EXHIBIT 1.1
COASTAL BANK CORPORATION
1,500,000 Shares of Common Stock(1)
UNDERWRITING AGREEMENT
November __, 1997
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX XXXXX & CO., INCORPORATED
As Representatives of the Several Underwriters
Identified in Schedule I Annexed Hereto
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
1. INTRODUCTORY. Coastal Bank Corporation, a Florida corporation (the
"Company") proposes to sell 1,500,000 shares (the "Firm Shares") of common
stock, $.01 par value per share (the "Common Stock"), to the several
underwriters identified in Schedule I annexed hereto (the "Underwriters"), who
are acting severally and not jointly. In addition, the Company has agreed to
grant to the Underwriters an option to purchase up to 225,000 additional shares
of Common Stock (the "Optional Shares") as provided in section 5 hereof. The
Firm Shares and, to the extent such option is exercised, the Optional Shares are
hereinafter collectively referred to as the "Shares."
You, as representatives of the Underwriters (the "Representatives"), have
advised the Company that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon hereafter as in your judgment is
advisable and that the public offering price of the Shares initially will be
$10.00 per share.
The Company hereby confirms its agreement with the Underwriters as
follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Underwriters, and shall be deemed
to represent and warrant to the several Underwriters on each Closing Date (as
hereinafter defined), that:
(a) The Company has been duly incorporated and is validly existing as
a corporation and its status is active under the laws of its jurisdiction of
incorporation, and, subject to section 1(e) hereof and the commencement of
business of Coastal Bank, N.A., a national bank (in organization) to be located
in Naples, Florida (the "Bank"), is duly registered under Section 3(a)(1) of the
Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act")
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and described in the
Prospectus (as hereinafter defined) and the Registration Statement (as defined
in subsection 2(n), below; the Company is duly registered and qualified to do
business as a foreign corporation under the laws of, and is in good standing as
such in, each jurisdiction in which such registration or qualification is
required, except where the failure to so register or qualify would not have a
material adverse effect on the condition (financial or other), business,
property, net worth or results of operations of the Company, taken as a whole
("Material Adverse Effect"); and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
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(1) Plus an option to acquire up to 225,000 additional shares of Common Stock
from the Company, to cover over-allotments.
Complete and correct copies of the articles of incorporation and by-laws, as
amended or restated ("Articles of Incorporation" and "By-laws," respectively),
of the Company as in effect on the date hereof have been delivered to the
Representatives, and no changes thereto will be made on or subsequent to the
date hereof and prior to each Closing Date.
(b) The shares of Common Stock issued and outstanding immediately
prior to the issuance and sale of the Shares to be sold by the Company hereunder
as set forth in the Prospectus have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description thereof contained in
the Prospectus and the Registration Statement. There are no preemptive,
preferential or, except as described in the Prospectus, other rights to
subscribe for or purchase any shares of Common Stock (including the Shares), and
no shares of Common Stock have been issued in violation of such rights. The
Shares to be issued and sold by the Company to the Underwriters have been duly
authorized and, when issued, delivered and paid for pursuant to this Agreement,
will be validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus and the Registration Statement.
The delivery of certificates for the Shares to be issued and sold by the Company
hereunder and payment therefor pursuant to the terms of this Agreement will pass
valid title to such Shares to the Underwriters, free and clear of any lien,
claim, encumbrance or defect in title. Except as described in the Prospectus,
there are no outstanding options, warrants or other rights of any description,
contractual or otherwise, entitling any person to be issued any class of
security by the Company, and there are no holders of Common Stock or other
securities of the Company, or of securities that are convertible or exchangeable
into Common Stock or other securities of the Company, that have rights to the
registration of such Common Stock or securities under the Securities Act of
1933, as amended, and the regulations thereunder (together, the "Act") or the
securities laws or regulations of any of the states (the "Blue Sky Laws").
(c) The Company does not currently have and never has had any
subsidiaries and does not own any equity interest in or control, directly or
indirectly, any other corporation, limited liability company, partnership,
limited liability partnership, joint venture, association, trust or other
business organization, other than the Bank. With respect to the representations
and warranties contained in this section 2, the Company shall be deemed to have
knowledge of anything known to the officers and directors of the Bank.
(d) The Company has full corporate power and authority to enter into
and perform this Agreement, and the execution and delivery by the Company of
this Agreement and the performance by the Company of its obligations hereunder
and the consummation of the transactions described herein, have been duly
authorized with respect to the Company by all necessary corporate action and
will not: (i) violate any provisions of the Articles of Incorporation or By-laws
of the Company; (ii) violate any provisions of, or result in the breach,
modification or termination of, or constitute a default under, any provision of
any agreement, lease, franchise, license, indenture, permit, mortgage, deed of
trust, evidence of indebtedness or other instrument to which the Company is a
party or by which the Company, or any property owned or leased by the Company,
may be bound or affected which violation, breach or default could have a
Material Adverse Effect; (iii) violate any statute, ordinance, rule or
regulation applicable to the Company, or order or decree of any court,
regulatory or governmental body, arbitrator, administrative agency or
instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company; or (iv) result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company. No
consent, approval, authorization or other order of any court, regulatory or
governmental body, arbitrator, administrative agency or instrumentality of the
United States or other country or jurisdiction is required for the execution and
delivery of this Agreement by the Company, the performance of its obligations
hereunder or the consummation of the transactions contemplated hereby, except
for compliance with the Act, the Securities Exchange Act of 1934, as amended,
and the regulations thereunder (together, the "Exchange Act"), the Blue Sky Laws
applicable to the public offering of the Shares by the several Underwriters and
the clearance of such offering and the underwriting arrangements evidenced
hereby with the National Association of Securities Dealers, Inc. (the "NASD").
This Agreement has been duly executed and delivered by and on behalf of the
Company and is a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except that rights to indemnity or
contribution may be limited by applicable law and except as enforceability may
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be limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws generally affecting the rights of creditors and by equitable principles
limiting the right to specific performance or other equitable relief.
(e) The Company has prepared and filed with the Board of Governors of
the Federal Reserve System (the "FRB") in accordance with Section 3(a)(1) of the
Bank Holding Company Act, and Section 225.14 of Regulation Y promulgated by the
FRB, an application to become a bank holding company which, together with all
exhibits, schedules, amendments, and supplements thereto, hereinafter, is
referred to as the "Holding Company Application". On ____________, 1997, the FRB
approved the Company's application to become a bank holding company through the
acquisition of 100% of the voting stock of the Bank (the "Holding Company
Approval"), effective upon the Company's compliance with commitments and
representations made in connection with the Holding Company Application. The
Holding Company Approval provides that the acquisition by the Company of the
Bank must be made within a "window" commencing 30 days after ___________, 1997,
and ending three months after such date, unless the period is extended by the
FRB. The Holding Company Approval further requires that the FRB be provided,
within 30 days of the Company's acquisition of the Bank's voting stock, certain
further information as set forth therein. In the event that the Company files
with the FRB an amendment or supplement to the Holding Company Application, the
term "Holding Company Application" shall refer to such amended or supplemented
Holding Company Application from and after the time it is filed with the FRB.
(f) The Company does not own any equity interest in, or control,
directly or indirectly, any corporation, limited liability company, association,
partnership, joint venture, trust or other business entity, except that as of
the First Closing Date and the Second Closing Date (as each such term is defined
in section 5 hereof), the Company will either own or have the sole right to
acquire all of the outstanding capital stock of the Bank. Upon the contribution
by the Company to the Bank of $10,000,000 of the net proceeds from the sale of
the Common Stock to the Underwriters pursuant to this Agreement, all of the
authorized capital stock of the Bank will be issued to the Company and upon such
issuance will have been duly authorized and validly issued, will be fully paid
and non-assessable and will be owned by the Company free and clear of any lien,
claim, encumbrance, defect in title, security interest, or restriction on
transfer (except for any restrictions under federal or state banking laws); and
no options, warrants, or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligations into shares of capital
stock or ownership interest in the Bank are, or will as of the First Closing
Date and the Second Closing Date be, outstanding.
(g) The incorporators of the Bank have prepared and filed with the
United States Comptroller of the Currency (the "OCC") in accordance with the
National Bank Act (the "Bank Act") an Application to Organize a National Bank
which, together with all exhibits, schedules, amendments and supplements
thereto, is hereinafter referred to as the "Charter Application." On
_____________, 1997, the OCC approved the Charter Application for authority to
organize the Bank, subject to certain terms and conditions specified in such
approval (the "Charter Approval"). The Charter Approval remains in full force
and effect as of the date hereof. In the event that the Company or the Bank
files with the OCC an amendment or supplement to the Charter Application, the
term "Charter Application" shall refer to such amended or supplemented Charter
Application from and after the time it is filed with the OCC.
