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EXHIBIT 1
FIRST COASTAL BANCSHARES
FIRST COASTAL CAPITAL TRUST
330,000 Units
Each Unit consisting of:
One Share of Common Stock of First Coastal Bancshares
and One__% Cumulative Preferred Security of First Coastal Capital Trust
UNDERWRITING AGREEMENT
[_________], 199[__]
XXXXXXX, HISLOP, XXXXXX & GIVEN, INC.
WEDBUSH XXXXXX SECURITIES INC.
As Representatives of the Several Underwriters
c/o Peacock, Xxxxxx, Xxxxxx & Given, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
First Coastal Bancshares, a California corporation ("First Coastal"), and
First Coastal Capital Trust (the "Trust" and, together with First Coastal, the
"Offerors"), confirm their agreement (the "Agreement") with each of the
Underwriters listed on Schedule I hereto (the "Underwriters"), for whom Peacock,
Hislop, Xxxxxx & Given, Inc. and Wedbush Xxxxxx Securities Inc. are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issuance and sale by the Offerors and the purchase by the Underwriters, acting
severally and not jointly, of the respective number set forth in Schedule I of
330,000 Units, each Unit consisting of (a) one share of common stock, without
par value (the "Common Shares"), of First Coastal and (b) one [__]% Cumulative
Preferred Security, liquidation amount $20.00 (the "Preferred Security"), of the
Trust.
The aggregate of 300,000 Units are referred to in this Agreement as the
"Firm Units." Pursuant to Section 2 of this Agreement, the Offerors have agreed
to grant the Underwriters an option to purchase up to an additional 30,000 Units
(the "Option Units" and, together with the Firm Units, the "Units").
The Offerors propose that the Preferred Securities be issued pursuant to
an Amended and Restated Trust Agreement (the "Trust Agreement") among Wilmington
Trust Company, as property trustee (the "Property Trustee") and Delaware
trustee, the administrators named therein (the "Administrators"), First Coastal
and the holders from time to time of undivided beneficial interests in the
assets of the Trust. The Preferred Securities will be guaranteed by First
Coastal (the "Guarantee") with respect to distributions and to payments upon
liquidation, redemption and otherwise pursuant to the Guarantee Agreement (the
"Guarantee Agreement")
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between Wilmington Trust Company, as guarantee trustee (the "Guarantee
Trustee") and First Coastal. First Coastal also will, pursuant to the Agreement
as to Expenses and Liabilities (the "Expense Agreement") between First Coastal
and the Trust, guarantee the full payment of any cost, expense or liabilities of
the Trust, other than payments to holders of Preferred Securities pursuant to
the terms of the Preferred Securities. The proceeds from the sale of the
Preferred Securities in the Offering will be combined with the proceeds from the
sale by the Trust to First Coastal of the Trust's common securities (the "Trust
Common Securities") and will be used by the Trust to purchase [__]% Junior
Subordinated Debentures due December 31, 2028 (the "Junior Subordinated
Debentures") issued by First Coastal pursuant to an indenture (the "Indenture")
between First Coastal and Wilmington Trust Company, as indenture trustee (the
"Indenture Trustee").
The Units, the Preferred Securities, the Common Shares, the Trust Common
Securities, the Guarantee and the Junior Subordinated Debentures are hereinafter
collectively referred to as the "Securities." The Indenture, the Trust
Agreement, the Guarantee Agreement, the Expense Agreement and this Agreement are
hereinafter referred to collectively as the "Operative Documents." The offering
of the Securities pursuant to this Agreement is referred to as the "Offering."
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-[______])
containing a preliminary prospectus relating to the Offering under the
Securities Act of 1933, as amended (the "Securities Act"), and have filed such
amendments thereto and such amended preliminary prospectuses as may have been
required by the Commission on or prior to the date hereof. Promptly after
execution and delivery of this Agreement, the Offerors will file such additional
amendments to the registration statement and such amended prospectuses relating
to the Offering (pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the rules and regulations of the Commission thereunder
(the "Exchange Act Regulations"), the Securities Act, the rules and regulations
of the Commission under the Securities Act (the "Securities Act Regulations") or
otherwise) as may hereafter be required by the Commission or pursuant to the
terms of this Agreement. Such registration statement, as amended, at the time
such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date, at
the time such post-effective amendment becomes effective (including all
financial statements, schedules and exhibits thereto and the information, if
any, deemed to be a part thereof pursuant to Rule 430A(b) of the Securities Act
Regulations), as from time to time amended or supplemented pursuant to the
Exchange Act, the Exchange Act Regulations, the Securities Act, the Securities
Act Regulations or otherwise, is referred to herein as the "Registration
Statement." Any registration statement increasing the size of the Offering filed
pursuant to Rule 462(b) of the Securities Act Regulations is referred to herein
as a "Rule 426(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus, including all financial statements, schedules and exhibits
thereto, is referred to herein as the "Prospectus," except that if any revised
prospectus relating to the Offering shall be provided to the Underwriters by the
Offerors for use in the Offering which differs from the prospectus relating to
the Offering on file at the Commission at the time of such use (whether or not
such revised prospectus is required to be filed by the Offerors pursuant to Rule
424(b) of the Securities Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. The term
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"Preliminary Prospectus" means the preliminary prospectus dated [______], 1998
distributed by the Underwriters prior to the date hereof.
The Offerors understand that the Underwriters propose to make the Offering
of the Securities as soon as the Representatives deem advisable after the
Registration Statement becomes effective and after the Trust Agreement, the
Indenture and the Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
1. REPRESENTATIONS AND WARRANTIES. The Offerors jointly and severally
represent and warrant to each Underwriter as of the date hereof and as of each
Closing Date, and agree with each Underwriter that:
(a) Registration Statement. The Offerors meet the requirements for
use of Form SB-2 under the Securities Act. The Offerors have filed the
Registration Statement with the Commission. The Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered to the Representatives, have been declared effective by the
Commission in such form. Other than such Registration Statement and any
such post-effective amendment, no document with respect to the
Registration Statement has been filed with the Commission. No stop order
suspending the effectiveness of the Registration Statement, or any
amendment thereto and no cease and desist order or temporary order under
Section 8A of the Securities Act has been issued, and no proceeding for
either such purpose has been instituted or is pending or threatened by the
Commission. No order preventing or suspending the use of any Prospectus or
any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in the Preliminary Prospectus in reliance
upon and in conformity with information furnished in writing to the
Offerors by or on behalf of the Representatives specifically for use in
connection with the preparation of the Preliminary Prospectus.
(b) Accuracy of Information. The Registration Statement conforms,
and the Prospectus and any Rule 462(b) Registration Statement and any
further amendment or supplement to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Securities Act and the Securities Act Regulations and will not, as of
the effective date of each of such Registration Statements and any
amendment thereto, and as of the applicable filing date of the Prospectus
and any amendment or supplement thereto, and as of each Closing Date
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in the Registration
Statement or Prospectus in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of the
Representatives
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specifically for use in connection with the preparation of the
Registration Statement or Prospectus.
(c) Independent Accountants. Xxxxxxxx, Trine, Day & Co. LLP, the
accountants who examined the financial statements of First Coastal and,
for the year ended December 31, 1997, and subsequent periods, American
Independent Bank, N.A. ("AIB"), in each case filed as part of the
Registration Statement and the Prospectus, are, and were during the
periods covered in such financial statements, independent certified public
accountants with respect to First Coastal and AIB within the meaning of
the Securities Act and the Securities Act Regulations. XxXxxxxxx & Xxxxxx,
LLP, the accountants who examined the financial statements of AIB for the
year ended December 31, 1996 filed as part of the Registration Statement
and the Prospectus, were during the period covered in such financial
statements, independent certified public accountants with respect to AIB
within the meaning of the Securities Act and the Securities Act
Regulations.
(d) Financial Statements. The consolidated financial statements of
First Coastal and its subsidiaries, together with the related notes
thereto, included in the Registration Statement and the Prospectus
(collectively, the "Financial Statements") present fairly the consolidated
financial position and the consolidated results of operations,
stockholders' equity and cash flows of First Coastal and its subsidiaries
as at the dates and for the respective periods specified therein. The
Financial Statements are accurate, complete and correct in all material
respects, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act
Regulations and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The summaries of the Financial Statements and the tables
included in the Preliminary Prospectus and the Prospectus are accurate and
correct, fairly present the information purported to be shown thereby as
at the dates and for the periods indicated and are consistent with the
Financial Statements to the extent they are derived from the Financial
Statements.
