Exhibit 1.1
[__________] SHARES
COASTAL BANCORP, INC.
__% SERIES A CUMULATIVE PREFERRED STOCK
PURCHASE AGREEMENT
__________ __, 1999
U.S. BANCORP XXXXX XXXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
c/o U.S.Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
Coastal Bancorp, Inc. (the "Company"), a Texas corporation, proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of [__________] shares (the "Firm Shares") of __%
Series A Cumulative Preferred Stock, liquidation value $25.00 per share (the
"Securities") of the Company.
The Company hereby confirms that the Firm Shares consist of authorized
but unissued shares of preferred stock to be issued and sold by the Company. The
Company hereby confirms its agreement with respect to the sale of the Securities
to the several Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form S-3 (File No. 333-___________) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission; one or more amendments to such registration statement have also been
so prepared and have been, or will be, so filed; and, if the Company has elected
to rely upon Rule 462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant
to Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is
or was declared effective by the Commission, and, in the event of any amendment
thereto after the effective date and prior to the Closing Date (as hereinafter
defined), such registration statement as so amended (but only from and after the
effectiveness of such amendment), including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations increasing the size
of the offering registered under the Act and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission is hereinafter
called the "Prospectus," except that if any prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations provided by
the Company for use with a prospectus subject to completion within the meaning
of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to the Underwriters by the Company for use in connection
with the offering of the Securities (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Underwriters by the Company for such
use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company, represents and warrants to, and agrees with,
the several Underwriters as follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, 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; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by any
Underwriter specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or
any post-effective amendment thereto, including a registration
statement, if any, filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the
Act) is or was declared effective by the Commission, upon the filing or
first delivery to the Underwriters of the Prospectus (or any supplement
to the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the Closing Date (as
hereinafter defined), (A) the Registration Statement and Prospectus (in
each case, as so amended and/or supplemented) conformed or will conform
in all material respects to the requirements of the Act and the Rules
and Regulations, (B) the Registration Statement (as so amended) did not
or will not include
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an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented) did
not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they are or were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to
the Company by any Underwriter specifically for use in the preparation
thereof. If the Registration Statement has been declared effective by
the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened
by the Commission.
(iii) The financial statements of the Company,
together with the notes thereto, incorporated by reference in the
Registration Statement and Prospectus comply in all material respects
with the requirements of the Act and fairly present the financial
condition of the Company as of the dates indicated and the results of
operations and changes in cash flows for the periods therein specified
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein); and the supporting schedules incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein. No other financial statements or
schedules are required to be included or incorporated by reference in
the Registration Statement or Prospectus. KPMG LLP, which has expressed
its opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and incorporated by
reference in the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the Rules and
Regulations.
(iv) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, condition (financial
or otherwise) property, prospects, net worth or results of operations
of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect").
(v) Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock except for
regular dividends paid on the Company's common stock and the Series B
Preferred Stock of Coastal Banc ssb; and there has not been any change
in the capital stock (other than a change in the number of outstanding
shares of common stock due to the issuance of shares upon the exercise
of outstanding options or warrants), 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 the capital stock,
of the Company or any
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of its subsidiaries, or any change having a Material Adverse Effect,
or any development involving a prospective change having a Material
Adverse Effect.
(vi) Except as set forth in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in a Material Adverse Effect.
(vii) There are no contracts or documents of the
Company or any of its subsidiaries that are required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been so filed.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal
and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally or of depositary
institutions the accounts of which are insured by the Federal Deposit
Insurance Corporation ("FDIC") and subject to general principles of
equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any agreement or instrument
to which the Company is a party or by which it is bound or to which any
of its property is subject, the Company's charter or by-laws, or any
order, rule, regulation or decree of any court or governmental agency
or body having jurisdiction over the Company or any of its properties
except for such statute, agreement instrument, order, rule, regulation
or decree the breach or violation of which will not have Material
Adverse Effect; no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as may
be required under the Act or state securities or blue sky laws; and the
Company has full corporate power and authority to enter into this
Agreement and to authorize, issue and sell the Securities as
contemplated by this Agreement.
