$10,000,000
Floating Rate MMCapS(SM)
TEXAS CAPITAL STATUTORY TRUST II
PLACEMENT AGREEMENT
New York, New York
March 28, 2003
SANDLER O'NEILL & PARTNERS, L.P.
919 Third Avenue
6th Floor
New York, New York 10022
Ladies and Gentlemen:
Texas Capital Statutory Trust II (the "Trust"), a statutory
trust organized under the Delaware Statutory Trust Act, 12 Del. C. Section 3801
et seq. (the "Delaware Act"), and Texas Capital Bancshares, Inc., a Delaware
corporation (the "Company" and together with the Trust, the "Offerors"), confirm
their agreement (the "Agreement") with Sandler O'Neill & Partners, L.P., as
agent of the Offerors (the "Placement Agent"), with respect to the issue and
sale by the Trust and the placement by the Placement Agent of 10,000 Floating
Rate MMCapS(SM) (liquidation amount of $1,000 per security) of the Trust bearing
a variable distribution rate per annum, reset quarterly, equal to LIBOR (as
defined in the Indenture (as defined below)) plus 3.25%, (the "Capital
Securities"). The Capital Securities will be guaranteed by the Company to the
extent provided in the Guarantee Agreement, to be dated as of the Closing Date
(as defined in Section 2 hereof) (the "Guarantee Agreement"), between the
Company, as guarantor, and Wilmington Trust Company, as guarantee trustee (the
"Guarantee Trustee"), with respect to distributions and payments upon
liquidation, redemption and otherwise.
The entire proceeds from the sale of the Capital Securities
will be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities"), and will be used by
the Trust to purchase $10,310,000 aggregate principal amount of Floating Rate
Junior Subordinated Debt Securities due April 24, 2033 (the "Subordinated Debt
Securities") issued by the Company. The Capital Securities and the Common
Securities will be issued pursuant to the Amended and Restated Declaration of
Trust, to be dated as of the Closing Date (the "Declaration"), among the
Company, as sponsor, the Administrators named therein (the "Administrators"),
Wilmington Trust Company, as institutional trustee (the "Institutional
Trustee"), Wilmington Trust Company, as Delaware trustee (the "Delaware
Trustee"), and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust. The Subordinated Debt Securities will be issued
pursuant to the Indenture, to be dated as of the Closing Date (the "Indenture"),
between the Company and Wilmington Trust Company, as indenture trustee (the
"Indenture Trustee"). The Indenture, the
Guarantee Agreement, the Declaration, this Agreement and the Subscription
Agreement (as defined in Section 2(a) hereof) are hereinafter referred to
collectively as the "Operative Documents."
SECTION 1 Representations and Warranties.
(a) The Trust and the Company, jointly and
severally, represent and warrant to the Placement Agent and the Purchaser (as
defined in Section 2(a) hereof) of Capital Securities as of the date hereof and
as of the Closing Date, and agree with the Placement Agent and the Purchaser, as
follows:
(i) Similar Offerings. The Offerors
have not, directly or indirectly, solicited any offer to buy or offered to sell,
and will not, directly or indirectly, solicit any offer to buy or offer to sell,
in the United States or to any United States citizen or resident, any security
which is or would be integrated with the sale of the Capital Securities in a
manner that would require the Capital Securities to be registered under the
Securities Act of 1933, as amended (the "1933 Act").
(ii) Incorporated Documents. The
documents of the Company filed with the Securities and Exchange Commission (the
"Commission") in accordance with the Securities Exchange Act of 1934, as amended
(the "1934 Act"), from and including the commencement of the fiscal year covered
by the Company's most recent Annual Report on Form 10-K, at the time they were
or hereafter are filed by the Company with the Commission (collectively, the
"1934 Act Reports"), complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), and, at the date of this Agreement and
on the Closing Date, do not and will not include 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 the light of the circumstances
under which they were made, not misleading; and other than such instruments,
agreements, contracts and other documents as are filed as exhibits to the
Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current
Reports on Form 8-K, there are no instruments, agreements, contracts or
documents of a character described in Item 601 of Regulation S-K promulgated by
the Commission to which the Company or any of its subsidiaries is a party.
(iii) Independent Accountants. The
accountants of the Company who certified the financial statements included in
the 1934 Act Reports are independent public accountants of the Company and its
subsidiaries within the meaning of the 1933 Act and the rules and regulations of
the Commission thereunder (the "1933 Act Regulations").
(iv) Financial Statements and
Information. The consolidated historical financial statements of the Company,
together with the related schedules and notes, included in the 1934 Act Reports
present fairly, in all material respects, the respective consolidated financial
positions of the Company and its consolidated subsidiaries at the respective
dates indicated, and the consolidated statements of income, changes in
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the respective periods
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specified; said financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved, except as disclosed in the
notes to such financial statements; the supporting schedules, if any, included
in the 1934 Act Reports present fairly, in all material respects, the
information required to be stated therein and any pro forma financial statements
and the related notes thereto included in the 1934 Act Reports present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change. Since
the respective dates as of which information is given in the 1934 Act Reports,
there has not been (A) any material adverse change in the condition, financial,
regulatory or otherwise, or in the earnings, business affairs or business
prospects of the Trust or of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect") or (B) any dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock other
than regular quarterly dividends on the Company's common stock.
(vi) Regulatory Enforcement Matters.
Neither the Company nor any of its subsidiaries is subject or is party to, or
has received any notice or advice that any of them may become subject or party
to, any investigation with respect to any cease-and-desist order, agreement,
consent agreement, memorandum of understanding or other regulatory enforcement
action, proceeding or order with or by, or is a party to any commitment letter
or similar undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board resolutions
at the request of, any Regulatory Agency (as defined below) that currently
restricts in any material respect the conduct of their business or that in any
material manner relates to their capital adequacy, their credit policies, their
management or their business (each, a "Regulatory Agreement"), nor has the
Company or any of its subsidiaries been advised by any Regulatory Agency that it
is considering issuing or requesting any such Regulatory Agreement; and there is
no unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any of its subsidiaries which, in the reasonable judgment of the Company, is
expected to result in a Material Adverse Effect. As used herein, the term
"Regulatory Agency" means any federal or state agency charged with the
supervision or regulation of depositary institutions or holding companies of
depositary institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company or any of its subsidiaries.