(e) Absence of Changes. Subsequent to the dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise set forth in the Registration Statement or the
Prospectus, respectively, (i) there has been no material adverse change,
or development reasonably likely to result in a material adverse change,
in the financial condition, earnings, business, assets or results of
operations of First Coastal, the Trust or First Coastal Bank, National
Association (the "Bank"), whether or not arising from transactions in the
ordinary course of business, (ii) neither First Coastal, the Trust nor the
Bank has incurred any material liabilities or obligations, direct or
contingent, or entered into any transaction not in the ordinary course of
business, or declared or paid any dividends or made any distribution of
any kind with respect to its capital stock, and (iii) there has not been
any change in the capital stock, or any material change in the short-term
or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase capital stock, of First Coastal,
the Trust or the Bank.
(f) Incorporation and Authority of First Coastal. First Coastal has
been duly incorporated and is validly existing as a corporation in good
standing under the
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laws of the State of California, with full corporate power and authority
to own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform
its obligations under the Operative Documents, as applicable, and the
Securities; First Coastal is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the State of
California and each other jurisdiction in which the conduct of its
business or ownership or lease of its properties requires such
qualification and where the failure to be so qualified would, individually
or in the aggregate, have a material adverse effect on the financial
condition, earnings, business, assets or results of operations of First
Coastal; and First Coastal is duly registered as a bank holding company
with the Board of Governors of the Federal Reserve System (the "FRB")
under the Bank Holding Company Act of 1956, as amended (the "BHC Act") and
all of the activities of First Coastal are among those permitted to bank
holding companies under applicable law, including, but not limited to, the
BHC Act and regulations thereunder.
(g) Organization and Authority of the Bank. The Bank has been duly
organized and is validly existing as a national banking association in
good standing, with the corporate authority to own its properties and
conduct its business as described in the Prospectus, and is duly qualified
to do business as a foreign corporation, or is exempt from such
qualification, and is in good standing under the corporation and banking
laws of each jurisdiction in which the conduct of its business or
ownership or lease of its properties requires such qualification and where
the failure to be so qualified would, individually or in the aggregate,
have a material adverse effect on the financial condition, earnings,
business, assets or results of operations of the Bank; the Bank is a
member in good standing of the Federal Reserve System (the "FRS"), the
deposit accounts maintained at the Bank are insured by the Federal Deposit
Insurance Corporation ("FDIC") to the fullest extent permitted by law, and
no proceedings for the termination or revocation of such membership or
insurance are pending or, to the knowledge of the Bank, threatened.
(h) Organization and Authority of the Trust. The Trust has been duly
created and is validly existing in good standing as a business trust under
the Business Trust Act of the State of Delaware with the power and
authority to own property and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform
its obligations under the Operative Documents, as applicable, and the
Securities; the Trust is duly qualified to transact business and is in
good standing in the State of California and in each other jurisdiction in
which the conduct of its business or ownership or lease of its properties
requires such qualification and where the failure to be so qualified
would, individually or in the aggregate, have a material adverse effect on
the financial condition, earnings, business, assets or results of
operations of the Trust; the Trust is not a party to or otherwise bound by
any agreement other than those described in the Registration Statement and
the Prospectus; and based on expected operations and current law the Trust
is and will be classified for United States federal income tax purposes as
a grantor trust and not as an association taxable as a corporation.
(i) Capital Stock of First Coastal. First Coastal's authorized
equity capitalization is as set forth in the Prospectus. All of the
outstanding shares of capital
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stock of First Coastal have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance with all
applicable federal and state securities laws, and were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities. The holders of First Coastal capital
stock are not subject to personal liability by reason of being such
holders. Except as otherwise stated in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of capital stock of
First Coastal pursuant to the Articles of Incorporation or Bylaws of First
Coastal or any agreement or other instrument to which First Coastal is a
party or by which First Coastal is bound. Neither the offering nor the
sale of the Securities gives or will give rise to any rights for or
relating to the registration of any shares of capital stock or other
securities of First Coastal (not including the Securities) under the
Securities Act or under the securities or Blue Sky laws of any state that
have not been satisfied or waived prior to the date hereof. Except as
stated in the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from First
Coastal any shares of capital stock of First Coastal.
(j) Capital Stock of the Bank. First Coastal has no subsidiaries
other than the Bank and the Trust. First Coastal owns beneficially and of
record all of the issued and outstanding capital stock of the Bank, free
and clear of any mortgage, pledge, lien, encumbrance or claim, except as
described in the Prospectus and as provided by 12 U.S.C. Section 55. All
of the issued and outstanding shares of capital stock of the Bank have
been duly and validly authorized and issued and are fully paid and
nonassessable, and except as disclosed in the Prospectus, there are no
outstanding options, warrants or other rights which require the issuance
or sale of, and no commitment, plan or arrangement to issue, any capital
stock of the Bank, or any security convertible into or exchangeable for
any such stock.
(k) Common Shares. The Common Shares offered hereby have been duly
and validly authorized and, when issued and delivered to the Underwriters
pursuant to this Agreement, will be fully paid and nonassessable, free and
clear of all liens, security interests, claims and encumbrances and
restrictions on transfer (except restrictions on transfer, if any, imposed
by the securities or Blue Sky laws of any state). The Common Shares will
conform in all material respects to the description thereof contained in
the Prospectus and the issuance of the Common Shares hereunder will not be
subject to preemptive or other similar rights (contractual or other). The
certificates representing the Common Shares are in valid and sufficient
form.
(l) Trust Common Securities. The Trust Common Securities have been
duly authorized by the Trust Agreement and, when issued and delivered by
the Trust to First Coastal against payment therefor as described in the
Registration Statement and the Prospectus, will be validly issued
undivided beneficial interests in the assets of the Trust entitled to the
benefits of the Trust Agreement. The Trust Common Securities will conform
in all material respects to the description thereof contained in the
Prospectus and the issuance of the Trust Common Securities will not be
subject to preemptive or other similar rights (contractual or other). At
each Closing Date all of the issued and outstanding Trust Common
Securities will be directly owned by First
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Coastal free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right. Upon issuance, the certificate
representing the Trust Common Securities will be in valid and sufficient
form.
(m) Preferred Securities. As of each Closing Date the Preferred
Securities will have been duly authorized by the Trust Agreement and, when
issued and delivered against payment therefor in accordance with the Trust
Agreement, as provided herein, will be validly issued, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust
entitled to the benefits of the Trust Agreement. The Preferred Securities
will conform in all material respects to the description thereof contained
in the Prospectus and the issuance of the Preferred Securities will not be
subject to preemptive or other similar rights (contractual or other). Upon
issuance, the certificates representing the Preferred Securities will be
in valid and sufficient form.
(n) Representatives' Warrants. First Coastal has full corporate
power and authority to authorize, issue and sell the Representatives'
Warrants (as defined in Section 5(q)) on the terms and conditions set
forth in this Agreement, and has taken all corporate action necessary
therefor. No consent, approval, authorization or other order of any
regulatory authority is required for such authorization, issue or sale,
except as may be required under the Securities Act or state Blue Sky laws.
As of the Closing Date, the Representatives' Warrants shall have been duly
authorized, executed and delivered by First Coastal to the Representatives
and will be the legal, valid and binding obligations of First Coastal
enforceable in accordance with their terms, subject to the Enforceability
Exceptions (as defined below). The holders of the Representatives'
Warrants will, upon their exercise, be entitled to purchase Common Shares
in accordance with the terms and conditions set forth in the form of
Representatives' Warrant attached to this Agreement as Exhibit A. The
Common Shares issuable upon exercise of the Representatives' Warrants will
upon such issuance be duly and validly authorized, fully paid and
nonassessable. First Coastal has duly authorized and reserved for issuance
such number of Common Shares as are initially issuable upon exercise of
the Representatives' Warrants.
(o) Legal Compliance. (i) At all times, each of First Coastal, the
Trust and the Bank has conducted its businesses in compliance in all
material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders (including, without
limitation, the Federal Deposit Insurance Act, as amended, and the rules
and regulations of the FDIC, FRB and the Office of the Comptroller of the
Currency ("OCC")), and (ii) each of First Coastal, the Trust and the Bank
holds all licenses, certificates, permits and other governmental
authorizations required for the conduct of its business as now being
conducted and as described in the Prospectus, and all such licenses,
certificates, permits and other governmental authorizations are in full
force and effect, and each of First Coastal, the Trust and the Bank is in
all material respects complying therewith. No such license, certificate,
permit or other governmental authorization contains a materially
burdensome restriction not adequately described in the Prospectus.