(ix) All of the issued and outstanding shares of
capital stock of the Company are duly authorized and validly issued,
fully paid and nonassessable, have been issued in material compliance
with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities; the Securities which may be sold
hereunder by the Company have been duly authorized and, when issued,
delivered and paid for in accordance with the terms hereof, will have
been validly issued and will be fully paid and nonassessable; and the
capital structure of the Company conform to the descriptions thereof in
the Registration Statement and Prospectus. Except as otherwise stated
in the Registration Statement and 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 Securities pursuant to
the Company's charter, by-laws or any agreement or other instrument to
which the Company is a party or by which the Company is bound. Neither
the filing of the Registration Statement nor the offering or sale of
the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of the Securities or
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other securities of the Company. All of the issued and outstanding
shares of capital stock of each of the Company's subsidiaries have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise described in the Registration
Statement and Prospectus and except for any directors' qualifying
shares, the Company owns of record and beneficially, free and clear of
any security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
Except as described in the Registration Statement and the Prospectus,
there are no options, warrants, agreements, contracts or other rights
in existence to purchase or acquire from the Company or any subsidiary
of the Company any shares of the capital stock of the Company or any
subsidiary of the Company.
(x) The Company and each of its subsidiaries each
holds, and is operating in compliance with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders of any governmental or self-regulatory body required for the
conduct of its business except where such failure to be in such
compliance would have a Material Adverse Effect, and all such
franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect except where the failure to be in full force and effect would
not have a Material Adverse Effect; and the Company and each of its
subsidiaries is in compliance with all applicable federal, state, local
and foreign laws, regulations, orders and decrees, except where such
failure to be in such compliance would have a Material Adverse Effect.
(xi) The Company and its subsidiaries each has good
and marketable title to all property described in the Registration
Statement and Prospectus as being owned by them, in each case free and
clear of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and the
Prospectus and except where the existence of any such liens, claims,
security interest or encumbrance would not materially interfere with
the use made or proposed to be made of such property; the property held
under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company or its
subsidiaries; the Company and each of its subsidiaries each owns or
possesses, and is each operating in compliance in all material respects
with, all patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and rights required to
conduct the business of the Company and its subsidiaries as currently
carried on and as described in the Registration Statement and
Prospectus; except as stated in the Registration Statement and
Prospectus, no name which the Company or any of its subsidiaries uses
and no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any infringement of, or
license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service
xxxx registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others material to the business or prospects of
the Company and neither the Company nor any of its subsidiaries has
received any notice alleging any such infringement or fee.
(xii) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or
other instrument
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to which it is subject or by which any of them may be bound, or to
which any of the material property or assets of the Company or any of
its subsidiaries is subject.
(xiii) The Company and its subsidiaries have each
filed all federal, state, local and foreign income and franchise tax
returns required to be filed and are not in default in the payment of
any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or
any of its subsidiaries is contesting in good faith.
(xiv) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to
be distributed by the Company.
(xv) The Firm Shares, upon issuance, delivery and
payment therefor in the manner described herein, will be duly
authorized, validly issued, fully paid and non-assessable and will
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(xvi) The Securities have been conditionally approved
for listing on the Nasdaq National Market and, on the date the
Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other applicable form under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
became or will become effective.
(xvii) Other than Coastal Banc ssb,
[_______________], the Company owns no capital stock or
other equity or ownership or proprietary interest in any
corporation, partnership, association, trust or other entity.
(xviii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xix) Other than as contemplated by this Agreement,
the Company has not incurred any liability for any finder's or broker's
fee or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
(xx) The Company and each of its subsidiaries are in
compliance in all material respects with all laws applicable to it
which are administered by and regulations of the Federal Reserve Board,
the FDIC, the Office of Thrift Supervision, the Texas Savings and Loan
Department and any other federal or state bank regulatory authority
with jurisdiction over the Company or any of its subsidiaries (the
"Bank Regulatory Authorities"), other than where such failures to
comply would not have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries is a party to
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any written agreement or memorandum of understanding with, or a party
to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of, any Bank Regulatory Authority which restricts materially
the conduct of its business, or in any matter relates to its capital
adequacy, its credit policies or its management, nor have any of them
been advised by any Bank Regulatory Authority that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing
or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or
similar submission, or any such board resolutions.
(xxii) Neither the Company nor any of its
subsidiaries is an "investment company" within the meaning of such term
under the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell [_______________] Firm Shares to the
several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto. The purchase price for each Firm Share
shall be $[______] per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of Firm Shares (to be adjusted
by the Underwriters to avoid fractional shares) which represents the same
proportion of the number of Firm Shares to be sold by the Company pursuant to
this Agreement as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto represents to the total number of Firm Shares
to be purchased by all Underwriters pursuant to this Agreement. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraph (b) of this Section 3 and in Section 8 hereof, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you
against payment of the purchase price therefor by certified or official bank
check or other same day funds payable to the order of the Company, at the
offices of U.S. Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities are
priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m. Eastern time, the fourth) full business day following the date hereof, or
at such other time and date as you and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, such time and date of delivery being herein
referred to as the "Closing Date." If the Underwriters so elect, delivery of the
Firm Shares may be made by credit through full fast transfer to the accounts at
The Depository Trust Company designated by the Underwriters. Certificates
representing the Firm Shares, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days'
prior notice to the Company, will be made available for checking and packaging
not later than 10:30 a.m., Central time, on the business day next preceding the
Closing Date at the
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offices of U.S. Bancorp Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable.
