Exhibit 1.1
STERLING BANCSHARES,
INC.
COMMON STOCK (PAR VALUE $1.00 PER
SHARE)
UNDERWRITING
AGREEMENT
May 6, 2009
May 6, 2009
To the Managers named in Schedule I
hereto
for the
Underwriters named in Schedule II hereto
Ladies and Gentlemen:
Sterling Bancshares, Inc., a Texas
corporation (the “ Company ”), proposes to issue
and sell to the several underwriters named in Schedule II hereto
(the “ Underwriters ”), for whom you are acting
as managers (the “ Managers ”), the number of
shares of its common stock, par value $1.00 per share set forth in
Schedule I hereto (the “ Firm Shares ”). The
Company also proposes to issue and sell to the several Underwriters
not more than the number of additional shares of its common stock,
par value $1.00 per share set forth in Schedule I hereto (the
“ Additional Shares ”) if and to the extent that
you, as Managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such
shares of common stock granted to the Underwriters in
Section 2 hereof. The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the “
Shares. ” The shares of common stock, par value $1.00
per share of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the
“ Common Stock. ” If the firm or firms listed in
Schedule II hereto include only the Managers listed in Schedule I
hereto, then the terms “Underwriters” and
“Managers” as used herein shall each be deemed to refer
to such firm or firms.
The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement, including a prospectus, (the
file number of which is set forth in Schedule I hereto) on Form
S-3, relating to the securities (the “ Shelf
Securities ”), including the Shares, to be issued from
time to time by the Company. The registration statement as amended
to the date of this Agreement, including the information (if any)
deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 430 B under
the Securities Act of 1933, as amended (the “ Securities
Act ”), is hereinafter referred to as the “
Registration Statement ”, and the related prospectus
covering the Shelf Securities dated April 27, 2009 in the form
first used to confirm sales of the Shares (or in the form first
made available to the Underwriters by the Company to meet requests
of purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “ Basic Prospectus.
” The Basic Prospectus, as supplemented by the prospectus
supplement specifically relating to the Shares in the form first
used to confirm sales of the Shares (or in the form first made
available to the Underwriters by the Company to meet
requests of purchasers pursuant to Rule 173
under the Securities Act) is hereinafter referred to as the “
Prospectus ,” and the term “ preliminary
prospectus ” means any preliminary form of the
Prospectus. For purposes of this Agreement, “ free writing
prospectus ” has the meaning set forth in Rule 405 under
the Securities Act, “ Time of Sale Prospectus ”
means the preliminary prospectus together with the free writing
prospectuses, if any, each identified in Schedule I hereto, and
“ broadly available road show ” means a
“bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act that has been made available
without restriction to any person. As used herein, the terms
“Registration Statement,” “Basic
Prospectus,” “preliminary prospectus,”
“Time of Sale Prospectus” and “Prospectus”
shall include the documents, if any, incorporated by reference
therein. The terms “ supplement ,” “
amendment ,” and “ amend ” as used
herein with respect to the Registration Statement, the Basic
Prospectus, the Time of Sale Prospectus, any preliminary prospectus
or free writing prospectus shall include all documents subsequently
filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), that are deemed to be incorporated by reference
therein.
Morgan Stanley & Co.
Incorporated (“ Morgan Stanley ”) has agreed to
reserve a portion of the Shares to be purchased by it under this
Agreement for sale to the Company’s directors, officers,
employees and business associates and other parties related to the
Company (collectively, “ Participants ”), as set
forth in the Prospectus under the heading
“Underwriters” (the “ Directed Share
Program ”). The Shares to be sold by Morgan Stanley and
its affiliates pursuant to the Directed Share Program are referred
to hereinafter as the “ Directed Shares ”. Any
Directed Shares not orally confirmed for purchase by any
Participant by the end of the business day on which this Agreement
is executed will be offered to the public by the Underwriters as
set forth in the Prospectus.
1. Representations and
Warranties . The Company represents and warrants to and agrees
with each of the Underwriters that:
(a) The Registration Statement has
become effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed
or to be filed pursuant to the Exchange Act and incorporated by
reference in the Time of Sale Prospectus or the Prospectus complied
or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, (ii) each part of the Registration
Statement, when such part became effective, did not contain, and
each such part, as amended or supplemented, if
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applicable, will not contain any 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, (iii) the Registration Statement as of
the date hereof does not contain any 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,
(iv) the Registration Statement and the Prospectus comply, and
as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder, (v) the Time of
Sale Prospectus does not, and at the time of each sale of the
Shares in connection with the offering when the Prospectus is not
yet available to prospective purchasers and at the Closing Date (as
defined in Section 4), the Time of Sale Prospectus, as then
amended or supplemented by the Company, if applicable, will not,
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, (vi) each broadly available road show, if any,
when considered together with the Time of Sale Prospectus, does not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading and (vii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration
Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Managers expressly for use
therein.