(p) No Breach or Violation. Neither First Coastal, the Trust nor the
Bank is (i) in violation of its articles of incorporation, declaration of
trust, articles of
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association, bylaws or other similar charter documents, (ii) in breach or
violation of or in default under the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement or other evidence of
indebtedness or other agreement, obligation, condition, covenant or
instrument to which First Coastal, the Trust or the Bank is a party or is
bound, or by which any of its property may be subject, where any such
default, breach or violation would have, individually or in the aggregate,
a material adverse effect on the financial condition, earnings, business,
assets or results of operations of First Coastal, the Trust or the Bank,
on the performance of this Agreement or any other Operative Document, or
on the consummation of the transactions contemplated hereby and thereby,
or (iii) in breach or violation of or in default under any statute, law,
decree, order, rule or regulation applicable to First Coastal, the Trust
or the Bank of any court or regulatory, administrative or governmental
agency, body or authority having jurisdiction over First Coastal, the
Trust or the Bank or their property, where any such default, breach or
violation would have, individually or in the aggregate, a material adverse
effect on the financial condition, earnings, business, assets or results
of operations of First Coastal, the Trust or the Bank, on the performance
of this Agreement or any other Operative Document, or on the consummation
of the transactions contemplated hereby and thereby.
(q) No Conflicts. Neither the execution, delivery and performance of
this Agreement or any of the Operative Documents nor the consummation of
the transactions contemplated hereby, thereby or in the Prospectus,
including, without limitation, the issuance, sale and delivery of the
Securities, will (i) conflict with, or result in a breach or violation of,
or constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) or require consent under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of First Coastal, the Trust or the Bank pursuant to,
the terms of any indenture, contract, mortgage, lease, deed of trust, note
agreement, loan agreement or other agreement or instrument to which First
Coastal, the Trust or the Bank is a party or by which First Coastal, the
Trust or the Bank or any of their material properties or assets may be
bound, (ii) violate or conflict with any provision of the charter,
articles of association or bylaws of First Coastal, the Trust or the Bank
or any statute, law, judgment, decree, order, rule or regulation
applicable to First Coastal, the Trust or the Bank of any court,
regulatory, administrative or governmental agency or body, arbitrator or
authority having jurisdiction over First Coastal, the Trust or the Bank or
any of its property (including, without limitation, the applicable rules
and regulations of the FDIC, FRB and OCC).
(r) Litigation. Except as stated in the Prospectus, there is no
litigation or legal, regulatory, administrative or other governmental
action, suit or proceeding, or, to the knowledge of the Offerors,
investigation, by or before any court, regulatory, administrative or
governmental agency, arbitrator, body or authority pending or, to the
knowledge of the Offerors, threatened against, or involving any of the
properties or business of, First Coastal, the Trust or the Bank that, if
determined adversely to First Coastal, the Trust or the Bank, would,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects, assets,
or results of operations of First Coastal, the Trust or the Bank, and no
such litigation, action, suit or proceeding, or, to the knowledge of the
Offerors,
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investigation, against, or involving any of the properties or business of,
First Coastal, the Trust or the Bank is pending or, to the knowledge of
the Offerors, threatened that would or would be reasonably likely to have
an adverse effect upon the performance of this Agreement or the other
Operative Documents or the consummation of the transactions hereby and
thereby contemplated. No person has sought to obtain review of any
transaction contemplated hereby or by any Operative Document or otherwise
challenged any aspect of the offer, sale or issuance of the Securities,
and, to the knowledge of the Offerors, no such review or challenge is
threatened by any regulatory, administrative or governmental authority or
any other person or entity.
(s) Real and Personal Property. Except as otherwise set forth in the
Prospectus or such as are not material to the business, financial
condition or results of operation of First Coastal, the Trust or the Bank,
each of First Coastal, the Trust and the Bank has good and marketable
title, free and clear of all liens, claims, encumbrances and restrictions
(except liens for taxes not yet due and payable), to all real and personal
property described in the Prospectus as being owned by it. Except as
otherwise set forth in the Prospectus or such as are not material to the
financial condition, earnings, business, assets or results of operations
of First Coastal, the Trust or the Bank, each of First Coastal, the Trust
and the Bank has valid and binding leases to the real and personal
property described in the Prospectus as being under lease to it, and each
enjoys peaceful and undisturbed possession under all such leases to which
it is a party as lessee with such exceptions as do not materially
interfere with the use of the leased property made by First Coastal, the
Trust or the Bank.
(t) Insurance. First Coastal, the Trust and the Bank maintain
insurance in accordance with the practice and custom for bank holding
companies, financing subsidiaries and banks.
(u) Fees and Commissions. Other than as contemplated by this
Agreement, neither First Coastal, the Trust nor the Bank has incurred any
liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or any other
Operative Document, the consummation of the transactions contemplated
hereby or thereby or the introduction of the Offerors to the Underwriters.
(v) Investment Company. Neither First Coastal, the Trust nor the
Bank is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or an "investment adviser" within the meaning of the
Investment Advisers Act of 1940, as amended.
(w) Taxes. Each of First Coastal, the Trust and the Bank has filed
all necessary federal, state and foreign income and franchise tax returns
required to be filed and paid all taxes shown as due thereon, except where
the failure to file or pay would not have a material adverse effect upon
the financial condition, earnings, business, assets or results of
operations of First Coastal, the Trust or the Bank; no tax deficiency has
been asserted or threatened against First Coastal, the Trust or the Bank
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which would materially adversely affect the financial condition, earnings,
business, assets or results of operations of First Coastal, the Trust or
the Bank.
(x) Intellectual Property. Each of First Coastal and the Bank own or
possess adequate rights to use all patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service
mark registrations, franchises, copyrights and licenses necessary for the
conduct of its business as currently carried on and as described in the
Prospectus; neither First Coastal, the Bank nor any partnership or joint
venture in which First Coastal or the Bank is a partner or participant has
received any notice of conflict with the asserted rights of others in
respect thereof, and the Offerors are not aware of any presently existing
facts or circumstances that could reasonably be expected to result in such
a conflict.
(y) Labor Relations. No labor dispute with the employees of First
Coastal or the Bank exists or, to the knowledge of the Offerors, is
imminent; and the Offerors have no knowledge of any existing or imminent
labor dispute or disturbance by the employees of any of principal
suppliers, depositors, borrowers or customers of First Coastal or the Bank
reasonably likely to result in a material adverse change in the financial
condition, earnings, business, assets or results of operations of First
Coastal, the Trust or the Bank.
(z) Underwriting Agreement. This Agreement has been duly and validly
authorized, executed and delivered by each of First Coastal and the Trust.
(aa) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or any of the other Operative
Documents by First Coastal or the Trust or for the consummation of the
transactions contemplated hereby or thereby, including, without
limitation, the issuance, sale and delivery of the Securities, except such
as may be required under the securities or Blue Sky laws of any state in
connection with the purchase and distribution of the Securities as
contemplated in this Agreement and the other Operative Documents, and such
others (specified in writing to the Representatives) as have been obtained
or made.
(bb) Regulatory Reports. Each report filed by First Coastal or the
Bank with the FDIC, FRB or OCC between July 1, 1996, and the date of this
Agreement, as of the date such report was filed, conformed in all material
respects with the applicable requirements of the FDIC, FRB and OCC.
(cc) Internal Controls. Each of First Coastal, the Trust and the
Bank maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principals and
to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable
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intervals and appropriate action is taken with respect to any differences.
(dd) Related Transactions. Except as stated in the Prospectus,
neither First Coastal, the Trust nor the Bank is a party to any contract
or agreement (whether oral or written) with any affiliate, director or
officer of First Coastal, the Trust, the Bank or any of their
subsidiaries.
(ee) Operative Documents. Each of the Operative Documents (other
than this Agreement) has been duly authorized, executed and delivered by
each Offeror that is a party thereto, and will, at each Closing Date, be a
valid and binding obligation of each Offeror that is a party thereto,
enforceable against such Offeror in accordance with its terms, except to
the extent that enforcement thereof may be limited by the receivership,
conservatorship and supervisory powers of bank regulatory agencies
generally as well as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity) and the
availability of equitable remedies (collectively, the "Enforceability
Exceptions").
(ff) Trust Indenture Act. Each of the Trust Agreement, the Guarantee
Agreement and the Indenture shall have been duly qualified under the 1939
Act as of each Closing Date.