(b) It is understood that you may each (but shall not be
obligated to) make payment to the Company, on behalf of any other Underwriter
for the Securities to be purchased by such Underwriter. Any such payment by you
shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company.
4. COVENANTS.
The Company covenants and agrees with the several Underwriters
as follows:
(a) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you promptly
of the time when the Registration Statement or any post-effective amendment to
the Registration Statement has become effective or any supplement to the
Prospectus (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus (or term
sheet within the meaning of Rule 434 of the Rules and Regulations) containing
the information omitted therefrom pursuant to Rule 430A of the Rules and
Regulations with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the Commission within
the time period required by, and otherwise in accordance with the provisions of,
Rule 462(b); the Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, may be necessary or advisable in
connection with the distribution of the Securities by the Underwriters; and the
Company will not file any amendment or supplement to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to the
filing.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose; and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(c) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations) relating
to the Securities is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by the Act, as
now and hereafter amended, and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales
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of or dealings in the Securities as contemplated by the provisions hereof and
the Prospectus. If during such period any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus to
comply with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so long as
required for the distribution of the Securities, except that the Company shall
not be required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(e) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments and
supplements (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to such documents, in each case as soon as available and
in such quantities as you may from time to time reasonably request.
(f) During a period of five years commencing with the date
hereof, the Company will furnish to the Underwriters copies of all periodic and
special reports furnished to the stockholders of the Company, and all
information, documents and reports filed with the Commission, the National
Association of Securities Dealers, Inc., Nasdaq or any securities exchange.
(g) The Company will make generally available to the holders
of the Securities as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning after
the effective date of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
under the provisions of Section 9(a) hereof or is terminated, will pay or cause
to be paid (i) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (ii) all expenses and fees (including, without
limitation, fees and expenses of the Company's accountants and counsel but,
except as otherwise provided below, not including fees of the Underwriters'
counsel) in connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the Securities,
each Preliminary Prospectus, the Prospectus, and any amendment thereof or
supplement thereto, and the printing, delivery, and shipping of this Agreement
and other underwriting documents, including Blue Sky Memoranda, (iii) all filing
fees and fees and disbursements of the Underwriters' counsel incurred in
connection with the qualification of the Securities for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of the states
and other jurisdictions which you shall designate in accordance with Section
4(d) hereof, (iv) the fees and expenses of any transfer agent or registrar, (v)
the filing fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities, (vi)
listing fees, if any, and (vii) all other costs and expenses incident to the
performance of its
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obligations hereunder that are not otherwise specifically provided for herein.
If the sale of the Securities provided for herein is not consummated by reason
of action by the Company pursuant to Section 9(a) hereof which prevents this
Agreement from becoming effective, or by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the Company
will reimburse the several Underwriters for all out-of-pocket disbursements
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder. The
Company shall not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
(i) The Company will apply the net proceeds from the sale of
the Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission with respect to the
sale of the Securities and the application of the proceeds therefrom as may be
required in accordance with Rule 463 of the Rules and Regulations.
(j) The Company will not, without your prior written consent,
offer for sale, sell, contract to sell, grant any option for the sale of or
otherwise issue or dispose of any Securities or any securities convertible into
or exchangeable for, or any options or rights to purchase or acquire,
Securities, except to the Underwriters pursuant to this Agreement for a period
of 180 days after the commencement of the public offering of the Securities by
the Underwriters.
(k) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities, and has not effected any sales of securities of the Company
which are required to be disclosed in response to Item 701 of Regulation S-K
under the Act which have not been so disclosed in the Registration Statement.
(l) The Company will not 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 the consummation of the transactions contemplated
hereby.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at the Closing Date (as if made at such Closing Date), of and
compliance with all representations, warranties and agreements of the Company
contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Central time, on the date of this Agreement, or such later
time and date as the Underwriters shall approve and all filings required by
Rules 424, 430A and 434 of the Rules and Regulations shall have been timely
made; no stop order suspending the effectiveness of the Registration Statement
or any amendment thereof shall have been issued; no proceedings for the issuance
of such an order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to your
satisfaction.