(h) The incorporators of the Bank have, on behalf of the Bank,
prepared and filed with the Federal Deposit Insurance Corporation (the "FDIC")
in accordance with Section 5(a)(1) of the Federal Deposit Insurance Act, as
amended (the "Federal Deposit Insurance Act"), an Application for Federal
Deposit Insurance which, together with all exhibits, schedules, amendments, and
supplements thereto, hereinafter is referred to as the "Deposit Insurance
Application". On ____________, 1997, the FDIC approved the Deposit Insurance
Application, subject to certain terms and conditions specified in such approval
(the "Approval of Deposit Insurance"). In the event that the Bank files with the
FDIC an amendment or supplement to the Deposit Insurance Application, the term
"Deposit Insurance Application" shall refer to such amended or supplemented
Deposit Insurance Application from and after the time it is filed with the FDIC.
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(i) The Company has previously provided the Underwriter with true and
complete copies of the Charter Application, the Holding Company Application, and
the Deposit Insurance Application, as each has been amended or supplemented from
time to time (the "Applications"), and the Charter Approval, Holding Company
Approval, and Approval of Deposit Insurance, as each has been amended or
supplemented in writing from time to time (the "Approvals"). As of the
respective times the Applications were filed with the respective authorities,
upon the filing or first delivery to the Underwriter of the Prospectus, as of
the date hereof and at the First Closing Date and the Second Closing Date: (i)
such Applications each conformed and will conform in all material respects to
the respective applicable requirements of the Bank Act, the Bank Holding Company
Act, the Federal Deposit Insurance Act and the rules and regulations promulgated
by the respective authorities thereunder; and (ii) none of the Applications
contained or will contain any untrue statement of a material fact or omitted or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(j) As of the First Closing Date and the Second Closing Date, as the
case may be, subject to the capital contribution to the Bank by the Company of
$10,000,000 of the net proceeds from the sale of the Shares to the Underwriters
pursuant to this Agreement, and the satisfaction of the conditions set forth in
the Charter Approval and the Approval of Deposit Insurance, the Bank will be
duly organized and validly existing and in good standing under the laws of the
United States as a commercial bank, and will have full power and authority
(corporate and other) to own, lease, and operate its properties and to conduct
its business as described in the Registration Statement, the Prospectus, the
Applications, and the Approvals, and is not required to be qualified as a
foreign corporation in any jurisdiction, except where the failure so to qualify
would not reasonably be expected to have a Material Adverse Effect on the
Company and the Bank considered as one enterprise or of the Bank considered
separately, and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
qualification.
(k) As of the First Closing Date and the Second Closing Date, as the
case may be, the Bank will have received the Charter Approval and the Approval
of Deposit Insurance (collectively, the "Bank Approvals") from, respectively,
the OCC and the FDIC and, as of such respective dates: (i) the Bank Approvals
will be in full force and effect and no action to suspend or revoke any of the
Bank Approvals will have been taken, or proceedings therefor initiated or
threatened, by the OCC or the FDIC; (ii) the Bank will not be in breach or
default under any condition precedent of or commitment contained in any of the
Bank Approvals that can be satisfied as of such date; and (iii) the Bank will
have satisfied all conditions precedent to the Bank Approvals that can be
satisfied as of such date.
(l) As of the First Closing Date and the Second Closing Date, as the
case may be, the Company will have received the Holding Company Approval from
the FRB and, as of such representative dates: (i) the Holding Company Approval
will be in full force and effect and no action to suspend or revoke the Holding
Company approval will have been taken by the FRB or proceedings therefor
initiated or threatened by the FRB; (ii) the Company will not be in breach or
default under any condition of or commitment contained in the Holding Company
Approval that can be satisfied as of such date; and (iii) the Company will have
satisfied all conditions precedent to the Holding Company Approval that can be
satisfied as of such date.
(m) In addition to the representations regarding federal deposit
insurance herein, the Company and the Bank maintain all other insurance of the
types and in the amounts generally deemed adequate in their respective
businesses and consistent with insurance coverage maintained by similar
companies and businesses, and as required by the rules and regulations of all
governmental agencies having jurisdiction over the Company or the Bank, all of
which insurance is in full force and effect. The Company has a key person life
insurance policy on the life of Xxxxxx X. Xxxxxxx in the amount of $1,500,000,
payable to the Company, which insurance is in full force and effect.
(n) A registration statement on Form SB-2 (Reg. No. 333-_____) with
respect to the Shares (the "Registration Statement"), including a preliminary
form of prospectus, has been carefully prepared by the Company
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in conformity with the requirements of the Act and has been filed with the
Securities and Exchange Commission (the "Commission"). If the Company files a
registration statement to register a portion of the Shares and relies on Rule
462(b) for such registration statement to become effective upon filing with the
Commission (the "Rule 462(b) Registration Statement"), then any reference to the
"Registration Statement" (as defined below) shall be deemed to include the Rule
462(b) Registration Statement, as amended from time to time. Such registration
statement, as finally amended and revised at the time such registration
statement was or is declared effective by the Commission (including the
information contained in the form of final prospectus, if any, filed with the
Commission pursuant to Rule 424(b) and Rule 430A under the Act and deemed to be
part of the registration statement if the registration statement has been
declared effective pursuant to Rule 430A(b)) and as thereafter amended by
post-effective amendment, if any, is herein referred to as the "Registration
Statement." The related final prospectus in the form first filed with the
Commission pursuant to Rule 424(b) or, if no such filing is required, as
included in the Registration Statement, or any supplement thereto, is herein
referred to as the "Prospectus." The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial filing of
the Registration Statement with the Commission, and each such prospectus as
amended from time to time until the date of the Prospectus, is referred to
herein as the "Preliminary Prospectus." The Company has prepared and filed such
amendments to the Registration Statement since its initial filing with the
Commission, if any, as may have been required to the date hereof, and will file
such additional amendments thereto as may hereafter be required. There have been
delivered to the Representatives two signed copies of the Registration Statement
and each amendment thereto, if any, together with two copies of each exhibit
filed therewith, and such number of conformed copies for each of the
Underwriters of the Registration Statement and each amendment thereto, if any
(but without exhibits), and of each Preliminary Prospectus and of the Prospectus
as the Representatives have requested. The Company is a "small business issuer"
as such term is defined in Rule 504 and Regulation SB under the Act.
(o) Neither the Commission nor any state securities commission has
issued any order preventing or suspending the use of any Preliminary Prospectus,
nor, to the knowledge of the Company, have any proceedings for that purpose been
initiated or threatened, and each Preliminary Prospectus filed with the
Commission as part of the Registration Statement (excluding from this
representation the information referred to in section 3), as originally filed or
as part of any amendment or supplement thereto complied when so filed with the
requirements of the Act and, as of its date, did not include any untrue
statement of a material fact or omit to state , a material fact required to be
stated therein or necessary to make the statements therein not misleading. As of
the effective date of the Registration Statement, and at all times subsequent
thereto up to each Closing Date, the Registration Statement and the Prospectus
contained or will contain all statements that are required to be stated therein
in accordance with the Act and conformed or will conform in all respects to the
requirements of the Act, and neither the Registration Statement nor the
Prospectus (excluding from this representation the information referred to in
section 3), included or will include any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the Company,
nor any person that controls, is controlled by or is under common control with
the Company, has distributed or will distribute prior to each Closing Date any
offering material in connection with the offering and sale of the Shares other
than a Preliminary Prospectus, the Prospectus, the Registration Statement, or
other materials permitted by the Act and provided to the Representatives.
(p) Xxxx, Xxxxx & King, Inc., which has expressed its opinion with
respect to the financial statements and schedules filed with the Commission and
included as a part of each Preliminary Prospectus, the Prospectus, or the
Registration Statement, are independent accountants as required by the Act.
(q) The financial statements and the related notes and schedules
thereto included in each Preliminary Prospectus, the Prospectus, and the
Registration Statement present fairly the financial position, results of
operations, and cash flows of the Company as of their respective dates or for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved. The financial statement schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein on a basis consistent with the combined financial statements of the
Company contained therein. The Company had an outstanding capitalization as set
forth in the Registration Statement and under "Capitalization"
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in the Prospectus as of the date indicated therein, and there has been no
material change thereto since such date except as disclosed in the Prospectus.
The financial and statistical information and data relating to the Company in
each Preliminary Prospectus, the Prospectus, and the Registration Statement are
accurately presented and prepared on a basis consistent with the audited
combined financial statements and books and records of the Company. The combined
financial statements and schedules and the related notes thereto included in
each Preliminary Prospectus, the Prospectus, or the Registration Statement are
the only such financial statements and schedules required under the Act to be
set forth therein.
(r) Neither the Company nor the Bank is currently, nor with the
giving of notice or passage of time or both, would be, in violation or in breach
of: (i) its Articles of Incorporation or By-laws; (ii) any statute, ordinance,
injunction, judgment, rule or regulation, license, permit, approval, or
authorization applicable to the Company or the Bank; (iii) any statute,
ordinance, order, rule or regulation applicable to the Company; (iv) any order
or decree of any court, regulatory body, arbitrator, administrative agency, or
other instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company; (v) any condition of or commitment
contained in any of the Applications, if such condition or commitment can be
performed as of such date; or (vi) any provision of any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust, evidence of
indebtedness, or other instrument to which the Company or the Bank is a party or
by which any property owned or leased by either is bound or affected. Neither
the Company nor the Bank has received notice of any violation of any applicable
statute, ordinance, order, rule or regulation applicable to the Company or the
Bank. Neither the Company nor the Bank is nor have they been (by virtue of any
action, omission to act, contract to which it is a party or other occurrence) in
violation of any applicable foreign, federal, state, municipal or local
statutes, laws, ordinances, rules, regulations, or orders (including those
relating to environmental protection, occupational safety and health and equal
employment practices) heretofore or currently in effect, except any such
violation that has been fully cured or satisfied without recourse.