(vii) No Undisclosed Liabilities. Neither
the Company nor any of its subsidiaries has any material liability, whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its
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subsidiaries giving rise to any such liability), except (i) for liabilities set
forth in the financial statements referred to in Section 1(a)(iv) above and (ii)
normal fluctuations in the amount of the liabilities referred to in clause (i)
above occurring in the ordinary course of business of the Company and all of its
subsidiaries since the date of the most recent balance sheet included in such
financial statements.
(viii) Internal Accounting Controls. The
Company and each of its subsidiaries maintain 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 asset accountability; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ix) Disclosure Controls. The Company
has established and maintains disclosure controls and procedures (as such term
is defined in Rule 13a-14 and 15d-14 under the 1934 Act); such disclosure
controls and procedures (A) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, particularly during the periods in which the
periodic reports required under the 1934 Act are being prepared, (B) have been
evaluated for effectiveness as of a date within 90 days prior to the filing of
the Company's most recent annual or quarterly report filed with the Commission
and (C) are effective to perform the functions for which they were established;
the Company's auditors and the Audit Committee of the Board of Directors have
been advised of: (A) any significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data and (B) any fraud, whether or not
material, that involves management or other employees who have a role in the
Company's internal controls; any material weaknesses in internal controls have
been identified for the Company's auditors; and since the date of the most
recent evaluation of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.
(x) Good Standing of the Company. The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full power and
authority under such laws to own, lease and operate its properties and to
conduct its business and to enter into and perform its obligations under each of
the Operative Documents to which it is a party; and the Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended.
(xi) Good Standing of the Subsidiaries.
Each "significant subsidiary" (as defined in Rule 1-02 of Regulation S-X) of the
Company ( a "Significant Subsidiary") has been duly organized and is validly
existing as an entity in good standing under the laws of the jurisdiction in
which it is chartered and has full power and authority under such laws to own,
lease and operate its properties and to conduct its current and contemplated
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business; and the deposit accounts of each of the Company's subsidiary banks are
insured up to the applicable limits by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation (the "FDIC") to the fullest extent permitted by
law and the rules and regulations of the FDIC, and no proceeding for the
revocation or termination of such insurance is pending or, to the knowledge of
the Company, threatened.
(xii) Foreign Qualifications. Each of the
Company and its subsidiaries is duly qualified as a foreign entity to transact
business and is each in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so qualified
would not singularly, or in the aggregate, in the reasonable judgment of the
Company, be expected to result in a Material Adverse Effect.
(xiii) Capital Stock Duly Authorized and
Validly Issued. All of the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and nonassessable;
all of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable except to the extent such shares may be deemed assessable under 12
U.S.C. Section 18310, and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right; and none of the issued and outstanding
capital stock of the Company or its Significant Subsidiaries was issued in
violation of any preemptive or similar rights arising by operation of law, under
the charter, by-laws or code of regulations of the Company or any of its
Significant Subsidiaries or under any agreement to which the Company or any of
its Significant Subsidiaries is a party.
(xiv) Good Standing of the Trust. The
Trust has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Act with the power and authority to own
property and to conduct its business as provided in the Declaration, to enter
into and perform its obligations under the Operative Documents to which it is a
party, and to issue the Capital Securities and the Common Securities; the Trust
is not a party to or otherwise bound by any agreement other than the Operative
Documents to which it is a party; and the Trust is, and will be, under current
law, classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation.
(xv) Authorization of Common Securities.
On the Closing Date, the Common Securities will have been duly authorized for
issuance by the Trust pursuant to the Declaration and, when duly issued and
executed in accordance with the Declaration and delivered by the Trust to the
Company against payment therefor in accordance with the subscription agreement
therefor, will be validly issued and fully paid and nonassessable undivided
common beneficial ownership interests in the assets of the Trust; the issuance
of the Common Securities is not subject to preemptive or other similar rights;
and on the Closing Date, all of the issued and outstanding Common Securities of
the Trust will be owned directly by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(xvi) Authorization of Capital
Securities. On the Closing Date, the Capital Securities will have been duly
authorized for issuance by the Trust pursuant to the
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Declaration, and when duly issued, executed and authenticated in accordance with
the Declaration and delivered by the Trust against payment therefor as provided
herein and in the Subscription Agreement (as defined in Section 2(a) hereof),
will be validly issued and fully paid and nonassessable undivided preferred
beneficial ownership interests in the assets of the Trust; the issuance of the
Capital Securities will not be subject to preemptive or other similar rights;
and the Capital Securities will be in the form contemplated by, and entitled to
the benefits of, the Declaration.
(xvii) Authorization of Agreement. This
Agreement has been duly authorized, executed and delivered by each of the
Offerors.
(xviii) Authorization of Subscription
Agreement. The Subscription Agreement (as defined in Section 2(a) hereof), has
been duly authorized, executed and delivered by the Company and the Trust and
will be enforceable in its entirety against the Company and the Trust.
(xix) Authorization of Declaration. The
Declaration has been duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company and the
Administrators, and assuming due authorization, execution and delivery of the
Declaration by the Institutional Trustee and the Delaware Trustee, the
Declaration will constitute a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) (collectively, the "Enforceability Exceptions").
(xx) Authorization of Guarantee
Agreement. The Guarantee Agreement has been duly authorized by the Company and,
on the Closing Date, will have been duly executed and delivered by the Company,
and assuming due authorization, execution and delivery of the Guarantee
Agreement by the Guarantee Trustee, the Guarantee Agreement will constitute a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforceability
may be limited by the Enforceability Exceptions.
(xxi) Authorization of Indenture. The
Indenture has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by the Company, and assuming due
authorization, execution and delivery of the Indenture by the Indenture Trustee,
the Indenture will constitute a valid, legal and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforceability may be limited by the Enforceability Exceptions.
