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EXHIBIT 1
1,500,000 Convertible Preferred Securities
Southside Capital Trust II
[____]% Cumulative Convertible Trust Preferred Securities
(Liquidation Amount of $10 per Preferred Security)
UNDERWRITING AGREEMENT
[________], 2000
STIFEL, NICOLAUS & COMPANY, INCORPORATED
As Representative of the SeveralUnderwriters
named in Schedule I hereto
501 North Broadway, 9th Floor
St. Louis, Missouri 63102
Dear Sirs:
Southside Bancshares, Inc., a Texas corporation (the "Company") and its
financing subsidiary, Southside Capital Trust II, a Delaware business trust (the
"Trust," and hereinafter together with the Company, the "Offerors"), propose
that the Trust issue and sell to the several underwriters listed on Schedule I
hereto (the "Underwriters"), pursuant to the terms of this Agreement, 1,500,000
of the Trust's [___]% Cumulative Convertible Trust Preferred Securities, with a
liquidation amount of $10.00 per preferred security (the "Preferred
Securities"), to be issued under the Trust Agreement (as hereinafter defined),
the terms of which are more fully described in the Prospectus (as hereinafter
defined). The aforementioned 1,500,000 Preferred Securities to be sold to the
Underwriters are herein called the "Firm Preferred Securities." Solely for the
purpose of covering over-allotments in the sale of the Firm Preferred
Securities, the Offerors further propose that the Trust issue and sell to the
Underwriters, at their option, up to an additional 225,000 Preferred Securities
(the "Option Preferred Securities") upon exercise of the over-allotment option
granted in Section 1 hereof. The Firm Preferred Securities and any Option
Preferred Securities are herein collectively referred to as the "Designated
Preferred Securities." You are acting as representative of the Underwriters and
in such capacity are sometimes herein referred to as the "Representative."
The Offerors hereby confirm as follows their agreement with each of the
Underwriters in connection with the proposed purchase of the Designated
Preferred Securities.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES,
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Offerors hereby agree that the Trust shall issue and sell to each of the
Underwriters and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $10.00 per Preferred Security
(the "Purchase Price"), the respective number of Firm Preferred Securities set
forth opposite the name of such Underwriter in Schedule I hereto. Because the
proceeds from the sale of the Firm Preferred Securities will be used to purchase
from the Company its Debentures (as hereinafter defined and as described in the
Prospectus), the Company shall pay to each Underwriter a commission of [$______]
per Firm Preferred Security purchased (the "Firm Preferred Securities
Commission"). In accordance with Section 9 hereof, the
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Representative may by notice to the Company amend Schedule I to add, eliminate
or substitute names set forth therein (other than to eliminate the name of the
Representative) and to amend the number of firm Preferred Securities to be
purchased by any firm or corporation listed thereon, provided that the total
number of Firm Preferred Securities listed on Schedule I shall equal 1,500,000.
In addition, on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Trust hereby grants to the Underwriters, severally and not jointly,
an option to purchase all or any portion of the 225,000 Option Preferred
Securities, and upon the exercise of such option in accordance with this Section
1, the Offerors hereby agree that the Trust shall issue and sell to the
Underwriters, severally and not jointly, all or any portion of the Option
Preferred Securities at the same Purchase Price per share paid for the Firm
Preferred Securities. If any Option Preferred Securities are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase from the Trust
that proportion (subject to adjustment as you may determine to avoid fractional
shares) of the number of Option Preferred Securities to be purchased that the
number of Firm Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to 1,500,000. Because the proceeds from the sale of the
Option Preferred Securities will be used to purchase from the Company its
Debentures, the Company shall pay to the Underwriters a commission of [$______]
per Option Preferred Security for each Option Preferred Security purchased (the
"Option Preferred Securities Commission"). The option hereby granted (the
"Option") shall expire 30 days after the date upon which the Registration
Statement (as hereinafter defined) becomes effective and may be exercised only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Firm Preferred Securities. The Option may
be exercised in whole or in part at any time (but not more than once) by you
giving notice (confirmed in writing) to the Trust setting forth the number of
Option Preferred Securities as to which the Underwriters are exercising the
Option and the time, date and place for payment and delivery of the Global
Securities (as hereafter defined) for such Option Preferred Securities. Such
time and date of payment and delivery for the Option Preferred Securities (the
"Option Closing Date") shall be determined by you, but shall not be earlier than
two nor later than five full business days after the exercise of such Option,
nor in any event prior to the Closing Date (as hereinafter defined). The Option
Closing Date may be the same as the Closing Date.
Payment of the Purchase Price and the Firm Preferred Securities
Commission and delivery of the Global Securities for the Firm Preferred
Securities shall be made at the offices of Stifel, Nicolaus & Company,
Incorporated, 501 North Broadway, 9th Floor, St. Louis, Missouri 63102, or such
other place as shall be agreed to by you and the Offerors, at 10:00 a.m., St.
Louis time, on [__________], 2000, or at such other time not more than five full
business days thereafter as the Offerors and you shall determine (the "Closing
Date"). The Trust shall deliver or cause to be delivered to you for the account
of the Underwriters against payment to or upon the order of the Trust of the
Purchase Price in federal or other immediately available funds, the Firm
Preferred Securities in the form of one or more permanent global securities in
definitive form (the "Global Securities") deposited with the Property Trustee
(as identified below) as custodian for the Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as nominee for DTC. Interests in any
permanent Global Securities will be held only in book-entry form. If the
Underwriters exercise the option to purchase any or all of the Option Preferred
Securities, payment of the Purchase Price and Option Preferred Securities
Commission and delivery of the Global Securities for such Option Preferred
Securities shall be made on the Option Closing Date at the Underwriters'
offices, or at such other place as the Offerors and you shall determine. Upon
delivery, the Option Preferred Securities shall be in the form of one or more
Global Securities registered in the name of Cede & Co., as nominee of DTC. Such
payments shall be made to an account designated by the Trust by wire transfer of
same day funds, in the amount of the Purchase Price therefor, against delivery
by or on behalf of the Trust to you for the respective accounts of the several
Underwriters of one or more Global Certificates for the Designated Preferred
Securities to be purchased by the Underwriters.
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The Agreement contained herein with respect to the timing of the
Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(c) and (d) promulgated under the
1934 Act (as defined herein), for a settlement date other than three business
days after the date of the contract.
Time shall be of the essence, and delivery of the Global Securities for
the Designated Preferred Securities at the time and place specified pursuant to
this Agreement is a further condition of the obligations of each Underwriter
hereunder.
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement among
Wilmington Trust Company, as Delaware Trustee and Property Trustee, the
Administrative Trustees named therein (collectively, the "Trustees"), and the
Company, in substantially the form heretofore delivered to the Underwriters,
said Agreement being hereinafter referred to as the "Trust Agreement." In
connection with the issuance of the Designated Preferred Securities, the Company
proposes (i) to issue its [_____]% Convertible Junior Subordinated Debentures
due 2030 (the "Debentures") pursuant to an Indenture, to be dated as of
[__________], 2000, between the Company and Wilmington Trust Company, as trustee
(the "Indenture") and (ii) to guarantee certain payments on the Designated
Preferred Securities pursuant to a Convertible Preferred Securities Guarantee
Agreement between the Company and Wilmington Trust Company, as guarantee trustee
(the "Guarantee"), to the extent described therein.
2. REPRESENTATIONS AND WARRANTIES.
The Offerors jointly and severally represent and warrant to, and agree
with, each of the Underwriters that:
(i) The reports filed with the Securities and Exchange
Commission (the "Commission") by the Company under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations thereunder (the "1934 Act Regulations") at the time they
were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading.
(ii) The Offerors have prepared and filed with the
Commission a registration statement on Form S-2 (File Numbers
333-47974 and 333-47974-01) for the registration of the Designated
Preferred Securities, the shares (the "Shares") of common stock, no par
value, of the Company (the "Common Stock") issuable by the Company upon
conversion of the Capital Securities, the Guarantee and up to
$18,298,970 aggregate principal amount of Debentures under the
Securities Act of 1933, as amended (the "1933 Act"), including the
related prospectus subject to completion, and one or more amendments to
such registration statement may have been so filed, in each case in
conformity in all material respects with the requirements of the 1933
Act, the rules and regulations promulgated thereunder (the "1933 Act
Regulations") and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the rules and regulations thereunder. Copies
of such registration statement, including any amendments thereto and
any documents incorporated by reference therein, each Preliminary
Prospectus (as defined herein) contained therein and the exhibits,
financial statements and schedules to such registration statement, as
finally amended and revised, have heretofore been delivered by the
Offerors to the Representative. After the execution of this Agreement,
the Offerors will file with the Commission (A) if such registration
statement, as it may have been amended, has been declared
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by the Commission to be effective under the 1933 Act, a prospectus in
the form most recently included in an amendment to such registration
statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are
required by Rule 430A of the 1933 Act Regulations ("Rule 430A") or
permitted by Rule 424(b) of the 1933 Act Regulations ("Rule 424(b)")
and as have been provided to and not objected to by the Representative
prior to (or as are agreed to by the Representative subsequent to) the
execution of this Agreement, or (B) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the 1933 Act, an amendment to such registration
statement, including a form of final prospectus, necessary to permit
such registration statement to become effective, a copy of which
amendment has been furnished to and not objected to by the
Representative prior to (or is agreed to by the Representative
subsequent to) the execution of this Agreement. As used in this
Agreement, the term "Registration Statement" means such registration
statement, as amended at the time when it was or is declared effective
under the 1933 Act, including (1) all financial schedules and exhibits
thereto, (2) all documents (or portions thereof) incorporated by
reference therein filed under the 1934 Act, and (3) any information
omitted therefrom pursuant to Rule 430A and included in the Prospectus
(as hereinafter defined); the term "Preliminary Prospectus" means each
prospectus subject to completion filed with such registration statement
or any amendment thereto, including all documents (or portions thereof)
incorporated by reference therein under the 1934 Act (including the
prospectus subject to completion, if any, included in the Registration
Statement and each prospectus filed pursuant to Rule 424(a) under the
1933 Act); and the term "Prospectus" means the prospectus first filed
with the Commission pursuant to Rule 424(b)(1) or (4) or, if no
prospectus is required to be filed pursuant to Rule 424(b)(1) or (4),
the prospectus included in the Registration Statement, in each case
including the financial schedules and all documents (or portions
thereof) incorporated by reference therein under the 1934 Act. The date
on which the Registration Statement becomes effective is hereinafter
referred to as the "Effective Date."
(iii) The documents incorporated by reference in the
Preliminary Prospectus or Prospectus or from which information is so
incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at the
Closing Date and any Option Closing Date, did not or will not, as the
case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. As of the date that each Preliminary
Prospectus was filed with the Commission or as of the date that the
Prospectus and any amendment or supplement thereto was filed with the
Commission (or, if not filed, on the date provided by the Offerors to
the Underwriters in connection with the offering and sale of the
Preferred Securities), as the case may be, no event has or will have
occurred which should have been set forth in an amendment or supplement
to any of the documents incorporated by reference in the Preliminary
Prospectus or Prospectus which has not then been set forth in such an
amendment or supplement.