(s) Other than the routine processing of the Application, there are
no legal or governmental proceedings or investigations pending or, to the
knowledge of the Company or the Bank, threatened to which the Company, the Bank,
Xxxxxx X. Xxxxxxx, or other key members of management, is or may be a party or
to which any property owned or leased by the Company or the Bank is or may be
subject, including, without limitation, any such proceedings that are related to
environmental or employment discrimination matters, that are required to be
described in the Registration Statement or the Prospectus that are not so
described, or that question the validity of this Agreement or any action taken
or to be taken pursuant hereto. Except as described in the Registration
Statement or the Prospectus, neither the Company nor the Bank: (i) is in
violation of any statute, ordinance, rule or regulation, or any decision, order
or decree of any court, regulatory body, arbitrator, administrative agency, or
other instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company or the Bank relating to the use, disposal,
or release of hazardous or toxic substances, or relating to the protection or
restoration of the environmental or human exposure to hazardous or toxic
substances (collectively, "environmental laws"); (ii) owns or operates any real
property contaminated with any substance that is subject to any environmental
laws; (iii) is liable for any off-site disposal or contamination pursuant to any
environmental laws; or (iv) is subject to any claim relating to any
environmental laws.
(t) There is no transaction, relationship, obligation, agreement, or
other document required to be described in the Registration Statement or the
Prospectus or to be filed or deemed to be filed as an exhibit to the
Registration Statement by the Act, which has not been described or filed as
required. All such contracts or agreements to which the Company or the Bank is a
party have been duly authorized, executed, and delivered by the Company or the
Bank, constitute valid and binding agreements of the Company or the Bank, comply
with applicable regulations of the OCC and the FRB and are enforceable by and
against the Company or the Bank, in accordance with the respective terms
thereof.
(u) The Company and the Bank have good and valid title to all
property and assets reflected as owned by the Company or the Bank, respectively,
in the Company's financial statements included in the Registration Statement (or
elsewhere in the Registration Statement or the Prospectus), free and clear of
all liens, claims,
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mortgages, security interests, or other encumbrance of any kind or nature
whatsoever except those, if any, reflected in such financial statements (or
elsewhere in the Registration Statement or the Prospectus). All property (real
and personal) held or used by the Company or the Bank under leases, licenses,
franchises, or other agreements is held by the Company or the Bank,
respectively, under valid, subsisting, binding and enforceable leases,
franchises, licenses, or other agreements.
(v) Neither the Company nor any person that controls, is controlled
by (including the Bank) or is under common control with the Company has taken or
will take, directly or indirectly, any action designed to cause or result in, or
which constituted, or which could cause or result in, stabilization or
manipulation, under the Exchange Act or otherwise, of the price of any security
of the Company to facilitate the sale or resale of the Common Stock.
(w) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in the
Registration Statement or the Prospectus and prior to each Closing Date: (i) the
Company and the Bank have not or will not have incurred any liability or
obligation, direct or contingent, or entered into any transaction, that is
material to the Company, except as in the ordinary course of business; (ii) the
Company and the Bank have not and will not have paid or declared any dividend or
other distribution with respect to their respective capital stock and the
Company and the Bank have not or will not be delinquent in the payment of
principal or interest on any outstanding debt obligation; and (iii) there has
not been and will not have been any change in the capital stock, any material
change in the indebtedness of the Company or the Bank, or any change or
development involving or that could be expected to involve, a Material Adverse
Effect, whether or not arising from transactions in the ordinary course of
business.
(x) Neither the Company nor any person that controls, is controlled
by (including the Bank) or is under common control with the Company has,
directly or indirectly: (i) made any unlawful contribution to any candidate for
political office, or failed to disclose fully any contribution in violation of
law; or (ii) made any payment to any federal, state, or foreign governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof or applicable foreign jurisdictions.
(y) The Company and the Bank own or possess adequate rights to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, and licenses
presently used in or necessary for the conduct of their respective business or
ownership of their properties and the Company has not violated or infringed upon
the rights of others or received any notice of conflict with the asserted rights
of others, in respect thereof.
(z) The Company and the Bank have in place and effective such
policies of insurance, with limits of liability in such amounts, as are normal
and prudent in the ordinary course of the business of the Company and the Bank.
(aa) No labor dispute with the employees of the Company or the Bank
exists or, to the knowledge of the Company or the Bank, is imminent, and the
Company or the Bank are not parties to any collective bargaining agreement and,
to the knowledge of the Company and the Bank, no union organizational attempts
have occurred or are pending. There has been no change in the relationship of
the Company or the Bank with any of its principal suppliers, manufacturers,
contractors, or customers resulting in or that could be expected to result in a
Material Adverse Effect.
(ab) The Company is not an "investment company", an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended.
(ac) All federal, state, and local tax returns required to be filed
by or on behalf of the Company and the Bank have been filed (or are the subject
of valid extension) with the appropriate federal, state, and local authorities,
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and all such tax returns, as filed, are accurate in all material respects; all
federal, state, and local taxes (including estimated tax payments) required to
be shown on all such tax returns or claimed to be due from or with respect to
the business of the Company have been paid or reflected as a liability on the
financial statements of the Company for appropriate periods; all deficiencies
asserted as a result of any federal, state, or local tax audits have been paid
or finally settled, and no issue has been raised in any such audit which, by
application of the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so audited; no state of
facts exist or has existed that would constitute grounds for the assessment of
any tax liability with respect to the periods that have not been audited by
appropriate federal, state, or local authorities; there are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any federal, state, or local tax return of any period; and the Company has never
been a member of an affiliated group of corporations filing consolidated federal
income tax returns, other than a group of which the Company is and has been the
common parent. The Company has not made an S Corporation election and has not at
any time been and is not qualified as an S Corporation.
(ad) Upon the satisfaction of the conditions set forth in the
Approvals, the Company and the Bank will hold and will be in compliance with all
permits, certificates, licenses, approvals, registrations, consents, and
authorizations required under all laws, rules, and regulations in connection
with their businesses, and all of such permits, certificates, licenses,
approvals, registrations, consents, and authorizations will be in full force and
effect; and neither the Company nor the Bank has received any notice of
threatened proceedings relating to the revocation or modification of any such
permit, certificate, license, approval, registration, consent, or authorization.
Neither the Company nor the Bank is, and neither has been (by virtue of any
action, omission to act, contract to which it is a party or any occurrence or
state of facts whatsoever) in violation of any applicable federal, state,
municipal or local statutes, laws, ordinances, rules, regulations, or orders
issued pursuant to foreign, federal, state, municipal, or local statutes, laws,
ordinances, rules, or regulations (including those relating to environmental
protection, occupational safety and health and employment practices) heretofore
or currently in effect, except any such violations that have been fully cured or
satisfied without recourse or that would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
(ae) Neither the Company nor the Bank is a participating employer or
plan sponsor with respect to any employee pension benefit plan as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any employee welfare benefit plan as defined in Section 3(1) of
ERISA, including, without limitation, any multi-employer welfare or pension
plan. With respect to each defined benefit retirement plan, such plan does not
have benefit liabilities (as defined in Section 4001(a)(16) of ERISA) exceeding
the assets of the plan. The Company or the Bank or the administrator of each of
any employee benefit plans (the "Plans"), as the case may be, has timely filed
the reports required to be filed by ERISA and the Code in connection with the
maintenance of the Plans, and no facts, including, without limitation, any
"reportable event" as defined by ERISA and the regulations thereunder, exist in
connection with the Plans which, under applicable law, would constitute grounds
for the termination of any of the Plans by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer any of the Plans.
(af) The Company and the Bank maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and with the regulations of the OCC, FRB and the FDIC and
to maintain accountability for assets; (iii) access to assets is permitted only
in accordance with management's general or specific authorizations; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ag) Neither the Company nor the Bank, nor any officer or director of
the Company or the Bank, or any person who owns of record or beneficially any
class of securities issued by the Company is: (i) an officer, director, or
partner of any brokerage firm, broker or dealer that is a member of the NASD
("NASD Member"); or (ii) directly or indirectly, a "person associated with" an
NASD member or an "affiliate" of an NASD member, as such
- 8 -
terms are used in the NASD Rules of Fair Practice. In addition, neither the
Company nor the Bank has issued or transferred any Common Stock, warrants,
options, or other securities, or any other items of value, to the Underwriter or
any "related person" of any Underwriter, as such term is used in the NASD Rules
of Fair Practice, except as provided in this Agreement.