(c) The Company is not an
“ineligible issuer” in connection with the offering
pursuant to Rules 164, 405 and 433 under the Securities Act. Any
free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will
be, filed with the Commission in accordance with the requirements
of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or on behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder.
Except for the free writing prospectuses, if any, identified in
Schedule I hereto forming part of the Time of Sale Prospectus, and
electronic road shows, if any, each furnished to you before first
use, the Company has not prepared, used or referred to, and will
not, without your prior consent, prepare, use or refer to, any free
writing prospectus.
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(d) The Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of 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 Company and its
subsidiaries, taken as a whole.
(e) Each Significant Subsidiary (as
defined in Section 1-02(w) of Regulation S-X of the Securities
Act) of the Company has been duly organized, is validly existing
and in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own its property and
to conduct its business as described in the Time of Sale Prospectus
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its
ownership or leasing of 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
Company and its Significant Subsidiaries, taken as a whole; all of
the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free
and clear of all liens, encumbrances, equities or
claims.
(f) This Agreement has been duly
authorized, executed and delivered by the Company.
(g) The authorized capital stock of
the Company conforms as to legal matters in all material respects
to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus.
(h) The shares of Common Stock
outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and
non-assessable.
(i) The Shares have been duly
authorized and, when appropriate certificates representing such
Shares are countersigned by the Company’s transfer agent and
registered and delivered against payment of the agreed
consideration therefore in accordance with this Agreement, such
Shares will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive
or similar rights.
(j) The execution, delivery and
performance by the Company of its obligations under this Agreement
will not (i) contravene any provision of the
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Articles of Incorporation or By-laws of the
Company, (ii) violate any applicable law, statute, rule,
regulation, judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
Significant Subsidiary, or (iii) violate any agreement or
other instrument binding upon the Company or any of its Significant
Subsidiaries except in the case of clauses (ii) and
(iii) above, such violations as would not have a material
adverse effect on the Company and its Significant Subsidiaries,
taken as a whole.
(k) No consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of
its obligations under this Agreement, except for
(i) registration of the Shares under the Securities Act, which
registration will be effected, and (ii) such consents,
approvals, authorizations, orders and qualifications as may be
required under applicable state securities laws in connection with
the offer and sale of the Shares by the Underwriters.
(l) There has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Prospectus.
(m) There are no legal or
governmental proceedings pending or, to the Company’s
knowledge, threatened to which the Company or any of its
Significant Subsidiaries is a party or to which any of the
properties of the Company or any of its Significant Subsidiaries is
subject (i) other than proceedings accurately described in all
material respects in the Time of Sale Prospectus and proceedings
that would not have a material adverse effect on the Company and
its Significant Subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this
Agreement or to consummate the transactions contemplated by the
Time of Sale Prospectus or (ii) that are required to be
described in the Registration Statement or the Prospectus and are
not so described; and there are no statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required.
(n) Each preliminary prospectus
filed as part of the registration statement as originally filed or
as part of any amendment thereto, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
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(o) The Company is not, and after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus
will not be, required to register as an “investment
company” as such term is defined in the Investment Company
Act of 1940, as amended.
(p) The Company and its Significant
Subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“ Environmental Laws ”), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(q) There are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(r) Except as otherwise disclosed in
the Registration Statement or Time of Sale Prospectus with respect
to the Company’s participation in the Troubled Asset Relief
Program and related Capital Purchase Program, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(s) Neither the Company nor any of
its subsidiaries or affiliates, nor any director, officer, or
employee, nor, to the Company’s knowledge, any agent or
representative of the Company or of any of its subsidiaries or
affiliates, has taken or will take any action in furtherance of an
offer, payment, promise to pay, or authorization or approval of the
payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government
official” (including any officer or employee of a government
or government-owned or controlled entity or of a public
international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political
party
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or party official or candidate for political
office) to influence official action or secure an improper
advantage; and the Company and its subsidiaries and affiliates have
conducted their businesses in compliance with applicable
anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote
and achieve compliance with such laws and with the representation
and warranty contained herein.
(t) The operations of the Company
and its subsidiaries are and have been conducted at all times in
material compliance with all applicable financial recordkeeping and
reporting requirements, including those of the Bank Secrecy Act, as
amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act), and the applicable
anti-money laundering statutes of jurisdictions where the Company
and its subsidiaries conduct business, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental
agency (collectively, the “ Anti-Money Laundering Laws
”), and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(u) (i) The Company represents that
neither the Company nor any of its subsidiaries (collectively, the
“ Entity ”) or, to the knowledge of the Entity,
any director, officer, employee, agent, affiliate or representative
of the Entity, is an individual or entity (“ Person
”) that is, or is owned or controlled by a Person that
is:
(A) the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control (“ OFAC ”), the
United Nations Security Council (“ UNSC ”), the
European Union (“ EU ”), Her Majesty’s
Treasury (“ HMT ”), or other relevant sanctions
authority (collectively, “ Sanctions ”),
nor
(B) located, organized or resident
in a country or territory that is the subject of Sanctions
(including, without limitation, Burma/Myanmar, Cuba, Iran, North
Korea, Sudan and Syria).
