Exhibit 1.1
UNDERWRITING AGREEMENT
for offering of
$___ Convertible Preferred Securities
GUARANTY CAPITAL TRUST I
(a Delaware Trust)
$___ Convertible Preferred Securities (the "Preferred Securities")
(Liquidation Amount of $25.00 per Preferred Security)
UNDERWRITING AGREEMENT
---------------
________ __, 1998
XxXxxxxx & Company, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxxx Building, 16th Floor
Norfolk, Virginia 23510
Dear Sirs:
Guaranty Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. ss.ss.3801 et
seq.), and Guaranty Financial Corporation, a Virginia corporation (the "Company"
and, together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with XxXxxxxx & Company, Inc. (the "Underwriter") with respect to
the sale by the Trust of $___ Convertible Preferred Securities (liquidation
amount of $25.00 per preferred security) of the Trust (the "Preferred
Securities") set forth in Schedule A. The Preferred Securities will be
guaranteed on a subordinated basis by the Company, to the extent set forth in
the Prospectus (as defined herein), with respect to distributions and payments
upon liquidation, redemption and otherwise (the "Preferred Securities
Guarantee") pursuant to the Guarantee Agreement, to be dated as of _______,
1998, and as may be amended, (the "Guarantee Agreement"), between the Company
and Wilmington Trust Company, as trustee (the "Guarantee Trustee"), and will be
entitled to the benefits of certain backup undertakings described in the
Prospectus (as defined herein) with respect to the Company's agreement pursuant
to the Indenture (as defined herein) to pay all expenses relating to
administration of the Trust (other than payment obligations with respect to the
Preferred Securities).
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (Nos. _______ and
_______) and a related preliminary prospectus for the registration under the
Securities Act of 1933, as amended (the "1933 Act") of (i) the Preferred
Securities, (ii) the Preferred Securities Guarantee, (iii) the Junior
Subordinated Debt Securities to be issued and sold to the Trust by the Company
and (iv) such indeterminate number of shares of common stock, par value ___, of
the Company (the "Common Stock") as
may be issuable upon conversion of the Preferred Securities, have filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. Such
registration statement (as amended) (including the information, if any, deemed
to be part thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")) and the prospectus
constituting a part thereof, as from time to time amended or supplemented
pursuant to the 1933 Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that, if any revised
prospectus shall be provided to the Underwriter by the Offerors for use in
connection with the offering of the Preferred Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Offerors pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriter for such use. All references in this
Agreement to financial statements and schedules and other information that is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information that
are or are deemed to be incorporated by reference in the Registration Statement
or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act that
is incorporated or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
The Offerors understand that the Underwriter proposes to make a public
offering of the Preferred Securities as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered and the Declaration (as
defined herein), the Indenture (as defined herein) and the Preferred Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act"). The entire proceeds to the Trust from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its common securities (the "Common Securities"), as
guaranteed on a subordinated basis by the Company, to the extent set forth in
the Prospectus, with respect to distributions and payments upon liquidation and
redemption thereof (the "Common Securities Guarantee" and together with the
Preferred Securities Guarantee, the "Guarantees") pursuant to the Guarantee
Agreement between the Company and Guarantee Trustee, as Trustee, and will be
used by the Trust to purchase up to $________ aggregate principal amount of __%
Junior Subordinated Debt Securities due _______, 2028 (the "Junior Subordinated
Debt Securities") issued by the Company under the Indenture (as defined herein).
The Preferred Securities and the Common Securities will be issued pursuant to
the Declaration of Trust of the Trust, to be dated as of ______, 1998 (the
"Declaration"), among the Company, as Depositor, the individuals named as
Administrative Trustees therein, as trustees (the "Administrative Trustees"),
and Wilmington Trust Company, as property trustee (the "Property Trustee" and,
together with the Administrative Trustees, the "Trustees"), and the holders from
time to time of undivided beneficial interests in the assets of the Trust. The
Junior Subordinated Debt Securities will be issued pursuant to an indenture, to
be dated as of _______, 1998, between the Company and Wilmington Trust Company,
as trustee
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(the "Indenture Trustee") (together with any amendments or supplements thereto,
the "Indenture").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors jointly and severally represent and warrant to the
Underwriter as of the date hereof and as of the Closing Time (as hereinafter
defined) as follows:
(i) At the time the Registration Statement became effective
and as of the date hereof, the Registration Statement complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations"), and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, dated
the date hereof (unless the term "Prospectus" refers to a prospectus that has
been provided to the Underwriter by the Trust for use in connection with the
offering of the Preferred Securities and that differs from the Prospectus on
file at the Commission at the time the Registration Statement became effective,
in which case, at the time it is first provided to the Underwriter for such use)
and at the date of the Closing Time referred to in Section 2 hereof, does not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, the
Offerors make no representations or warranties as to (A) that part of the
Registration Statement which constitutes the Statements of Eligibility and
Qualification (Forms T-1) under the 1939 Act of the Indenture Trustee, the
Property Trustee or the Guarantee Trustee or (B) the information contained in or
omitted from the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of the
Underwriter specifically for use in the Registration Statement and the
Prospectus.