(gg) Junior Subordinated Debentures. The Junior Subordinated
Debentures have been duly authorized by First Coastal and, at each Closing
Date, will have been duly executed by First Coastal and, when
authenticated in the manner provided in the Indenture and delivered
against payment therefor as described in the Registration Statement and
the Prospectus will constitute legally valid and binding obligations of
First Coastal, enforceable against First Coastal in accordance with their
terms, except as enforcement thereof may be limited by the Enforceability
Exceptions; and the Junior Subordinated Debentures will be in the form
contemplated by, and entitled to the benefits of, the Indenture and will
conform in all material respects to the description thereof in the
Prospectus; and the issuance of the Junior Subordinated Debentures will
not be subject to preemptive or similar rights.
(hh) Administrators. Each of the Administrators of the Trust is an
officer of First Coastal and has been duly authorized by First Coastal to
execute and deliver the Trust Agreement.
(ii) Descriptions of Securities and Operative Documents. The
Securities and the Operative Documents conform in all material respects to
the summary descriptions thereof contained in the Registration Statement
and the Prospectus.
(jj) Stabilization, Other Securities Sales. Neither First Coastal,
the Trust or the Bank has (i) taken or will take, directly or indirectly,
any action which constitutes, or which is designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities and (ii) since the filing of the
Registration Statement, except for the marketing of the Securities and the
12
payment to the Underwriters of the compensation contemplated by Section 2
of this Agreement, (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another person
to purchase any securities of First Coastal, the Trust or the Bank.
2. PURCHASE AND SALE.
(a) On the basis of the representations, warranties and agreements
contained in this Agreement, and subject to the terms and conditions hereof, the
Offerors agree to issue and sell to each Underwriter, severally and not jointly,
and each Underwriter, severally and not jointly, agrees to purchase from the
Offerors the number of Firm Units set forth on Schedule I opposite the name of
such Underwriter, plus any additional Units the Underwriter may become obligated
to purchase pursuant to the provisions of Section 9 hereof, at a price of
$[_____] per Unit payable as follows: $20.00 per Unit to the Trust for each
Preferred Security and $[____] per Unit to First Coastal for each Common Share.
In addition, as compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase Junior Subordinated Debentures of First
Coastal, First Coastal hereby agrees to pay at each Closing Date to the
Representatives in immediately available funds, for the accounts of the several
Underwriters, $[_____] per Preferred Security to be delivered by the Trust
hereunder at such Closing Date or, if agreed by the Representatives and First
Coastal, by deduction from the amount payable by the Underwriters to the Trust
in respect of the Preferred Securities being purchased on such date.
(b) In addition, on the basis of the representations, warranties and
agreements contained in this Agreement, and subject to the terms and conditions
hereof, the Offerors hereby grant an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 33,000 Optional Units
at the purchase price per Unit to be paid for the Firm Units, for use solely in
covering any over-allotments made by the Representatives for the account of the
Underwriters in the sale and distribution of the Firm Units. The option granted
hereunder may be exercised at any time on one or more occasions within 45 days
after the first date that any of the Units are released by the Representatives
for sale to the public, upon notice by the Representatives to First Coastal
setting forth the aggregate number of Optional Units as to which the
Underwriters are exercising the option and the time of delivery. Such time of
delivery shall be determined by the Representative, but if at any time other
than the Initial Closing Date shall not be earlier than three nor later than
five full business days after delivery of such notice of exercise. The number of
Optional Units to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Units to be sold by the Offerors pursuant to
such notice of exercise by a fraction, the numerator of which is the number of
Firm Units to be purchased by such Underwriter as set forth opposite its name in
Schedule I and the denominator of which is 330,000 (subject to such adjustments
to eliminate any fractional share purchases as the Representatives in their
discretion may make). The manner of payment for and delivery of the Optional
Units shall be the same as for the Firm Units purchased from the Offerors as
specified in the three preceding paragraphs. At any time before lapse of the
option, the Representatives may cancel such option by giving written notice of
such cancellation to First Coastal. If the option is canceled or expires
unexercised in whole or in part, the Offerors will deregister under the
Securities Act the number of Optional Units as to which the option has
13
not been exercised.
3. DELIVERY AND PAYMENT. The initial delivery of the certificates
representing the Common Shares and Preferred Securities underlying the Units and
payment therefor shall be made at 10:00 a.m., Los Angeles Time, on [_______],
199[__], or such later time as the Representatives and First Coastal shall
determine, which date and time may be postponed as provided in Section 9 hereof
(such initial date and time of delivery and payment called the "Initial Closing
Date"). Delivery of the certificates of Common Shares and Preferred Securities
underlying the Units shall be made for the account of the respective
Underwriters against payment by the Underwriters of the purchase price thereof
by wire transfer of same day funds in Los Angeles, California to First Coastal
and the Trust in the amounts specified in Section 2(a). Delivery of the
certificates of Common Shares and Preferred Securities underlying the Units
shall be made at the offices of Xxxxxx, Xxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, or such location as the Representatives may
designate at least one business day in advance of any Closing Date. The Initial
Closing Date and the subsequent closing dates, if any, for delivery and payment
of the certificates of Common Shares and Preferred Securities underlying the
Option Units shall be collectively referred to herein as the "Closing Date."
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Units for sale to the public as set forth in the
Prospectus. The Underwriters will, and hereby agree to, cooperate with the
Offerors to prevent any person from acquiring more than 9.9% of the outstanding
Common Shares, and use all reasonable efforts to implement and comply with
procedures prescribed by the Offerors or agents thereof to prevent any such
acquisition.
5. COVENANTS OF THE OFFERORS. The Offerors jointly and severally covenant
and agree with each Underwriter that:
(a) Registration Statement and Prospectus. The Offerors will make no
further amendment or any supplement to the Registration Statement or the
Prospectus prior to any Closing Date which is reasonably disapproved by
the Representatives after reasonable notice thereof. The Offerors will
notify the Representatives immediately and confirm the notice in writing
(i) when any post-effective amendment to the Registration Statement (and
any other amendment thereto) has been declared effective by the
Commission, (ii) of the transmittal to the Commission for filing of any
amendment or supplement to the Prospectus, (iii) of the receipt by the
Offerors of any comments from the Commission or any state securities
commission with respect to the transactions contemplated by this
Agreement, (iv) of any request by the Commission or any state securities
commission for any amendment or supplement to the Registration Statement
or the Prospectus, or for additional information, (v) of the issuance by
the Commission or any state securities commission or court of competent
jurisdiction of any order suspending either the Offering or the use of
either the Preliminary Prospectus or the Prospectus or of the threat of
any such action by any such entity, (vi) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any amendment thereto or of the receipt by the Offerors of
any notification with respect to the suspension of the registration
qualification or exemption of the Units for offering or sale in any
jurisdiction, or the initiation or threatening of
14
any proceeding for such purpose. The Offerors will use their best efforts
to prevent the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or
suspending any such registration, qualification of exemption, and if such
an order is issued, the Offerors promptly will use their best efforts to
obtain its withdrawal.
(b) Amendments to Registration Statement. The Offerors will give the
Representatives notice of their intention to file or prepare any amendment
or supplement to the Registration Statement or any filing under Rule
462(b) or any amendment or supplement to the Prospectus (whether, in the
case of the Registration Statement and the Prospectus, by the filing of
documents pursuant to the Exchange Act, the Securities Act or otherwise
and, in the case of the Prospectus, by amending or supplementing the
Prospectus then being used by the Underwriters) and will furnish the
Representatives with copies of any such amendment or supplement or other
document proposed to be filed a reasonable amount of time prior to such
proposed filing and will not file any such amendment or supplement or
other document or use any such prospectus to which the Representatives or
counsel to the Underwriters shall reasonably object.
(c) Required Amendments to the Registration Statement. If, at any
time during the period when the Underwriters are engaged in marketing or
sales efforts relating to the Securities or when a Prospectus is required
to be delivered in connection with the distribution of the Securities, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
or if it shall be necessary to amend or supplement the Registration
Statement or the Prospectus to comply with applicable law, the Offerors
promptly will prepare, subject to paragraph (b) of this Section 5, an
amendment or supplement which will correct such statement or omission or
effect such compliance.
(d) Copies of the Registration Statement. The Offerors have
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, copies of the Registration Statement as
originally filed and of each amendment thereto including exhibits filed
therewith and copies of all consents and certificates of experts, and will
also deliver to the Representatives a copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters.