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the Preliminary
Prospectus) has been issued by the Commission, nor has the Commission,
to the knowledge of the Offerors, threatened to issue such an order or
instituted proceedings for that purpose. Each Preliminary Prospectus,
at the time of filing thereof, (A) complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
(B) did not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of
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the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Offerors by any of the
Underwriters expressly for inclusion in the Prospectus beneath the
heading "Underwriting" (such information referred to herein as the
"Underwriters' Information"). Each Preliminary Prospectus and the
Prospectus will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system, except to the
extent permitted by Regulation S-T.
(v) The Registration Statement has been declared effective
under the 1933 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 or, to the Company's knowledge, threatened
by the Commission. At the Effective Date and at all times subsequent
thereto, up to and including the Closing Date and, if applicable, the
Option Closing Date, the Registration Statement and any post-effective
amendment thereto (A) complied and will comply in all material respects
with the requirements of the 1933 Act, the 1933 Act Regulations and the
Trust Indenture Act (and the rules and regulations thereunder) and (B)
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, not misleading; provided,
however, that this representation and warranty does not apply to
Underwriters' Information. At the Effective Date and at all times when
the Prospectus is required to be delivered in connection with offers
and sales of Designated Preferred Securities, including, without
limitation, the Closing Date and, if applicable, the Option Closing
Date, the Prospectus, as amended or supplemented, (A) complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the Trust Indenture Act (and the rules
and regulations thereunder) and (B) did not contain and will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty does not apply to Underwriters' Information. Since the date
that the Registration Statement was filed with the Commission, no event
has or will have occurred which should have been set forth in an
amendment or supplement to the Registration Statement which has not
then been set forth in such an amendment or supplement. The
Registration Statement will be identical to the electronically
transmitted copy thereof filed with the Commission pursuant to its
EDGAR system, except to the extent permitted by Regulation S-T.
(vi)
(A) The Company is duly organized, validly existing
and in good standing under the laws of the State of Texas, with full
corporate and other power and authority to own, lease and operate its
properties and conduct its business as described in and contemplated by
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as
currently being conducted and is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the
"BHC Act").
(B) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Delaware Business Trust Act with the power and authority (trust and
other) to own its property and conduct its business as described in the
Registration Statement and Prospectus, to issue and sell its common
securities (the "Common Securities") to the Company pursuant to the
Trust Agreement, to issue and sell the Designated
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Preferred Securities, to enter into and perform its obligations under
this Agreement and to consummate the transactions herein contemplated;
the Trust has no subsidiaries and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or the ownership of its property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Trust; the Trust has conducted and will conduct no business other than
the transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Trust Agreement among the
Administrative Trustees, the Company and Wilmington Trust Company dated
__________, 2000 (the "Original Trust Agreement") and the agreements
and instruments contemplated by the Trust Agreement and described in
the Prospectus; the Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement
and the Trust Agreement and described in the Prospectus; the Trust is
not a party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Closing Date or any Option Closing
Date will not be classified as an association taxable as a corporation
for United States federal income tax purposes; and the Trust is, and as
of the Closing Date or any Option Closing Date will be, treated as a
consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(vii) The Company has the direct and indirect subsidiaries
identified on Exhibit A attached hereto and incorporated herein (the
"Subsidiaries"). The Company does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries.
Each Subsidiary is a corporation, limited liability company, business
trust or bank duly organized or incorporated, as the case may be,
validly existing and in good standing under the laws of its respective
jurisdiction of organization. Each such Subsidiary has full power and
authority to own, lease and operate its properties and to conduct its
business as described in and contemplated by the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and as currently being conducted. The
deposit accounts of Southside Bank (the "Bank") are insured by the Bank
Insurance Fund administered by the Federal Deposit Insurance
Corporation (the "FDIC") up to the maximum amount provided by law; and
no proceedings for the modification, termination or revocation of any
such insurance are pending or, to the knowledge of the Offerors,
threatened. Southside Delaware Financial Corporation conducts no
business except to hold all of the capital stock of the Bank.
(viii) The Company and each of the Subsidiaries is duly
qualified to transact business as a foreign corporation, limited
liability company, bank or business trust, as the case may be, and is
in good standing in each other jurisdiction in which it owns or leases
property or conducts its business so as to require such qualification
except where the failure to so qualify would, individually or in the
aggregate, not have a material adverse effect on the condition
(financial or otherwise), earnings, business, shareholders equity or
results of operations of the Company and the Subsidiaries on a
consolidated basis. All of the issued and outstanding shares of capital
stock or membership interests of the Subsidiaries (A) have been duly
authorized and are validly issued, (B) are fully paid and nonassessable
except to the extent such shares or interests may be deemed assessable
under 12 U.S.C. Section 55 or 12 U.S.C. Section 1831o, and (C) except
for BSC Securities, L.C. and Independent Bank Services, L.C. which are
each at least 25% indirectly owned by the Company, are wholly owned,
directly or indirectly, by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, restriction upon voting
or transfer, preemptive rights, claim or equity. Except as disclosed in
the Registration Statement and the Prospectus, there are no outstanding
rights, warrants or options to acquire or
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instruments convertible into or exchangeable for any capital stock,
equity securities or other ownership interests of the Offerors or the
Subsidiaries.
(ix) The capital stock of the Company, including the
Shares, and the equity securities of the Trust conform in all material
respects to the description thereof contained in the Prospectus (or, if
the Prospectus is not in existence, the Preliminary Prospectus). The
outstanding shares of capital stock and equity securities of each
Offeror have been duly authorized and validly issued and are fully paid
and nonassessable and no such shares were issued in violation of the
preemptive or similar rights of any security holder of an Offeror. No
person has any preemptive or similar right to purchase from the
Offerors any shares of capital stock of the Company or equity
securities of the Trust. Except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the Preliminary Prospectus), there
are no outstanding rights, options or warrants to acquire any
securities of the Offerors or the Subsidiaries, and there are no
outstanding securities convertible into or exchangeable for any such
securities of the Offerors or the Subsidiaries and no restrictions upon
the voting or transfer of any capital stock of the Company or equity
securities of the Trust pursuant to the Company's articles of
incorporation or bylaws, the Trust Agreement or any agreement or other
instrument to which an Offeror is a party or by which an Offeror is
bound. The Shares initially issuable upon conversion of the Preferred
Securities have been duly authorized and validly reserved for issuance
upon conversion of the Preferred Securities and are free of statutory
and contractual preemptive rights and are sufficient in number to meet
current conversion requirements, and such Shares, when so issued upon
conversion in accordance with the terms of the Indenture and Trust
Agreement, will be duly and validly issued and fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof.
(x)
(A) The Trust has all requisite power and authority
to issue, sell and deliver the Designated Preferred Securities in
accordance with and upon the terms and conditions set forth in this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the Preliminary
Prospectus). All corporate and trust action required to be taken by the
Offerors for the authorization, issuance, sale and delivery of the
Designated Preferred Securities in accordance with such terms and
conditions has been validly and sufficiently taken. The Designated
Preferred Securities, when delivered and paid for in accordance with
this Agreement, will be duly and validly issued and outstanding, will
represent valid fully paid and nonassessable undivided beneficial
interests in the assets of the Trust, will be entitled to the benefits
of the Trust Agreement, will not be issued in violation of or subject
to any preemptive or similar rights, and will conform to the
description thereof in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the Preliminary Prospectus)
and the Trust Agreement. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon voting
or transfer, preemptive rights, claim, equity or other defect.
(B) The Debentures have been duly and validly
authorized, and, when duly and validly executed, authenticated and
issued as provided in the Indenture and delivered to the Trust pursuant
to the Trust Agreement, will constitute valid and legally binding
obligations of the Company enforceable against the Company, in
accordance with their terms, except to the extent that enforcement
thereof may be limited by and/or subject to bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity, will be in the
form contemplated by, and entitled to the benefits of, the Indenture,
will conform in all material respects to the description thereof
contained in the
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Prospectus and will be owned by the Trust free and clear of any
security interest, mortgage, pledge, lien, encumbrance, restriction
upon transfer, preemptive rights, claim or equity.
(C) The Guarantee has been duly and validly
authorized, and, when duly and validly executed and delivered to the
guarantee trustee for the benefit of the Trust, will constitute a valid
and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by and/or subject to bankruptcy,
insolvency, reorganization, or similar laws affecting the rights of
creditors generally and subject to general principles of equity, and
will conform in all material respects to the description thereof
contained in the Prospectus.
(D) The Agreement as to Expenses and Liabilities
between the Company and the Trust (the "Expense Agreement") has been
duly and validly authorized, and, when duly and validly executed and
delivered by the Company, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by and/or subject to bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity, and will conform in all material respects
to the description thereof contained in the Prospectus.
(xi) The Offerors and the Subsidiaries have complied in all
material respects with all material federal, state and local statutes,
regulations, ordinances and rules as now in effect and applicable to
the ownership and operation of their properties or the conduct of their
businesses as described in and contemplated by the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the Preliminary Prospectus) and as currently being
conducted. Neither the Company nor any non-banking Subsidiary engages
directly or indirectly in any activity prohibited by the Board of
Governors of the Federal Reserve System (the "FRB") or the BHC Act or
the regulations promulgated thereunder.
(xii) The Offerors and the Subsidiaries have all material
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the Preliminary Prospectus) and as currently being
conducted. All such Permits are in full force and effect and each of
the Offerors and the Subsidiaries are in all material respects
complying therewith, and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof
or will result in any other material impairment of the rights of the
holder of any such Permit, subject in each case to such qualification
as may be adequately disclosed in the Prospectus (or, if the Prospectus
is not in existence, the Preliminary Prospectus). Such Permits contain
no restrictions that would materially impair the ability of the Company
or the Subsidiaries to conduct their businesses in the manner
consistent with their past practices. Neither the Offerors nor any of
the Subsidiaries have received notice or otherwise has knowledge of any
proceeding or action relating to the revocation or modification of any
such Permit.
(xiii) Neither of the Offerors nor any of the Subsidiaries
are in breach or violation of their corporate charter, by-laws or other
governing documents (including without limitation, the Original Trust
Agreement) in any material respect. Neither of the Offerors nor any of
the Subsidiaries is, and to the knowledge of the Offerors no other
party is, in violation, breach or default (with or without notice or
lapse of time or both) in the performance or observance of any term,
covenant, agreement, obligation, representation, warranty or condition
contained in
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(A) any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, which such breach, violation or default
could have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business or results of operations of the
Company and the Subsidiaries on a consolidated basis, and to the
knowledge of the Offerors, no other party has asserted that the
Offerors or any of the Subsidiaries is in such violation, breach or
default (provided that the foregoing shall not apply to defaults by
borrowers from the Bank), or (B) except as disclosed in the Prospectus
(or, if the Prospectus is not in existence, the Preliminary
Prospectus), any order, decree, judgment, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties the
breach, violation or default of which could have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis.
(xiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement, the Trust Agreement, the Guarantee, the Indenture, the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) do not and will
not conflict with, result in the creation or imposition of any material
lien, claim, charge, encumbrance or restriction upon any property or
assets of the Offerors or the Subsidiaries or the Designated Preferred
Securities pursuant to, constitute a breach or violation of, or
constitute a default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the charter or
by-laws of the Company or the Subsidiaries, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license, Permit or any other agreement or instrument to
which the Offerors or the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound or any order,
decree, judgment, rule or regulation of any court, arbitrator,
government, or governmental agency or instrumentality, domestic or
foreign, having jurisdiction over the Offerors or the Subsidiaries or
any of their respective properties which conflict, creation,
imposition, breach, violation or default would have either singly or in
the aggregate a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business or results of operations of the
Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of or filing, registration or
qualification with, any person (including, without limitation, any
court, governmental body or authority) is required in connection with
the transactions contemplated by this Agreement, the Trust Agreement,
the Indenture, the Guarantee, the Expense Agreement, the Registration
Statement and the Prospectus (or such Preliminary Prospectus), except
such as have been obtained under the 1933 Act and the Trust Indenture
Act and from The Nasdaq Stock Market relating to the listing of the
Designated Preferred Securities, and such as may be required under
state securities laws or Interpretations or Rules of the National
Association of Securities Dealers, Inc. ("NASD") in connection with the
purchase and distribution of the Designated Preferred Securities by the
Underwriters.
(xv) The Offerors have all requisite power and authority to
enter into this Agreement and this Agreement has been duly and validly
authorized, executed and delivered by the Offerors and constitutes the
legal, valid and binding agreement of the Offerors, enforceable against
the Offerors in accordance with its terms, except as the enforcement
thereof may be limited by and/or subject to bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity and except as any
indemnification or contribution provisions thereof may be limited under
applicable securities laws. Each of the Indenture, the Trust Agreement,
the Guarantee and the Expense Agreement has been duly authorized by the
Company, and, when executed and delivered by the Company on the
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<PAGE> 10
Closing Date, each of said agreements will constitute a valid and
legally binding obligation of the Company and will be enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by and/or subject to bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity and
except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws. Each of the Indenture, the
Trust Agreement and the Guarantee has been duly qualified under the
Trust Indenture Act and will conform in all material respects to the
description thereof contained in the Prospectus.
(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business, in
each case free and clear of all security interests, liens, mortgages,
pledges, encumbrances, restrictions, claims, equities and other defects
except such as are referred to in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or such as
do not materially affect the value of such property in the aggregate
and do not materially interfere with the use made or proposed to be
made of such property; and all of the leases under which the Company or
the Subsidiaries hold real or personal property are valid, existing and
enforceable leases and in full force and effect with such exceptions as
are not material and do not materially interfere with the use made or
proposed to be made of such real or personal property, and neither the
Company nor any of the Subsidiaries is in default in any material
respect of any of the terms or provisions of any material leases.
(xvii) PricewaterhouseCoopers LLP, who have certified
certain of the consolidated financial statements of the Company and the
Subsidiaries including the notes thereto, included by incorporation by
reference or otherwise in the Registration Statement and Prospectus,
are independent public accountants with respect to the Company and the
Subsidiaries, as required by the 1933 Act and the 1933 Act Regulations.
(xviii) The consolidated financial statements including the
notes thereto, included by incorporation by reference or otherwise in
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) with respect
to the Company and the Subsidiaries comply in all material respects
with the 1933 Act and the 1933 Act Regulations and present fairly in
all material respects the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and shareholders' equity
of the Company and the Subsidiaries for the periods specified and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis. The selected consolidated
financial data concerning the Company and the Subsidiaries included in
the Registration Statement and the Prospectus (or such Preliminary
Prospectus) comply in all material respects with the 1933 Act and the
1933 Act Regulations, present fairly in all material respects the
information set forth therein, and have been compiled on a basis
consistent with that of the consolidated financial statements of the
Company and the Subsidiaries in the Registration Statement and the
Prospectus (or such Preliminary Prospectus). The other financial,
statistical and numerical information included in the Registration
Statement and the Prospectus (or such Preliminary Prospectus) are
accurate in all material respects, comply in all material respects with
the 1933 Act and the 1933 Act Regulations, present fairly in all
material respects the information shown therein, and to the extent
applicable have been compiled on a basis consistent with the
consolidated financial statements of the Company and the Subsidiaries
included in the Registration Statement and the Prospectus (or such
Preliminary Prospectus).
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<PAGE> 11
(xix) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), except as otherwise stated therein:
(A) neither of the Offerors nor any of the
Subsidiaries has sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree which is material to the condition (financial
or otherwise), earnings, business or results of operations of the
Company and the Subsidiaries on a consolidated basis;
(B) there has not been any material adverse change
in, or any development which is reasonably likely to have a material
adverse effect on, the condition (financial or otherwise), earnings,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis, whether or not arising in the ordinary course
of business;
(C) neither of the Offerors nor any of the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any material transactions, other than in
the ordinary course of business, which is material to the condition
(financial or otherwise), earnings, business or results of operations
of the Company and the Subsidiaries on a consolidated basis;
(D) neither of the Offerors has declared or paid any
dividend, and neither of the Offerors nor any of the Subsidiaries has
become delinquent in the payment of principal or interest on any
outstanding borrowings;
(E) there has not been any change in the capital
stock, equity securities, long-term debt, obligations under capital
leases or, other than in the ordinary course of business, short-term
borrowings of the Offerors or the Subsidiaries; and
(F) there has not occurred any other event and there
has arisen no set of circumstances required to be disclosed by the 1933
Act or the 1933 Act Regulations to be disclosed in the Registration
Statement or Prospectus which has not been so set forth in the
Registration Statement or such Prospectus as fairly and accurately
summarized therein in all material respects.
(xx) Except as set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), no charge, investigation, action, suit
or proceeding is pending or, to the knowledge of the Offerors,
threatened, against or affecting the Offerors or the Subsidiaries or
any of their respective properties before or by any court or any
regulatory, administrative or governmental official, commission, board,
agency or other authority or body, or any arbitrator, wherein an
unfavorable decision, ruling or finding could reasonably be expected to
have a material adverse effect on the consummation of this Agreement or
the transactions contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, or results of operations of
the Offerors and the Subsidiaries on a consolidated basis or which is
required to be disclosed in the Registration Statement or the
Prospectus (or such Preliminary Prospectus) and is not so disclosed.
(xxi) There are no contracts or other documents required to
be filed as exhibits to the Registration Statement by the 1933 Act or
the 1933 Act Regulations or the Trust Indenture Act (or any rules or
regulations thereunder) which have not been filed as exhibits or
incorporated by reference to the Registration Statement, or that are
required to be summarized in the
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<PAGE> 12
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) that are not so summarized.
(xxii) Neither of the Offerors has taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Designated Preferred
Securities in violation of the Commissioner's rules and regulations,
including, but not limited to, Regulation M, and neither of the
Offerors is aware of any such action taken or to be taken by any
affiliate of the Offerors.
(xxiii) The Offerors and the Subsidiaries own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the businesses
now conducted by them in all material respects or as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and neither the Company nor the Subsidiaries
have received any notice of infringement or conflict with asserted
rights of others with respect to any patents, copyrights, trademarks,
service marks, trade names or other rights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business or results of
operations of the Company and the Subsidiaries on a consolidated basis,
and the Offerors do not know of any basis for any such infringement or
conflict individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis.
(xxiv) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the Preliminary Prospectus), no labor
dispute involving the Company or the Subsidiaries exists or, to the
knowledge of the Offerors, is imminent which might be expected to have
a material adverse effect on the condition (financial or otherwise),
earnings, affairs, business or results of operations of the Company and
the Subsidiaries on a consolidated basis or which is required to be
disclosed in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus). Neither the Company nor any of
the Subsidiaries have received notice of any existing or threatened
labor dispute by the employees of any of its principal suppliers,
customers or contractors which might be expected to have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(xxv) The Offerors and the Subsidiaries have timely and
properly prepared and filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business or results of operations of the Company and the Subsidiaries
on a consolidated basis. The Offerors have no knowledge of any tax
deficiency which has been or might be assessed against the Offerors or
the Subsidiaries which, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business or
results of operations of the Company and the Subsidiaries on a
consolidated basis.
(xxvi) Each of the material contracts, agreements and
instruments listed, described, or attached as an exhibit to the
Company's Annual Report on Form 10-K for the year
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<PAGE> 13
ended December 31, 1999, or its Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 2000, as filed with the Commission
is in full force and effect and is the legal, valid and binding
agreement of the Offerors or the Subsidiaries, enforceable against the
Offerors or the Subsidiaries, as the case may be, in accordance with
its terms, may be limited by and/or subject to bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity, except where the
cancellation, termination or unenforceability does not constitute a
material change in the affairs of the Company and the Subsidiaries on a
consolidated basis. Except as disclosed in the Prospectus (or such
Preliminary Prospectus), neither the Company nor any Subsidiary is
(with or without notice or lapse of time or both) in breach or default
in any material respect thereunder and, to the knowledge of the
Offerors, no other party to any such agreement is (with or without
notice or lapse of time or both) in breach or default in any material
respect thereunder.
(xxvii) No relationship, direct or indirect, exists between
or among the Company or the Subsidiaries, on the one hand, and the
directors, officers, trustees, shareholders, customers or suppliers of
the Company or the Subsidiaries, on the other hand, which is required
to be described in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) which is not adequately described therein.
(xxviii) No person has the right to request or require the
Offerors or the Subsidiaries to register any securities for offering
and sale under the 1933 Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the
Designated Preferred Securities except as adequately disclosed in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(xxix) The Designated Preferred Securities have been
approved for quotation on The Nasdaq National Market subject to
official notice of issuance.
(xxx) Except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the Preliminary
Prospectus), there are no contractual encumbrances or restrictions or
material legal restrictions required to be described therein, on the
ability of the Subsidiaries (A) to pay dividends or make any other
distributions on its capital stock or to pay any indebtedness owed to
the Company, (B) to make any loans or advances to, or investments in,
the Company or (C) to transfer any of its property or assets to the
Company.
(xxxi) Neither of the Offerors is an "investment company,"
an entity "controlled" by an "investment company" or an "investment
adviser" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxxii) The Offerors have not distributed and will not
distribute prior to the Closing Date any prospectus in connection with
the Offering, other than a Preliminary Prospectus, the Prospectus, the
Registration Statement and the other materials permitted by the 1933
Act and the 1933 Act Regulations and reviewed by the Representative.
(xxxiii) The activities of the Offerors and the
Subsidiaries are permitted under applicable federal and state banking
laws and regulations. The Company has all necessary approvals,
including the approval of the Texas Department of Banking (the "TDB")
and the FRB, as applicable, to own the capital stock of the
Subsidiaries. Neither the Company nor any of the Subsidiaries is a
party or subject to any agreement or memorandum with, or directive or
other order issued by, the FRB, the TDB or other regulatory authority
having jurisdiction over it (each, a "Regulator," and collectively, the
"Regulators"), which imposes any restrictions or
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<PAGE> 14
requirements not generally applicable to entities of the same type as
the Company and the Subsidiaries. Neither the Company nor any
Subsidiary is subject to any directive from any Regulator to make any
material change in the method of conducting their respective
businesses, and no such directive is pending or threatened by such
Regulators.