(ah) The Company has prepared and filed with the Commission a
registration statement for the Common Stock pursuant to Section 12(g) of the
Exchange Act. Such registration statement either has been declared effective by
the Commission under the Exchange Act or will be declared effective by the
Commission prior to or concurrently with the commencement of the public offering
of the Shares.
(ai) Neither the Company, nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075 of the Florida Statutes, and the
Company agrees to comply with such section if, prior to the completion of the
distribution of the Shares, the Company, or any affiliate of the Company
commences doing such business.
(aj) All offers and sales of the securities of the Company prior to
the date hereof were made in compliance with the Act and all other applicable
state and federal laws or regulations. Except pursuant to this Agreement, the
Company knows of no outstanding claims for finder's, origination, or
underwriting fees with respect to the sale of the Common Stock.
(ak) The Company has obtained for the benefit of the Underwriters the
agreement, enforceable by Xxxxxx X. Xxxxx & Co. Incorporated ("Baird"), of each
of the officers and directors of the Company, and each of the current
shareholders of the Company that for a period of 180 days after the date of the
Prospectus, such persons will not, without the prior written consent of Baird,
except for the repurchase of 100 shares of Common Stock (the "Organizational
Shares") from Xxxxxx X. Xxxxxxx, directly or indirectly, offer, sell, transfer,
or pledge, contract to sell, transfer or pledge, or cause or in any way permit
to be sold, transferred, pledged, or otherwise disposed of, any: (i) shares of
Common Stock; (ii) rights to purchase shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by any such shareholder in accordance with the applicable regulations of the
Commission and shares of Common Stock that may be issued upon the exercise of a
stock option, warrant, or other convertible security); or (iii) securities that
are convertible or exchangeable into shares of Common Stock.
A certificate signed by any officer of the Company and delivered
to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby. A certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinion referred to in section
10(d) will also be furnished to the Representatives and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by the Company as to the matters covered thereby.
3. REPRESENTATIVES OF UNDERWRITERS. The Representatives will act as the
representatives for the several Underwriters in connection with the public
offering of the Shares, and any action under or in respect of this Agreement
taken by the Representatives will be binding upon all of the Underwriters.
4. INFORMATION FURNISHED BY THE UNDERWRITERS. The information set forth in
the last paragraph on the outside front cover page of the Prospectus concerning
the terms of the offering by the Underwriters, the paragraph on the inside front
cover page of the Prospectus relating to stabilization practices, and the
concession and reallowance amounts appearing under the caption "Underwriting" in
the Prospectus constitute all of the information furnished to the Company by and
on behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus, as such information is referred to in
this Agreement.
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5. PURCHASE, SALE AND DELIVERY OF SHARES.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters identified in Schedule I annexed
hereto 1,500,000 Firm Shares, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company the number of Firm Shares as
hereinafter set forth at the price per share of $9.30, except as provided in the
following sentence. The obligation of each Underwriter to the Company shall be
to purchase from the Company that number of full Firm Shares which (as nearly as
practicable in full shares as determined by the Representatives) bears the same
proportion to the number of Firm Shares to be sold by the Company as the number
of shares set forth opposite the name of such Underwriter in Schedule I annexed
hereto bears to the total number of Firm Shares to be purchased by all of the
Underwriters under this Agreement. The purchase price will be increased to $9.70
with respect to sales of Common Stock to any director or officer of the Company
or the Bank whose name, address, and telephone number are on a list furnished to
the Underwriters by the Company as of _________, 1997.
(b) On the First Closing Date (as hereinafter defined), the Company
will deliver to the Representatives, at the offices of Baird, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or through the facilities of The Depository
Trust Company, for the accounts of the several Underwriters, certificates
representing the Firm Shares to be sold by it against payment in Milwaukee,
Wisconsin of the purchase price therefor by certified or official bank check or
checks in New York Clearing House (next day) funds payable to the order of the
Company with respect to the Firm Shares being sold by the Company. As referred
to in this Agreement, the "First Closing Date" shall be on the third full
business day after the date of the Prospectus, at 9:00 a.m., Milwaukee,
Wisconsin time, or at such other date or time not later than ten full business
days after the date of the Prospectus as the Representatives and the Company may
agree. The certificates for the Firm Shares to be so delivered will be in
denominations and registered in such names as the Representatives request by
notice to the Company prior to the First Closing Date, and such certificates
will be made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full business day preceding the First Closing Date
at a location to be designated by the Representatives.
(c) In addition, on the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Company hereby agrees to sell to the Underwriters, and the
Underwriters, severally and not jointly, shall have the right at any time within
thirty days after the date of the Prospectus to purchase up to 225,000 Optional
Shares from the Company, at the purchase price per share of $9.30 for use solely
in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
upon notice by the Representatives to the Company within thirty days after the
date of the Prospectus setting forth the aggregate number of Optional Shares to
be purchased by the Underwriters and sold by the Company, the names and
denominations in which the certificates for such shares are to be registered and
the date and place at which such certificates will be delivered. Such date of
delivery (the "Second Closing Date") shall be determined by the Representatives,
provided that the Second Closing Date, which may be the same as the First
Closing Date, shall not be earlier than the First Closing Date and, if after the
First Closing Date, shall not be earlier than three nor later than ten full
business days after delivery of such notice to exercise. Certificates for the
Optional Shares will be made available for checking and packaging at 9:00 a.m.,
Milwaukee, Wisconsin time, on the first full business day preceding the Second
Closing Date at a location to be designated by the Representatives. The manner
of payment for and delivery of (including the denominations of and the names in
which certificates are to be registered) the Optional Shares shall be the same
as for the Firm Shares.
(d) The Representatives have advised the Company that each
Underwriter has authorized the Representatives to accept delivery of the Shares
and to make payment therefor. It is understood that the Representatives,
individually and not as representatives of the Underwriters, may (but shall not
be obligated to) make payment for any Shares to be purchased by any Underwriter
whose funds shall not have been received by the Representatives by the First
Closing Date or the Second Closing Date, as the case may be, for the account of
such Underwriter, but any such payment shall not relieve such Underwriter from
any obligation under this Agreement.
- 10 -
As referred to in this Agreement, "Closing Date" shall mean either the First
Closing Date or the Second Closing Date.
(e) Notwithstanding anything contained herein to the contrary, if
prior to the First Closing Date or the Second Closing Date the Company shall not
have received Holding Company Approval and the Bank shall not have received
Charter Approval or Approval of Deposit Insurance, then the net offering
proceeds shall be held in escrow by a nationally-chartered, FDIC-insured bank of
the Company's choice pursuant to the terms of an escrow agreement in
substantially the form of Exhibit A (the "Escrow Agreement).
6. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters that:
(a) If the effective time of the Registration Statement is not prior
to the execution and delivery of this Agreement, the Company will use its best
efforts to cause the Registration Statement to become effective at the earliest
possible time and, upon notification from the Commission that the Registration
Statement has become effective, will so advise the Representatives and counsel
to the Underwriters immediately. If the effective time of the Registration
Statement is prior to the execution and delivery of this Agreement and any
information shall have been omitted therefrom in reliance upon Rule 430A, the
Company, at the earliest possible time, will furnish the Representatives with a
copy of the Prospectus to be filed by the Company with the Commission to comply
with Rule 424(b) and Rule 430A under the Act and, if the Representatives do not
object to the contents thereof, will comply with such Rules. Upon compliance
with such Rules, the Company will so advise the Representatives promptly. The
Company will advise the Representatives and counsel to the Underwriters
immediately of the issuance by the Commission or any state securities commission
of any stop order suspending the effectiveness of the Registration Statement or
of the institution of any proceedings for that purpose, or of any notification
of the suspension of qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceedings for that purpose, and will also
advise the Representatives and counsel to the Underwriters immediately of any
request of the Commission for amendment or supplement of the Registration
Statement, of any Preliminary Prospectus or of the Prospectus, or for additional
information, and the Company will not file any amendment or supplement to the
Registration Statement (either before or after it becomes effective), to any
Preliminary Prospectus or to the Prospectus (including a prospectus filed
pursuant to Rule 424(b)) if the Representatives have not been furnished with a
copy prior to such filing (with a reasonable opportunity to review such
amendment or supplement) or if the Representatives object to such filing.
(b) If, at any time when a prospectus relating to the Shares is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact, or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to supplement the Prospectus to comply with the Act,
the Company promptly will advise the Representatives and counsel to the
Underwriters and the Attorneys-in-Fact thereof and will promptly prepare and
file with the Commission, at its expense, an amendment to the Registration
Statement that will correct such statement or omission or an amendment that will
effect such compliance; and, if any Underwriter is required to deliver a
prospectus nine months or more after the effective date of the Registration
Statement, the Company, upon request of the Representatives but at the expense
of such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act. The Company consents to the use, in accordance with the provisions
of the Act and with the Blue Sky Laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, of each Preliminary
Prospectus.
(c) The Company will not, prior to the Second Closing Date, if any,
incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business, or enter
into any transaction with an "affiliate," as defined in Rule 405 under the Act,
which is required to be described in the Prospectus pursuant to Item 404 of
Regulation S-B under the Act, except as described in the Prospectus.