10
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital stock
except for regular dividends paid on the Company's common stock and Series B
Preferred Stock of Coastal Bank ssb; and there shall not have been any change in
the capital stock (other than a change in the number of outstanding shares of
common stock due to the issuance of shares upon the exercise of outstanding
options or warrants), or any material change in the short-term or long-term debt
of the Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any of its
subsidiaries, or any change having a Material Adverse Effect or any development
involving a prospective change having a Material Adverse Effect.
(d) On the Closing Date, there shall have been furnished to
the several Underwriters the opinion of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.,
special counsel for the Company, dated such Closing Date and addressed to you,
to the effect that:
(i) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and, to the best of such counsel's knowledge, is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which it owns or leases real property
or in which the conduct of its business makes such qualification
necessary except where the failure to so qualify would not have a
Material Adverse Effect.
(ii) The capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus
under the caption "Capitalization." All of the issued and outstanding
shares of the capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. The Securities
to be issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in accordance with
the terms of this Agreement, will have been validly issued and will be
fully paid and nonassessable. Except as otherwise stated in the
Registration Statement and 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 of the Securities pursuant to the
Company's charter or by-laws or, to the best of such counsel's
knowledge, any agreement or other instrument to which the Company is a
party or by which the Company is bound. To the best of such counsel's
knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any
shares of common stock or other securities of the Company.
11
(iii) All of the issued and outstanding shares of
capital stock of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable,
and, to the best of such counsel's knowledge, except as otherwise
described in the Registration Statement and Prospectus or in the
documents incorporated therein by reference and except for directors'
qualifying shares, the Company owns of record and beneficially, free
and clear of any security interests, claims, liens, proxies, equities
or other encumbrances, all of the issued and outstanding shares of such
stock. To the best of such counsel's knowledge, except as described in
the Registration Statement and Prospectus or in the documents
incorporated therein by reference, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or
acquire from the Company or any subsidiary any shares of the capital
stock of the Company or any subsidiary of the Company.
(iv) The Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or,
to the knowledge of such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present in all
material respects such statutes, legal and governmental proceedings,
contracts and other documents; and to the best of such counsel's
knowledge, there are no statutes or legal or governmental proceedings
required to be described in the Prospectus that are not described
therein or in the documents incorporated therein by reference as
required, or to the best of such counsel's knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or filed as exhibits to the
Registration Statement that are not described therein or in the
documents incorporated therein by reference or filed as exhibits as
required.
(vi) The Company has full corporate power and
authority to enter into this Agreement, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally or
depositary institutions the accounts of which are insured the FDIC and
subject to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule or regulation, any agreement or instrument known to such
counsel to which the Company is a party or by which it is bound or to
which any of its property is subject, the Company's charter or by-laws
or, any order or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties (except for such statutes, agreements, instruments,
orders, rules, regulations or decrees the breach or violation of which
would not have a Material Adverse Effect); and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities
by the Company, except such as may be required under the Act or state
securities laws.
12
(vii) To the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws. To the best of such counsel's knowledge,
neither, the Company nor any of its subsidiaries is in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or
other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the
Company or any of its subsidiaries is subject.
(viii) The Registration Statement and the Prospectus,
and any amendment thereof or supplement thereto, comply as to form in
all material respects with the requirements of the Act and the Rules
and Regulations.
(ix) Such other matters as you may reasonably
request.
In rendering such opinion such counsel may rely (i) as to
matters of law other than federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that such opinion or opinions of local counsel
are satisfactory to them and that they believe they and you are justified in
relying thereon and (ii) as to matters of fact, to the extent such counsel deems
reasonable, upon certificates of officers of the Company and its subsidiaries
provided that the extent of such reliance is specified in such opinion.
(e) On the Closing Date, there shall have been furnished to
you, as Underwriters, the letter of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.,
special counsel for the Company, dated the Closing Date and addressed to you, to
the effect that on the basis of conferences with officers of the Company,
examination of documents referred to in the Registration Statement and
Prospectus and such other procedures as such counsel deemed appropriate, nothing
has come to the attention of such counsel that causes such counsel to believe
that the Registration Statement or any amendment thereof, at the time the
Registration Statement became effective and as of such Closing Date (including
any Registration Statement filed under Rule 462(b) of the Rules and
Regulations), 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 and as
of such Closing Date), as amended or supplemented, includes any untrue statement
of material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that such counsel need express no opinion as
to the financial statements, notes to financial statements, schedules or other
financial, statistical or accounting data included or incorporated by reference
in any of the documents mentioned in this clause.