(xxxiv) The Bank has properly administered all accounts for
which it acts as a fiduciary, including but not limited to accounts for
which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable
state and federal law and regulation and common law, except where the
failure to be in compliance would not have a material adverse effect
upon the condition (financial or otherwise), earnings, affairs,
business or results of operations of the Offerors and the Subsidiaries
on a consolidated basis. Neither the Bank nor any of its directors,
officers or employees, has committed any material breach of trust with
respect to any such fiduciary account, and the accountings for each
such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account in all
material respects.
(xxxv) The conditions for use of Form S-2, as set forth in
the General Instructions thereto, have been satisfied.
(xxxvi) The Offerors and the Subsidiaries are in compliance
with all provisions of Section 517.075, Florida Statutes, relating to
doing business with the Government of Cuba or with any person or
affiliate located in Cuba.
(xxxvii) Neither the Company nor any Subsidiary has any
liability under any "pension plan," as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(xxxviii) 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 thereby.
(xxxix) No report or application filed by the Company or
any of its Subsidiaries with the FRB, the TDB or any other state or
federal regulatory authority, as of the date it was filed or amended,
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 in all
material respects with the applicable requirements of the FRB, the TDB
or any other state or federal regulatory authority, as the case may be.
(xl) None of the Offerors, the Subsidiaries or, to the best
knowledge of the Offerors, any other person associated with or acting
on behalf of the Offerors or any of the Subsidiaries, including,
without limitation, any director, officer, agent, or employee of any of
the Subsidiaries or the Company has, directly or indirectly, while
acting on behalf of such Offeror or Subsidiary (i) used any corporate
funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; (ii) made any
unlawful contribution to any candidate for foreign or domestic office,
or to any foreign or domestic government officials or employees or
other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States or
any jurisdiction thereof or to foreign or domestic political parties or
campaigns from corporate funds, or failed to disclose fully any
contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices
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Act of 1977, as amended; or (iv) made any other payment of funds or
either or both of the Offerors or a Subsidiary or retained any funds
which constitute a violation of any law, rule or regulation or which
was or is required to be disclosed in the Registration Statement or the
Prospectus pursuant to the requirements of the 1933 Act or the 1933 Act
Regulations.
(xli) The employee benefit plans, including employee
welfare benefit plans, of the Company and each of the Subsidiaries (the
"Employee Plans") have been operated in material compliance with the
applicable provisions of ERISA, the Internal Revenue Code of 1986, as
amended (the "Code"), all regulations, rulings and announcements
promulgated or issued thereunder and all other applicable governmental
laws and regulations (except to the extent such noncompliance would
not, in the aggregate, have a material adverse effect upon the
condition (financial or otherwise) earnings, affairs, business or
results of operations of the Offerors or the Subsidiaries on a
consolidated basis). No reportable event under Section 4043(c) of ERISA
has occurred with respect to any Employee Plan of the Company or any of
the Subsidiaries for which the reporting requirements have not been
waived by the Pension Benefit Guaranty Corporation. No prohibited
transaction under Section 406 of ERISA, for which an exemption does not
apply, has occurred with respect to any Employee Plan of the Company or
any of the Subsidiaries. There are no pending or, to the knowledge of
the Offerors, threatened, claims by or on behalf of any Employee Plan,
by any employee or beneficiary covered under any such Employee Plan or
by any governmental authority or otherwise involving such Employee
Plans or any of their respective fiduciaries (other than for routine
claims for benefits). All Employee Plans that are group health plans
have been operated in material compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code.
(xlii) The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted
only in accordance with management's general or specific authorization,
and (D) the recorded accounts for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto.
(xliii) Except as described in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the
Preliminary Prospectus), there is no factual basis for any action, suit
or other proceeding involving the Company or the Subsidiaries or any of
their material assets for any failure of the Company or any of the
Subsidiaries, or any predecessor thereof, to comply with any
requirements of federal, state or local regulation relating to air,
water, solid waste management, hazardous or toxic substances, or the
protection of health or the environment; except where such action, suit
or other proceeding would not have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business or
results of operations of the Company and the Subsidiaries on a
consolidated basis. Except as described in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the
Preliminary Prospectus) or as would not have a material adverse effect
on the condition (financial or otherwise), earnings, affairs, business
or results of operations of the Company and the Subsidiaries on a
consolidated basis, none of the property owned or leased by the Company
or any of the Subsidiaries is contaminated with any waste or hazardous
substances, and neither the Company nor any of the Subsidiaries may be
deemed an "owner or operator" of a "facility" or "vessel" which owns,
possesses, transports, generates or disposes of a "hazardous substance"
as those terms are defined in Section 9601 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et seq.
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(xliv) The Company and the Subsidiaries maintain insurance
covering in all material respects their properties, personnel and
business. Such insurance insures against such losses and risks as, in
the judgment of the executive officers of the Company, are adequate to
protect in all material respects the Company and the Subsidiaries and
their businesses. Neither the Company nor any of the Subsidiaries has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures shall have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and shall be
outstanding and duly in force on the Closing Date and, if applicable,
the Option Closing Date, with such exceptions as would not have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business or results of operations of the Company and
the Subsidiaries on a consolidated basis.
(xlv) Neither the Company nor any Subsidiary has any
agreement or understanding with any person (A) concerning the future
acquisition by the Company or the Bank of a controlling interest in any
entity or (B) concerning the future acquisition by any person of a
controlling interest in the Company or any Subsidiary, in either case
that is required by the 1933 Act or the 1933 Act Regulations to be
disclosed by the Company that is not disclosed in the Prospectus.
3. OFFERING BY THE UNDERWRITERS.
After the Registration Statement becomes effective or, if the
Registration Statement is already effective, after this Agreement becomes
effective, the Underwriters propose to offer the Firm Preferred Securities for
sale to the public upon the terms and conditions set forth in the Prospectus.
The Underwriters may from time to time thereafter reduce the public offering
price and change the other selling terms, provided the proceeds to the Trust
shall not be reduced as a result of such reduction or change. Because the NASD
is expected to view the Preferred Securities as interests in a direct
participation program, the offering of the Preferred Securities is being made in
compliance with the applicable provisions of Rule 2810 of the NASD's conduct
rules.
The Underwriters may reserve and sell such of the Designated Preferred
Securities purchased by the Underwriters as the Underwriters may elect to
dealers chosen by it (the "Selected Dealers") at the public offering price set
forth in the Prospectus less the applicable Selected Dealers' concessions set
forth therein, for re-offering by Selected Dealers to the public at the public
offering price. The Underwriters may allow, and Selected Dealers may re-allow, a
concession set forth in the Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE OFFERORS.
The Offerors jointly and severally covenant with the Underwriters as
follows:
(a) The Offerors shall cause the Registration Statement and
any amendments thereto, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible. If the Registration
Statement has become or becomes effective pursuant to Rule 430A and information
has been omitted therefrom in reliance on Rule 430A, then, the Offerors will
prepare and file in accordance with Rule 430A and Rule 424(b) copies of the
Prospectus or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including the Prospectus) containing all information so
omitted and will provide evidence satisfactory to the Representative of such
timely filing.
(b) The Offerors shall notify you immediately, and confirm
such notice in writing:
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(i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, has become effective, or when the
Prospectus or any supplement to the Prospectus or any amended Prospectus has
been filed;
(ii) of the receipt of any comments or requests from the
Commission;
(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or the
Prospectus or for additional information; and
(iv) of the issuance by the Commission or any state or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any Preliminary Prospectus or the Prospectus, or suspending the qualification of
any of the Designated Preferred Securities for offering or sale in any
jurisdiction or the institution or threat of institution of any proceedings for
any of such purposes. The Offerors shall use their best efforts to prevent the
issuance of any such stop order or of any other such order and if any such order
is issued, to cause such order to be withdrawn or lifted as soon as possible.
(c) The Offerors shall furnish to the Underwriters, from time
to time without charge, as soon as available, as many copies as the Underwriters
may reasonably request of (i) the registration statement as originally filed and
of all amendments thereto, in executed form, including exhibits, whether filed
before or after the Registration Statement becomes effective, (ii) all exhibits
and documents incorporated therein or filed therewith, (iii) all consents and
certificates of experts in executed form, (iv) the Preliminary Prospectus and
all amendments and supplements thereto, and (v) the Prospectus, and all
amendments and supplements thereto.
(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Offerors shall comply with the 1933 Act and
the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Designated Preferred Securities
as contemplated herein and in the Trust Agreement and the Prospectus. The
Offerors shall not file any amendment to the registration statement as
originally filed or to the Registration Statement and shall not file any
amendment thereto or make any amendment or supplement to the Preliminary
Prospectus or to the Prospectus of which you shall not previously have been
advised in writing and provided a copy a reasonable time prior to the proposed
filings thereof or to which you or counsel for the Underwriters shall reasonably
object. If it is necessary, in the Company's reasonable opinion or in the
reasonable opinion of the Company's counsel to amend or supplement the
Registration Statement or the Prospectus in connection with the distribution of
the Designated Preferred Securities and the Shares, the Offerors shall forthwith
amend or supplement the Registration Statement or the Prospectus, as the case
may be, by preparing and filing with the Commission (provided the Underwriters
or counsel for the Underwriters does not reasonably object), and furnishing to
you such number of copies as you may reasonably request of an amendment or
amendments of, or a supplement or supplements to, the Registration Statement or
the Prospectus, as the case may be (in form and substance reasonably
satisfactory to you and counsel for the Underwriters). If any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus to
correct an untrue statement of a material fact or to include a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if for any reason it is necessary at
any time to amend or supplement the Prospectus to comply with the 1933 Act and
the 1933 Act Regulations, the Offerors shall, subject to the second sentence of
this subsection (d), forthwith at their cost and expense amend or supplement the
Prospectus by preparing and filing with the Commission, and furnishing to you,
such number of copies as you may reasonably request of an amendment or
amendments of, or a supplement or supplements to, the
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Prospectus (in form and substance satisfactory to you and counsel for the
Underwriters) so that, as so amended or supplemented, the Prospectus shall not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) The Offerors shall cooperate with you and counsel for the
Underwriters in order to qualify the Designated Preferred Securities and the
Shares for offering and sale under the securities or blue sky laws of such
jurisdictions as you may reasonably request and shall continue such
qualifications in effect so long as may be advisable for distribution of the
Designated Preferred Securities and the Shares; provided, however, that the
Offerors shall not be required to qualify to do business as a foreign
corporation or file a general consent to service of process in any jurisdiction
in connection with the foregoing. The Offerors shall file such statements and
reports as may be required by the laws of each jurisdiction in which the
Designated Preferred Securities and the Shares have been qualified as above. The
Offerors will notify you promptly of, and confirm in writing, the suspension of
qualification of the Designated Preferred Securities and the Shares or threat
thereof in any jurisdiction.
(f) The Offerors shall use their best efforts to permit the
Preferred Securities to be eligible for clearance and settlement through the
facilities of DTC.
(g) The Offerors shall make generally available to their
security holders in the manner contemplated by Rule 158 of the 1933 Act
Regulations and furnish to you as soon as practicable, but in any event not
later than 16 months after the Effective Date, a consolidated earnings statement
of the Offerors in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, conforming with the requirements of Section 11(a) of the 1933 Act and
Rule 158.