(e) Copies of the Prospectus. The Offerors have delivered or will
deliver to each Underwriter, without charge, from time to time until the
effective date of the Registration Statement, as many copies of each
Preliminary Prospectus as such Underwriter may reasonably request, and the
Offerors hereby consent to the use of such copies for purposes permitted
by the Securities Act. The Offerors will furnish to each Underwriter,
without charge, from time to time during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act,
such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request for the purposes contemplated by
the Securities
15
Act or the Exchange Act or the respective applicable rules and regulations
of the Commission thereunder.
(f) Rule 430A Compliance. If, at the time that the Registration
Statement or a post-effective amendment thereto becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A
of the Securities Act Regulations, then immediately following
effectiveness, the Offerors will prepare, and file or transmit for filing
with the Commission in accordance with such Rule 430A and Rule 424(b) of
the Securities Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted and will use its best efforts to cause any such post-effective
amendment to be declared effective as promptly as practicable.
(g) Qualification under State Securities Laws. The Offerors will use
their best efforts to qualify the Securities for sale, to the extent that
exemptions from qualification requirements are not available, under the
securities or Blue Sky laws of such jurisdictions as the Representatives
may reasonably designate, will maintain such qualifications in effect so
long as required for the distribution of the Securities and will file such
consents to service of process or other documents as may be necessary in
order to effect such qualifications. The Offerors will file such
statements and responses as may be required by the laws of each
jurisdiction in which the Securities have been qualified as above
provided. In the event of any action suspending any such qualification,
the Offerors will promptly notify the Representatives and promptly use
their reasonable efforts to obtain withdrawal or reversal of any such
action.
(h) Payment of Expenses. Whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, First
Coastal will pay or cause to be paid the following fees, disbursements and
expenses customarily incurred in an offering of trust preferred securities
and common stock: (i) the preparation, printing or other production and
filing of documents with respect to the transaction (including the
Operative Documents) and any costs of preparation, printing and filing of
the Registration Statement originally filed with respect to the Securities
and any amendment thereto, any Rule 462(b) Registration Statement, and the
Prospectus and any amendment or supplement thereto, this Agreement and any
blue sky memoranda; (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents in such quantities as
the Underwriters may reasonably request; (iii) filing fees, costs and
expenses incurred in connection with obtaining regulatory approvals (or
obtaining confirmation that any such approval is not required); (iv)
filing fees, costs and expenses incurred in qualifying the offering under
the "Blue Sky" laws of such states as, in the opinion of the
Representatives, are desirable for a proper distribution of, or secondary
offering of, the Securities, including the reasonable fees and expenses of
counsel to the Underwriters; (v) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Offerors; (vi) the costs of preparing and engraving certificates
representing the Securities; (vii) any transfer agent fees and all
transfer taxes and registrar fees; (viii) the filing fees of the
Commission and the National Association of Securities Dealers, Inc.
relating to the Securities; (ix) the fees and expenses of listing the
Securities on a stock exchange or
16
qualifying the Securities for inclusion on the Nasdaq SmallCap Market or
other quotation service; (x) the fees and expenses of the trustees
appointed under the Operative Documents, including the fees an
disbursements of counsel for such trustees in connection with the
Operative Document; (xi) the travel and lodging expenses of employees of
the Offerors who participate in the advertising and marketing of the
Securities; and (xii) all other costs and expenses incident to the
performance of the obligations of the Offerors hereunder which are not
otherwise specifically provided for in this Section.
(i) Earnings Statements. Each of the Offerors will make generally
available to its security holders as soon as practicable, but not later
than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the
Securities Act Regulations) covering a 12-month period beginning not later
than the first day of the Offeror's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration
Statement.
(j) Information to the Representatives. During the period of two
years after the date hereof, the Offerors will promptly furnish to the
Representatives copies of (i) all reports or other communications
(financial or otherwise) furnished generally to stockholders of the
Offerors, or furnished to or filed with the Commission or any other
supervisory or regulatory authority pursuant to the Exchange Act or the
requirements of any national securities exchange or system on which any
class of securities of the Offerors is listed or quoted, and (ii) such
additional information concerning the businesses and financial condition
of the Offerors as the Representatives may from time to time reasonably
request. If, and so long as, First Coastal has active subsidiaries, such
financial reports will be on a consolidated basis to the extent the
accounts of First Coastal and its subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission. To the
extent such reports or communications are not otherwise available to the
public, the Representatives will keep such information confidential
(unless otherwise agreed by First Coastal) and will not disseminate such
information.
(k) Compliance with Securities Laws. During any period when the
Underwriter is engaged in sales efforts relating to the Securities or when
a Prospectus is required to be delivered in connection with the
distribution of the Securities, the Offerors will comply, so far as they
are able and at their own expense, with all requirements imposed upon them
by the Securities Act and the Exchange Act and the Securities Act
Regulations and the Exchange Act Regulations of the Commission promulgated
under such statutes, including, without limitation, Regulation M under the
Exchange Act, so far as necessary to permit the continuance of sales of or
dealing in the Securities during such period in accordance with the
provisions hereof and the Prospectus.
(l) Lock-Up Agreement. Except as may be necessary or reasonably
desirable in order to comply with the requirements of appropriate banking
regulators, neither First Coastal, the Trust, the Bank nor any of their
subsidiaries will, for a period
17
of fifteen (15) months following the date hereof, without the written
consent of the Representatives, offer for sale, sell or contract to sell,
grant any option for the sale or otherwise issue or dispose of, directly
or indirectly, or announce the offering of, any shares of common stock or
any shares of preferred stock, or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, shares
of common stock or preferred stock, of First Coastal, the Trust, the Bank
or any of their subsidiaries, except for (i) the issuance of the
Securities hereunder, (ii) the issuance of Common Shares upon conversion
of the outstanding shares of the Series A 10% Cumulative Convertible
Preferred Stock (the "Series A Preferred"), (iii) the issuance of Common
Shares pursuant to the exercise of First Coastal options or warrants
outstanding on the date hereof, (iv) the issuance of stock options
pursuant to First Coastal's 1996 Stock Option Plan, as it may be amended
from time to time, in an amount equal to or less than those issued in
fiscal year 1998 through the date of this Agreement, and (v) the issuance
to Xxxxxxx X. Xxxxxx of up to 8,000 stock options pursuant to his
employment agreement with First Coastal.
(m) Transfer Agent. Prior to the Initial Closing Date, the Offerors
shall retain as a transfer agent for the Common Shares and the Preferred
Securities U.S. Stock Transfer Corporation. So long as any of the
Securities are outstanding, the Offerors shall continue to maintain a
transfer agent, which may be either U.S. Stock Transfer Corporation or a
replacement transfer agent selected by the Offerors and reasonably
acceptable to the Representatives. The Representatives consent to the
appointment of Wilmington Trust Company as the transfer agent for the
Preferred Securities when the Preferred Securities may be traded
separately from the Common Shares.
(n) Redemptions and Dividends. Neither Offeror will acquire any of
its capital stock prior to any Closing Date nor will any Offeror declare
or pay any dividend or make any other distribution upon its capital stock
payable to the shareholders of record on a date between the date hereof
and any Closing Date, except as disclosed in the Prospectus and except for
regular cash dividends on First Coastal's Series A Cumulative Convertible
Preferred Stock.
(o) Use of Proceeds. The Trust will apply the net proceeds from the
sale of the Preferred Securities and First Coastal will apply the net
proceeds from the sale of the Common Shares and the Junior Subordinated
Debentures for the purposes set forth under "Use of Proceeds" in the
Preliminary Prospectus and the Prospectus.
(p) Fees and Commissions. Neither Offeror will incur any liability
for any finder's or broker's fee or agent's commission in connection with
the execution and delivery of this Agreement or any other Operative
Document or the consummation of the transactions contemplated hereby and
thereby.
(q) Representatives' Warrants. Simultaneously with the purchase and
payment by the Underwriters of the Units on the Initial Closing Date,
First Coastal shall sell, at a price of $0.001 per warrant, and issue and
deliver to the Representatives 16,500 warrants, in the form attached to
this Agreement as Exhibit A (the "Representatives' Warrants"), to purchase
an aggregate of 16,500 shares of First
18
Coastal common stock (equal to five percent of the number of Units
purchased by the Underwriters on the Initial Closing Date) at a price per
share equal to the greater of (i) 120% of the initial public offering
price per share allocated to the Common Shares and (ii) $9.00. The
Representatives' Warrants will be not be exercisable for the first year
following the Initial Closing Date, and shall thereafter be exercisable
for four years.