(xxii) Authorization of Subordinated Debt
Securities. The Subordinated Debt Securities have been duly authorized by the
Company; on the Closing Date, the Subordinated Debt Securities will have been
duly executed by the Company and, when authenticated in the manner provided for
in the Indenture and delivered by the Company to the Trust against payment
therefor as contemplated in the subscription agreement therefor, will
6
constitute valid, legal and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions; the Subordinated
Debt Securities will be in the form contemplated by, and entitled to the
benefits of, the Indenture; and the Company has no present intention to exercise
its option to defer payments of interest on the Subordinated Debt Securities as
provided in the Indenture.
(xxiii) Authorization of Administrators.
Each of the Administrators of the Trust is an officer or employee of the Company
and has been duly authorized by the Company to execute and deliver the
Declaration.
(xxiv) Not an Investment Company. Neither
the Trust nor the Company is, and immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds
therefrom neither the Trust nor the Company will be, an "investment company"
required to be registered under the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxv) Absence of Defaults and Conflicts.
The Trust is not in violation of the trust certificate of the Trust filed with
the State of Delaware (the "Trust Certificate") or the Declaration, and neither
the Company nor any of its Significant Subsidiaries is in violation of its
charter, by-laws or code of regulations; none of the Trust, the Company or any
subsidiary of the Company is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which it is a party or by which it or any of
them may be bound or to which any of its properties or assets is subject
(collectively, "Agreements and Instruments"), except for such defaults under
Agreements and Instruments that, in the reasonable judgment of the Company, are
not expected to result in a Material Adverse Effect; and the execution, delivery
and performance of the Operative Documents by the Trust or the Company, as the
case may be, the issuance, sale and delivery of the Capital Securities and the
Subordinated Debt Securities, the consummation of the transactions contemplated
by the Operative Documents, and compliance by the Offerors with the terms of the
Operative Documents to which they are a party have been duly authorized by all
necessary corporate action on the part of the Company and, on the Closing Date,
will have been duly authorized by all necessary action on the part of the Trust,
and do not and will not, whether with or without the giving of notice or passage
of time or both, violate, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any, security interest, mortgage, pledge, lien, charge,
encumbrance, claim or equitable right upon any properties or assets of the
Trust, the Company or any of its Significant Subsidiaries pursuant to any of the
Agreements and Instruments, nor will such action result in any violation of the
provisions of the charter, by-laws or code of regulations of the Company or any
of its Significant Subsidiaries or the Declaration or the Trust Certificate, or
violation by the Company or any of its Significant Subsidiaries of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust or the Company or any of
its Significant Subsidiaries or their respective properties or assets
(collectively, "Governmental Entities"). As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person
7
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Trust or the
Company or any of its Significant Subsidiaries prior to its scheduled maturity.
(xxvi) Absence of Labor Dispute. No labor
dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the executive officers of the Company, is imminent, which,
in the reasonable judgment of the Company, is expected to result in a Material
Adverse Effect.
(xxvii) Absence of Proceedings. There is no
action, suit, proceeding, inquiry or investigation before or brought by any
Governmental Entity, now pending, or, to the knowledge of the Trust or the
Company, threatened, against or affecting the Trust or the Company or any of its
subsidiaries, which, in the reasonable judgment of the Trust or the Company, is
expected to result in a Material Adverse Effect or materially and adversely
affect the consummation of the transactions contemplated by the Operative
Documents or the performance by the Trust or the Company of its obligations
hereunder or thereunder; and the aggregate of all pending legal or governmental
proceedings to which the Trust or the Company or any of its subsidiaries is a
party or of which any of their respective properties or assets is the subject,
including ordinary routine litigation incidental to the business, are not, in
the reasonable judgment of the Company or the Trust, expected to result in a
Material Adverse Effect.
(xxviii) Absence of Further Requirements. No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that have
been made or obtained, is necessary or required for the performance by the Trust
or the Company of their respective obligations under the Operative Documents, as
applicable, or the consummation by the Trust and the Company of the transactions
contemplated by the Operative Documents.
(xxix) Possession of Licenses and Permits.
Each of the Trust, the Company and the subsidiaries of the Company possesses
such permits, orders, certificates, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
Governmental Entities necessary to conduct the business now operated by it that
is material to the Trust or the Company and its subsidiaries considered as one
enterprise; each of the Trust, the Company and the subsidiaries of the Company
is in compliance with the terms and conditions of all of its Governmental
Licenses, except where the failure so to comply, in the reasonable judgment of
the Company, is not expected to, singularly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect, in the reasonable
judgment of the Company, is not expected to have a Material Adverse Effect; and
none of the Trust, the Company or any subsidiary of the Company has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singularly or in the aggregate, in the reasonable
judgment of the Company or the Trust, is expected to result in a Material
Adverse Effect.
(xxx) Title to Property. Each of the
Trust, the Company and the subsidiaries of the Company has good and marketable
title to all of its respective real and
8
personal properties, in each case free and clear of all liens, encumbrances and
defects, except such as, in the reasonable judgment of the Trust or the Company,
singularly or in the aggregate, are not expected to result in a Material Adverse
Effect; and all of the leases and subleases under which the Trust, the Company
or any subsidiary of the Company holds properties are in full force and effect,
except when the failure of such leases and subleases to be in full force and
effect, in the reasonable judgment of the Company, singularly or in the
aggregate, is not expected to have a Material Adverse Effect, and none of the
Trust, the Company or any subsidiary of the Company has any notice of any claim
of any sort that has been asserted by anyone adverse to the rights of the Trust,
the Company or any subsidiary of the Company under any of the leases or
subleases under which the Trust, the Company or any subsidiary of the Company
holds properties, or affecting or questioning the rights of such entity to the
continued possession of the leased or subleased premises under any such lease or
sublease, except when such claim, in the reasonable judgment of the Company,
singularly or in the aggregate, is not expected to have a Material Adverse
Effect.
(xxxi) Stabilization. The Company has not
taken and will not take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Capital Securities.
(xxxii) No General Solicitation. Neither
the Trust or the Company nor any of their Affiliates (as defined in Rule 501(b)
under the 1933 Act) or any person acting on its or any of their behalf (other
than the Placement Agent, as to whom the Offerors make no representation) has
engaged or will engage, in connection with the offering of the Capital
Securities, in any form of general solicitation or general advertising within
the meaning of Rule 502(c) under the 1933 Act.