(ii) The documents, if any, incorporated or deemed to be
incorporated by reference in the Registration Statement or Prospectus, at the
time they were or hereafter are filed with the Commission complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the "1934 Act
Regulations").
(iii) To the best knowledge of the Offerors, BDO Xxxxxxx, LLP,
the accountants who certified the financial statements and supporting schedules
included in or incorporated by reference into the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Preferred Securities, the Common
Securities and the Declaration; the Trust is not a party to or otherwise bound
by any agreement
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other than those described in the Prospectus; the Trust is and will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(v) The Common Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered by the Trust to
the Company against payment therefor as described in the Registration Statement
and Prospectus, will be validly issued and, subject to the terms of the
Declaration, fully paid and non-assessable undivided beneficial interests in the
assets of the Trust and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(vii) The Declaration has been duly authorized by the Company,
as Depositor, and will have been duly executed and delivered by the Company and
the Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Property Trustee, the Declaration is and will be a valid and
binding obligation of the Company, the Trust and the Administrative Trustees,
enforceable against the Company and the Administrative Trustees in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
other similar laws affecting the rights of creditors now or hereafter in effect,
and to equitable principles that may limit the right to specific enforcement of
remedies, and further subject to 12 U.S.C. 1818(b)(6)(D) (or any successor
statute) and any bank regulatory powers now or hereafter in effect and to the
application of principles of public policy (collectively, the "Permitted
Exceptions") and will conform to all statements relating thereto in the
Prospectus; and the Declaration has been duly qualified under the 1939 Act.
(viii) The Guarantee Agreement has been duly authorized by the
Company and, when validly executed and delivered by the Company, assuming due
authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Permitted Exceptions,
and each of the Guarantees and the Guarantee Agreement will conform to all
statements relating thereto contained in the Prospectus; and the trust pursuant
to the Guarantee Agreement will have been duly qualified under the 1939 Act.
(ix) The Preferred Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered pursuant to
this Agreement and payment of the consideration therefor set forth in Schedule B
hereto, will be validly issued and, subject to the terms of the Declaration,
fully paid and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; the issuance of the
Preferred Securities is not subject to
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preemptive or other similar rights; and, subject to the terms of the
Declaration, holders of Preferred Securities will be entitled to the same
limitation of personal liability under Delaware law as extended to stockholders
of private corporations for profit.
(x) Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Declaration; the Declaration has been duly executed and
delivered by the Administrative Trustees and is a valid and binding obligation
of each Administrative Trustee, enforceable against such Administrative Trustee
in accordance with its terms except to the extent that enforcement thereof may
be limited by the Permitted Exceptions.
(xi) None of the Offerors is, and upon the issuance and sale
of the Preferred Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus none will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
(xii) No authorization, approval, consent or order of any court
or governmental authority or agency is necessary in connection with the issuance
and sale of the Common Securities or the offering of the Preferred Securities,
the Junior Subordinated Debt Securities or the Guarantees hereunder, except such
as may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and the qualification of the Declaration, the Guarantee
Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Trust or
of the Company and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the Commonwealth of
Virginia, with corporate power to own, lease and operate its properties and to
conduct its business as described in the Prospectus, to enter into and perform
its obligations under this Agreement, the Declaration, as Depositor, the
Indenture and each of the Guarantees and to purchase, own, and hold the Common
Securities issued by the Trust; the Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended; and the Company
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the character or location of its
properties or the nature or the conduct of its business requires such
qualification, except for any failures to be so qualified or in good standing
which, taken as a whole, are not material to the Company and its subsidiaries,
considered as one enterprise.
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(iii) Guaranty Bank (the "Principal Subsidiary Bank") is a
banking association operating under the laws of Virginia and authorized
thereunder to transact business; all of the issued and outstanding capital stock
of the Principal Subsidiary Bank has been duly authorized and validly issued, is
fully paid and non-assessable; and the capital stock of the Principal Subsidiary
Bank owned by the Company, directly or through subsidiaries, is owned free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(iv) The Indenture has been duly authorized by the Company
and, when validly executed and delivered by the Company, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Permitted Exceptions; the Indenture will conform to all
statements relating thereto contained in the Prospectus; and the Indenture has
been duly qualified under the 1939 Act.
(v) The Junior Subordinated Debt Securities have been duly
authorized by the Company and have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms except to the extent that enforcement thereof may be
limited by the Permitted Exceptions, will be in the form contemplated by, and
subject to the Permitted Exceptions entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
(vi) The Company's obligations under the Guarantees are
subordinate and junior in right of payment to all Senior Debt of the Company
(which, as defined in the Indenture, includes all outstanding subordinated debt
of the Company).