(h) The Offerors shall use the net proceeds from the sale of
the Designated Preferred Securities to be sold by the Trust hereunder in the
manner specified in the Prospectus under the caption "Use of Proceeds."
(i) For five years from the Effective Date, the Offerors shall
furnish to the Representative copies of all reports and communications
(financial or otherwise) furnished by the Offerors to the holders of the
Designated Preferred Securities and the Shares as a class, copies of all reports
and financial statements filed with or furnished to the Commission (other than
portions for which confidential treatment has been obtained from the Commission)
or with any national securities exchange or The Nasdaq Stock Market or other
self-regulatory organization and such other documents, reports and information
concerning the business and financial conditions of the Offerors as the
Representative may reasonably request, other than such documents, reports and
information for which the Offerors has the legal obligation not to reveal to the
Representative.
(j) (i) For a period of 90 days from the Effective Date, the
Offerors shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any Designated Preferred Securities, any other
beneficial interests in the assets of the Trust or any securities of the Trust
or the Company that are substantially similar to the Designated Preferred
Securities, including any guarantee of such beneficial interests or
substantially similar securities, or securities convertible into or exchangeable
for or that represent the right to receive any such beneficial interest or
substantially similar securities, and (ii) for a period of 90 days from the
Effective Date, the Offerors shall not, directly or indirectly, offer for sale,
sell or agree to sell or otherwise dispose of any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than
pursuant to employee benefit plans of the Company) or warrants or other rights
to purchase Common Stock or permit the registration under the 1933 Act of any
shares of Common Stock, except for the registration of the Designated Preferred
Securities and the Shares and the
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sales to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options, warrants and debentures,
without the prior written consent of the Representative.
(k) The Offerors shall use their best efforts to cause the
Designated Preferred Securities and the Shares to become quoted on The Nasdaq
National Market, or in lieu thereof a national securities exchange, and to
remain so quoted for at least five years from the Effective Date or for such
shorter period as may be specified in a written consent of the Representative,
provided this shall not prevent the Company from redeeming the Designated
Preferred Securities pursuant to the terms of the Trust Agreement. If the
Designated Preferred Securities are exchanged for Debentures, the Company shall
use its best efforts to have the Debentures promptly listed on The Nasdaq
National Market or other organization on which the Designated Preferred
Securities are then listed, and to have the Debentures promptly registered under
the 1934 Act.
(l) Subsequent to the date of this Agreement and through the
date which is the later of (i) the day following the date on which the
Underwriters' option to purchase the Option Preferred Securities shall expire or
(ii) the day following the Option Closing Date with respect to any Option
Preferred Securities that the Underwriters shall elect to purchase, except as
described in or contemplated by the Prospectus, neither the Offerors nor any of
the Subsidiaries shall take any action (or refrain from taking any action) which
will result in the Offerors or the Subsidiaries incurring any material liability
or obligation, direct or contingent, or enter into any material transaction,
except in the ordinary course of business, or take or refrain from taking any
action which will cause or result in any material adverse change in the
financial position, capital stock, or any material increase in long-term debt,
obligations under capital leases or short-term borrowings of the Offerors and
the Subsidiaries on a consolidated basis.
(m) The Offerors shall not, for a period of 180 days after the
date hereof, without the prior written consent of the Representative, purchase,
redeem or call for redemption, or prepay or give notice of prepayment (or
announce any redemption or call for redemption, or any repayment or notice of
prepayment) of the Offerors' securities.
(n) The Offerors shall not take, directly or indirectly, any
action designed to result in or which constitutes or which might reasonably be
expected to (i) cause or result in stabilization or manipulation of the price of
any security of the Offerors to facilitate the sale or resale of the Designated
Preferred Securities or the Shares or (ii) otherwise violate the Commission's
Regulation M and the Offerors are not aware of any such action taken or to be
taken by any affiliate of the Offerors.
(o) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Offerors, the Subsidiaries or the offering of the Designated Preferred
Securities or the Shares (the "Offering") which you shall not previously have
been provided a copy a reasonable time prior to the release thereof or provided
reasonable notice thereof and you shall not have reasonably objected thereto.
(p) The Offerors shall comply with all registration, filing
and reporting requirements of the 1934 Act for so long as the Preferred
Securities or the Debentures shall remain outstanding.
(q) At any time that the number of authorized but unissued
shares of Common Stock (or shares of Common Stock held in treasury and available
for such purpose) shall be less than the aggregate number of shares of Common
Stock into which the Preferred Securities then outstanding shall be convertible,
to take such action as is necessary to increase the number of shares of Common
Stock
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which the Company is authorized to issue so that the Company will have a
sufficient number of shares of Common Stock available for conversion of the
Capital Securities then outstanding.
(r) The Offerors shall inform the Florida Department of
Banking and Finance at any time prior to the consummation of the distribution of
the Designated Preferred Securities by the Underwriters if either of the
Offerors or any of the Subsidiaries commences engaging in business with the
government of Cuba or with a person or affiliate located in Cuba, with such
information to be provided within 90 days after the commencement thereof or
after a change occurs with respect to previously reported information.
5. PAYMENT OF EXPENSES.
Whether or not this Agreement is terminated or the sale of the
Designated Preferred Securities to the Underwriters is consummated, the Company
covenants and agrees that it will pay or cause to be paid (directly or by
reimbursement) all costs and expenses incident to the performance of the
obligations of the Offerors under this Agreement, including:
(a) the preparation, printing, filing, delivery and shipping
of the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any amendments
or supplements thereto, and the printing, delivery and shipping of this
Agreement and any other underwriting documents (including, without limitation,
selected dealers agreements);
(b) all fees, expenses and disbursements of the Offerors'
counsel and accountants;
(c) all fees and expenses incurred in connection with the
qualification of the Designated Preferred Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as you may
request, including all filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith.
(d) all fees and expenses incurred in connection with filings
made with the NASD and DTC;
(e) any applicable fees and other expenses incurred in
connection with the listing of the Designated Preferred Securities and, if
applicable, the Guarantee and the Debentures on The Nasdaq Stock Market;
(f) the cost of furnishing to you copies of the initial
registration statements, any Preliminary Prospectus, the Registration Statement
and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar
and the fees and disbursements of counsel for any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes)
incurred in connection with the printing, issuance and delivery of the
Designated Preferred Securities to the Underwriters;
(i) all expenses incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture, the Guarantee and the Expense
Agreement; and
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(j) all other costs and expenses incident to the performance
of the obligations of the Company hereunder and under the Trust Agreement that
are not otherwise specifically provided for in this Section 5.
If the sale of Designated Preferred Securities contemplated by this
Agreement is not completed due to termination pursuant to the terms hereof
(other than pursuant to Section 9 hereof), the Company will pay you your
accountable out-of-pocket expenses in connection herewith or in contemplation of
the performance of your obligations hereunder, including without limitation
travel expenses, reasonable fees, expenses and disbursements of counsel or other
out-of-pocket expenses incurred by you in connection with any discussion of the
Offering or the contents of the Registration Statement, any investigation of the
Offerors and the Subsidiaries, or any preparation for the marketing, purchase,
sale or delivery of the Designated Preferred Securities, in each case following
presentation of reasonably detailed invoices therefor.
If the sale of Designated Preferred Securities contemplated by this
Agreement is completed, the Company shall not be responsible for payment of fees
or disbursements of counsel for the Underwriters other than in accordance with
paragraph (c) above, or for the reimbursement of any expenses of the
Underwriters.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for the Firm
Preferred Securities and, following exercise of the option granted by the
Offerors in Section 1 of this Agreement, the Option Preferred Securities, are
subject, in your sole discretion, to the accuracy of and compliance with the
representations and warranties and agreements of the Offerors herein as of the
date hereof and as of the Closing Date (or in the case of the Option Preferred
Securities, if any, as of the Option Closing Date), to the accuracy of the
written statements of the Offerors made pursuant to the provisions hereof, to
the performance by the Offerors of their covenants and obligations hereunder and
to the following additional conditions:
(a) If the Registration Statement or any amendment thereto
filed prior to the Closing Date has not been declared effective prior to the
time of execution hereof, the Registration Statement shall become effective not
later than 10:00 a.m., St. Louis time, on the first business day following the
time of execution of this Agreement, or at such later time and date as you may
agree to in writing. If required, the Prospectus and any amendment or supplement
thereto shall have been timely filed in accordance with Rule 424(b) and Rule
430A under the 1933 Act and Section 4(a) hereof. No stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued under the 1933 Act or any applicable state
securities laws and no proceedings for that purpose shall have been instituted
or shall be pending, or, to the knowledge of the Offerors or the Representative,
shall be contemplated by the Commission or any state authority. Any request on
the part of the Commission or any state authority for additional information (to
be included in the Registration Statement or Prospectus or otherwise) shall have
been disclosed to you and complied with to your satisfaction and to the
satisfaction of counsel for the Underwriters.
(b) No Underwriter shall have advised the Company at or before
the Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of a fact which, in your opinion, is material or omits to state a fact which, in
your opinion, is material and is required to be stated therein or is necessary
to make statements therein (in the case of the Prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were made)
not misleading.
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(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Trust Agreement, and
the Designated Preferred Securities, and the authorization and form of the
Registration Statement and Prospectus, other than financial statements and
other financial data, and all other legal matters relating to this Agreement
and the transactions contemplated hereby or by the Trust Agreement shall be
satisfactory in all material respects to counsel for the Underwriters, and the
Offerors and the Subsidiaries shall have furnished to such counsel all
documents and information relating thereto that they may reasonably request to
enable them to pass upon such matters.
(d) Jenkens & Gilchrist, counsel for the Offerors, shall have
furnished to you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Texas,
and is duly registered as a bank holding company under the BHC Act.
Each of the Subsidiaries is duly incorporated or organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Company and the
Subsidiaries has full power (corporate or otherwise) and authority to
own or lease its properties and to conduct its business as such
business is described in the Prospectus and is currently conducted in
all material respects. All outstanding shares of capital stock or
membership interests of the Subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable except to the
extent such shares or membership interests may be deemed assessable
under 12 U.S.C. Section 1831.
(ii) The capital stock of the Company, the Debentures and
Guarantee of the Company and the equity securities of the Trust
conform to the description thereof contained in the Prospectus in all
material respects. To the best of such counsel's knowledge, the
capital stock of the Company authorized as of June 30, 2000 is as set
forth under the caption "Capitalization" in the Prospectus, has been
duly authorized and validly issued, and is fully paid and
nonassesable. The form of certificates to evidence the Designated
Preferred Securities has been approved by the Trust and is in due and
proper form and complies with all applicable requirements. To the best
of such counsel's knowledge, there are no outstanding rights, options
or warrants to purchase, no other outstanding securities convertible
into or exchangeable for, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or equity securities
of the Trust, except as described in the Prospectus.
(iii) The issuance, sale and delivery of the Designated
Preferred Securities, the Shares and Debentures in accordance with the
terms and conditions of this Agreement and the Indenture have been
duly authorized by all necessary actions of the Offerors. All of the
Designated Preferred Securities have been duly and validly authorized
and, when delivered and paid for in accordance with this Agreement
will be duly and validly issued, fully paid and nonassessable, and
will conform in all material respects to the description thereof in
the Registration Statement, the Prospectus and the Trust Agreement.