(xxxiii) No Directed Selling Efforts.
Neither the Trust or the Company nor any of their Affiliates or any person
acting on its or any of their behalf (other than the Placement Agent, as to whom
the Offerors make no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the 1933 Act
("Regulation S") with respect to the offering of the Capital Securities.
(xxxiv) No Registration. Subject to
compliance by the Placement Agent with the relevant provisions of Section 6
hereof, it is not necessary in connection with the offer, sale and delivery of
the Capital Securities by the Trust in the manner contemplated by this Agreement
to register the Capital Securities, the guarantee as described in the Guarantee
Agreement or the Subordinated Debt Securities under the 1933 Act or to qualify
the Declaration, the Guarantee Agreement or the Indenture under the Trust
Indenture Act of 1939, as amended.
(xxxv) No Integration. Within the period
of the preceding six months prior to the date hereof, neither the Company or the
Trust nor any other person acting on behalf of the Company or the Trust has
offered or sold to any person any Capital Securities, or any securities of the
same or a similar class as the Capital Securities, other than the Capital
Securities referred to herein.
(b) Any certificate signed by any Trustee of the
Trust or any duly authorized officer of the Company or any of its subsidiaries
and delivered to the Placement
9
Agent or to counsel for the Placement Agent shall be deemed a representation and
warranty by the Trust or the Company, as the case may be, to the Placement Agent
as to the matters covered thereby.
SECTION 2 Sale and Delivery through Placement Agent;
Closing.
(a) The Offerors propose to issue and sell the
Capital Securities on April 10, 2003 (or such other date mutually agreed to by
the Offerors and the Placement Agent) (the "Closing Date") to MM Community
Funding IX, Ltd., a newly formed company with limited liability incorporated
under the laws of the Cayman Islands (the "Purchaser"), pursuant to the terms of
the Capital Securities Subscription Agreement, to be entered into on or prior to
the Closing Date (the "Subscription Agreement"), between the Offerors and the
Purchaser. The Offerors agree to execute the Subscription Agreement with the
Purchaser and to return the same to the Placement Agent. In addition, the
Offerors agree that the Purchaser shall be entitled to the benefit of, and to
rely on, the provisions of this Agreement to the extent such provisions address
or relate to the Purchaser or the Capital Securities to be purchased by the
Purchaser.
(b) The Offerors hereby grant to the Placement
Agent the exclusive right to arrange the placement of the Capital Securities
with the Purchaser on their behalf. The Placement Agent accepts such right and
agrees to use its best efforts, on and prior to the Closing Date, to effect such
placement.
(c) Deliveries of certificates for the Capital
Securities shall be made by the Trust to or on behalf of the Purchaser at the
offices of Cleary, Gottlieb, Steen & Hamilton in the City of New York, and
payment of the purchase price for the Capital Securities shall be made by the
Purchaser to the Trust by wire transfer of immediately available funds to a bank
designated by the Company contemporaneous with closing on the Closing Date.
Certificates for the Capital Securities in the aggregate
liquidation amount thereof shall be registered in the name of the Purchaser.
(d) As compensation to the Placement Agent for
its placement of the Capital Securities and in view of the fact that the
proceeds of the sale of the Capital Securities will be used to purchase the
Subordinated Debt Securities of the Company, the Company hereby agrees to pay on
the Closing Date to the Placement Agent in immediately available funds a
commission of $20.00 per Capital Security to be delivered by the Trust hereunder
on the Closing Date.
(e) In performing its duties under this
Agreement, the Placement Agent shall be entitled to rely upon any notice,
signature or writing which the Placement Agent shall in good faith believe to be
genuine and to be signed or presented by a proper party or parties. The
Placement Agent may rely upon any opinions or certificates or other documents
delivered by the Offerors or their counsel or designees either to it or the
Purchaser. In addition, in connection with the performance of its duties under
this Agreement, the Placement Agent shall not be liable for any error of
judgment or any action taken or omitted to be taken unless it was grossly
negligent or engaged in willful misconduct in connection with such performance
or non-performance. No provision of this Agreement shall require the Placement
Agent to expend
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or risk its own funds or otherwise incur any financial liability on behalf of
the Purchaser in connection with the performance of any of its duties hereunder.
The Placement Agent shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement.
SECTION 3 Notice of Material Events. The Offerors
covenant with the Placement Agent and the Purchaser that, prior to the
completion of the initial placement of the Capital Securities through the
Placement Agent, the Offerors will immediately notify the Placement Agent, and
confirm such notice in writing, of any event or development that, in the
reasonable judgment of the Company, is expected to result in a Material Adverse
Effect.
SECTION 4 Payment of Expenses. Whether or not this
Agreement or the Subscription Agreement is terminated or the sale of the Capital
Securities is consummated, the Company, as borrower under the Subordinated Debt
Securities, will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, issuance and delivery of
the certificates for the Capital Securities and Subordinated Debt Securities,
(ii) the fees and disbursements of the Company's counsel, accountants and other
advisors, and (iii) after the Closing Date, the fees and disbursements of
counsel for any trustee appointed under any of the Operative Documents.
SECTION 5 Conditions of Placement Agent's Obligations.
The obligations of the Placement Agent and the Purchaser on the Closing Date are
subject to the accuracy of the representations and warranties of the Offerors
contained in Section 1 hereof or in certificates of any Administrator of the
Trust or any officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Offerors of their
obligations hereunder, and to the following further conditions:
(a) Opinion of Counsel for the Offerors. On the
Closing Date, the Placement Agent and the Purchaser shall have received the
favorable opinion, dated as of the Closing Date, of Patton Boggs LLP, special
counsel for the Offerors, in substantially the form set out in Annex A hereto,
in form and substance reasonably satisfactory to counsel for the Placement
Agent. Such counsel may state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
Administrators of the Trust, officers of the Company or any of its subsidiaries
and public officials.
(b) Opinion of Special Delaware Counsel for the
Trust. On the Closing Date, the Placement Agent and the Purchaser shall have
received the favorable opinion, dated as of the Closing Date, of Morris, James,
Hitchens & Williams LLP, special Delaware counsel for the Trust, in
substantially the form set out in Annex B hereto, in form and substance
reasonably satisfactory to counsel for the Placement Agent.
