to the Closing Date
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement thereto made by the
Offerors prior to the Closing Date (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
20
state a material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of the Closing
Date, either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Offerors prior to the Closing Date
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.
xxxi) In rendering the above opinions, counsel may rely (i) as to
matters of law other than Texas and federal law, upon the opinion or opinions of
local counsel provided that the extent of such reliance is specified in such
opinion and that such counsel shall state that such opinion or opinions of local
counsel are satisfactory to them and they believe they and you are justified in
relying thereon and (ii) as to matters of fact, upon the representations of the
Trust and the Company contained in this Agreement and upon certificates of
trustees or officers of the Trust, the Company and of public officials.
c) The Underwriters shall have received on the Closing Date the opinion
of Xxxxxxxx, Xxxxxx and Finger, P.A., Wilmington, Delaware, counsel to First
Union, as Property Trustee under the Trust Agreement, Indenture Trustee under
the Indenture, and Guarantee Trustee under the Guarantee Agreement, dated the
Closing Date, addressed to the Underwriters, to the effect that:
i) First Union is duly incorporated and is validly existing in good
standing as a national banking association under the laws of the United States
and the State of Delaware.
ii) First Union has the power and authority to execute, deliver and
perform its obligations under the Trust Agreement, the Indenture and the
Guarantee Agreement.
iii) Each of the Trust Agreement, the Indenture and the Guarantee
Agreement has been duly authorized, executed and delivered by First Union and
constitutes a legal, valid and binding obligation of First Union, enforceable
against First Union, in accordance with its terms.
iv) The execution, delivery and performance by First Union of the Trust
Agreement, the Indenture and the Guarantee Agreement do not conflict with or
constitute a breach of the charter, Articles of Association or Bylaws of First
Union.
v) No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware or the
United States of America governing the banking or trust powers of First Union is
required for the execution, delivery or performance by First Union of the Trust
Agreement, the Indenture and the Guarantee Agreement.
d) The underwriters shall have received on the Closing Date, the opinion
of Xxxxxxxx, Xxxxxx and Xxxxxx, P.A., as special counsel for the Offerors that:
i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required as
of the date hereof under the
21
Delaware Act with respect to the creation and valid existence of the Trust as a
business trust have been made.
ii) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority to own property and to conduct its business, all as
described in the Prospectus.
iii) The Trust Agreement constitutes a valid and binding obligation of
the Company, the Property Trustee and each of the Administrative Trustees, and
is enforceable against the Company, the Property Trustee and each of the
Administrative Trustees in accordance with its terms.
iv) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority (i) to execute and deliver, and to perform its
obligations under, this Agreement, and (ii) to issue, and to perform its
obligations under, the Trust Preferred Securities and the Common Securities.
v) Under the Trust Agreement and the Delaware Act, the execution and
delivery by the Trust of this Agreement, and the performance by the Trust of its
obligations under this Agreement, have been duly authorized by all necessary
trust action on the part of the Trust.
vi) Under the Delaware Act, the certificate attached to the Trust
Agreement as Exhibit E is an appropriate form of certificate to evidence
ownership of the Trust Preferred Securities. The Trust Preferred Securities and
the Common Securities have been duly authorized by the Trust Agreement and are
duly and validly issued and, subject to the qualifications hereinafter expressed
in this paragraph (vi), fully paid and non-assessable undivided beneficial
interests in the assets of the Trust. The respective holders of the Trust
Preferred Securities and the Common Securities, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. Such counsel may note that the
respective holders of the Trust Preferred Securities and the Common Securities
may be obligated, pursuant to the Trust Agreement, to make certain payments
under the Trust Agreement.
vii) Under the Trust Agreement and the Delaware Act, the issuance of
the Trust Preferred Securities and the Common Securities is not subject to
preemptive or similar rights.
viii) The issuance and sale by the Trust of the Trust Preferred
Securities and the Common Securities, the purchase by the Trust of the Junior
Subordinated Debentures, the execution, delivery and performance by the Trust of
this Agreement and the Guarantee Agreement, the consummation by the Trust of the
transactions contemplated by this Agreement and compliance by the Trust with its
obligations under this Agreement do not violate (a) any of the provisions of the
Certificate of Trust or the Trust Agreement or (b) any applicable Delaware law
or Delaware administrative regulations.
e) The Underwriters shall have received from Xxxxxxxxxx, Xxxxxxx & Xxxxx,
LLP, Denver, Colorado, counsel for the Underwriters, an opinion dated the
Closing Date, as the case may
22
be, with respect to the formation of the Trust, the validity of the Trust
Preferred Securities, the Indenture, the Trust Agreement, the Guarantee
Agreement, the Expense Agreement, this Agreement, the Registration Statement,
the Prospectus, and other related matters as the Underwriters may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters.