The Designated Preferred Securities have been approved for quotation
on the Nasdaq Stock Market subject to official notice of issuance.
There are no preemptive or other rights to subscribe for or to
purchase, and other than as disclosed in the Prospectus no
restrictions upon the voting or transfer of, any equity securities of
the Offerors or the Subsidiaries pursuant to the corporate charter,
by-laws or other governing documents (including without limitation,
the Trust Agreement) of the Offerors or the Subsidiaries, or, to the
best of such counsel's knowledge, any agreement or other instrument to
which either Offeror or any of the Subsidiaries is a party or by which
either Offeror or any of the Subsidiaries may be bound.
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(iv) The Offerors have all requisite corporate and trust
power to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal,
valid and binding obligations of the Offerors enforceable against the
Offerors in accordance with its terms, and except as the
indemnification and contribution provisions hereof may be limited
under applicable laws and certain remedies may not be available in the
case of a non-material breach.
(v) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a
valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms.
(vi) The Debentures have been duly authorized, executed, and
delivered by the Company, and, when authenticated by the Indenture
Trustee, will be legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms. The
holders of the Debentures are entitled to the benefits of the
Indenture.
(vii) The Expense Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable against the Company in
accordance with its terms.
(viii) The Shares initially issuable upon conversion of the
Preferred Securities and the Debentures have been duly authorized and
validly reserved for issuance upon conversion of the Preferred
Securities and the Debentures and are free of statutory and, to the
best of such counsel's knowledge, contractual preemptive rights and
are sufficient in number to meet current conversion requirements, and
such Shares, when so issued upon such conversion in accordance with
the terms of the Trust Agreement and the Indenture, will be duly and
validly issued and fully paid and nonassessable, with no personal
liability attaching to the ownership thereof.
(ix) To the best of such counsel's knowledge, neither of the
Offerors nor any of the Subsidiaries is in breach or violation of, or
default under, with or without notice or lapse of time or both, its
corporate charter, by-laws or governing document (including without
limitation, the Trust Agreement). The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement, and the Trust Agreement do not and
will not conflict with, result in the creation or imposition of any
material lien, claim, charge, encumbrance or restriction upon any
property or assets of the Offerors or the Subsidiaries or the
Designated Preferred Securities pursuant to, or constitute a material
breach or violation of, or constitute a material default under, with
or without notice or lapse of time or both, any of the terms,
provisions or conditions of the charter, by-laws or governing document
(including without limitation, the Trust Agreement) of the Offerors or
the Subsidiaries, or any material contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease, franchise, license or
any other agreement or instrument certified to such counsel (as
provided in this Agreement) to which either Offeror or the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment,
franchise, license, Permit, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality,
domestic or foreign, certified to such counsel (as provided in this
Agreement) having jurisdiction over the Offerors or the Subsidiaries
or any of their respective properties which, in each case, is material
to the Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing, registration
or qualification with, any person (including, without limitation, any
court, governmental body or authority) is required under Texas law in
connection
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with the transactions contemplated by this Agreement with respect to
the purchase and distribution of the Designated Preferred Securities
by the Underwriters.
(x) To the best of such counsel's knowledge, holders of
securities of the Offerors do not have any right that, if exercised,
would require the Offerors to cause such securities to be included in
the Registration Statement or have waived such right. To the best of
such counsel's knowledge, neither the Company nor any of the
Subsidiaries is a party to any agreement or other instrument which
grants rights for or relating to the registration of any securities of
the Offerors.
(xi) Except as set forth in the Registration Statement and
the Prospectus to the best of such counsel's knowledge, (i) no action,
suit or proceeding at law or in equity is pending or threatened in
writing to which the Offerors or the Subsidiaries is or is threatened
to be made a party, and (ii) no action, suit or proceeding is pending
or threatened in writing against or affecting the Offerors or the
Subsidiaries or any of their properties, before or by any court or
governmental official, commission, board or other administrative
agency, authority or body, or any arbitrator, wherein an unfavorable
decision, ruling or finding could reasonably be expected to have a
material adverse effect on the consummation of this Agreement or the
issuance and sale of the Designated Preferred Securities as
contemplated herein or the condition (financial or otherwise),
earnings, business, or results of operations of the Offerors and the
Subsidiaries on a consolidated basis or which is required to be
disclosed in the Registration Statement or the Prospectus and is not
so disclosed.
(xii) No authorization, approval, consent or order of or
filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act and
the Trust Indenture Act, and except such as may be required under
state securities laws or Interpretations or Rules of the NASD in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters.
(xiii) The Registration Statement and the Prospectus and any
amendments or supplements thereto (other than the financial statements
or other financial data included therein or omitted therefrom and
Underwriters' Information, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations as of their
respective dates of effectiveness or issuance. The documents
incorporated by reference in the Registration Statement and the
Prospectus and any amendments or supplements thereto (other than the
exhibits, financial statements or other financial data included
therein or omitted therefrom, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations as of their
respective dates of effectiveness.
(xiv) To the best of such counsel's knowledge, there are no
contracts, agreements, leases or other documents of a character
required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement that are not
so described or filed.
(xv) The statements under the captions "Description of the
Convertible Preferred Securities," "Description of the Convertible
Subordinated Debentures," "Description of the Guarantee,"
"Relationship Among the Convertible Preferred Securities, the
Convertible Subordinated Debentures, the Expense Agreement and the
Guarantee," "Certain Federal Income
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<PAGE> 25
Tax Consequences," and "ERISA Considerations" in the Prospectus,
insofar as such statements constitute a description of legal and
regulatory matters, documents or instruments referred to therein, are
accurate descriptions of the matters purported to be summarized
therein in all material respects and fairly present in all material
respects the information called for with respect to such legal
matters, documents and instruments, other than financial and
statistical data as to which said counsel expresses no opinion or
belief.
(xvi) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under
the 1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made within the time period required by Rule 424(b);
to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for a stop order are pending or threatened by the
Commission.
(xvii) Except as disclosed in the Prospectus, to the best of
such counsel's knowledge, there are no contractual encumbrances or
restrictions, or material legal restrictions required to be disclosed
on the ability of the Subsidiaries (A) to pay dividends or make any
other distributions on its capital stock or to pay indebtedness owed
to the Offerors, (B) to make any loans or advances to, or investments
in, the Offerors or (C) to transfer any of its property or assets to
the Offerors.
(xviii) To the best of such counsel's knowledge, (A) the
business and operations of the Offerors and the Subsidiaries comply in
all material respects with all statutes, ordinances, laws, rules and
regulations applicable thereto and which are material to the Offerors
and the Subsidiaries on a consolidated basis, except in those
instances where non-compliance would not materially impair the ability
of the Offerors and the Subsidiaries to conduct their business and
would not have a material adverse effect on the condition (financial
or otherwise), earnings, business, affairs or results of operations of
the Company and the Subsidiaries on a consolidated basis; and (B) the
Offerors and the Subsidiaries possess and are operating in all
material respects in compliance with the terms, provisions and
conditions of all Permits, consents, licenses, franchises and
governmental and regulatory authorizations ("Authorizations") and
required to conduct their businesses as described in the Prospectus
and which are material to the Offerors and the Subsidiaries on a
consolidated basis, except in those instances where the loss thereof
or non-compliance therewith would not have a material adverse effect
on the condition (financial or otherwise), business or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis; to the best of such counsel's knowledge, all such
Authorizations are valid and in full force and effect, and, to the
best of such counsel's knowledge, no action, suit or proceeding is
pending or threatened which may lead to the revocation, termination,
suspension or non-renewal of any such Authorization, except in those
instances where the loss thereof or non-compliance therewith would not
materially impair the ability of the Offerors or the Subsidiaries to
conduct their businesses.
(xix) Neither the Company nor the Trust is and, after giving
effect to the offering and sale of the Designated Preferred Securities
and the application of the proceeds thereof as described in the
Prospectus, neither the Company nor the Trust will be, an "investment
company," an entity "controlled" by an "investment company" or an
"investment adviser" as defined in the Investment Company Act.
In giving the above opinion, such counsel may state that, insofar as
such opinion involves factual matters, they have relied upon certificates of
officers of the Offerors including, without limitation, certificates as to the
identity of any and all material contracts, indentures, mortgages, deeds of
trust, loans
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<PAGE> 26
or credit agreements, notes, leases, franchises, licenses or other agreements
or instruments, and all material permits, easements, consents, licenses,
franchises and government regulatory authorizations, for purposes of paragraphs
(viii), (ix), (x), (xiii), (xiv), (xvii) and (xviii) hereof, and certificates
of public officials. In giving such opinion, such counsel may rely upon the
opinion of Richards, Layton & Finger, special Delaware counsel to the Offerors
as to certain matters relating to the Trust and the Designated Preferred
Securities which are governed by Delaware law.
In giving the above opinion, such counsel may state that, with respect
to agreements referred to in paragraphs (iv), (v), (vi) and (vii) any
enforcement with respect thereto may be limited by and/or subject to
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Offerors
and with their independent public accountants and with you and your counsel, at
which conferences such counsel made inquiries of such officers, representatives
and accountants and discussed in detail the contents of the Registration
Statement and Prospectus and the documents incorporated therein by reference
and (relying as to materiality to a large extent upon facts provided by
officers and other representatives of the Company) such counsel has no reason
to believe (A) that the Registration Statement or any amendment thereto (except
for the financial statements and related schedules and statistical data
included therein or omitted therefrom or Underwriters' Information, as to which
such counsel need express no opinion), at the time the Registration Statement
or any such amendment became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (B) that the
Prospectus or any amendment or supplement thereto and the documents
incorporated therein by reference (except for the financial statements,
exhibits and related schedules and statistical data included therein or omitted
therefrom or Underwriters' Information, as to which such counsel need express
no opinion), at the time the Registration Statement became effective (or, if
the term "Prospectus" refers to the prospectus first filed pursuant to Rule
424(b) of the 1933 Act Regulations, at the time the Prospectus was issued), at
the time any such amended or supplemented Prospectus was issued, at the Closing
Date and, if applicable, the Option Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading or (C)
that there is any amendment to the Registration Statement required to be filed
that has not already been filed.
(e) Richards, Layton & Finger, special Delaware counsel to the
Offerors, shall have furnished to you their signed opinion, dated as of Closing
Date or the Option Closing Date, as the case may be, in form and substance
satisfactory to such counsel, to the effect that:
(i) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust
Act and, under the Trust Agreement and the Delaware Business Trust
Act, has the trust power and authority to conduct its business as
described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Company, as sponsor, and the Trustees, and is
enforceable against the Company, as sponsor, and the Trustees, in
accordance with its terms.
(iii) Under the Trust Agreement and the Delaware Business
Trust Act, the execution and delivery of the Underwriting Agreement by
the Trust, and the performance by the
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Trust of its obligations thereunder, have been authorized by all
requisite trust action on the part of the Trust.