(vii) The Junior Subordinated Debt Securities are subordinated
and junior in right of payment to all Senior Debt of the Company.
(viii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and compliance by
the Company with its obligations hereunder will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or the
Principal Subsidiary Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or the Principal
Subsidiary Bank is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or the Principal Subsidiary
Bank is subject (except for conflicts, breaches and defaults which would not,
individually or in the aggregate, be materially adverse to the Company and its
subsidiaries taken as a whole or materially adverse to the transactions
contemplated by this Agreement), nor will such action result in any material
violation of the provisions of the articles of incorporation or by-laws of the
Company, or any applicable law, administrative regulation or administrative or
court decree.
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(ix) The shares of Common Stock issuable upon conversion of
the Preferred Securities have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion in accordance with
the provisions of the Preferred Securities, will have been validly issued and
will be fully paid and non-assessable and free of preemptive rights.
(x) There are not now outstanding and at the Closing Time
there will be no preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon the Company for the purchase or
acquisition of any shares of its capital stock other than as set forth in the
Prospectus.
(c) Each certificate signed by any officer of the Company and
delivered to the Underwriter shall be deemed to be a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
(d) The Trust represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Trust,
whether or not arising in the ordinary course of business, and (B) there have
been no transactions entered into by the Trust, other than in the ordinary
course of business, which are material with respect to the Trust.
(ii) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the best
knowledge of the Trust, threatened, against or affecting the Trust that is
required to be disclosed in the Prospectus, other than actions, suits or
proceedings which are not reasonably expected, individually or in the aggregate,
to have a material adverse effect on the condition, financial or otherwise, or
on the earnings or business affairs of the Trust, whether or not arising in the
ordinary course of business; and there are no transactions, contracts or
documents of the Trust that are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations that have
not been so filed.
(iii) The Trust possesses adequate certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies to conduct the business now operated by it, and the Trust has not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding would materially and
adversely affect the condition, financial or otherwise, or the earnings or
business affairs of the Trust.
(iv) The execution, delivery and performance of this
Agreement, the Declaration, the Guarantee Agreement and the Guarantees, the
issuance and sale of the Preferred Securities and the Common Securities, and the
consummation of the transactions contemplated herein and therein and compliance
by the Trust with its obligations hereunder and thereunder have
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been duly authorized by all necessary action (corporate or otherwise) on the
part of the Trust and do not and will not result in any violation of the
Declaration or Certificate of Trust and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Trust under (A) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Trust is a party or by which it may be bound or to which
any of its properties may be subject or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust, or any of its properties (except for conflicts, breaches, violations or
defaults which would not, individually or in the aggregate, be materially
adverse to the Trust, or materially adverse to the transactions contemplated by
this Agreement).
(e) Each certificate signed by any Trustee of the Trust and
delivered to the Underwriter or counsel for the Underwriter shall be deemed to
be a representation and warranty by the Trust to the Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY; CLOSING.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Trust
agrees to issue and sell the Preferred Securities through the Underwriter, as
agent for the Trust, to the public and the Underwriter agrees to use its best
efforts to sell the Preferred Securities as agent for the Trust, at the price
per Preferred Security set forth on Schedule B (the "Public Offering Price").
The Trust reserves the right to increase the aggregate liquidation amount by up
to $900,000. The Company agrees to pay the Underwriter a commission for
Preferred Securities sold through the Underwriter in the public offering as set
forth on Schedule B (the "Selling Commission"). The Underwriter may reject any
offer to purchase the Preferred Securities made through the Underwriter in whole
or in part, and any such rejection shall not be deemed a breach of the
Underwriter's agreement contained herein.
(b) It is understood that, after the Registration Statement becomes
effective, you propose to sell the Preferred Securities to the public as agent
for the Trust upon the terms and conditions set forth in the Prospectus. The
escrow procedures established by the Underwriter shall comply with Commission
Rule 15c2-4 promulgated under the Exchange Act ("Rule 15c2-4"). All subscribers
to whom the Underwriter directly sells Preferred Securities shall be instructed
to make their check for payment of the Preferred Securities payable to "Guaranty
Capital Trust I Escrow Account." The Underwriter shall transmit all funds that
it receives from subscribers to Wilmington Trust Company, the escrow agent (the
"Escrow Agent") by noon of the next business day following receipt thereof. Only
broker/dealers who are either (i) members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") that are registered with
the NASD and maintain net capital pursuant to Rule 15c3-1 promulgated under the
Exchange Act of not less than $25,000 or (ii) dealers with their principal
places of business located outside the United States, its territories and its
possessions and not registered as brokers or dealers under the Exchange Act, who
have agreed not to make any sales within the United States, its territories or
its possessions or to persons who are nationals thereof or
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residents therein shall be designated selected dealers by the Underwriter. The
Underwriter shall comply, and shall require all selected dealers to comply, with
Rule 15c2-4.