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(d) Other than the repurchase of the Organizational Shares, the
Company will not, prior to the Second Closing Date, if any, acquire any of the
Common Stock nor will the Company declare or pay any dividend or make any other
distribution upon its Common Stock payable to shareholders of record on a date
prior to such earlier date, except as described in the Prospectus.
(e) The Company will make generally available to its security holders
and the Representatives an earnings statement as soon as practicable, but in no
event later than sixty days after the end of its fiscal quarter in which the
first anniversary of the effective date of the Registration Statement occurs,
covering a period of twelve consecutive calendar months beginning after the
effective date of the Registration Statement, which will satisfy the provisions
of the last paragraph of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(f) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company will
furnish to the Representatives at the expense of the Company, copies of the
Registration Statement, the Prospectus, any Preliminary Prospectus, and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as the Representatives may reasonably request.
(g) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder for the purposes set forth in the Prospectus.
(h) The Company will cooperate with the Representatives and counsel
to the Underwriters in qualifying or registering the Shares for sale under the
Blue Sky Laws of such jurisdictions as the Representatives designate, and will
continue such qualifications or registrations in effect so long as reasonably
requested by the Representatives to effect the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is not
presently qualified. In each jurisdiction where any of the Shares shall have
been qualified as provided above, the Company will file such reports and
statements as may be required to continue such qualification for a period of not
less than one year from the date of the Prospectus. The Company shall promptly
prepare and file with the Commission, from time to time, such reports as may be
required to be filed by the Act and the Exchange Act, and the Company shall
comply in all respects with the undertakings given by the Company in connection
with the qualification or registration of the Shares for offering and sale under
the Blue Sky Laws.
(i) During the period of five years from the date of the Prospectus,
the Company will furnish to each of the Representatives and to each of the other
Underwriters who may so request, as soon as available, each report, statement or
other document of the Company or its Board of Directors mailed to its
shareholders or filed with the Commission, and such other information concerning
the Company as the Representatives may reasonably request.
(j) Except for the sale of the Common Stock pursuant to this
Agreement, without the prior written consent of Baird, the Company will not,
during the period of 180 days from the date of the Prospectus, directly or
indirectly, issue, offer, sell, grant any option for the sale of, or otherwise
dispose of, contract to sell or otherwise dispose of, or cause or in any way
permit to be sold or otherwise disposed of, any: (i) shares of Common Stock;
(ii) rights to purchase shares of Common Stock; or (iii) securities that are
convertible or exchangeable into shares of Common Stock.
(k) The Company will maintain a transfer agent and, if required by
law or the rules of The Nasdaq Stock Market or any national securities exchange
on which the Common Stock is listed, a registrar (which, if permitted by
applicable laws and rules, may be the same entity as the transfer agent) for its
Common Stock.
(l) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any rumor, publication or event relating
to of affecting the Company shall occur as a result of which, in the opinion of
Baird, the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to the Prospectus), the Company will, after
- 12 -
written notice from Baird advising the Company of any of the matters set forth
above, promptly consult with Baird concerning the advisability and substance of,
and, if the Company and Baird determine that it is appropriate, disseminate, a
press release or other public statement responding to or commenting on, such
rumor, publication or event.
(m) If the sale to the Underwriters of the Shares is not consummated
on or before ___________ __, 1997 because (i) the Company decides not to proceed
with the Offering and the Underwriters are prepared to proceed with an offering,
or (ii) the Underwriters decide not to proceed with the Offering due to a
material, adverse change in the financial condition, results of operations,
business, or prospects of the Company, which, in the reasonable opinion of the
Underwriters, would adversely affect the Offering, the Company agrees to
reimburse the Underwriters for all of their out-of-pocket expenses incurred in
connection with the Offering, including without limitation, fees and expenses of
counsel for the Underwriters, and the provisions of sections 7 and 10 hereof
shall at all times be effective and apply. Notwithstanding the foregoing, if the
sale to the Underwriters of the Shares is not consummated for any reason other
than termination of this Agreement by the Underwriters pursuant to section 11
hereof, and the Company or any of the shareholders of the Company enter into an
agreement on or before one year from the date of this Agreement with respect to
the sale, lease, disposition, or other transfer of all or substantially all of
the Company's assets or a majority interest in its capital stock, directly or
indirectly, by merger, share exchange, business combination or otherwise (such
sale, lease, disposition, or other transfer of assets or stock is hereinafter
referred to as a "Business Combination"), then the Company shall engage the
Representatives as its financial advisors for any such Business Combination and
the Company shall pay the Representatives a financial advisory fee in the amount
of $______ in immediately available funds upon consummation of such Business
Combination for financial advisory services to be rendered by the
Representatives in connection therewith.
(n) The Company will comply or cause to be complied with the
conditions to the obligations of the Underwriters in sections 8(a), (b)(i), (d),
(e), (g), (h), (i), and (j) hereof.
(o) The Company shall deliver the requisite notice of issuance to the
NASD and shall take all necessary and appropriate action within its power to
cause or permit trading and listing of the Common Stock on the OTC Bulletin
Board for a period of at least 36 months after the date of this Agreement,
except during such period(s) in which the Company's Common Stock shall be listed
for trading on any of the: (i) Nasdaq Small Cap Market; (ii) the Nasdaq National
Market System; (iii) the American Stock Exchange; or (iv) the New York Stock
Exchange; or with the prior written consent of Baird.
(p) The Company shall promptly prepare and file with the Commission,
from time to time, such reports as may be required to be filed by the Company
under the Act, the Exchange Act or the Rules and Regulations thereunder.
(q) The Company will apply the net proceeds from the sale of the
Common Stock to be sold by it hereunder for the purposes set forth in the
Prospectus.
(r) Neither the Company nor the Bank shall file any amendment or
supplement to any of the Applications of which the Underwriters shall not
previously have been advised and furnished with a copy or as to which the
Underwriters shall have objected in writing promptly after reasonable notice
thereof. In addition, the Company will advise the Underwriters promptly of any
of the following events: (i) the issuance by the OCC, the FRB or the FDIC of any
amendment to any of the Approvals; (ii) the receipt of any comments from the
OCC, the FRB or the FDIC concerning any of the Applications or the Approvals;
(iii) any request by the OCC, the FRB or the FDIC for any amendment or
supplement to any of the Applications or for additional information; and (iv)
the issuance by the OCC, the FRB or the FDIC of any order suspending any of the
Approvals or the initiation or threatening of any proceedings for that purpose.
- 13 -
7. PAYMENT OF EXPENSES. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective, or if this
Agreement is terminated for any reason, the Company will pay the costs, fees,
and expenses incurred in connection with the public offering of the Shares. Such
costs, fees and expenses to be paid by the Company include, without limitation:
(a) All costs, fees, and expenses (excluding the expenses incurred by
the Underwriters and the legal fees and disbursements of counsel for the
Underwriters, but including such fees and disbursements described in subsection
(b) of this section 7) incurred in connection with the performance of the
Company's obligations hereunder, including without limiting the generality of
the foregoing: the registration fees related to the filing of the Registration
Statement with the Commission; the fees and expenses related to the quotation of
the Shares on the OTC Bulletin Board; the fees and expenses of the Company's
counsel, accountants, transfer agent and registrar; the costs and expenses
incurred in connection with the preparation, printing, shipping, and delivery of
the Registration Statement, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all agreements and
supplements provided for herein, this Agreement and the Preliminary and
Supplemental Blue Sky Memoranda, including, without limitation, shipping
expenses via overnight delivery or courier service to comply with applicable
prospectus delivery requirements; and the costs and expenses associated with the
production of materials related to, and travel expenses incurred by the
management of the Company in connection with, the various meetings to be held
between the Company's management and prospective investors.
(b) All registration fees and expenses, including legal fees (which
in no event shall exceed $20,000) and disbursements of counsel for the
Underwriters incurred in connection with qualifying or registering all or any
part of the Shares for offer and sale under the Blue Sky Laws (including
applicable Canadian securities laws, if any) and the clearing of the public
offering and the underwriting arrangements evidenced hereby with the NASD.
(c) All fees and expenses related to printing of the certificates for
the Shares, and all transfer taxes, if any, with respect to the sale and
delivery of the Shares.
8. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters under this Agreement shall be subject to the accuracy
of the representations and warranties on the part of the Company herein set
forth as of the date hereof and as of each Closing Date, to the accuracy of the
statements of the Company's officers made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions, unless waived in writing by the
Representatives:
(a) The Registration Statement shall have been declared effective by
the Commission not later than 5:30 p.m., Washington, D. C. time, on the date of
this Agreement, or such later time as shall have been consented to by the
Representatives , which consent shall be deemed to have been given if the
Registration Statement shall have been declared effective on or before the date
and time requested in the acceleration request submitted on behalf of the
Representatives pursuant to Rule 461 under the Act; all filings required by
Rules 424(b) and 430A under the Act shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the Commission or any state securities commission nor, to the
knowledge of the Company, shall any proceedings for that purpose have been
initiated or threatened; and any request of the Commission or any state
securities commission for inclusion of additional information in the
Registration Statement, or otherwise, shall have been complied with to the
satisfaction of the Representatives.