(ii) The Entity represents and
covenants that it will not, directly or indirectly, use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other Person:
(A) to fund or facilitate any
activities or business of or with any Person or in any country or
territory that, at the time of such funding or facilitation, is the
subject of Sanctions; or
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(B) in any other manner that will
result in a violation of Sanctions by any Person (including any
Person participating in the offering, whether as underwriter,
advisor, investor or otherwise).
(iii) The Entity represents and
covenants that for the past 5 years it has not knowingly engaged
in, is not now knowingly engaged in, and will not engage in, any
dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.
(v) The Company and each of its
subsidiaries are in material compliance with all applicable laws
administered by, and regulations of, the Federal Reserve Board, the
Federal Deposit Insurance Corporation (the “ FDIC
”), the Office of the Comptroller of the Currency (the
“ OCC ”) and any other federal or state bank
regulatory authorities (together with the Federal Reserve Board,
the FDIC and the OCC, the “ Bank Regulatory
Authorities ”) with jurisdiction over the Company or any
of its subsidiaries. The deposit accounts of each banking
subsidiary of the Company are insured up to applicable limits by
the FDIC and no proceedings for the termination or revocation of
such insurance are pending or, to the knowledge of the Company,
threatened. Neither the Company nor any of its subsidiaries is a
party to or otherwise subject to any consent decree, memorandum of
understanding, cease and desist order, order of prohibition or
suspension, written commitment, supervisory agreement, or written
agreement or other written statement as described under 12 U.S.C.
1818(u) (whether or not such federal banking agency has determined
that publication would be contrary to the public interest) with any
of the Bank Regulatory Authorities or any other governmental agency
or authority, nor has the Company or any of its subsidiaries been
advised by any of the Bank Regulatory Authorities or any other
governmental agency or authority that it is contemplating issuing
or requesting any of the foregoing.
(w) The Registration Statement, the
Prospectus, the Time of Sale Prospectus and any preliminary
prospectus comply, and any amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus, the Time of Sale Prospectus
or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share
Program.
(x) No consent, approval,
authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any
jurisdiction where the Directed Shares are being
offered.
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(y) The Company has not offered, or
caused Morgan Stanley to offer, Shares to any person pursuant to
the Directed Share Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter
the customer’s or supplier’s level or type of business
with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its
products.
2. Agreements to Sell and
Purchase. The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly,
to purchase from the Company the respective numbers of Firm Shares
set forth in Schedule II hereto opposite its name at the
purchase price set forth in Schedule I hereto (the “
Purchase Price ”).
On the basis of the representations
and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to sell to the
Underwriters the Additional Shares, and the Underwriters shall have
the right to purchase, severally and not jointly, up to the number
of Additional Shares set forth in Schedule I hereto at the Purchase
Price. You may exercise this right on behalf of the Underwriters in
whole or from time to time in part by giving written notice not
later than 30 days after the date of the Prospectus. Any exercise
notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business
day after the written notice is given and may not be earlier than
the closing date for the Firm Shares nor later than ten business
days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the
purpose of covering over-allotments made in connection with the
offering of the Firm Shares. On each day, if any, that Additional
Shares are to be purchased (an “ Option Closing Date
”), each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine)
that bears the same proportion to the total number of Additional
Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule II hereto opposite the name
of such Underwriter bears to the total number of Firm
Shares.
3. Public Offering . The
Company is advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon
after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public upon
the terms set forth in the Prospectus.
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4. Payment and Delivery.
Payment for the Firm Shares shall be made to the Company by wire
transfer in Federal or other funds immediately available in a
single bank account designated by the Company on the closing date
and time set forth in Schedule I hereto, or at such other time on
the same or such other date, not later than the fifth business day
thereafter, as may be designated in writing by you. The time and
date of such payment are hereinafter referred to as the “
Closing Date .”
Payment for any Additional Shares
shall be made to the Company by wire transfer in Federal or other
funds immediately available in a single bank account designated by
the Company on the date specified in the corresponding notice
described in Section 1(v) or at such other time on the same or
on such other date, in any event not later than the tenth business
day thereafter, as may be designated in writing by you.