(c) The Underwriter shall direct the Escrow Agent to make payment
for the Preferred Securities sold hereunder by wire transfer or certified or
bank cashier's check drawn to the order of the Trust in next day funds. Such
payment is to be made at the offices of Guaranty Financial Corporation, at 10:00
a.m. local time, on or about _________, 1998, or at such other time, date and
place as you and the Trust shall agree upon, such time and date being herein
referred to as the "Closing Time." The certificates for the Preferred Securities
will be delivered in such denominations and in such registrations as the
Underwriter requests in writing not later than the third (3rd) full business day
prior to the Closing Time, and will be made available for inspection by the
Underwriter at least twenty-four (24) hours prior to the Closing Time. Such
certificates will be delivered to the Escrow Agent by 12:00 p.m. on the day
prior to the Closing Time, along with addressed labels to be used to mail the
certificates to the purchasers thereof. The Trust shall direct the Escrow Agent
to deliver (i) payment of the portion of the Selling Commission due to the
Underwriter by wire transfer or certified or bank cashier's check drawn to the
order of the Underwriter in next day funds, to the Underwriter at the Closing
Time and (ii) payment of the portion of the Selling Commission due to each
selected dealer by wire transfer or certified or bank cashier's check drawn to
the order of such selected dealer in next day funds, to each selected dealer at
the Closing Time.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and
severally covenants with the Underwriter as follows:
(a) The Offerors will notify the Underwriter promptly, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Offerors will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Offerors will give the Underwriter notice of their intention
to file or prepare (i) any amendment to the Registration Statement (including
any post-effective amendment), (ii) any amendment or supplement to the
Prospectus (including any revised prospectus which the Offerors propose for use
by the Underwriter in connection with the offering of the Preferred Securities
which differs from the prospectus on file at the Commission at the time the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), or
(iii) any document that would as a result thereof be incorporated by reference
in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Underwriter with copies of any such amendment, supplement or
other document within a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment, supplement or
other document or use any such prospectus to which the Underwriter or counsel
for the Underwriter shall
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reasonably object. Subject to the foregoing, the Offerors will file the
Prospectus pursuant to Rule 424(b) and Rule 430A under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement.
(c) The Offerors will deliver to the Underwriter as many signed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) as
the Underwriter may reasonably request and will also deliver to the Underwriter
a conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits).
(d) The Offerors will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the respective applicable rules and regulations of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Preferred Securities, any event
shall occur as a result of which the Prospectus as then amended or supplemented
will include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading or if it shall be
necessary to amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors will,
subject to paragraph (b) above, promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance, and the Offerors will furnish to
the Underwriter a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriter,
to qualify the Preferred Securities (and the Preferred Securities Guarantee),
the Junior Subordinated Debt Securities and the Common Stock for offering and
sale under the applicable securities laws of such states and the other
jurisdictions of the United States as the Underwriter may designate; provided,
however, that none of the Offerors shall be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified.
(g) The Company will make generally available to its security
holders and to the Underwriter as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (which
need not be audited) of the Company and its subsidiaries, covering an applicable
period beginning not later than the first day of the Company's fiscal quarter
next following the "Effective Date" (as defined in Rule 158(c) under the 0000
Xxx) of the Registration Statement, which will satisfy the provisions of Section
11(a) of the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offerors' obligations under this Agreement,
and will pay: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment
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thereto, (ii) the preparation, issuance and delivery of the certificates for the
Preferred Securities and the Common Stock, (iii) the fees and disbursements of
the Company's and the Trust's counsel and accountants and counsel to the
Underwriter, (iv) the qualification of the Preferred Securities, the Preferred
Securities Guarantee, the Junior Subordinated Debt Securities and the Common
Stock under securities laws in accordance with the provisions of Section 3(f)
hereof, including fees and expenses incurred in connection with the preparation
of any blue sky survey, (v) the printing and delivery to the Underwriter of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vi) the printing and delivery to the
Underwriter of copies of any blue sky survey, (vii) the fee of the NASD, if
applicable, (viii) the fees and expenses of the Indenture Trustee, including the
fees and disbursements of counsel for the Indenture Trustee in connection with
the Indenture and the Junior Subordinated Debt Securities, (ix) the fees and
expenses of the Property Trustee and the Guarantee Trustee, including the fees
and disbursements of counsel for the Property Trustee in connection with the
Declaration and the Certificate of Trust; (x) the cost and charges of any
transfer agent or registrar, and (xi) the cost of qualifying the Preferred
Securities with Depository Trust Company ("DTC").