(c) Opinion of Special Tax Counsel for the
Offerors. On the Closing Date, the Placement Agent and the Purchaser shall have
received an opinion, dated as of the Closing Date, of Patton Boggs LLP, special
tax counsel for the Offerors, that (i) the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation and (ii) the Subordinated Debt Securities will
constitute indebtedness of the Company for United States federal income tax
purposes, in substantially the form set out in Annex C hereto. Such opinion may
be conditioned on, among other things, the
11
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and other documents deemed necessary for such opinion.
(d) Opinion of Counsel to the Guarantee Trustee,
the Institutional Trustee, the Delaware Trustee and the Indenture Trustee. On
the Closing Date, the Placement Agent and the Purchaser shall have received the
favorable opinion, dated as of the Closing Date, of Morris, James, Hitchens &
Williams LLP, counsel for the Guarantee Trustee, the Institutional Trustee, the
Delaware Trustee and the Indenture Trustee, in substantially the form set out in
Annex D hereto, in form and substance reasonably satisfactory to counsel for the
Placement Agent.
(e) Certificates. On the Closing Date, there
shall not have been, since the date hereof or since the respective dates as of
which information is given in the 1934 Act Reports, any Material Adverse Effect,
and the Placement Agent shall have received a certificate of the Chairman, the
Chief Executive Officer, the President, any Executive Vice President or any Vice
President of the Company and of the Chief Financial Officer or Chief Accounting
Officer of the Company and a certificate of an Administrator of the Trust, dated
as of the Closing Date, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1 hereof were
true and correct when made and are true and correct with the same force and
effect as though expressly made on and as of the Closing Date, and (iii) the
Offerors have complied with all agreements and satisfied all conditions on their
part to be performed or satisfied on or prior to the Closing Date.
(f) Maintenance of Ratings. Between the date of
this Agreement and the Closing Date, there shall not have occurred a downgrading
in or withdrawal of the rating assigned to the Company's debt securities or
preferred stock by any nationally recognized statistical rating organization,
and no such organization shall have publicly announced that it has under
surveillance or review its rating of the Company's debt securities or preferred
stock.
(g) Sale of Securities. The Purchaser shall have
sold securities issued by it in such an amount that the net proceeds therefrom
shall be available on the Closing Date and shall be sufficient to purchase the
Capital Securities and all other capital securities contemplated in agreements
similar to this Agreement and the Subscription Agreement.
(h) Additional Documents. On the Closing Date,
the Placement Agent and the Purchaser shall have been furnished such documents
and opinions as they may reasonably request in connection with the issue, sale
and placement of the Capital Securities; and all proceedings taken by the
Offerors in connection with the issuance, sale and placement of the Capital
Securities shall be satisfactory in form and substance to the Placement Agent
and the Purchaser.
(i) Termination of Agreement. If any condition
specified in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement may be terminated by the Placement Agent by notice
to the Offerors at any time on or prior to the Closing Date. If the sale of the
Capital Securities provided for herein is not consummated because any condition
set forth in Section 5(a), (b), (c), (d), (e), (f) or (h) is not satisfied,
because
12
of any termination pursuant to Section 10(a) hereof or because of any refusal,
inability or failure on the part of the Offerors to perform any agreement herein
or comply with any provision hereof, the Company will reimburse the Placement
Agent upon demand for all documented out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
the Placement Agent in connection with the proposed offering of the Capital
Securities. In addition, such termination shall be subject to Section 4 hereof
and Sections 7 and 8 hereof shall survive any such termination and remain in
full force and effect.
SECTION 6 Offers and Sales of the Capital Securities.
(a) Offer and Sale Procedures. The Placement
Agent and the Offerors hereby establish and agree to observe the following
provisions with respect to the offer, issue, sale and placement of the Capital
Securities:
(i) Offers and Sales only to the
Purchaser. Offers and sales of the Capital Securities will be made only to the
Purchaser in a transaction not requiring registration under the 1933 Act.
(ii) No General Solicitation. No general
solicitation or general advertising (within the meaning of Rule 502(c) under the
1933 Act) will be used in connection with the offering of the Capital
Securities.
(iii) No Directed Selling Efforts. No
directed selling efforts (within the meaning of Regulation S) will be used with
respect to the offering of the Capital Securities.
(iv) Purchaser Notification. Prior to or
contemporaneously with the purchase of the Capital Securities by the Purchaser,
the Placement Agent will take reasonable steps to inform the Purchaser that the
Capital Securities (A) have not been and will not be registered under the 1933
Act, (B) are being sold to them without registration under the 1933 Act in
accordance with an exemption from registration under the 1933 Act and (C) may
not be offered, sold or otherwise transferred except (1) to the Company or (2)
in accordance with (x) Rule 144A to a person whom the seller reasonably believes
is a Qualified Institutional Buyer (as defined in Rule 144A under the Securities
Act ("Rule 144A")) that is purchasing such Securities for its own account or for
the account of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A, (y) Regulation S
to a non-U.S. person in an offshore transaction or (z) any other available
exemption from registration under the 1933 Act (including the exemption provided
by Rule 144).
(b) Covenants of the Offerors. Each of the
Offerors, jointly and severally, covenant with the Placement Agent and the
Purchaser as follows:
(i) Due Diligence. In connection with
the initial placement of the Capital Securities, the Offerors agree that, prior
to any offer or sale of the Capital Securities through the Placement Agent, the
Placement Agent and the Purchaser shall have the right to make reasonable
inquiries into the business of the Trust, the Company and the subsidiaries of
the Company. The Offerors also agree to provide answers to the Placement Agent
and the Purchaser, if requested, concerning the Trust, the Company and the
subsidiaries of the Company
13
(to the extent that such information is available or can be acquired and made
available without unreasonable effort or expense and to the extent the provision
thereof is not prohibited by applicable law) and the terms and conditions of the
offering of the Capital Securities and the Subordinated Debt Securities.