(f) On the Closing Date, there shall have been furnished to
you, as Underwriters, the opinion of Xxxxx X. Xxxxxxx, Counsel to the Company,
dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly
13
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business makes such
qualification necessary except where the failure to so qualify would
not have a Material Adverse Effect.
(ii) The capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus
under the caption "Capitalization." All of the issued and outstanding
shares of the capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. The Securities
to be issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in accordance with
the terms of this Agreement, will have been validly issued and will be
fully paid and nonassessable. Except as otherwise stated in the
Registration Statement and 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 of the Securities pursuant to the
Company's charter or by-laws or any agreement or other instrument to
which the Company is a party or by which the Company is bound. Neither
the filing of the Registration Statement nor the offering or sale of
the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any shares of common
stock or other securities of the Company.
(iii) All of the issued and outstanding shares of
capital stock of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable,
and, except as otherwise described in the Registration Statement and
Prospectus or in the documents incorporated therein by reference and
except for directors' qualifying shares, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the
Registration Statement and Prospectus or in the documents incorporated
therein by reference, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the
Company or any subsidiary any shares of the capital stock of the
Company or any subsidiary of the Company.
(iv) The Company has full corporate power and
authority to enter into this Agreement, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally or
depositary institutions the accounts of which are insured the FDIC and
subject to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule or regulation, any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its
property is subject, the Company's charter or by-laws or any order or
decree of any court or governmental agency or body having jurisdiction
over the Company or any of their respective properties (except for such
statutes, agreements, instruments, orders, rules, regulations or
decreed the breach or violation of which would not have a Material
Adverse Effect); and no consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is required
for the execution, delivery and performance of this Agreement or for
the consummation of the transactions contemplated
14
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities laws.
(v) The Company and each of its subsidiaries holds,
and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business and all
such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect.
(vi) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws. Neither, the
Company nor any of its subsidiaries is in breach of or otherwise in
default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note, indenture, loan
agreement or any other material contract, lease or other instrument to
which it is subject or by which any of them may be bound, or to which
any of the material property or assets of the Company or any of its
subsidiaries is subject.
(vii) Such other matters as you may reasonably
request.
In rendering such opinion such counsel may rely as to matters
of law other than federal law, upon the opinion or opinions of local counsel
provided that the extent of such reliance is specified in such opinion and that
such counsel shall state that such opinion or opinions of local counsel are
satisfactory to them and that they believe they and you are justified in relying
thereon.
(g) On the Closing Date, there shall have been furnished to
the several Underwriters such opinion or opinions from Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, counsel for the several Underwriters, dated such Closing Date and
addressed to you, with respect to the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(h) On the Closing Date the several Underwriters shall have
received a letter of KPMG LLP, dated such Closing Date and addressed to you,
confirming that they are independent public accountants within the meaning of
the Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter.
(i) On the Closing Date, there shall have been furnished to
the several Underwriters, a certificate, dated such Closing Date and addressed
to the Underwriters, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company
in this Agreement are true and correct, in all material respects, as if
made at and as of such
15
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or
the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), and (A)
such documents contain all statements and information required to be
included therein, the Registration Statement, or any amendment thereof,
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as
amended or supplemented, does not include any untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company or
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, 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 (except for regular dividends paid on the Company's
common stock or the Series B Preferred Stock of Coastal Banc, ssb), and
except as disclosed in the Prospectus, there has not been any change in
the capital stock (other than a change in the number of outstanding
shares of common stock due to the issuance of shares upon the exercise
of outstanding options or warrants), 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 the capital stock,
of the Company, or any of its subsidiaries, or any Material Adverse
Effect or any development involving a prospective Material Adverse
Effect, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the
Company or any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any Material Adverse Effect
(j) The Company shall have furnished to you and counsel for
the Underwriters such additional documents, certificates and evidence as you or
they may have reasonably requested.
(k) The Company shall have furnished to you and counsel for
the Underwriters such documents, certificates or evidence reasonably
satisfactory to them indicating that the Firm Shares have been approved for
listing on the Nasdaq National Market.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and counsel
16
for the Underwriters. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rules 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter specifically for use in the preparation thereof.
In addition to their other obligations under this Section
6(a), the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), it will reimburse each Underwriter on a monthly
basis for all reasonable legal fees or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it to
the party or parties that made such payment, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by U.S. Bank, National Association, Minneapolis, Minnesota (the "Prime Rate").