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9 hereof, the Company shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Offerors herein contained or in certificates of officers of
the Company, to the performance by the Offerors of their obligations hereunder,
and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or, with the consent of the Underwriter, not
later than 5:30 P.M. on the first business day following the date hereof, or at
such later time and date as may be approved by the Underwriter; and at the
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. The Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the 1933 Regulations and in accordance with
Section 3(b) and prior to Closing Time the Offerors shall have provided evidence
satisfactory to the Underwriter of such timely filing.
(b) At Closing Time the Underwriter shall have received:
(1) The favorable opinion of Williams, Mullen, Christian & Xxxxxxx,
P.C., counsel for the Company, dated as of the Closing Time, to the following
effect:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of the Commonwealth of Virginia, has
the corporate power and authority
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to own its properties, conduct its business as described in the Prospectus and
perform its obligations under this Agreement, and is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended; the
Principal Subsidiary Bank is a banking association operating under the laws of
Virginia and authorized thereunder to transact business.
(ii) Except for those jurisdictions specifically enumerated in
such opinion, neither the Company nor the Principal Subsidiary Bank is required
to be qualified or licensed to do business as a foreign corporation in any
jurisdiction.
(iii) All the outstanding shares of capital stock of the
Principal Subsidiary Bank have been duly and validly authorized and issued and
are fully paid and non-assessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Principal Subsidiary
Bank are owned, directly or indirectly, by the Company free and clear of any
perfected security interest and, to the best knowledge of such counsel, any
other security interests, claims, liens or encumbrances.
(iv) To the best knowledge of such counsel, there is no
pending threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract, or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required.
(v) The Registration Statement has become effective under the
1933 Act; to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened; the Registration Statement,
the Prospectus and each amendment thereof or supplement thereto (other than the
financial statements and other financial and statistical information contained
therein or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act Regulations and the
Exchange Act and the rules and regulations of the Commission under the Exchange
Act (the "Exchange Act Regulations").
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with the offering,
issuance or sale of the Preferred Securities through the Underwriter, the
Preferred Securities Guarantee or the Junior Subordinated Debt Securities,
except (a) such as may be required under the 1933 Act and the 1933 Act
Regulations and such as may be required under the blue sky or insurance laws of
any jurisdiction, and (b) the qualification of the Declaration, the Guarantee
Agreement and the Indenture under the 1939 Act.
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(viii) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and has been duly
qualified under the 1939 Act.
(ix) The Guarantee Agreement has been duly authorized,
executed and delivered by the Company, and assuming it is duly authorized,
executed and delivered by the Guarantee Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be limited by the
Permitted Exceptions; and the Guarantee Agreement has been duly qualified under
the 0000 Xxx.
(x) The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by the
Indenture Trustee, is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Permitted Exceptions; the Indenture
has been duly qualified under the 1939 Act; and the Indenture conforms to the
description thereof in the Prospectus.
(xi) The Junior Subordinated Debt Securities have been duly
authorized and executed by the Company and, when authenticated by the Trustee in
the manner provided in the Indenture and delivered against payment therefor,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Permitted Exceptions; and the Junior
Subordinated Debt Securities conform to the description thereof in the
Prospectus.
(xii) Neither the Company nor the Trust is and, upon the
issuance and sale of the Preferred Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus,
neither will be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the 0000 Xxx.
(xiii) The shares of Common Stock issuable upon conversion of
the Preferred Securities have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion in accordance with
the provisions of the Preferred Securities, will have been validly issued and
will be fully paid and non-assessable and free of preemptive rights.
In rendering such opinion, such counsel may rely (A) as to matters
involving certain matters of Delaware law upon the opinion of Xxxxxxxx, Xxxxxx &
Finger, special Delaware counsel to the Offerors, which shall be delivered in
accordance with Section 5(b)(2)hereto; and (B) as to matters of fact, to the
extent deemed proper, on the representations and warranties of the Offerors
contained herein or in the Declaration, the Indenture and the Guarantee
Agreement of even date herewith, between the Company and the Trust covering the
Common Securities, and on certificates of responsible officers of the Company
and its subsidiaries and public officials.
(2) The favorable opinion of Xxxxxxxx, Xxxxxx & Finger, Special
Delaware counsel to the Offerors, in form and substance satisfactory to the
Underwriter, to the effect that:
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(i) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the formation
and valid existence of the Trust as a business trust have been made; the Trust
has all necessary power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement, the Preferred
Securities and the Common Securities; the Trust is duly qualified and in good
standing as a foreign company in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse effect on the Trust;
and the Trust is not a party to or otherwise bound by any agreement other than
those described in the Prospectus.
(ii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Declaration is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Permitted Exceptions.
(iii) The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable beneficial interests in the assets of the Trust,
and the issuance of the Common Securities is not subject to preemptive or other
similar rights.