(ii) Integration. The Offerors agree
that they will not, and will cause their Affiliates not to, make any offer or
sale of securities of the Offerors of any class if, as a result of the doctrine
of "integration" referred to in Rule 502 under the 1933 Act, such offer or sale
would render invalid the exemption from the registration requirements of the
1933 Act provided by Section 4(2) thereof or by Rule 144A or otherwise.
(iii) Restriction on Repurchases. Until
the expiration of two (2) years (or such shorter period as may hereafter be
referred to in Rule 144(k) (or similar successor rule)) after the original
issuance of the Capital Securities, the Offerors will not, and will cause their
Affiliates not to, purchase or agree to purchase or otherwise acquire any
Capital Securities which are "restricted securities" (as such term is defined
under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or
otherwise, unless, immediately upon any such purchase, the Offerors or any
Affiliate shall submit such Capital Securities to the Institutional Trustee for
cancellation.
SECTION 7 Indemnification.
(a) Indemnification of the Placement Agent and
the Purchaser. The Offerors agree, jointly and severally, to indemnify and hold
harmless: (x) the Placement Agent and the Purchaser, (y) each person, if any,
who controls (within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act) the Placement Agent or the Purchaser (each such person, a
"controlling person") and (z) the respective partners, directors, officers,
employees and agents of the Placement Agent and the Purchaser or any such
controlling person, as follows:
(i) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, relating to or
arising out of, or based upon, in whole or in part, (A) any untrue statement or
alleged untrue statement of a material fact included in the 1934 Act Reports, or
the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; (B) any untrue statement or alleged untrue
statement of material fact contained in any information (whether written or
oral) or documents executed in favor of or furnished or made available to the
Placement Agent or the Purchaser by the Offerors; (C) any omission or alleged
omission to state in any information (whether written or oral) or documents
executed in favor of or furnished or made available to the Placement Agent or
the Purchaser by the Offerors a material fact necessary to make the statements
therein not misleading; or (D) the breach or alleged breach of any
representation, warranty and agreement of any Offeror contained herein or in the
Subscription Agreement;
(ii) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or
14
any such alleged untrue statement or omission, or breach or alleged breach of
any such representation, warranty or agreement; provided, that (subject to
Section 7(c) hereof) any such settlement is effected with the written consent of
the Offerors; and
(iii) against any and all expense
whatsoever, as incurred (including the fees and disbursements of counsel chosen
by the Placement Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, or breach or alleged breach of any such representation,
warranty or agreement, to the extent that any such expense is not paid under (i)
or (ii) above;
provided, however, that the Company shall indemnify and hold harmless
the Trust against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, which is due from the Trust pursuant to the foregoing.
(b) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof, and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. Counsel to the indemnified parties shall be
selected by the Placement Agent. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(c) Settlement without Consent if Failure to
Reimburse. If at any time an indemnified party shall have validly requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into
15
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement,
provided, however, that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party (1)
reimburses such indemnified party with respect to those fees and expenses of
counsel that it determines in good faith are reasonable and (2) provides written
notice within 10 days after receipt of the request for reimbursement to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 8 Contribution. In order to provide for just
and equitable contribution in circumstances under which the indemnification
provided for in Section 7 hereof is for any reason held to be unenforceable for
the benefit of an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Offerors, on the one hand, and the Placement Agent, on the other hand, from
the offering of the Capital Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 Placement Agent, on the other hand, in connection with the
statements, omissions or breaches which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Offerors, on the one
hand, and the Placement Agent, on the other hand, in connection with the
offering of the Capital Securities pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of the Capital Securities pursuant to this Agreement (before deducting
expenses) received by the Offerors and the total commission received by the
Placement Agent bear to the aggregate of such net proceeds and commissions.
The Offerors and the Placement Agent agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement, omission or alleged omission or breach or alleged breach.
Notwithstanding the provisions of this Section 8, the
Placement Agent shall not be required to contribute any amount in excess of the
total commissions received by it.
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.
16
For purposes of this Section 8, the Purchaser, each person, if
any, who controls the Placement Agent or the Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and the respective
partners, directors, officers, employees and agents of the Placement Agent, the
Purchaser or any such controlling person shall have the same rights to
contribution as the Placement Agent, while each officer and director of the
Company, each Trustee of the Trust and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Offerors.
SECTION 9 Representations, Warranties and Agreements
to Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or Trustees of the
Trust submitted pursuant hereto shall remain operative and in full force and
effect, and shall survive delivery of the Capital Securities by the Trust.
SECTION 10 Termination of Agreement.
(a) Termination; General. The Placement Agent
may terminate this Agreement, by notice to the Offerors, at any time on or prior
to the Closing Date if, since the time of execution of this Agreement or, in the
case of (i), since the respective dates as of which information is given in the
1934 Act Reports, (i) there has occurred any Material Adverse Effect, or (ii)
there has occurred any material adverse change in the financial markets in the
United States, any outbreak of hostilities or escalation thereof or any other
calamity or crisis, or any change or development involving political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Placement Agent, impracticable to market the Capital
Securities or to enforce contracts for the sale of the Capital Securities, or
(iii) trading in any securities of the Company has been suspended or limited by
the Commission or any national stock exchange or market on or in which such
securities are traded or quoted, or if trading generally on the American Stock
Exchange, the New York Stock Exchange or the Nasdaq National Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers or any other governmental authority, or (iv) a banking
moratorium has been declared by United States federal, Delaware or New York
authorities.
(b) Liabilities. If this Agreement is terminated
pursuant to this Section, such termination shall be without liability of any
party to any other party except as provided in Section 4 and Section 5 hereof,
and provided further that Sections 1, 7 and 8 hereof shall survive such
termination and remain in full force and effect.
SECTION 11 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Placement Agent shall be directed to Sandler O'Neill & Partners,
L.P. as follows: 919 Third Avenue, 6th Floor, New York, New York 10022,
Attention: Thomas W. Killian, Principal, with a copy to Cleary, Gottlieb, Steen
& Hamilton, 2000 Pennsylvania Avenue, N.W., Washington, D.C. 20006, Attention:
Kenneth L. Bachman, Esq.; and notices to the Offerors shall be directed to Texas
Capital Bancshares, Inc., 2100
17
McKinney Avenue, Suite 900, Dallas, TX 75201, Attention: Raleigh Hortenstine
III, with a copy to Patton Boggs LLP, 8484 Westpark Drive, Ninth Floor, McLean,
VA 22102, Attention: Lloyd Spencer, Esq.