Any such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request. This indemnity agreement shall be in
addition to any liabilities which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any
17
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the 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 Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter, specifically for use in the preparation thereof, and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company or in connection with investigating or defending against any such
loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party (except to the extent the indemnifying
party was unaware of such action and has been prejudiced in any material respect
by such failure or otherwise forfeits substantive rights or defenses by reason
of such failure or from any liability which it may have to any indemnified party
otherwise than under subsections (a) or (c) above). In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED, HOWEVER,
that if, in the sole judgment of the Underwriters, it is advisable for the
Underwriters to be represented as a group by separate counsel, the Underwriters
shall have the right to employ a single counsel to represent all Underwriters
who may be subject to liability arising from any claim in respect of which
indemnity may be sought by the Underwriters under subsection (a) of this Section
6, in which event the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties and reimbursed to the
Underwriters as incurred (in accordance with the provisions of the second
paragraph in subsection (a) above). An indemnifying party shall not be obligated
under any settlement agreement relating to any action under this Section 6 to
which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same
18
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were to be 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 in the
first sentence of this subsection (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Firm Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act. The obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons, or any
controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up
and pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule I hereto,
the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule I
19
hereto except as may otherwise be determined by you) the Firm Shares that the
withdrawing or defaulting Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up
and pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased aggregates more
than 10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section 4(h) and
Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of Firm Shares agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company (except to the extent provided
in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by any other party or parties or the
Company shall have the right to postpone the Closing Date for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used herein, the term "Underwriter" includes
any person substituted for an Underwriter under this Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m.,
Central time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; PROVIDED, HOWEVER, that if the Registration
Statement is effective at the time this Agreement is executed, this Agreement
shall become effective at such time as you in your discretion shall first
release the Securities for sale to the public. For the purpose of this Section,
the Securities shall be deemed to have been released for sale to the public upon
release by you of the publication of a newspaper advertisement relating thereto
or upon release by you of telexes offering the Securities for sale to securities
dealers, whichever shall first occur. By giving notice as hereinafter specified
before the time this Agreement becomes effective, the several Underwriters or
the Company may prevent this Agreement from becoming effective without liability
of any party to any other party, except that the provisions of Section 4(h) and
Section 6 hereof shall at all times be effective.
(b) The several Underwriters shall have the right to terminate
this Agreement by giving notice as hereinafter specified at any time at or prior
to the Closing Date, if (i) the Company shall have failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its part
to be performed hereunder, (ii) any other condition of the Underwriters'
obligations hereunder is not fulfilled, (iii) trading on the New York Stock
Exchange or the American Stock Exchange shall have been wholly suspended, (iv)
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, on the New York Stock
Exchange or the American Stock Exchange, by such Exchange or by order of the
Commission or any other governmental authority having jurisdiction, (v) a
banking moratorium shall have been declared by Federal, New York or Texas
authorities, or (vi) there has occurred any material adverse change in the
financial markets in the United States or an outbreak of major hostilities (or
an escalation thereof) in which the United
20
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Firm Shares. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(h) and Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by you by telephone or telegram, confirmed by
letter. If the Company elects to prevent this Agreement from becoming effective,
you shall be notified by the Company by telephone or telegram, confirmed by
letter.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus and in the Prospectus constitute the written information
furnished by or on behalf of the Underwriters referred to in Section 2 and
Section 6 hereof.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Underwriters c/o U.S. Bancorp Xxxxx
Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the address stated in the
Underwriters' Questionnaire furnished by such Underwriter in connection with
this offering; if to the Company, shall be mailed, telegraphed or delivered to
it at Coastal Banc Plaza, 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
Attention: Xxxxxxxxx X. Xxxxx, Chief Financial Officer. All notices given by
telegram shall be promptly confirmed by letter. Any party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
21
Please sign and return to the Company the enclosed duplicates
of this letter whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
COASTAL BANCORP, INC.
By
--------------------------------
Xxxxxxxxx X. Xxxxx
Chief Financial Officer
Confirmed as of the date first
above mentioned.
U.S. BANCORP XXXXX XXXXXXX INC.
By
------------------------------
Managing Director
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By
------------------------------
Managing Director
22
SCHEDULE I
Underwriter Number of Firm Shares
----------- ---------------------
U.S. Bancorp Xxxxx Xxxxxxx Inc. .................. [________]
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.............. [________]
--------------
Total............................................. [________]
--------------
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