(r) Application to Nasdaq. Following the Closing Date, First Coastal
shall use its best efforts to meet the minimum corporate governance
requirements for quotation of the Units, the Common Shares and the
Preferred Securities on the Nasdaq SmallCap Market. If and when First
Coastal meets such requirements and the other requirements for quotation,
First Coastal shall take such action, including the filing of required
applications and payment of required fees, to ensure that the Units, the
Common Shares and the Preferred Securities are included for quotation on
the Nasdaq SmallCap Market.
(s) Application for Secondary Market Exemptions. As of the first
date that First Coastal and its securities are eligible, First Coastal
will apply to the Department of Corporations of the State of California to
have the Units, the Common Shares and the Preferred Securities listed as
"Eligible Securities" for purposes of secondary market exemptions in the
State of California. First Coastal will take such other similar steps as
are reasonably necessary to obtain exemptions for secondary trading of the
Units, the Common Shares and the Preferred Securities in the State of
Arizona and other United States jurisdictions in which the securities
trade on the secondary market.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters under this Agreement are subject to the accuracy, as of the
date hereof and each Closing Date, of and compliance with all representations,
warranties and agreements of the Offerors contained herein, to the accuracy of
the statements of the Offerors made in any certificates delivered pursuant to
the provisions hereof, to the performance by the Offerors of their obligations
hereunder and to the following additional conditions:
(a) Registration Statement. The Registration Statement, including
any Rule 462(b) Registration Statement, shall be effective at the time of
execution of this Agreement. If required, the Prospectus that constitutes
a part of the Registration Statement and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within
the time period required by Rule 424(b) under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of
the Offerors or Representatives, shall be contemplated by the Commission;
and the Offerors shall have complied with any request of the Commission
for additional information (to be included in the Registration Statement
or the Prospectus or otherwise).
(b) No Untrue Statement or Omission. The Representatives shall not
have advised the Offerors that the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, contains an
untrue statement of fact which, in the
19
Representatives' opinion, is material, or omits to state a fact which, in
the Representatives' opinion, is material and is required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(c) Absence of Changes. Except as contemplated in the Prospectus,
since the respective dates as of which information is given in the
Prospectus, (i) neither First Coastal, the Trust nor the Bank shall have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transaction not in the ordinary course of
business, or declared or paid any dividends or made any distribution of
any kind with respect to its capital stock, (ii) there shall not have been
any change in the capital stock, or any material change in the short-term
or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase capital stock, of First Coastal,
the Trust or the Bank, and (iii) there shall not have been any material
adverse change, or development reasonably likely to result in a material
adverse change (whether or not arising from transactions in the ordinary
course of business), in the financial condition, earnings, business,
assets or results of operations of First Coastal, the Trust or the Bank,
that in the Representatives' judgment, makes it impractical or inadvisable
to offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) Opinion of Counsel to the Offerors. On each Closing Date, there
shall have been furnished to the Underwriters the opinion of Xxxxxxxx &
Xxxxxxxx, special counsel for the Offerors, dated such Closing Date and
addressed to the Underwriters, to the effect that:
(i) First Coastal has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of California, with full corporate power and authority to
conduct its business as described in the Prospectus. The Bank has
been duly organized and is validly existing as a national banking
association in good standing under the applicable laws with full
power and authority to conduct its business as described in the
Prospectus. All of the outstanding shares of capital stock of the
Bank have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned by First Coastal free and clear of
all liens, encumbrances, security interests and claims, except as
set forth in the Prospectus and 12 U.S.C. Section 55.
(ii) First Coastal is duly registered as a bank holding
company with the FRB under the BHC Act. The Bank is a member in good
standing of the FRS and is an institution with deposit accounts
insured by the FDIC to the fullest extent permitted by law. No
proceedings for the termination or revocation of First Coastal's
registration or the Bank's membership or insurance are, to the best
knowledge of such counsel, pending or threatened.
(iii) First Coastal's authorized equity capitalization is as
set forth in the Prospectus, and all of the issued and outstanding
shares of capital stock of First Coastal have been duly authorized
and validly issued and are fully paid and nonassessable. The Common
Shares offered hereby have been duly and validly authorized and,
when issued and delivered to and paid for by the
20
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable and free and clear of all liens, security interests,
claims and encumbrances and restrictions on transfer. Except as
otherwise stated in the Prospectus, there are no preemptive rights
or other rights to subscribe for or to purchase, or any restriction
upon the voting or transfer of, any shares of capital stock of First
Coastal pursuant to the Articles of Incorporation or Bylaws of First
Coastal or, to the knowledge of such counsel, any agreement or other
instrument to which First Coastal is a party or by which First
Coastal is bound. To the best knowledge of such counsel, neither the
offering nor the sale of the Securities gives or will give rise to
any rights for or relating to the registration of any shares of
capital stock or other securities of First Coastal (not including
the Securities) under the Securities Act that have not been
satisfied or waived prior to the date hereof. To the best knowledge
of such counsel, except as stated in the Prospectus, there are no
options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from First Coastal any shares of
capital stock of First Coastal.
(iv) Each of the Trust Agreement, the Guarantee Agreement and
the Indenture has been duly qualified under the 1939 Act.
(v) First Coastal has the full corporate power and authority
to execute and deliver each Operative Document to which it is a
party and to perform its obligations thereunder. Each of the
Operative Documents to which First Coastal is a party has been duly
authorized, executed and delivered by First Coastal, and each
Operative Document to which First Coastal is a party (other than
this Agreement) is a valid and legally binding obligation of First
Coastal enforceable in accordance with its terms, except to the
extent that enforcement may be limited by the Enforceability
Exceptions.
(vi) The Junior Subordinated Debentures have been duly
authorized, executed, authenticated, issued and delivered, are
entitled to the benefits of the Indenture, and constitute valid and
legally binding obligations of First Coastal enforceable in
accordance with their terms, except to the extent that enforcement
may be limited by the Enforceability Exceptions.
(vii) Under current U.S. federal income tax law, (A) the Trust
will be classified as a grantor trust and not as an association
taxable as a corporation; [(B) the Junior Subordinated Debentures
should be classified as indebtedness of First Coastal]; and (C) the
discussions in the Prospectus under "ERISA Considerations" and
"Certain Federal Income Tax Consequences" are fair and accurate
summaries of the matters addressed therein, based upon the
assumptions stated or referred to therein.
(viii) Neither the execution, delivery and performance of this
Agreement nor the consummation of any of the transactions
contemplated hereby, including, without limitation, the issuance,
sale and delivery of the Securities, will conflict with, result in a
breach or violation of, or constitute a
21
default under the Articles of Incorporation or Bylaws of First
Coastal or any other document filed as an exhibit to the
Registration Statement.
(ix) To the best knowledge of such counsel, no charge,
investigation, action, suit or proceeding before or by any
regulatory, administrative or governmental agency, arbitrator, body
or authority is pending or threatened that might affect the
performance of this Agreement or the consummation of the
transactions herein contemplated or, except as disclosed in the
Prospectus, that would or would be reasonably likely to have,
individually or in the aggregate, a material adverse effect upon the
financial condition, earnings, business, assets or results of
operations of First Coastal or the Trust; provided that in the case
of suits against AIB, such suits are limited to those originating in
Los Angeles County.
(x) All regulatory consents, authorizations, approvals, orders
and filings required to be obtained or made by First Coastal and the
Trust under the Federal laws of the United States and the laws of
the State of California for the issuance, sale and delivery of the
Securities by First Coastal and the Trust have been obtained or made
by First Coastal and the Trust.
(xi) Neither First Coastal nor the Trust is not an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or an
"investment adviser" within the meaning of the Investment Advisers
Act of 1940, as amended.
In rendering such opinion, as to matters of fact, to the extent they deem
proper, such counsel may rely on certificates of officers of First Coastal
and trustees of the Trust, concerning matters within the respective areas
of responsibility of any such officer and trustee, and of public
officials, all of which shall be attached to such opinion.