(iv) The Preferred Securities have been duly authorized by the
Declaration and are validly issued and, subject to the terms of the Declaration,
when delivered to and paid for by the Underwriter pursuant to this Agreement,
will be validly issued, fully paid and non-assessable beneficial interests in
the assets of the Trust; the holders of the Preferred Securities will, subject
to the terms of the Declaration, be entitled to the same limitation of personal
liability under Delaware law as is extended to stockholders of private
corporations for profit; and the issuance of the Preferred Securities is not
subject to preemptive or other similar rights.
(v) The Common Securities, the Preferred Securities and the
Declaration conform in all material respects to all statements relating thereto
contained in the Prospectus.
(vi) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(vii) This Agreement has been duly authorized, executed and
delivered by the Trust.
(viii) The execution, delivery and performance of this
Agreement, the Declaration, the Preferred Securities and the Common Securities;
the consummation of the transactions contemplated herein and therein; and the
compliance by the Trust with its obligations hereunder and thereunder do not and
will not result in any violation of the Declaration or Certificate of Trust, and
do not and will not conflict with, or result in a breach of, any of the terms
-14-
or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or any other agreement or instrument known to such counsel to which the Trust is
a party or by which it may be bound or to which any of its properties may be
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition,
financial or otherwise, or in the earnings or business affairs of the Trust),
(B) any existing applicable law, rule or regulation (other than the securities
or blue sky laws of the various states, as to which such counsel need express no
opinion) or (C) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust or any of its properties.
(3) The favorable opinion, dated as of the Closing Time, of
Xxxxxxxx, Xxxxxx & Finger, counsel to Wilmington Trust Company, as Property
Trustee under the Declaration, Guarantee Trustee under the Guarantee Agreement,
and Indenture Trustee under the Indenture, in form and substance satisfactory to
the Underwriter, to the effect that:
(i) Wilmington Trust Company is a Delaware banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and perform its obligations
under, the terms of the Declaration.
(ii) The execution, delivery and performance by the Indenture
Trustee of the Indenture and the execution, delivery and performance by the
Property Trustee of the Declaration and the execution, delivery and performance
by the Guarantee Trustee of the Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Indenture Trustee, the
Property Trustee and the Guarantee Trustee, respectively. The Indenture, the
Declaration and the Guarantee Agreement have been duly executed and delivered by
the Indenture Trustee, the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations of the
Indenture Trustee, the Property Trustee and the Guarantee Trustee, respectively,
enforceable against the Indenture Trustee, the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their terms, except as
enforcement thereof may be limited by the Permitted Exceptions.
(iii) The execution, delivery and performance of the Indenture,
the Declaration and the Guarantee Agreement by the Indenture Trustee, Property
Trustee and the Guarantee Trustee, respectively, does not conflict with or
constitute a breach of the Certificate of Incorporation or Bylaws of the
Indenture Trustee, Property Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Indenture Trustee, the Property
Trustee and the Guarantee Trustee of the Indenture, the Declaration and the
Guarantee Agreement, respectively.
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(4) The favorable opinion of Williams, Mullen, Christian & Xxxxxxx,
P.C., tax counsel to the Company and the Trust, as to certain Federal tax
matters set forth in the Prospectus under "United States Income Taxation."
(5) Williams, Mullen, Christian & Xxxxxxx, P.C. shall also provide a
written statement that nothing has come to their attention that has caused them
to believe that the Registration Statement (except for financial statements and
schedules and other financial or statistical data included or incorporated by
reference, therein, as to which counsel need make no statement), at the time it
became effective or as of the date of their respective opinions, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus (except for financial statements and schedules and other
financial or statistical data included or incorporated by reference therein, as
to which counsel need make no statement), as at the date hereof or at Closing
Time, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(6) At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company and a
certificate of the Trustee of the Trust, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(iii) the Trust and the Company have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(7) At the Closing Time, BDO Xxxxxxx, LLP shall have furnished to
the Underwriter a letter or letters (which may refer to letters previously
delivered to the Underwriter), dated as of the Closing Time, in form and
substance satisfactory to the Underwriter, confirming that the response, if any,
to Item 10 of the Registration Statement is correct insofar as it relates to
them and stating in effect that:
(i) They are independent accountants within the meaning of
the 1933 Act and the Exchange Act and the 1933 Act Regulations and the Exchange
Act Regulations.
(ii) In their opinion, the consolidated financial statements
of the Company and its subsidiaries audited by them and included or incorporated
by reference in the Registration Statement and Prospectus comply as to form in
all material respects with the applicable
-16-
accounting requirements of the 1933 Act and the 1933 Act Regulations with
respect to registration statements on Form S-1 and the Exchange Act and the
Exchange Act Regulations.