(iv) The Designated Preferred Securities have been duly
authorized by the Trust Agreement, and when issued and sold in
accordance with the Trust Agreement, the Designated Preferred
Securities will be, subject to the qualifications set forth in
paragraph (v) below, fully paid and nonassessable beneficial interest
in the assets of the Trust and entitled to the benefits of the Trust
Agreement. The form of certificate to evidence the Designated
Preferred Securities has been approved by the Trust and is in due and
proper form and complies with all applicable requirements of the
Delaware Business Trust Act.
(v) Holders of Designated Preferred Securities, as beneficial
owners of the Trust, will be entitled to the same limitation of
personal liability extended to shareholders of private, for-profit
corporations organized under the General Corporation Law of the State
of Delaware. Such opinion may note that the holders of Designated
Preferred Securities may be obligated to make payments as set forth in
the Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the Designated
Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, and the
consummation of the transactions contemplated by this Agreement, do
not violate (a) the Trust Agreement, or (b) any applicable Delaware
law, rule or regulation.
Such opinion may state that it is limited to the laws of the State of
Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
(f) Lewis, Rice & Fingersh, L.C., counsel for the Underwriters, shall
have furnished you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, with respect to the sufficiency of all
corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Preferred Securities, the Registration Statement,
the Prospectus and such other related matters as you may reasonably request and
there shall have been furnished to such counsel such documents and other
information as they may request to enable them to pass on such matters. In
giving such opinion, Lewis, Rice & Fingersh, L.C. may rely as to matters of
fact upon statements and certifications of officers of the Offerors and of
other appropriate persons and may rely as to matters of law, other than law of
the United States and the State of Missouri, and upon the opinions of Jenkens &
Gilchrist and Richards, Layton & Finger described herein.
(g) On the date of this Agreement and on the Closing Date (and, if
applicable, any Option Closing Date), the Representative shall have received
from PricewaterhouseCoopers LLP a letter, dated the date of this Agreement and
the Closing Date (and, if applicable, the Option Closing Date), respectively,
in form and substance satisfactory to the Representative, confirming that they
are independent public accountants with respect to the Company and the
Subsidiaries, within the meaning of the 1933 Act and the 1933 Act Regulations,
and stating in effect that:
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(i) In their opinion, the consolidated financial statements
of the Company audited by them and included or incorporated by
reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act
Regulations.
(ii) On the basis of the procedures specified by the American
Institute of Certified Public Accountants as described in SAS No. 71,
"Interim Financial Information," inquiries of officials of the Company
responsible for financial and accounting matters, and such other
inquiries and procedures as the Underwriters may request and
PricewaterhouseCoopers LLP are willing to perform and report upon,
which procedures do not constitute an audit in accordance with U.S.
generally accepted auditing standards, nothing came to their attention
that caused them to believe that, if applicable, the unaudited interim
consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement do not comply
as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 Act, the 1933 Act Regulations
and the 1934 Act Regulations or are not in conformity with U.S.
generally accepted accounting principles applied on a basis
substantially consistent, except as noted in the Registration
Statement, with the basis for the audited consolidated financial
statements of the Company included in the Registration Statement.
(iii) On the basis of limited procedures, not constituting an
audit in accordance with U.S. generally accepted auditing standards,
consisting of a reading of the unaudited interim financial statements
and other information referred to below, a reading of the latest
available unaudited condensed consolidated financial statements of the
Company, inspection of the minute books of the Company since the date
of the latest audited financial statements of the Company included or
incorporated by reference in the Registration Statement, inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as the Underwriters may
request and PricewaterhouseCoopers LLP are willing to perform and
report upon, nothing came to their attention that caused them to
believe that:
(A) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in the
consolidated capital stock of the Company, any increase in the
consolidated debt of the Company or any decrease in the consolidated
shareholders equity of the Company or any changes, decreases or
increases in other items specified by the Underwriters, in each case
as compared with amounts shown in the latest unaudited interim
consolidated statement of financial condition of the Company included
or incorporated by reference in the Registration Statement except in
each case for changes, increases or decreases which the Registration
Statement specifically discloses, have occurred or may occur or which
are described in such letter; and
(B) for the period from the date of the latest
unaudited interim consolidated financial statements included or
incorporated by reference in the Registration Statement to the
specified date referred to in Clause (iii)(A), there were any
decreases in the consolidated net income of the Company or in the per
share amount of net income of the Company or changes, decreases or
increases in other items as compared with the comparable period of the
preceding year and with any other period of corresponding length as the
Underwriters may request and PricewaterhouseCoopers LLP are willing to
perform and report upon, except in each case for increases or decreases
which the Registration Statement discloses have occurred or may occur,
or which are described in such letter.
(iv) In addition to the audit referred to in their report
included or incorporated by reference in the Registration Statement
and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (ii) and (iii) above, they
have
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carried out certain specified procedures, not constituting an audit in
accordance with U.S. generally accepted auditing standards, with
respect to certain amounts, percentages and financial information as
the Underwriters may request and PricewaterhouseCoopers LLP are willing
to perform and report upon which are derived from the general
accounting records and consolidated financial statements of the Company
which appear in the Registration Statement specified by the
Underwriters in the Registration Statement, and have compared such
amounts, percentages and financial information with the accounting
records and the material derived from such records and consolidated
financial statements of the Company have found them to be in agreement.
In the event that the letter to be delivered on the date hereof, on
the Closing Date (and, if applicable, any Option Closing Date) referred to
above set forth any such changes, decreases or increases as specified in
Clauses (iii)(A) or (iii)(B) above, or any exceptions from such agreement
specified in Clause (iv) above, it shall be a further condition to the
obligations of the Underwriters that the Representative shall have determined,
after discussions with officers of the Company responsible for financial and
accounting matters, that such changes, decreases, increases or exceptions as
are set forth in such letters do not (x) reflect a material adverse change in
the items specified in Clause (iii)(A) above as compared with the amounts shown
in the latest unaudited consolidated statement of financial condition of the
Company included or incorporated by reference in the Registration Statement,
(y) reflect a material adverse change in the items specified in Clause (iii)(B)
above as compared with the corresponding periods of the prior year or other
period specified by the Representative, or (z) reflect a material adverse
change in items specified in Clause (iv) above from the amounts shown in the
Preliminary Prospectus distributed by the Underwriters in connection with the
offering contemplated hereby or from the amounts shown in the Prospectus.
(h) At the Closing Date and, if applicable, the Option Closing Date,
you shall have received certificates of the chief executive officer and the
chief financial and accounting officer of the Company, which certificates shall
be deemed to be made on behalf of the Company dated as of the Closing Date and,
if applicable, the Option Closing Date, evidencing satisfaction of the
conditions of Section 6(a) and stating that (i) the representations and
warranties of the Company set forth in Section 2(a) hereof are accurate as of
the Closing Date and, if applicable, the Option Closing Date, and that the
Offerors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to such Closing Date and,
if applicable, the Option Closing Date; (ii) since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any material adverse change in the condition (financial or
otherwise), earnings, affairs, business or results of operations of the Company
and the Subsidiaries on a consolidated basis; (iii) since such dates there has
not been any material transaction entered into by the Offerors or the
Subsidiaries other than transactions in the ordinary course of business; and
(iv) they have carefully examined the Registration Statement and the Prospectus
as amended or supplemented and nothing has come to their attention that would
lead them to believe that either the Registration Statement or the Prospectus,
or any amendment or supplement thereto as of their respective effective or
issue dates, contained, and the Prospectus as amended or supplemented at such
Closing Date (and, if applicable, the Option Closing Date), contains any untrue
statement of a material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and (v)
covering such other matters as you may reasonably request. The officers'
certificate of the Company shall further state that no stop order affecting the
Registration Statement is in effect or, to their knowledge, threatened.
(i) At the Closing Date and, if applicable, the Option Closing Date,
you shall have received a certificate of an authorized representative of the
Trust to the effect that to the best of his or her knowledge based upon a
reasonable investigation, the representations and warranties of the Trust in
this Agreement are true and correct as though made on and as of the Closing
Date (and, if applicable, the
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Option Closing Date); the Trust has complied with all the agreements and
satisfied all the conditions required by this Agreement to be performed or
satisfied by the Trust on or prior to the Closing Date, and since the most
recent date as of which information is given in the Prospectus, except as
contemplated by the Prospectus, the Trust has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business and there has not been any
material adverse change in the condition (financial or otherwise) of the Trust.
(j) On the Closing Date, you shall have received duly executed
counterparts of the Trust Agreement, the Guarantee, the Indenture and the
Expense Agreement.
(k) On the Closing Date, you shall have received signed letters, dated
the date of this Agreement, from each of the directors and officers of the
Company and stockholders of the Company designated by the Representative to the
effect that such persons shall not sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of Common
Stock or warrants or other rights to purchase Common Stock for a period of 90
days after the date of the Prospectus without the prior written consent of the
Representative.
(l) The NASD, upon review of the terms of the public offering of the
Designated Preferred Securities and the Shares, shall not have objected to the
Underwriters' participation in such offering.
(m) Prior to the Closing Date and, if applicable, the Option Closing
Date, the Offerors shall have furnished to you and counsel for the Underwriters
all such other documents, certificates and opinions as they have reasonably
requested.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you. The Offerors shall furnish you with conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request.
If any of the conditions referred to in this Section 6 shall not have
been fulfilled when and as required by this Agreement, this Agreement and all
of the Underwriters' obligations hereunder may be terminated by you on notice
to the Company at, or at any time before, the Closing Date or the Option
Closing Date, as applicable. Any such termination shall be without liability of
the Underwriters to the Offerors.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter, each of its directors, officers and agents, and each
person, if any, who controls any Underwriter within the meaning of the 1933
Act, against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and reasonable attorney fees and
expenses), joint or several, arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact made by the Company or
the Trust contained in Section 2 of this Agreement (or any certificate
delivered by the Company or the Trust pursuant to Sections 6(h), 6(i) and 6(m)
hereto) or the registration statement as originally filed or the Registration
Statement, any Preliminary Prospectus or the Prospectus, or in any amendment or
supplement thereto, (ii) any blue sky application or other document executed by
the Company or the Trust specifically for that purpose or based upon written
information furnished by the Company or the Trust filed in any state or other
jurisdiction in order to qualify any of the Designated Preferred Securities
under the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application"), (iii)
any omission or alleged
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omission to state a material fact in the registration statement as originally
filed or the Registration Statement, the Preliminary Prospectus or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application, required to be stated therein or necessary to make the statements
therein not misleading, and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
attorney fees), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or (iv) the enforcement of this indemnification
provision or the contribution provisions of Section 7(d); and shall reimburse
each such indemnified party for any reasonable legal or other expenses as
incurred, but in no event less frequently than 30 days after each invoice is
submitted, incurred by them in connection with investigating or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case
such payments shall be promptly refunded; provided, however, that the Offerors
shall not be liable in any such case to the extent, but only to the extent,
that any such losses, claims, damages, liabilities and expenses arise out of or
are based upon any untrue statement or omission or allegation thereof that has
been made therein or omitted therefrom in reliance upon and in conformity with
the "Underwriter Information" provided, that the indemnification contained in
this paragraph with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or of any person controlling any Underwriter)
to the extent any such losses, claims, damages, liabilities or expenses
directly results from the fact that such Underwriter sold Designated Preferred
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been furnished
to you in sufficient time to distribute same with or prior to the written
confirmation of the sale involved), if required by law, and if such loss,
claim, damage, liability or expense would not have arisen but for the failure
to give or send such person such document. The foregoing indemnity agreement is
in addition to any liability the Company or the Trust may otherwise have to any
such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless each Offeror, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls an
Offeror within the meaning of the 1933 Act, to the same extent as required by
the foregoing indemnity from the Company to each Underwriter, but only with
respect to the Underwriters Information or information related to any
Underwriter furnished in writing to an Offeror through such Underwriter by or
on its behalf expressly for use in a Blue Sky Application. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to any such indemnified party.