SECTION 12 Parties. This Agreement shall inure to the
benefit of and be binding upon each of the Placement Agent and the Offerors and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Placement Agent, the Purchaser and the Offerors, and their respective
successors and the controlling persons and other persons referred to in Sections
1, 7 and 8 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Placement
Agent, the Purchaser and the Offerors and their respective successors, and said
controlling persons and other persons and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 13 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
EACH OF THE TRUST AND THE COMPANY, ON BEHALF OF ITSELF AND ITS
SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE TRUST), HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS
LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY,
IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. EACH OF THE TRUST AND THE COMPANY, ON BEHALF
OF ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE TRUST),
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 14 Effect of Headings. The Section headings
herein are for convenience only and shall not affect the construction hereof.
18
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Placement Agent and the Offerors in accordance with its
terms.
Very truly yours,
TEXAS CAPITAL BANCSHARES, INC.
By: /s/ RALEIGH HORTENSTINE III
----------------------------------------
Name: Raleigh Hortenstine III
Title: President
TEXAS CAPITAL STATUTORY TRUST II
By: TEXAS CAPITAL BANCSHARES, INC., AS
Sponsor
By: /s/ RALEIGH HORTENSTINE III
----------------------------------------
Name: Raleigh Hortenstine III
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ CATHERINE A. LAWTON
------------------------------
Name: Catherine A. Lawton
Title: Vice President
ANNEX A
Pursuant to Section 5(a) of the Placement Agreement, special counsel for the
Offerors shall deliver an opinion in substantially the following form:
1. The Company is incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to (i)
execute and deliver, and to perform its obligations under, the Operative
Documents to which it is a party and (ii) issue and perform its obligations
under the Subordinated Debt Securities.
3. The Company is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended
4. The Bank is validly existing and in good standing under
the laws of the jurisdiction of its organization, and to the best of our
knowledge, all of the issued and outstanding shares of capital stock of the Bank
are owned of record by the Company, directly or through subsidiaries.
5. The deposit accounts of the Bank are insured by the
Federal Deposit Insurance Corporation up to the maximum amount allowable under
applicable law and to the best of our knowledge no proceeding for the
termination of such insurance is pending or threatened.
6. Each of the Company and the Bank (i) is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification wherein it owns or leases
properties or conducts business and (ii) holds all approvals, authorizations,
orders, licenses, certificates and permits from governmental authorities
necessary for the conduct of its business, except where the failure to be so
qualified or to hold such approvals, authorizations, orders, licenses,
certificates and/or permits would not singularly, or in the aggregate have a
Material Adverse Effect.
7. No consent, approval, authorization or order of or
filing, registration or qualification with any Governmental Entity is required
in connection with the execution and delivery by the Company of the Operative
Documents and the consummation of the transactions contemplated thereby except
as have already been obtained or made.
8. Each of the Placement Agreement and the Capital
Securities Subscription Agreement has been duly authorized, executed and
delivered by each of the Company and the Trust and constitutes a valid and
binding instrument of each of the Company and the Trust, enforceable against
each of the Company and the Trust in accordance with its terms.
9. The Amended Declaration has been duly authorized,
executed and delivered by the Company and the Administrators.
10. Each of the Guarantee Agreement and the Indenture has
been duly authorized, executed, and delivered by the Company and, assuming due
authorization, execution and delivery by the Guarantee Trustee and the Indenture
Trustee, respectively, constitutes a valid and
A-1
binding instrument of the Company, enforceable against the Company in accordance
with its terms.
11. The Debt Securities have been duly authorized for
issuance by the Company pursuant to the Indenture and, when executed,
authenticated and delivered in the manner provided for in the Indenture and paid
for in accordance with the Debenture Subscription Agreement, will constitute
valid and binding obligations of the Company and will entitle the holders
thereof to the benefits of the Indenture, enforceable against the Company in
accordance with their terms.
12. The execution, delivery and performance of the Operative
Documents, as applicable, by the Company and the Trust and the consummation by
the Company and the Trust of the transactions contemplated by the Operative
Documents, as applicable, will not result in any violation of the charter or
bylaws of the Company, the charter or bylaws of the Bank, the Amended
Declaration or the Certificate of Trust, the terms of any indenture or other
agreement or instrument known to such counsel and to which the Company or any of
its subsidiaries is a party or bound or any judgment, order or decree of any
Governmental Entity having jurisdiction over the Company or any of its
subsidiaries, or any law or administrative regulation of any state applicable to
the Company.
13. Assuming (i) the accuracy of the representations and
warranties, and compliance with the agreements, contained in the Placement
Agreement and the Capital Securities Subscription Agreement and (ii) that the
Capital Securities are sold in the manner contemplated by, and in accordance
with, the Placement Agreement, the Capital Securities Subscription Agreement and
the Amended Declaration, it is not necessary in connection with the offer, sale
and delivery of the Capital Securities by the Trust to the Purchaser to register
the Capital Securities, the Guarantee Agreement or the Debt Securities under the
1933 Act or to qualify an indenture under the Trust Indenture Act of 1939, as
amended.
14. Neither the Company nor the Trust is, and, following the
issuance of the Capital Securities and the consummation of the transactions
contemplated by the Operative Documents and the application of the proceeds
therefrom, neither the Company nor the Trust will be, an "investment company" or
entity "controlled" by an "investment company," required to be registered under
the Investment Company Act of 1940, as amended.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of New York, the corporate laws of the State of Delaware and
the Federal laws of the United States and (B) rely as to matters involving the
application of laws of any jurisdiction other than New York and Delaware or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are satisfactory to you and as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.
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ANNEX B
Pursuant to Section 5(b) of the Placement Agreement, special Delaware counsel
for the Trust shall deliver an opinion in substantially the following form:
1. The Trust has been duly formed and is validly existing
in good standing as a statutory trust under the Act.
2. The Declaration constitutes a valid and binding
obligation of the Sponsor and Trustees party thereto, enforceable against such
Sponsor and Trustees in accordance with its terms.