(iii) On the basis of procedures (but not in accordance with
generally accepted auditing standards) consisting of:
(a) Reading the minutes of the meetings of the
shareholders, the board of directors, executive committee and audit committee of
the Company and the boards of directors and executive committees of its
subsidiaries as set forth in the minute books through a specified date not more
than five business days prior to the date of delivery of such letter;
(b) Performing the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
on the unaudited condensed consolidated interim financial statements of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Registration Statement and Prospectus and reading the unaudited interim
financial data, if any, for the period from the date of the latest balance sheet
included or incorporated by reference in the Registration Statement and
Prospectus to the date of the latest available interim financial data; and
(c) Making inquiries of certain officials of the
Company who have responsibility for financial and accounting matters regarding
the specific items for which representations are requested below; nothing has
come to their attention as a result of the foregoing procedures that caused them
to believe that:
(1) the unaudited condensed consolidated
interim financial statements, included or incorporated by reference in the
Registration Statement and Prospectus, do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act and the
Exchange Act Regulations thereunder;
(2) any material modifications should be made
to the unaudited condensed consolidated interim financial statements, included
or incorporated by reference in the Registration Statement and Prospectus, for
them to be in conformity with generally accepted accounting principles;
(3)(i) at the date of the latest available interim
financial data and at the specified date not more than five business days prior
to the date of the delivery of such letter, there was any change in the capital
stock or the long-term debt (other than scheduled repayments of such debt) or
any decreases in shareholders' equity of the Company and the subsidiaries on a
consolidated basis as compared with the amounts shown in the latest balance
sheet included or incorporated by reference in the Registration Statement and
the Prospectus or (ii) for the period from the date of the latest available
financial data to a specified date not more than five business days prior to the
delivery of such letter, there was any change in the capital stock or the
long-term debt (other than scheduled repayments of such debt) or any decreases
in shareholders' equity of the Company and the subsidiaries on a consolidated
basis, except in all instances for changes or
-17-
decreases which the Registration Statement and Prospectus disclose have occurred
or may occur, or BDO Xxxxxxx, LLP shall state any specific changes or decreases.
(iv) The letter shall also state that BDO Xxxxxxx, LLP has
carried out certain other specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration Statement and
Prospectus and which are specified by the Underwriter and agreed to by BDO
Xxxxxxx, LLP, and has found such amounts, percentages and financial information
to be in agreement with the relevant accounting, financial and other records of
the Company and its subsidiaries identified in such letter.
In addition, at or prior to the time this Agreement is executed, BDO
Xxxxxxx, LLP shall have furnished to the Underwriter a letter dated the date of
this Agreement, in form and substance satisfactory to the Underwriter, to the
effect set forth in this subsection (7).
(8) At the Closing Time, the NASD shall have confirmed in writing
that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof, and except
that Sections 1, 7, and 8 shall survive any such termination and will remain in
full force and effect.
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors jointly and severally agree to indemnify and hold
harmless the Underwriter and each of its partners, officers, directors, and
employees and each person, if any, who controls the Underwriter within the
meaning of the 1933 Act or the Exchange Act against any losses, claims, damages
or liabilities, and any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of the Preferred Securities), joint or several, which arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, or any amendment or supplement
thereto, including information deemed to be part of the Registration Statement
pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, (B) the
Prospectus and any amendment or supplement thereto, or (C) any application or
other document, any amendment or supplement thereto, executed by the Offerors or
based upon information furnished by or on behalf of the Offerors filed in any
jurisdiction in order to qualify the Preferred Securities and the Common Stock
under the securities or blue sky laws thereof (each, an "Application") or (ii)
the omission or alleged omission to state in the Registration Statement, or any
amendment or supplement thereto, or the Prospectus or any amendment or
-18-
supplement thereto, or any Application, a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse the Underwriter and each such controlling person for any legal and
other expenses incurred, as incurred, in investigating or defending or preparing
to defend against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that neither
of the Offerors shall be liable to the Underwriter in any such case to the
extent that any such loss, claim, damage or liability arises out of, or is based
upon, any untrue statement or alleged untrue statement made in the Prospectus,
including any amendment or supplement thereto, in reliance upon or in conformity
with information furnished in writing to the Offerors by or on behalf of the
Underwriter specifically for inclusion and actually included therein; and
provided further that, as to any Prospectus that has been amended or
supplemented as provided herein, this indemnity agreement shall not inure to the
benefit of the Underwriter, on account of any loss, claim, damage, liability or
action arising out of the sale of Preferred Securities to any person by the
Underwriter if (A) the Underwriter failed to send or give a copy of the final
Prospectus as so amended or supplemented to that person at or prior to the
confirmation of the sale of such Preferred Securities to such person in any case
where such delivery is required by the 1933 Act, and (B) the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in any preliminary Prospectus was corrected in an
amendment or supplement thereto (but only if the sale to such person occurred
after the Offerors provided the Underwriter and the Underwriter received copies
of such amendment or supplement for distribution). This indemnity agreement will
be in addition to any liability which the Offerors may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company,
the Trust, the Trustees and each of the Company's directors, each of its
officers and each person, if any, who controls the Company or the Trust within
the meaning of the 1933 Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Offerors to the Underwriter, but only with
reference to written information relating to such underwriter furnished to the
Offerors by the Underwriter and specifically included in the Prospectus. This
indemnity shall be in addition to any liability which such Underwriter may
otherwise have. The Offerors acknowledge that the statements set forth under the
heading "Underwriting" in the Prospectus constitute the only information
furnished in writing by the Underwriter for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party otherwise than under
subsection (a) or (b) of this Section 7 or to the extent that the indemnifying
party was not adversely affected by such omission. In case any such action is
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party
-19-
and the indemnified party shall have reasonably concluded that there may be one
or more legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified party
or parties shall have the right to select separate counsel to defend such action
on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the lead Underwriter in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions), or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, which consent will not be
unreasonably withheld, unless such indemnified party waived its rights under
this Section 7 in writing in which case the indemnified party may effect such a
settlement without such consent.