(b) Since the dates as of which information is given in the
Registration Statement:
(i) there shall not have occurred any change or development
involving, or which could be expected to involve, a Material
Adverse Effect whether or not arising from transactions in the
ordinary course of business in the ability of the Company or the
Bank to conduct its business; and
- 14 -
(ii) the Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood,
windstorm, hurricane, accident or other calamity (whether or not
insured) or from any court or governmental action, order or
decree,
the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the opinion of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(c) The Representatives shall not have advised the Company that the
Registration Statement or the Prospectus contains an untrue statement of fact
that, in the opinion of the Representatives or counsel for the Underwriters, is
material, or omits to state a fact that, in the opinion of the Representatives
or such counsel, is material and is required to be stated therein or necessary
to make the statements therein not misleading.
(d) The Representatives shall have received an opinion of XxXxxxxxx &
Xxxxx, P.A., counsel for the Company addressed to the Representatives, as the
representatives of the Underwriters, and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation and whose status is active under the
laws of Florida, and has received the approval of the FRB to
become a bank holding under Section 3(a)(1) of the Bank Holding
Company Act, with full corporate power and authority to own,
lease, and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and the
Registration Statement; and to the knowledge of such counsel
after investigation, the Company is duly registered and
qualified to do business as a foreign corporation under the laws
of, and is in good standing as such in, each jurisdiction in
which such registration or qualification is required, except
where the failure to so register or qualify would not have a
Material Adverse Effect;
(ii) The authorized capital stock of the Company consists of
10,000,000 shares of Common Stock, par value $0.01 per share,
and 2,000,000 shares of Preferred Stock, par value $0.01 per
share, and all such stock conforms as to legal matters to the
descriptions thereof in the Prospectus and the Registration
Statement;
(iii) The issued and outstanding shares of capital stock of the
Company immediately prior to the issuance and sale of the Shares
to be sold by the Company hereunder have been duly authorized
and validly issued, are fully paid and nonassessable, and there
are no preemptive, preferential or, except as described in the
Prospectus and to such counsel's knowledge after investigation,
other rights to subscribe for or purchase any shares of capital
stock of the Company, and to such counsel's knowledge after
investigation, no shares of capital stock of the Company have
been issued in violation of such rights;
(iv) Upon the satisfaction of the conditions set forth in the
Approvals, and upon contribution by the Company to the Bank of
$10,000,000 of the net proceeds form the sale of the Common
Stock to the Underwriter pursuant to this Agreement, all of the
capital stock of the Bank will be duly authorized and validly
issued, will be fully paid and non-assessable and will be owned
by the Company free and clear of any lien, encumbrance, equity,
security interest, or claim; and to such counsel's knowledge, no
options, warrants, or other rights to purchase, agreements or
other obligations to issue or rights to convert any obligations
into shares of capital stock or ownership interest in the Bank
are, or will as of the First closing Date and the Second Closing
Date be, outstanding;
- 15 -
(v) As of the time the Holding Company Application was filed
with the FRB and as of the First Closing Date and the Second
Closing Date, as the case may be: (A) such application conformed
in all material respects to the applicable requirements of the
Bank Holding Company Act and the rules and regulations
thereunder; and (B) to such counsel's knowledge after
investigation, as of any such times such application contained
no untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) The Bank has received the Approvals from the OCC and the
FDIC and, to the knowledge of such counsel after investigation,
as of the date hereof: (A) such Approvals are in full force and
effect and no action to suspend or revoke any of such Approvals
has been taken, or, proceedings therefor initiated or
threatened, by the OCC or the FDIC; (B) the Bank is not in
breach or default under any condition contained in any of such
Approvals that can be satisfied as of such date; and (C) the
Bank has satisfied all conditions precedent to such Approvals
which can be satisfied as of such date;
(vii) The Company has received Holding Company Approval from the
FRB and, to the knowledge of such counsel after investigation,
as of the date hereof: (A) the Holding Company Approval is in
full force and effect and no action to suspend or revoke the
Holding Company Approval has been taken by the FRB or
proceedings therefor initiated or threatened by the FRB; (B) the
Company is not in breach or default under any condition of or
commitment that may be satisfied as of the date hereof contained
in the Holding Company Approval; and (C) the Company has
satisfied all conditions precedent to the Holding Company
Approval that can be satisfied as of such date;
(viii) The Company does not own or control any subsidiary or
other affiliate other than the Bank, and does not, to such
counsel's knowledge after investigation, own any equity interest
in or control, directly or indirectly, any other corporation,
limited liability company, partnership, limited liability
partnership, joint venture, association, trust or other business
organization, except as described in the Prospectus and the
Registration Statement;
(ix) The certificates for the Shares to be delivered hereunder
are in due and proper form and conform to the requirements of
applicable law including the Bank Act; and when duly
countersigned by the Company's transfer agent, and delivered to
the Representatives or upon the order of the Representatives
against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Shares to
be sold by the Company represented thereby will be duly
authorized and validly issued, fully paid and nonassessable, and
free of any preemptive, preferential or other rights to
subscribe for or purchase shares of Common Stock and, upon
delivery to the Underwriters or upon the order against payment
of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Underwriters will acquire good
and marketable title thereto, free and clear of any lien, claim,
security interest, encumbrance, or restriction on transfer
(except for any restriction under the Act, the Blue Sky Laws,
and applicable banking laws);
(x) The Registration Statement has become effective under the
Act, and to such counsel's knowledge after investigation, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been initiated or are threatened under the Act or any Blue
Sky Law; the Registration Statement and the Prospectus and any
amendment or supplement thereto (except for the financial
statements and other statistical or financial data included
therein as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the
Act; no facts have come to the attention of such counsel which
lead it to believe that the Registration Statement or the
Prospectus or any amendment or supplement (if any) thereto,
contains any untrue statement of a material fact or omitted to
state a material fact required to be
- 16 -
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the First Closing Date
or the Second Closing Date, as the case may be, contained any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances
under which they were made (except, in each case, for the
financial statements and other financial data included therein
as to which such counsel need express no opinion); to such
counsel's knowledge after investigation, there are no legal or
governmental proceedings pending or threatened, including,
without limitation, any such proceedings that are related to
environmental or employment discrimination matters, required to
be described in the Registration Statement or the Prospectus
which are not so described or which question the validity of
this Agreement or any action taken or to be taken pursuant
thereto, nor is there any transaction, relationship, agreement,
contract or other document of a character required to be
described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement by the Act,
which is not described or filed as required;
(xi) The Company has full corporate power and authority to enter
into and perform this Agreement; the performance of the
Company's obligations hereunder and the consummation of the
transactions described herein have been duly authorized by the
Company by all necessary corporate action and this Agreement has
been duly executed and delivered by and on behalf of the
Company, and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms, except that rights to indemnity or contribution may be
limited by applicable law and except as enforceability of this
Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally, and by equitable principles limiting the right
to specific performance or other equitable relief; no consent,
approval, authorization or other order or decree of any court,
regulatory or governmental body, arbitrator, administrative
agency or other instrumentality of the United States, Florida,
or to the knowledge of such counsel, any other jurisdiction
having jurisdiction over the Company or the Bank is required for
the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement (except for
compliance with the Act, the Exchange Act, applicable Blue Sky
Laws and the clearance of the underwriting arrangements by the
NASD);
(xii) The execution, delivery and performance of this Agreement
by the Company will not: (A) violate any provisions of the
Articles of Incorporation or By-laws of the Company or the Bank;
(B) violate any provisions of, or result in the breach,
modification or termination of, or constitute a default under,
any agreement, lease, franchise, license, indenture, permit,
mortgage, deed of trust, other evidence of indebtedness or other
instrument known to such counsel after investigation, to which
the Company or the Bank is a party or by which the Company or
the Bank, or any of their respective owned or leased property is
bound, and which is filed as an exhibit to the Registration
Statement; or (C) violate any statute, ordinance, order, rule,
decree or regulation of any court, regulatory or governmental
body, arbitrator, administrative agency or other instrumentality
of the United States, Florida, or to the knowledge of such
counsel, any other jurisdiction having jurisdiction over the
Company or the Bank (assuming compliance with all applicable
federal and state securities laws);
(xiii) Subject to the capital contribution by the Company to the
Bank of $10,000,000 of the net proceeds from the sale of the
Common Shares to the Underwriters pursuant to this Agreement,
and the satisfaction of the conditions set forth in the Charter
Approval and the Approval of Deposit Insurance, the Bank will be
duly organized and validly existing under the laws of the United
States as a commercial bank and will have all requisite
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement, the Prospectus and the Applications, and
is not required to be duly qualified as a foreign corporation in
any state, except where the failure so to qualify would not have
a Material Adverse Effect on the
- 17 -
conditions or earnings of the Company and the Bank considered as
one enterprise or of the Bank considered separately, and no
proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such qualification;
(xiv) As of the respective times the Charter Application and the
Deposit Insurance Application were filed with the respective
authorities and as of the First Closing Date and the Second
Closing Date, as the case may be: (A) such applications each
conformed in all material respects to the respective applicable
requirements of the OCC, the Federal Deposit Insurance Act and
the rules and regulations promulgated by the respective
authorities thereunder; and (B) to such counsel's knowledge
after investigation as of such times such Applications contained
no untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(xv) To such counsel's knowledge after investigation, except as
described in the Prospectus, there are no holders of Common
Stock or other securities of the Company, or securities that are
convertible or exchangeable into Common Stock or other
securities of the Company, that have rights to the registration
of such securities under the Act or any Blue Sky Laws;
(xvi) The Common Stock is registered under the Exchange Act;
(xvii) The Company is not, nor with the giving of notice or
passage of time or both would be, in violation of its Articles
of Incorporation or By-laws or, to such counsel's knowledge
after investigation, in default in any material respect in the
performance of any agreement, lease, franchise, license, permit,
mortgage, deed of trust, evidence of indebtedness or other
instrument or document that is filed as an exhibit to the
Registration Statement, to which the Company is subject or
bound;
(xviii) The Company is not an "investment company", an
"affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended, and, upon its
receipt of any proceeds from the sale of the Shares, assuming
application of the proceeds in the manner set forth under the
caption "Use of Proceeds" in the Prospectus, the Company will
not become or be deemed to be an "investment company"
thereunder;
(xix) The description in the Registration Statement and the
Prospectus of statutes, law, regulations, legal and governmental
proceedings, and contracts and other legal documents described
therein fairly and correctly presents, in all material respects,
the information required to be included therein by the Act; and
(xx) All offers and sales by the Company of its capital stock
before the date hereof were at all relevant times duly
registered under or exempt from the registration requirements of
the Act, and were duly registered under or the subject of an
available exemption from the registration requirements of any
applicable Blue Sky Laws.