The Firm Shares and the Additional
Shares shall be registered in such names and in such denominations
as you shall request in writing not later than one full business
day prior to the Closing Date or the applicable Option Closing
Date, as the case may be, for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection
with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the
Underwriters’ Obligations . The several obligations of
the Underwriters are subject to the following
conditions:
(a) Subsequent to the execution and
delivery of this Agreement and prior to the Closing
Date:
(i) there shall not have occurred
any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change,
in the rating accorded any of the securities of the Company or any
of its subsidiaries by any “nationally recognized statistical
rating organization,” as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred
any change, or any development involving a prospective change, in
the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Time of Sale Prospectus as of the
date of this Agreement that, in your judgment, is
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material and adverse and that makes
it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Time of Sale
Prospectus.
(b) The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company, to the effect
set forth in Section 5(a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.
(c) The Underwriters shall have
received on the Closing Date an opinion of Locke Lord
Bissell & Liddell LLP, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company (A) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Texas, (B) is duly
registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended and (C) has the corporate power and
authority to own, lease and operate its property and to conduct its
business as described in the Time of Sale Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the Company has advised such counsel that the
conduct of the Company’s business or its ownership or leasing
of 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 Company and its subsidiaries,
taken as a whole;
(ii) each Significant Subsidiary of
the Company (A) has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization, (B) has the power and authority to own its
property and to conduct its business as described in the Time of
Sale Prospectus including, in the case of Sterling Bank, the
requisite authority from its respective banking regulatory
authorities to do business as a state-charted banking corporation
under the laws of the State of Texas except where the failure to be
so qualified or in good standing or have such power or authority
would not, individually or in the aggregate, have a material
adverse affect and (C) is duly qualified to transact business
and is in good standing in each jurisdiction in which the Company
has advised such counsel that the conduct of such Significant
Subsidiary’s
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business or its ownership or leasing
of 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 Company and its Significant
Subsidiaries, taken as a whole;
(iii) the authorized capital stock
of the Company conforms in all material respects to the description
of the terms thereof contained under the heading “Description
of Capital Stock” in each of the Time of Sale Prospectus and
the Prospectus;
(iv) all of the issued shares of
capital stock of each Significant Subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(v) the Shares have been duly
authorized and, when appropriate certificates representing such
Shares are countersigned by the Company’s transfer agent and
registered and delivered against payment of the agreed
consideration therefore in accordance with this Agreement, such
Shares will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive
rights under the Texas Business Corporations Act, under the
Company’s Articles of Incorporation or under any contractual
provision of which such counsel has knowledge;
(vi) this Agreement has been duly
authorized, executed and delivered by the Company;
(vii) the execution, delivery and
performance by the Company of this Agreement will not
(i) contravene any provision of the Articles of Incorporation
or by-laws of the Company, (ii) conflict with, or result in a
breach or violation of, any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Significant Subsidiaries pursuant to any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument listed as an exhibit to the Company’s
Annual Report on Form 10-K for the year ended December 31,
2008 or in any report subsequently filed by the Company pursuant to
Section 13(a) or Section 15(d) of the Exchange Act prior
to the date hereof, or (iii) result in the violation of any
law, statute or regulation (other than the blue sky laws of the
various states as to which such counsel need not express any
opinion) or, to the best of such counsel’s knowledge, any
judgment, order or decree of any governmental body, agency or
court
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having jurisdiction over the Company
or any Significant Subsidiary except, in the case of clauses
(ii) and (iii) above, for such conflicts, breaches,
violations or defaults that would not, individually or in the
aggregate, have a material adverse effect on the Company and its
Significant Subsidiaries, and
(viii) no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of
its obligations under this Agreement, except for (i) the
registration of the Shares under the Securities Act, which
registration shall have been effected, and (ii) such consents,
approvals, authorizations, orders and qualifications as may be
required under applicable state securities laws in connection with
the offer and sale of the Shares by the Underwriters;
(ix) the statements relating to
legal matters, documents or proceedings included in (A) the
Time of Sale Prospectus and the Prospectus under the captions
“Material U.S. Federal Income Tax Considerations” and
“Description of Capital Stock,” (B) the Prospectus
under the caption “Underwriters” and (C) the
Registration Statement in Item 15, in each case fairly
summarize in all material respects such matters, documents or
proceedings;
(x) to the best of such
counsel’s knowledge, it does not know of (i) any legal
or governmental proceedings pending or threatened to which the
Company or any of its Significant Subsidiaries is a party or to
which any of the properties of the Company or any of its
Significant Subsidiaries is subject that are required under
Item 103 of Regulation S-K under the Securities Act to be
described in the Registration Statement or the Prospectus and are
not so described in the Registration Statement or the Prospectus or
(ii) any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xi) the Company is not, and after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus
will not be, required to register as an “investment
company” as such term is defined in the Investment Company
Act of 1940, as amended; and
(xii) (A) in the opinion of such
counsel (1) each document filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the
Prospectus (except for the financial statements and
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related notes and financial
schedules and other financial, accounting and statistical data
included therein, as to which such counsel need not express any
opinion) appeared on its face to be a