(c) If any action or claim shall be brought or asserted against any
indemnified party or any person controlling an indemnified party in respect of
which indemnity may be sought from the indemnifying party, such indemnified
party or controlling person shall promptly notify the indemnifying party in
writing, and the indemnifying party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all expenses; provided, however, that the failure so to notify
the indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under such paragraph, and further,
shall only relieve it from liability under such paragraph to the extent
prejudiced thereby. Any indemnified party or any such controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party
in writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action
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(including any impleaded parties) include both such indemnified party or such
controlling person and the indemnifying party and such indemnified party or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it that are different from or in
addition to those available to the indemnifying party (in which case, if such
indemnified party or controlling person notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party or such
controlling person) it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time and for all
such indemnified party and controlling persons, which firm shall be designated
in writing by the indemnified party (and, if such indemnified parties are
Underwriters, by you, as Representative). Each indemnified party and each
controlling person, as a condition of such indemnity, shall use reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. The indemnifying party shall not be liable for any settlement
of any such action effected without its written consent, but if there shall be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
An indemnifying party shall not, without the prior written consent of
each indemnified party, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the 1933 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes a release of each such
indemnified party reasonably satisfactory to each such indemnified party and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding or unless the indemnifying party shall confirm in a
written agreement with each indemnified party, that notwithstanding any
federal, state or common law, such settlement, compromise or consent shall not
alter the right of any indemnified party or controlling person to
indemnification or contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriters on the other from the offering of the Designated Preferred
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The 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 of the Designated
Preferred Securities (before deducting expenses) received by the Offerors bear
to the total underwriting discounts, commissions and compensation received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Offerors on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by the Underwriters and the parties'
relative intent,
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knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Offerors and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the first
sentence of this paragraph (d) shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Designated Preferred Securities
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriters has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this paragraph (d), each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls an Offeror
within the meaning of the 1933 Act, each officer and trustee of an Offeror who
shall have signed the Registration Statement and each director of an Offeror
shall have the same rights to contribution as the Offerors subject in each case
to the preceding sentence. The obligations of the Offerors under this paragraph
(d) shall be in addition to any liability which the Offerors may otherwise have
and the obligations of the Underwriters under this paragraph (d) shall be in
addition to any liability that the Underwriters may otherwise have.
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Offerors set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling an Underwriter or by or on behalf of the Offerors, or
such directors, trustees or officers (or any person controlling an Offeror,
(ii) acceptance of any Designated Preferred Securities and payment therefor
hereunder and (iii) any termination of this Agreement. A successor of any
Underwriter or of an Offeror, such directors, trustees or officers (or of any
person controlling an Underwriter or an Offeror) shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 7.
(f) The Company agrees to indemnify the Trust against any and
all losses, claims, damages or liabilities that may become due from the Trust
under this Section 7.
8. TERMINATION.
You shall have the right to terminate this Agreement at any time at or
prior to the Closing Date or, with respect to the Underwriters' obligation to
purchase the Option Preferred Securities, at any time at or prior to the Option
Closing Date, without liability on the part of the Underwriters to the
Offerors, if:
(a) Either Offeror shall have failed, refused, or been unable
to perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;
(b) The Offerors or any of the Subsidiaries shall have
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree which
in the
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judgment of the Representative materially impairs the investment quality of the
Designated Preferred Securities;
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely to
have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business or results of operations of the Offerors and the
Subsidiaries on a consolidated basis, whether or not arising in the ordinary
course of business;
(d) There has occurred any outbreak of hostilities or other
calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable to market the Designated Preferred
Securities or enforce contracts for the sale of the Designated Preferred
Securities;
(e) Trading generally on the New York Stock Exchange, the
American Stock Exchange or The Nasdaq Stock Market's National Market shall have
been suspended, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required, by any of
said exchanges or market system or by the Commission or any other governmental
authority; or
(f) A banking moratorium shall have been declared by either
federal or Texas authorities; or
(g) Any action shall have been taken by any government in
respect of its monetary affairs which, your reasonable judgment, has a material
adverse effect on the United States securities markets.
If this Agreement shall be terminated pursuant to this Section 8, the
Offerors shall not then be under any liability to the Underwriters except as
provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS.
If any Underwriter or Underwriters shall default in its or their
obligations to purchase Designated Preferred Securities hereunder, the other
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Designated Preferred Securities which
such defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that the non-defaulting Underwriters shall be under no
obligation to purchase such Designated Preferred Securities if the aggregate
number of Designated Preferred Securities to be purchased by such
non-defaulting Underwriters shall exceed 110% of the aggregate underwriting
commitments set forth in Schedule I hereto, and provided further, that no
non-defaulting Underwriter shall be obligated to purchase Designated Preferred
Securities to the extent that the number of such Designated Preferred
Securities is more than 110% of such Underwriter's underwriting commitment set
forth in Schedule I hereto.
In the event that the non-defaulting Underwriters are not obligated
under the above paragraph to purchase the Designated Preferred Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase, the
Representative may in its discretion arrange for one or more of the
Underwriters or for another party or parties to purchase such Designated
Preferred Securities on the terms contained herein. If within one business day
after such default the Representative does not arrange for the purchase of such
Designated Preferred Securities, then the Company shall be entitled to a
further period
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of one business day within which to procure another party or parties
satisfactory to the Representative to purchase such Designated Preferred
Securities on such terms.
In the event that the Representative or the Company do not arrange for
the purchase of any Designated Preferred Securities to which a default relates
as provided above, this Agreement shall be terminated.
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or a part of the Designated Preferred Securities
of a defaulting Underwriter or Underwriters as provided in this Section 9, (i)
you shall have the right to postpone the Closing Date for a period of not more
than five full business days, in order to effect any changes that, in the
opinion of counsel for the Underwriters or the Company, may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or agreements, and the Company agrees promptly to file any amendments
to the Registration Statement or supplements to the Prospectus which, in its
opinion, may thereby be made necessary and (ii) the respective numbers of
Designated Preferred Securities to be purchased by the remaining Underwriters
or substituted underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of any liability it may have for damages
occasioned by its default hereunder. Any termination of this Agreement pursuant
to this Section 9 shall be without liability on the part of any non-defaulting
Underwriter or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT.
If the Registration Statement is not effective at the time of
execution of this Agreement, this Agreement shall become effective on the
Effective Date at the time the Commission declares the Registration Statement
effective. The Company shall immediately notify the Underwriters when the
Registration Statement becomes effective.
If the Registration Statement is effective at the time of execution of
this Agreement, this Agreement shall become effective at the earlier of 11:00
a.m. St. Louis time, on the first full business day following the day on which
this Agreement is executed, or at such earlier time as the Representative shall
release the Designated Preferred Securities for initial public offering. The
Representative shall notify the Offerors immediately after it has taken any
action which causes this Agreement to become effective.
Until such time as this Agreement shall have become effective, it may
be terminated by the Offerors, by notifying you or by you, as Representative of
the several Underwriters, by notifying either Offeror, except that the
provisions of Sections 5 and 7 shall at all times be effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
The representations, warranties, indemnities, agreements and other
statements of the Offerors and their officers and trustees set forth in or made
pursuant to this Agreement and the agreements of the Underwriters contained in
Section 7 hereof shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Offerors or controlling
persons of either Offeror, or by or on behalf of the Underwriters or
controlling persons of the Underwriters or any termination or cancellation of
this Agreement and shall survive delivery of and payment for the Designated
Preferred Securities.
35
<PAGE> 36
12. NOTICES.
Except as otherwise provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand, mailed by registered or certified mail, return
receipt requested, or transmitted by any standard form of telecommunication and
confirmed. Notices to Offerors shall be sent to 1201 S. Beckham, Tyler, Texas
75701, Attention: Lee Gibson (with a copy to Jenkens & Gilchrist, 1445 Ross
Avenue, Suite 3200, Dallas, Texas 75202, Attention: Ronald J. Frappier) and
notices to the Underwriters shall be sent to Stifel, Nicolaus & Company,
Incorporated, 501 North Broadway, 9th Floor, St. Louis, Missouri 63102,
Attention: Rick E. Maples (with a copy to Lewis, Rice & Fingersh, L.C., 500
North Broadway, Suite 2000, St. Louis, Missouri 63102, Attention: Thomas C.
Erb, Esq.). In all dealings with the Company under this Agreement, Stifel,
Nicolaus & Company, Incorporated shall act as representative of and on behalf
of the several Underwriters, and the Company shall be entitled to Act and rely
upon any statement, request, notice or agreement on behalf of the Underwriters,
made or given by Stifel, Nicolaus & Company, Incorporated on behalf of the
Underwriters, as if the same shall have been made or given in writing by the
Underwriters.
13. PARTIES.
The Agreement herein set forth is made solely for the benefit of the
Underwriters and the Offerors and, to the extent expressed, directors, trustees
and officers of the Offerors, any person controlling the Offerors or the
Underwriters, and their respective successors and assigns. No other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, in his status as such
purchaser, from the Underwriters of the Designated Preferred Securities.
14. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Missouri,
without giving effect to the choice of law or conflicts of law principles
thereof.
15. AUTHORITY.
Any certificate signed by an authorized officer of the Company or the
Bank and delivered to the Representative or to counsel for the Underwriters
pursuant to this Agreement shall be deemed a representation and warranty by the
Company to the Underwriters as to the matters covered thereby.
16. COUNTERPARTS.
This Agreement may be executed by facsimile and in one or more
counterparts, and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same Agreement.
If the foregoing is in accordance with the your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
shall become a binding agreement between the Company, the Trust and you in
accordance with its terms.
Very truly yours,
SOUTHSIDE BANCSHARES, INC.
By:
----------------------
Name:
-------------------
Title:
-------------------
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SOUTHSIDE CAPITAL TRUST II
By:
----------------------
Name:
-------------------
Title:
-------------------
CONFIRMED AND ACCEPTED, as of [__________], 2000.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
For itself and as Representative of the several Underwriters named in Schedule
I hereto.
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SCHEDULE I
UNDERWRITER NUMBER OF SHARES
Stifel, Nicolaus & Company, Incorporated
<PAGE> 39
EXHIBIT A
LIST OF SUBSIDIARIES
Southside Delaware Financial Corporation
Southside Bank
Southside Capital Trust I
Southside Capital Trust II
Red File 1, Inc.
BSC Securities, L.C.
Independent Bank Services, L.C.
Countywide Loans, Inc.