In rendering such opinion, counsel for the Company may rely, to the
extent counsel deems such reliance proper, as to matters of fact upon
certificates of officers of the Company and of governmental officials, and
copies of all such certificates shall be furnished to the Representatives and
for the Underwriters on or before each Closing Date.
(e) The Representatives shall have received an opinion of Holland &
Knight LLP, counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the
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issuance and sale of the Shares by the Company, the Registration Statement and
other related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents and shall have exhibited to them
such papers and records as they request for the purpose of enabling them to pass
upon such matters.
(f) The Representatives shall have received on each Closing Date, a
certificate of Xxxxxx X. Xxxxxxx, in his capacity as President and Chief
Executive Officer; and ____________, in his capacity as principal financial
officer of the Company, to the effect that:
(i) The representations and warranties of the Company set forth
in section 2 hereof are true and correct in all material
respects as of the date of this Agreement and as of the date of
such certificate, and the Company has complied with all the
agreements and satisfied all the conditions to be performed or
satisfied by it at or prior to the date of such certificate;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary
Prospectus or any amendment or supplement thereto; no stop order
suspending the effectiveness of the Registration Statement has
been issued; and to the knowledge of the respective signatories,
no proceedings for that purpose have been initiated or are
pending or contemplated under the Act or under the Blue Sky Laws
of any jurisdiction;
(iii) Each of the respective signatories has carefully examined
the Registration Statement and the Prospectus, and any amendment
or supplement thereto, and such documents contain all statements
required to be stated therein, and do not include 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 since the date on which
the Registration Statement was initially filed, no event has
occurred that was required to be set forth in an amended or
supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth; and
(iv) Since the date on which the Registration Statement was
initially filed with the Commission, there shall not have
occurred any change or development involving, a Material Adverse
Effect, whether or not arising from transactions in the ordinary
course of business relating to the organization of the Company
or the Bank, except as disclosed in the Prospectus and the
Registration Statement as heretofore amended or (but only if the
Representatives expressly consent thereto in writing) as
disclosed in an amendment or supplement thereto filed with the
Commission and delivered to the Representatives after the
execution of this Agreement; since such date and except as so
disclosed or in the ordinary course of business, the Company has
not incurred any liability or obligation, direct or indirect, or
entered into any transaction which is material to the Company;
since such date and except as so disclosed, there has not been
any change in the outstanding capital stock of the Company, or
any change that is material to the Company in the short-term
debt or long-term debt of the Company; since such date and
except as so disclosed, the Company has not acquired any of the
Common Stock or other capital stock of the Company nor has the
Company declared or paid any dividend, or made any other
distribution, upon its outstanding Common Stock payable to
shareholders of record on a date prior to such Closing Date;
since such date and except as so disclosed, the Company has not
incurred any material contingent obligations, and no material
litigation is pending or threatened against the Company; and,
since such date and except as so disclosed, the Company has not
sustained any material loss or interference from any strike,
fire, flood, windstorm, accident or other calamity (whether or
not insured) or from any court or governmental action, order or
decree.
The delivery of the certificate provided for in this subsection (f)
shall be and constitute a representation and warranty of the Company as to the
facts required in the immediately foregoing clauses (i), (ii), (iii), and (iv)
to be set forth in the certificate.
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(g) At the time this Agreement is executed and also on each Closing
Date, there shall be delivered to the Representatives a letter addressed to the
Representatives, as the representatives of the Underwriters, from Xxxx, Xxxxx &
King, Inc., the Company's independent accountants, the first letter to be dated
the date of this Agreement, the second letter to be dated the First Closing Date
and the third letter (if applicable) to be dated the Second Closing Date, which
shall be in form and substance satisfactory to the Representatives and shall
contain information as of a date within five days of the date of such letter.
There shall not have been any change or decrease set forth in any of the letters
referred to in this subsection (i) which makes it impracticable or inadvisable
in the judgment of the Representatives to proceed with the public offering or
purchase of the Shares as contemplated hereby.
(h) The Shares shall have been qualified or registered for sale under
the Blue Sky Laws of such jurisdictions as shall have been specified by the
Representatives, the underwriting terms and arrangements for the offering shall
have been cleared by the NASD, and the Common Stock shall have been approved for
listing on the OTC Bulletin Board and shall have been registered under the
Exchange Act.
(i) Such further certificates and documents as the Representatives
may reasonably request (including certificates of officers of the Company).
(j) A written agreement or agreements signed by officers and
directors of the Company to the effect that such persons will not offer to sell,
sell, grant any option for the sale, of, or otherwise dispose of any shares of
Common Stock, or any rights to purchase shares of Common Stock, in the open
market or otherwise, for a period of 180 days after the date of the Prospectus,
except with the prior written consent of the Underwriter and except for the sale
to the Company of the Organizational Shares by Xxxxxx X. Xxxxxxx.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Representatives and to Holland & Knight LLP, counsel for the Underwriters. The
Company shall furnish the Representatives with such manually signed or conformed
copies of such opinions, certificates, letters and documents as the
Representatives may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied when and as
required by this Agreement, this Agreement at the election of the
Representatives will terminate upon notification to the Company without
liability on the part of any Underwriter, including the Representatives or the
Company except for the provisions of section 6(n) hereof, the expenses to be
paid by the Company pursuant to section 7 hereof and except to the extent
provided in section 10 hereof.
9. MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT. The Company will use
its best efforts to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement, and, if such stop order is issued,
to obtain as soon as possible the lifting thereof.
10. INDEMNIFICATION.
(a) The Company subject to the last paragraph of this section 10,
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act or the Exchange Act,
from and against any losses, claims, damages, expenses, liabilities, or actions
in respect thereof ("Claims"), joint or several, to which such Underwriter or
each such controlling person may become subject under the Act, the Exchange Act,
Blue Sky Laws, or other federal or state statutory laws or regulations, at
common law or otherwise (including payments made in settlement of any
litigation), insofar as such Claims arise out of or are based upon any breach of
any representation, warranty, or covenant made by the Company in this Agreement,
or any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or in any application filed
under any Blue Sky Law or other document executed by the Company for that
purpose or based upon written information furnished by the Company and filed in
any state or other jurisdiction to qualify any or all of the Shares under the
- 20 -
securities laws thereof (any such document, application, or information being
hereinafter called a "Blue Sky Application") 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. The
Company, subject to the last paragraph of this section 10, agrees to reimburse
each Underwriter and each such controlling person for any legal fees or other
expenses incurred by such Underwriter or any such controlling person in
connection with investigating or defending any such Claim; provided, however,
that the Company will not be liable in any such case to the extent that: (i) any
such Claim 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 supplement thereto or in any Blue
Sky Application in reliance upon and in conformity with the written information
furnished to the Company pursuant to section 4 of this Agreement; or (ii) such
statement or omission was contained or made in any Preliminary Prospectus and
corrected in the Prospectus and (1) any such Claim suffered or incurred by any
Underwriter (or any person who controls any Underwriter) resulted from an
action, claim or suit by any person who purchased Shares that are the subject
thereof from such Underwriter in the offering, and (2) such Underwriter failed
to deliver or provide a copy of the Prospectus to such person at or prior to the
confirmation of the sale of such Shares in any case where such delivery is
required by the Act, unless such failure was due to failure by the Company to
provide copies of the Prospectus to the Underwriters as required by this
Agreement. The indemnification obligations of the Company as provided above are
in addition to and in no way limit any liabilities the Company may otherwise
have.