On each Closing Date, there shall also have been furnished to the
Underwriters a letter from such counsel to the effect that, in the course
of a review of the Registration Statement and the Prospectus, and
discussions with representatives of the Underwriters, the Offerors and
their accountants, considered in light of such counsel's understanding of
applicable law and experience gained under their practice, the
Registration Statement, as of its effective date, and the Prospectus, as
of its date, appeared on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and that nothing came to the attention of such
counsel during the course of its review that caused it to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as of its date or as of the Closing
Date, contained any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Such letter may state that (A) such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Statement or the Prospectus, except
for those made under the captions, "Description of
22
Capital Stock," "Description of Units," "Description of Preferred
Securities," "Description of Junior Subordinated Debentures," "Description
of Guarantee and Expense Agreement" and "Relationship Among Preferred
Securities, Junior Subordinated Debentures, Guarantee and Expense
Agreement," to the extent they describe the terms of securities or
agreements referenced therein, and "Underwriting" to the extent it
describes the terms of this Agreement, and (B) such counsel does not
express any opinion or belief as to the financial data contained in the
Registration Statement or Prospectus. Such counsel shall also state that,
to the best knowledge of such counsel, no action prohibiting the use of
the Prospectus or any amendment thereof or supplement thereto or
suspending the public offering of the Securities has been taken by the
Commission or any other regulatory authority, and no proceedings for that
purpose have been instituted or threatened.
(e) Opinion of Special Delaware Counsel to the Offerors. On each
Closing Date, there shall have been furnished to the Underwriters the
opinion of Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel for
the Offerors, dated such Closing Date and addressed to the Underwriters,
to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust
Act and, under the Trust Agreement and the Delaware Business Trust
Act, has the trust power and authority to conduct its business as
described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of First Coastal and the Administrators thereunder, and is
enforceable against First Coastal and the Administrators in
accordance with its terms, except to the extent that enforcement may
be limited by (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws relating to or affecting the rights and remedies
of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether
considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability
of provisions relating to indemnification or contribution.
(iii) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery of this Agreement by the
Trust, and the performance by the Trust of its obligations
hereunder, have been authorized by all requisite trust action on the
part of the Trust.
(iv) The Preferred Securities have been duly authorized by the
Trust Agreement. The Preferred Securities, when duly issued in
accordance with the Trust Agreement and delivered against payment
thereof in accordance with the Trust Agreement and this Agreement,
will be validly issued and, subject to the qualifications set forth
herein, fully paid and nonasssessable undivided beneficial interests
in the assets of the Trust and will entitle the Preferred Security
holders to the benefits of the Trust Agreement. The Preferred
Security holders, as beneficial owners of the Trust, will be
entitled to
23
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 that the Preferred
Security holders may be obligated, pursuant to the Trust Agreement,
(i) to provide indemnity and security in connection with and pay
taxes or government charges arising from the transfer of
certificates evidencing the Preferred Securities (the "Preferred
Securities Certificates") and the issuance of replacement Preferred
Security Certificates, and (ii) to provide security and indemnity in
connection with requests of or directions to the Property Trustee to
exercise its rights and powers under the Trust Agreement. The forms
of certificates to evidence the Preferred Securities and Trust
Common Securities comply with the Trust Agreement and comply with
all applicable requirements, if any, of the Delaware Business Trust
Act.
(v) The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued undivided beneficial
interests in the assets of the Trust and are entitled to the
benefits of the Trust Agreement.
(vi) The issuance of the Preferred Securities and the Trust
Common Securities is not subject to pre-emptive rights under the
Trust Agreement or the Delaware Business Trust Act.
(vii) The issuance and sale by the Trust of the Preferred
Securities and the Trust Common Securities, the execution, delivery
and performance by the Trust of this Agreement, and the consummation
of the transactions contemplated by this Agreement, do not violate
the Trust Agreement or any applicable Delaware law, rule or
regulation.
(f) Opinion of Counsel to the Underwriters. On each Closing Date,
there shall have been furnished to the Underwriters such opinion or
opinions from Xxxxxx, Xxxxxx & Xxxxx LLP, dated such Closing Date and
addressed to the Underwriters, with respect to such matters as the
Underwriters may reasonably require, and the Offerors shall have furnished
to such counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(g) Certificates. On each Closing Date, there shall have been
furnished to the Underwriters certificates, dated such closing date,
signed by the Chairman, President and Chief Executive Officer and the
Executive Vice President, Chief Financial Officer and Secretary of First
Coastal, and by each of the Administrators of the Trust, to the effect
that each has carefully examined the Registration Statement, the
Preliminary Prospectus, the Prospectus (including any amendment thereof or
supplement thereto), this Agreement and the other Operative Documents and
that:
(i) The representations and warranties of the Offerors in this
Agreement are true and correct on and as of the date of such
certificate, with the same force and effect as if made on the date
of such certificate, and the Offerors have complied with all the
agreements and satisfied all the conditions on their part to be
performed or satisfied at or prior to such date;
24
(ii) No action prohibiting the use of the Prospectus or any
amendment thereof or supplement thereto or suspending or prohibiting
the public offering of the Securities has been taken by the
Commission or any other body or authority, and no proceedings for
such purposes have been instituted or, to such officers' knowledge,
threatened; and
(iii) As of its respective dates, the Registration Statement
and the Prospectus, and each amendment thereof and supplement
thereto, conform or will conform in all material respects with all
applicable requirements of the Commission and neither the
Registration Statement nor the Prospectus (including any amendment
thereof and supplement thereto) contains any untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
since the date of the Prospectus, there has occurred no event
required to be set forth in an amendment of or supplement to the
Registration Statement or the Prospectus in order to prevent the
Registration Statement or the Prospectus from containing any untrue
statement of a material fact or from omitting to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading which has not been so set forth; since the
respective dates as of which information is given in the Prospectus,
except as disclosed in the Prospectus, there has been no material
adverse change, or development involving a prospective material
adverse change, in the financial condition, earnings, business,
assets or results of operations of First Coastal, the Trust or the
Bank, whether or not arising from transactions in the ordinary
course of business, neither First Coastal, the Trust nor the Bank
has incurred any material liabilities or obligations, direct or
contingent, or entered into any material transaction not in the
ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock,
and there has not been any change in the capital stock, or any
material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to
purchase capital stock, of First Coastal, the Trust or the Bank, and
except as disclosed in the Prospectus, there is not pending, or, to
the knowledge of such officers and trustees, threatened or
contemplated, any action, suit or proceeding to which First Coastal,
the Trust or the Bank is a party, or, to the knowledge of such
officers and trustees, to which First Coastal, the Trust or the Bank
is reasonably likely to be made a party, before or by any court or
governmental agency, authority or body, or any arbitrator, which
might result in any material adverse change in the financial
condition, earnings, business, assets or results of operations of
First Coastal, the Trust or the Bank.
(h) Accountants' Comfort Letter. At the time of the execution of
this Agreement, the Underwriters shall have received from Vavrinek, Trine,
Day & Co. LLP a letter, dated such date, in form and substance reasonably
satisfactory to the Underwriters, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements
25
and certain financial information of First Coastal and AIB contained in
the Prospectus.
(i) Bring-down Comfort Letter. At each Closing Date, the
Underwriters shall have received from Vavrinek, Trine, Day & Co. LLP a
letter, dated as of such Closing Date, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (h) of
this Section, except that the specified date referred to shall be a date
not more than three business days prior to such Closing Date.
(j) NASD Review. At the date of this Agreement and at each Closing
Date, the NASD, upon review of the terms of the public offering of the
Securities, shall not have objected to such offering, such terms or the
Underwriters' participation in such offering.
(k) Blue Sky Qualifications. The Securities will be qualified in
such states as the Representatives may reasonably request and each such
qualification shall be in effect and not subject to any stop order or
other proceeding on any Closing Date.
(l) Lockup Letters. The Representatives shall have received from
each person who is an executive officer or director of First Coastal
and/or the Bank and from each person owning five percent or more of any
class of First Coastal's capital stock a written agreement, in the form
attached hereto as Exhibit B, to the effect that such person will not, for
a period of fifteen (15) months following the date hereof, without the
written consent of the Representatives, offer for sale, sell or contract
to sell, grant any option for the sale or otherwise dispose of, directly
or indirectly, or announce the disposition of, any shares of common stock
or any shares of preferred stock, or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, shares
of common stock or preferred stock, of First Coastal, the Trust or the
Bank.
(m) Acquisition of AIB. The acquisition of AIB by First Coastal
shall have been approved by the shareholders of AIB, First Coastal shall
have received all required bank regulatory approvals, and all other
conditions precedent to each party's obligations to consummate the
acquisition of AIB by First Coastal and shall have been satisfied or
waived in writing. The AIB acquisition agreement shall have been duly
amended to change the January 15, 1999 financing deadline to February 28,
1999 and shall not have been terminated by either party, or otherwise
amended in any material respect.