(d) The Company agrees to indemnify the Trust against all losses,
claims, damages or liabilities due from the Trust under Section 7(a) hereof.
(e) If the indemnification provided for in the preceding paragraphs
of this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under paragraph (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then the
Offerors or the Underwriter shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Offerors and
the Underwriter may be subject in such proportion so that the Underwriter is
responsible for that portion represented by the percentage that the total
discounts and/or commissions received by the Underwriter bears to the sum of
such discounts and/or commissions and the purchase price of the Preferred
Securities specified in Schedule B hereto and the Offerors are responsible for
the balance; provided, however, that (y) in no case shall the Underwriter be
responsible for any amount in excess of the total discounts and/or commissions
received by it with respect to the Preferred Securities sold under this
Agreement and (z) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7, each person who controls the Underwriter within the meaning
of the 1933 Act shall have the same rights to contribution as the Underwriter,
and each person who controls either of the Offerors within the
-20-
meaning of either the 1933 Act or the Exchange Act, each officer or trustee of
the Offerors who shall have signed the Registration Statement and each director
or trustee of the Offerors shall have the same rights to contribution as the
Offerors, subject in each case to clause (y) of this paragraph (e). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (e), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this paragraph
(e).
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by or on behalf of the Offerors, and shall survive
delivery of the Preferred Securities to the purchasers thereof.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the
Offerors, at any time at or prior to the Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, or in the earnings or business affairs
of the Trust or the Company and its subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Preferred Securities or to enforce
contracts for the sale of the Preferred Securities, or (iii) if trading in any
securities of the Company or the Trust has been suspended or materially limited
by the Commission or the applicable exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or on the NASDAQ National
Market, has been suspended, limited or restricted or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or such system or by order of the Commission,
the NASD or any governmental authority, or (iv) if a banking moratorium has been
declared by Federal, New York, Virginia or Delaware authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and except that Sections 1, 7, and 8 shall survive
any such termination and will remain in full force and effect.
SECTION 10. [INTENTIONALLY OMITTED]
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SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to XxXxxxxx & Company, 000 Xxxx Xxxxxx, First
Xxxxxxxx Xxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
XxXxxxxx. Notices to the Trust and the Company shall be directed to them at
Guaranty Financial Corporation, 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxxxxxxxxxxx,
Xxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxx.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Underwriter and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal Underwriter, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriter and the
Trust and the Company and their respective successors, and said controlling
persons and officers, directors and trustees and their heirs and legal
Underwriter, and for the benefit of no other person, firm or corporation. No
purchaser of Preferred Securities from the Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia
applicable to agreements made and to be performed in said Commonwealth. Except
as otherwise set forth herein, specified times of day refer to City of Richmond
time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Trust and the Company in accordance with its
terms.
Very truly yours,
GUARANTY FINANCIAL CORPORATION
By:______________________________
Title:
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GUARANTY CAPITAL TRUST I
By:______________________________
Title: Trustee
By:______________________________
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XxXXXXXX & COMPANY, INC.
By:_____________________________
Xxxxxxx X. XxXxxxxx, Xx.
President
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SCHEDULE A
Name of Underwriter Number of Preferred Securities
------------------- ------------------------------
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SCHEDULE B
Underwriting Agreement dated ________, 1998
Registration Statement No. _________
Underwriter: XxXxxxxx & Company, Inc.
Address of Underwriter: 000 Xxxx Xxxxxx, Xxxxx Xxxxxxxx Building, 16th Floor,
Norfolk, Virginia 23510
Title, Purchase Price and Description of Securities:
Title: $________ Convertible Preferred Securities (Liquidation Amount
$25.00)
1. The initial public offering price per security for the
Preferred Securities, determined as provided in Section
2, shall be $25.00.
2. The compensation per Preferred Security to be paid by
the Company to the Underwriter shall be $_______, out of
which commissions payable to Selected Dealers shall be
paid.
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