3. Under the Act and the Declaration, the Trust has the
requisite trust power and authority (i) to own its properties and conduct its
business, all as described in the Declaration, (ii) to execute and deliver, and
perform its obligations under, the Trust Documents, (iii) to authorize, issue,
sell and perform its obligations under its Trust Securities, and (iv) to
purchase and hold the Debentures.
4. The Capital Securities of the Trust have been duly
authorized for issuance by the Trust and, when issued, executed and
authenticated in accordance with the Declaration and delivered against payment
therefor in accordance with the Declaration and the Capital Securities
Subscription Agreement, will be validly issued and, subject to the
qualifications set forth in paragraph 5 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust and the Capital
Security Holders will be entitled to the benefits provided by the Declaration.
5. Each Capital Security Holder, in such capacity, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note, however, that the Capital Security Holders
may be required to make payment or provide indemnity or security as set forth in
the Declaration.
6. Under the Declaration and the Act, the issuance of the
Trust Securities of the Trust is not subject to preemptive rights.
7. The Common Securities of the Trust have been duly
authorized for issuance by the Trust and, when issued and executed in accordance
with the Declaration and delivered against payment therefor in accordance with
the Declaration and the Common Securities Subscription Agreement, will be
validly issued undivided beneficial interests in the assets of the Trust and the
Common Security Holders will be entitled to the benefits provided by the
Declaration.
8. Under the Declaration and the Act, the execution and
delivery by the Trust of the Trust Documents, and the performance by the Trust
of its obligations thereunder, have been duly authorized by the requisite trust
action on the part of such Trust.
9. The issuance and sale by the Trust of its Trust
Securities, the execution, delivery and performance by the Trust of the Trust
Documents, the consummation by the Trust
B-1
of the transactions contemplated by the Trust Documents, and the compliance by
the Trust with its obligations thereunder are not prohibited by (i) the
Declaration or the Certificate, or (ii) any law or administrative regulation of
the State of Delaware applicable to such Trust.
10. No authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency is required
to be obtained by the Trust solely in connection with the issuance and sale by
the Trust of its Trust Securities, the due authorization, execution and delivery
by the Trust of the Trust Documents or the performance by the Trust of its
obligations under the Trust Documents.
11. The Capital Security Holders (other than those Capital
Security Holders who reside or are domiciled in the State of Delaware) will have
no liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be liable for
any income tax imposed by the State of Delaware.
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ANNEX C
Pursuant to Section 5(c) of the Placement Agreement, special tax counsel for the
Offerors shall deliver an opinion in substantially the following form:
We have acted as special tax counsel to Texas Capital
Bancshares, Inc., a Delaware corporation (the "Company"), in connection with the
offering by Texas Capital Statutory Trust II (the "Trust") of 10,000 Floating
Rate MMCapS(SM)
(liquidation amount $1,000 per capital security) (the "Capital
Securities"). The Capital Securities represent undivided beneficial ownership
interests in $10,310,000 in aggregate principal amount of Floating Rate Junior
Subordinated Debt Securities due 2033 of the Company (the "Subordinated Debt
Securities"). This opinion letter is furnished pursuant to Section 5(c) of the
Placement Agreement dated March 28, 2003, between the Company, the Trust and
you.
In arriving at the opinions expressed below we have examined
executed copies of (i) the Amended and Restated Declaration of Trust of the
Trust dated the date hereof (the "Declaration"), and (ii) the Indenture relating
to the issuance of the Subordinated Debt Securities dated the date hereof (the
"Indenture") (together, the "Operative Documents"). In addition, we have made
such investigations of law and fact as we have deemed appropriate as a basis for
the opinion expressed below.
It is our opinion that, under current law and assuming the
performance of the Operative Documents in accordance with the terms described
therein, the Subordinated Debt Securities will be treated for United States
federal income tax purposes as indebtedness of the Company.
It is our opinion that the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
Our opinion is based on the U.S. Internal Revenue Code of
1986, as amended, Treasury regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as of the date hereof
and all of which are subject to change, possibly on a retroactive basis. In
rendering this opinion, we are expressing our views only as to the federal
income tax laws of the United States of America.
C-1
ANNEX D
Pursuant to Section 5(d) of the Placement Agreement, counsel to the Guarantee
Trustee, the Institutional Trustee, the Delaware Trustee and the Indenture
Trustee shall deliver an opinion in substantially the following form:
1. Wilmington Trust Company, ("WTC"), is a Delaware banking
corporation with trust powers, duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with requisite corporate power
and authority to execute and deliver, and to perform its obligations under, the
Transaction Documents.
2. The execution, delivery, and performance by WTC of the
Transaction Documents have been duly authorized by all necessary corporate
action on the part of WTC, and the Transaction Documents have been duly executed
and delivered by WTC.
3. The execution, delivery and performance of the
Transaction Documents by WTC and the consummation of any of the transactions by
WTC contemplated thereby are not prohibited by (i) the Charter or Bylaws of WTC,
(ii) any law or administrative regulation of the State of Delaware or the United
States of America governing the banking and trust powers of WTC, or (iii) to our
knowledge (based and relying solely on the Officer Certificates), any agreements
or instruments to which WTC is a party or by which WTC is bound or any judgments
or order applicable to WTC.
4. The Debentures delivered on the date hereof have been
authenticated by due execution thereof and delivered by WTC, as Debenture
Trustee, in accordance with the Corporation Order. The Capital Securities
delivered on the date hereof have been authenticated by due execution thereof
and delivered by WTC, as Institutional Trustee, in accordance with the Trust
Order.
5. None of the execution, delivery and performance by WTC
of the Transaction Documents and the consummation of any of the transactions by
WTC contemplated thereby requires the consent, authorization, order or approval
of, the withholding of objection on the part of, the giving of notice to, the
registration with or the taking of any other action in respect of, any
governmental authority or agency, under any law or administrative regulation of
the State of Delaware or the United States of America governing the banking and
trust powers of WTC, except for the filing of the Certificate for the Trust with
the Office of the Secretary of State of the State of Delaware pursuant to the
Delaware Statutory Trust Act 12 Del.C. Section 3801, et seq. (which filing has
been duly made).
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