(n) Reverse Stock Split. First Coastal shall have effected a
one-for-five reverse split of its outstanding Common Shares.
(p) Conversion Agreement. First Coastal shall have entered into a
Conversion Agreement with Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx
Xxxxxxxx and Xxxx Xxxxxxx Xxxxx obligating each to convert all shares of
Series A Preferred held by them on or before the Initial Closing Date, and
such agreements shall remain in full force and effect.
26
(q) Subscription Agreement. California Community LLC shall have
entered into a Subscription Agreement with First Coastal obligating it to
exercise all warrants to purchase First Coastal common stock held by it on
or before the closing of the AIB acquisition and such agreement shall
remain in full force and effect as of each Closing Date.
(r) Further Assurances. On or prior to each Closing Date, the
Offerors shall have furnished to the Underwriters and their counsel such
further information, certificates and documents as the Underwriters or
their counsel or they may reasonably request.
7. REPRESENTATIVES' EXPENSES.
(a) Expense Allowance. At the Initial Closing Date, First Coastal shall
pay the Representatives for their expenses incurred in connection with the
Offering, on a non-accountable basis, an amount equal to $160,000 less $25,000
advanced by First Coastal to the Representatives prior to the Initial Closing
Date. Such expense allowance may be deducted by the Representatives from the
amount due to First Coastal for the purchase of Common Shares pursuant to
Section 2(a) hereof. Nothing in this Section 7(a) shall reduce or otherwise
affect the obligation of First Coastal to pay the expenses described in Section
5(h), including expenses that may be incurred by the Representatives or their
counsel on behalf of First Coastal.
(b) Reimbursement of Representatives' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof (other than
Section 6(j) or 6(k)) is not satisfied, or because of termination of this
Agreement pursuant to Section 10 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 other than by reason of a default by the Underwriters,
First Coastal will reimburse the Representatives upon demand for all
out-of-pocket expenses (including, without limitation, all reasonable fees and
disbursements of Underwriter's counsel) that shall have been incurred by them in
connection with the preparation of this Agreement and the proposed placement and
sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of Underwriters. The Offerors agree jointly and
severally to indemnify and hold harmless the Underwriters and each person who
controls any Underwriter within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, the Registration Statement, any statement or
communication issued by either of the Offerors in connection with the offering
of the Securities, or in the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not
27
misleading, and agree to reimburse promptly each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Offerors will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Offerors by the
Representatives on behalf of the Underwriters specifically for use in connection
with the preparation thereof, and (ii) such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities that are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the confirmation of the
sale of such Securities to such person and the untrue statement or omission or
alleged untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
(b) Indemnification of Offerors. Each Underwriter severally and not
jointly agrees to indemnify and hold harmless the Offerors, each of their
directors, officers and Administrators, and each person who controls an Offeror
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Prospectus, the
Registration Statement, any statement or communication issued by either of the
Offerors in connection with the offering of the Securities, or in the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Preliminary Prospectus, the Registration Statement, any statement or
communication issued by the Offerors in connection with the offering of the
Securities, or in the Prospectus, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information related to
the Underwriter furnished to the Offerors by the Representatives specifically
for use in the preparation of the documents referred to in the foregoing
indemnity, and will reimburse the Offerors and any such controlling persons for
any legal or other expenses reasonably incurred by the Offerors or any such
controlling person in connection with investigating or defending against any
such loss, claim, liability or action. This indemnity agreement will be in
addition to any liability which the Underwriters may otherwise have. The
Offerors acknowledge that the statements set forth in the [____] paragraph under
the heading "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter for inclusion in any of
the documents referred to in the foregoing indemnity, and the Underwriters
confirm that such statements are correct.
(c) Procedures. Promptly after receipt by an indemnified party (including
any controlling person) under this Section 8 of notice of the commencement of
any action, such
28
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified part, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such action
and approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified party under such
paragraph (a) who are parties to such action), (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, or (iii) the indemnifying party has authorized the
employment of separate counsel for the indemnified party at the expense of the
indemnifying party, and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Any indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 8 to which it has not agreed
in writing.
(d) Contribution. In order to provide for just and equitable contribution
in circumstances under which the indemnification provided for in this Section 8
is for any reason insufficient to hold harmless, or is held to be unavailable 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
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to provide notice
in accordance with subsection (c) above, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors, on the one hand, and the Underwriters, on
the other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant considerations. The relative benefits received by the Offerors on the
one hand and the Underwriters on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
29
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Offerors and the total commission received by the Underwriters in this
offering, bear to the aggregate initial offering price of the Securities. The
relative fault of the Offerors, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Offerors, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Offerors and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 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 or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each officer, director and Administrator
of an Offeror, and each person, if any, who controls an Offeror within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Offeror. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the number of Securities set forth opposite their respective names
in Schedule I hereto and not joint.
9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of the
Underwriters shall fail at any Closing Date to purchase the Securities which it
or they are obligated to purchase under this Agreement at such Closing Date (the
"Defaulted Securities"), the Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other Underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Underwriters shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of Securities to be purchased hereunder, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective purchasing obligations hereunder bear to
30
the purchasing obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Securities to be purchased hereunder, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default. In the event of any such
default which does not result in a termination of this Agreement, either the
Underwriters or the Offerors shall have the right to postpone the Closing Date
for a period not exceeding seven days in order to effect any required changes in
the Prospectus or in any other documents or arrangements. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 9.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Offerors at
any time prior to the Closing Date, if prior to such time (a) a banking
moratorium shall have been declared either by Federal or California State
authorities or (b) there shall have occurred any outbreak or material escalation
of major hostilities in which the United States is involved or other substantial
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the Representatives' judgment, impracticable to
proceed with the completion of the sale of and the payment for the Securities.
Any termination of this Agreement pursuant to this Section 10 shall be without
liability of any party to any other party, except as specified in Section 7 and
except that the provisions of Section 8 hereof shall be effective at all times.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities, and other statements of the Offerors
and their officers and trustees and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Underwriters or the Offerors or
any of the officers, trustees, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment of the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing, effective
only on receipt, and addressed as follows: (i) if to the Offerors, First Coastal
Bancshares, 000 Xxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxx X.
Xxxxxxxx, with a copy to Xxxxxxxx & Xxxxxxxx, 1888 Century Park East, Los
Angeles, California 90067, Attention: Xxxxxxx X. Xxxxxx; and (ii) if to the
Representatives, Peacock, Hislop, Xxxxxx & Given, Inc., 0000 Xxxxx 00xx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Managing
Director, and Wedbush Xxxxxx Securities Inc., 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Managing
Director, with a copy to Xxxxxx, Xxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. X'Xxxxxxxx, or in any case to
such other address as the person to be notified may have requested in writing.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors and controlling persons referred to in Section 8 hereof. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the
31
preceding sentence any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person.
14. APPLICABLE LAW. This Agreement will be governed by and construed and
enforced in accordance with the laws of the State of California.
15. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
in various counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument. This Agreement may also
be executed either manually or by facsimile, and both types of signatures shall
be of equal force and effect.
16. AGREEMENT SUPERSEDES. This Agreement shall supersede all prior
agreements and understandings between the parties respecting the subject matter
hereof. This Agreement may not be changed or terminated orally by or on behalf
of any party.
17. HEADINGS. The Section and paragraph headings in this Agreement are
provided for convenience only and will not affect the construction or
interpretation of this Agreement.
32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among First
Coastal, the Trust and the Underwriters.
Very truly yours,
FIRST COASTAL BANCSHARES
By:
---------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
FIRST COASTAL CAPITAL TRUST
By: First Coastal Bancshares,
as Depositor
By:
---------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX, HISLOP, XXXXXX & GIVEN, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
WEDBUSH XXXXXX SECURITIES INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
For themselves and as Representatives
of the Underwriters named in
Schedule I hereto
33
SCHEDULE I
Number of Firm Number of Option
Units to be Units to be
Underwriter Offered for Sale Offered for Sale
----------- ---------------- ----------------
Peacock, Xxxxxx, Xxxxxx & Given, Inc. 150,000 15,000
Wedbush Xxxxxx Securities Inc. 150,000 15,000
------- ------
Total 300,000 30,000
34
EXHIBIT A
Form of Representatives' Warrant
35
EXHIBIT B
Form of Lock-Up Agreement