f) The Underwriters shall have received on each of the date hereof, and
the Closing Date, a signed letter, dated as of the date hereof, or the Closing
Date, in form and substance satisfactory to the Underwriters, from Xxxxxx &
Xxxxxxx Company, P.C., to the effect that they are independent public
accountants with respect to the Trust, the Company and the Subsidiaries within
the meaning of the Act and the related rules and regulations and containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
g) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been taken or, to the knowledge of the Company or its counsel shall
be contemplated by the Commission, there shall not have been any change or any
development involving a reasonably foreseeable change, in or affecting the
general affairs, management, financial position, shareholders' equity or results
of operations of the Offerors and neither of the Offerors shall have incurred
any material liabilities or obligations, whether or not in the ordinary course
of business, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in your reasonable judgment, is material and adverse to the
Offerors and makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Trust Preferred Securities being delivered at
the Closing Date, on the terms and in the manner contemplated in the Prospectus.
h) The Underwriters shall have received on the Closing Date, a
certificate or certificates of the chief executive officer and the principal
financial officer of the Company, to the effect that, as of such Closing Date
each of them severally represents as follows:
i) The Prospectus was filed with the Commission pursuant to Rule 424(b)
within the applicable period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4 of this Agreement; no
stop order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose have been initiated or are, to his
knowledge, threatened by the Commission.
ii) The representations and warranties of the Company set forth in
Section 1 of this Agreement are true and correct at and as of the Closing Date,
and the Company has performed all of its obligations under this Agreement, the
Trust Agreement, the Indenture, the Guaranty Agreement and the Expense Agreement
to be performed at or prior to the Closing Date.
23
i) The Underwriters shall have received on the Closing Date, a
certificate or certificates of the Administrative Trustees, to the effect that,
as of such Closing Date each of them severally represents as follows:
i) The Prospectus was filed with the Commission pursuant to Rule
424(b) within the applicable period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4 of this Agreement; no
stop order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose have been initiated or are, to his
knowledge, threatened by the Commission.
ii) The representations and warranties of the Trust set forth in
Section 1 of this Agreement are true and correct at and as of the Closing Date,
and the Trust has performed all of its obligations under this Agreement the
Trust Agreement, the Indenture, the Guaranty Agreement and the Expense Agreement
to be performed at or prior to the Closing Date.
j) The Offerors shall have furnished to the Underwriters such further
certificates and documents as the Underwriters may reasonably have requested.
k) The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Underwriters and its counsel.
l) If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Underwriters by notifying the Trust of such termination in writing or by
telegram at or prior to the Closing Date. In such event, the Trust and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 7 hereof).
7) Indemnification.
a) The Offerors jointly and severally agree to indemnify and hold
harmless each Underwriter, each officer and director thereof, and each person,
if any, who controls any Underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities to which such Underwriter or such persons
may became subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus, including any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not misleading
in light of the circumstances under which they were made, or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Trust Preferred Securities or
the offering contemplated hereby, and which is included as part of or referred
to in any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arising out of or based upon matters covered by clause (i) or
(ii) above, and will reimburse each
24
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such action or claim as such expenses are
incurred.
b) However, the Offerors shall not be liable hereunder:
i) in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission, made in the Registration
Statement, any Preliminary Prospectus or the Prospectus, including any
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished to the Offerors by any Underwriter specifically
for use therein or
ii) with respect to any preliminary prospectus from which an action or
claim arising from the sale of the Trust Preferred Securities by the
Underwriters brought by any person who purchased the Trust Preferred Securities
from the Underwriter if (A) a copy of the Prospectus (as amended or supplemented
if any amendments or supplements thereto shall have been furnished to the
Underwriters prior to the written confirmation of the sale involved) shall not
have been given or sent to such person by or on behalf of the Underwriters with
or prior to the written confirmation of the sale involved and (B) the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus (as amended or supplemented); and
iii) in the case of any matter covered by clause (i) and (ii) above to
the extent that it is determined in a final judgment by a court of competent
jurisdiction that such losses, claims, damages or liabilities resulted directly
from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence, recklessness or willful misconduct.
c) Each Underwriter severally agrees to indemnify and hold harmless the
Offerors and the trustees and directors and officers who have signed the
Registration Statement, and each person, if any, who controls the Offerors
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Offerors or any such person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a 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, and will reimburse any legal or
other expenses reasonably incurred by the Offerors or any such person in
connection with investigating or defending any such action or claim as such
expenses are incurred.
d) However, each Underwriter will be liable in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission has been made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
or the Company by or through the Underwriters specifically for use therein. The
25
obligations of the Underwriters under this Section 7(b) are several in
proportion to their respective underwriting obligations and not joint.
e) The Company agrees to indemnify the Trust against all loss,
liability, claim damage and expense whatsoever, which may become due from the
Trust under subsection (a) of this Section 7.
f) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity or
contribution may be sought pursuant to this Section 7, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing of such
indemnification obligations. In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay promptly as incurred the reasonable fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and the indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it or other indemnified parties which are different from
or additional to those available to the indemnifying party. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm at any time for all such indemnified
parties. Such firm shall be designated in writing by the Underwriters and shall
be reasonably satisfactory to the Offerors in the case of parties indemnified
pursuant to Section 7(a) and shall be designated in writing by the Offerors and
shall be reasonably satisfactory to the Underwriters in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
g) Contribution. If the indemnification provided for in this Section 7
is unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors on the
one hand and the Underwriters on the other from the offering of the Trust
Preferred Securities. If, however, the allocation provided by the immediately
preceding sentence is not
26
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Offerors on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Offerors on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Offerors bears to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth on the cover page of the Prospectus. The relative fault 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 on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Offerors and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7(e). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereto) referred to above in
this Section 7(e) shall be deemed to include 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
Section 7(e), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Trust
Preferred Securities purchased by such Underwriter; and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section 7(e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
h) The obligations of the Offerors under this Section 7 shall be in
addition to any liability that the Offerors may otherwise have, and the
obligations of the Underwriters under this Section 7 shall be in addition to any
liability that the Underwriters may otherwise have.
8) Notices. All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows:
a) if to the Underwriters, to Xxxxxx & Xxxxxx, Incorporated, 000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, attention Xxxxxx
X. Xxxxxx and to Samco Capital Markets, 0000 Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, attention Xxxxxxx Xxxxxx;
b) if to the Company, to Paradigm Bancorporation, Inc., 0000 XX 0000 X.,
Xxxxx 000 Xxxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxxx; and
c) if to the Trust, to it at c/o Paradigm Bancorporation, Inc., 3934 FM
0000 X. Xxxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxxx. All notices given by
telegram or facsimile shall
27
be promptly confirmed by letter. Any notice to the Trust shall also be copied to
the Company at the address previously stated. Any party may change its address
for notice purposes by written notice to the other parties.
9) Termination. This Agreement may be terminated by you by notice to the
Offerors as follows:
a) At any time prior to the time this Agreement shall become effective
as to all its provisions, and any such termination shall be without liability on
the part of the Offerors to the Underwriters (except for the expenses to be paid
or reimbursed pursuant to Section 5 and except to the extent provided in Section
7 hereof) or of any Underwriter to the Offerors;
b) Without liability of the Underwriters to any of the Offerors or their
Subsidiaries, at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, in the reasonable opinion of the
Underwriters, any material adverse change in or affecting the condition,
financial or otherwise, of the Trust, the Company and the Subsidiaries taken as
a whole or the business affairs, management, financial position, shareholders'
equity or results of operations of the Trust, the Company and the Subsidiaries
taken as a whole, whether or not arising in the ordinary course of business,
(ii) any outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity or
crisis or change in economic or political conditions or change in the financial
markets if the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change in the financial markets of the United States would,
in the judgment of the Underwriters, make the offering or delivery of the Trust
Preferred Securities impracticable or inadvisable, (iii) suspension of trading
in securities on the New York Stock Exchange or the American Stock Exchange or
limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on either such Exchange, or a halt or suspension of
trading in securities generally which are quoted on the Over The Counter
Bulletin Board or (iv) declaration of a banking moratorium by either federal
authorities or New York or Texas state authorities; or
c) As provided in Section 6 of this Agreement.
10) Written Information. For all purposes under this Agreement (including,
without limitation, Section 1, Section 3 and Section 7 hereof), the Offerors
understand and agree with each of the Underwriters that the only written
information furnished to the Offerors by the Underwriters specifically for use
in preparation of the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto is under the caption
"Underwriting" in the Preliminary Prospectus and the Prospectus.
11) Successors. This Agreement has been and is made solely for the benefit of
and shall be binding upon the Underwriters, the Trust and the Company and their
respective successors, executors, administrators, heirs and assigns, and the
trustees and controlling persons and the officers and directors of any such
controlling person referred to herein, and no other person will have any
28
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Trust Preferred Securities merely because of such purchase.
12) Miscellaneous.
a) Survival. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Offerors or controlling persons thereof and (iii) delivery of and payment
for the Trust Preferred Securities under this Agreement.
b) Severability. Each provision of this Agreement shall be interpreted
in such a manner to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable
under any applicable law or rule in any jurisdiction, such provision will be
ineffective only to the extent of such invalidity, illegality or
unenforceability in such jurisdiction or any provision hereof in any other
jurisdiction.
c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
d) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
29
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Offerors and the
Underwriters in accordance with its terms.
Very truly yours,
PARADIGM CAPITAL TRUST I, a Delaware business trust
By: ______________________________
Xxx X. Xxxxxx, Xx., Administrative Trustee
PARADIGM BANCORPORATION, INC., a Texas corporation
By: ________________________________
Xxxxx X. Xxxxxx, Director, President and CEO
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
XXXXXX & XXXXXX, INCORPORATED.
By: ________________________________
Xxxxxx X. Xxxxxx, Senior Vice President
SAMCO CAPITAL MARKETS
by:___________________________
[Name and Title]
30
SCHEDULE A
Schedule of Underwriters
Number of
Trust Preferred Securities
Underwriter to Be Purchased
----------------------------------------------------------------------
Xxxxxx & Xxxxxx, Incorporated
----------------------------------------------------------------------
Samco Capital Markets
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Total: 600,000
----------------------------------------------------------------------
31