(b) The Company agrees to indemnify and hold harmless each
Underwriter and each controlling person from and against any Claims to which
such Underwriter or each such controlling person may become subject under the
Act, the Exchange Act, Blue Sky Laws or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in settlement
of any litigation), insofar as such Claims arise out of or are based upon any
breach of any representations, warranty or covenant made by such parties in this
Agreement.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and each of its officers who
sign the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act, against any Claim to
which the Company, or any such director, officer, or controlling person may
become subject under the Act, the Exchange Act, Blue Sky Laws or other federal
or state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter), insofar as such Claim arises out
of or is based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any Blue Sky
Application, or arises out of or is 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 amendment or supplement thereto,
or in any Blue Sky Application, in reliance solely upon and in conformity with
the written information furnished by the Representatives to the Company pursuant
to section 5 of this Agreement. Each Underwriter will severally reimburse any
legal fees or other expenses incurred by the Company, or any such director,
officer, or controlling person in connection with investigating or defending any
such Claim, and from any and all Claims solely resulting from failure of an
Underwriter to deliver a Prospectus, if the person asserting such Claim
purchased Shares from such Underwriter and a copy of the Prospectus (as then
amended if the Company shall have furnished any amendments thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim. The indemnification obligations of
each Underwriter as provided above are in addition to any liabilities any such
Underwriter may otherwise have. Notwithstanding the provisions of this section,
no Underwriter shall be required to indemnify or reimburse the Company, or any
officer, director or controlling person in an aggregate amount in excess of the
total price at which the Shares purchased by any such Underwriter hereunder were
offered to the public, less the amount of any damages such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
- 21 -
(d) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action in respect of a Claim, such
indemnified party will, if a Claim in respect thereof is to be made against an
indemnifying party under this section, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve an indemnifying party from any liability it may have to
any indemnified party under this section or otherwise. In case any such action
is brought against any indemnified party, and such indemnified party notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that he, she or it may wish,
jointly with all other indemnifying parties, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party shall
have been advised by counsel that there may be legal defenses available to the
indemnified party that are different from or additional to those available to
any indemnifying party and in the reasonable judgment of such counsel it is
advisable for the indemnified party to employ separate counsel, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party will not be
liable for any settlement of any proceeding effected without its written
consent, which shall not be unreasonably withheld.
(e) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this section for any legal fees 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 assumption of legal defenses in
accordance with the proviso to the last sentence of subsection
(e) of this section (it being understood, however, that the
indemnifying party shall not be liable for the legal fees and
expenses of more than one separate counsel, approved by the
Representatives, if one or more of the Underwriters or their
controlling persons are the indemnified parties);
(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 the
indemnified party's notice to the indemnifying party of
commencement of the action; or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(f) If the indemnification provided for in this section is
unavailable to an indemnified party under subsection (a), (b), or (c) hereof in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Underwriters from the
offering of the Shares; 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 and the Underwriters in connection with the statements
or omissions which resulted in such Claim, as well as any other
relevant equitable considerations.
The relative benefits received by each of the Company and the
Underwriters shall be deemed to be in such proportion so that the Underwriters
are responsible for that portion represented by the percentage that the amount
of the underwriting discounts and commissions per share appearing on the cover
page of the Prospectus
- 22 -
bears to the public offering price per share appearing thereon, and the Company
(including its officers and directors and controlling persons) is responsible
for the remaining portion. The relative fault of the Company and the
Underwriters 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' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the Claims referred to
above shall be deemed to include, subject to the limitations set forth in
subsections (e) and (f) of this section, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
(g) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this section were determined by pro
rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method or allocation which does not
take into account the equitable considerations referred to in subsection (f) of
this section. Notwithstanding the other provisions of this section, no
Underwriter shall be required to contribute any amount that is greater than the
amount by which the total price at which the Shares underwritten 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this section are several in proportion to their
respective underwriting commitments and not joint.
11. DEFAULT OF UNDERWRITERS. It shall be a condition to the obligations of
each Underwriter to purchase the Shares in the manner as described herein, that,
except as hereinafter provided in this section, each of the Underwriters shall
purchase and pay for all the Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on either the First Closing Date or the
Second Closing Date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed ten
percent of the total number of Shares that the Underwriters are obligated to
purchase on such Closing Date, the Representatives may make arrangements for the
purchase of such Shares by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date the nondefaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Shares which such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of Shares with respect to which
such default or defaults occur is greater than ten percent of the total number
of Shares which the Underwriters are obligated to purchase on such Closing Date,
and arrangements satisfactory to the Representatives for the purchase of such
Shares by other persons are not made within thirty-six hours after such default,
this Agreement will terminate without liability on the part of any nondefaulting
Underwriter or the Company, except for the expenses to be paid by the Company
pursuant to section 7 hereof, and except to the extent provided in section 10
hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, 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 in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
12. EFFECTIVE DATE. This Agreement shall become effective upon the
execution and delivery of this Agreement by the parties hereto. Such execution
and delivery shall include an executed copy of this Agreement sent by
telecopier, facsimile transmission or other means of transmitting written
documents.
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13. TERMINATION. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof, this Agreement may be terminated by the
Representatives prior to or on the First Closing Date and the over-allotment
option from the Company referred to in section 5 hereof, if exercised, may be
cancelled by the Representatives at any time prior to or on the Second Closing
Date, if in the judgment of the Representatives, payment for and delivery of the
Shares is rendered impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and effect on
the date hereof, shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the New York
Stock Exchange or the American Stock Exchange, or trading in securities
generally shall have been suspended or materially limited on either such
exchange or on The Nasdaq Stock Market or OTC Bulletin Board or a general
banking moratorium shall have been established by either federal or state
authorities in New York, Florida or Wisconsin;
(b) any development or prospective development involving particularly
the business or properties or securities of the Company or the Bank or
transactions contemplated by this Agreement has occurred that, in the judgment
of the Representatives makes it impractical or inadvisable to offer or deliver
the Shares; including, but not limited to, events set forth in section 8(b); or
(c) an outbreak or escalation of hostilities or other national or
international calamity or any substantial change in political, financial, or
economic conditions shall have occurred or shall have accelerated to such
extent, in the judgment of the Representatives, as to have a material adverse
effect on the financial markets of the United States, or to make it
impracticable or inadvisable to proceed with completion of the sale of and
payment for the Shares as provided in this Agreement.
Any termination pursuant to this section shall be without liability
on the part of any Underwriter to the Company, or on the part of the Company to
any Underwriter, except for expenses to be paid by the Company pursuant to
section 7 hereof or reimbursed by the Company pursuant to section 6(n) hereof
and except as to indemnification to the extent provided in section 10 hereof.
14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective
indemnities, agreements, representations, warranties, covenants and other
statements of the Company, of its officers or directors, and of the several
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 any
Underwriter or the Company or any of their partners, officers, directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder.
15. NOTICES. All communications hereunder will be in writing and, if sent
to the Representatives, will be mailed, delivered, telecopied (with receipt
confirmed) or telegraphed and confirmed to Xxxxxx X. Xxxxx & Co. Incorporated at
000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxx,
Managing Director, with a copy to Xxxxxxx X. Xxxxxxxxx, Esq., Holland & Knight
LLP, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx, 00000 and if sent to
the Company, will be mailed, delivered, telecopied (with receipt confirmed) or
telegraphed and confirmed to the Company at 000 0xx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, with a copy to Xxxxxx X. XxXxxxxxx,
XxXxxxxxx & Xxxxx, P.A., 0000 Xxxxxxx Xxx Xxxxxxxxx, Xxxxx 000-X, Xxxxxx,
Xxxxxxx 00000.
16. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in section 10 hereof and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares as such from any of the Underwriters merely
by reason of such purchase.
- 24 -
17. PARTIAL UNENFORCEABILITY. If any section, paragraph, clause or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
18. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida without
reference to conflict of law principles thereunder. This Agreement may be signed
in various counterparts which together shall constitute one and the same
instrument, and shall be effective when at least one counterpart hereof shall
have been executed by or on behalf of each party hereto.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including the Representatives, all in accordance with its terms.
Very truly yours,
COASTAL BANK CORPORATION
By:
-----------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
- 25 -
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the
date first above written.
By: XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX XXXXX & CO., INCORPORATED
Acting as Representatives of the several
Underwriters (including themselves) identified
in Schedule I annexed hereto.
By:
------------------------
Authorized Representative
By:
------------------------
Authorized Representative
- 26 -
Coastal Bank Corporation
SCHEDULE I
NUMBER OF FIRM
SHARES TO
NAME OF UNDERWRITER BE PURCHASED
------------------- --------------
Xxxxxx X. Xxxxx & Co. Incorporated
Xxxxxx Xxxxx & Co., Incorporated
Total ------------------
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EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into by and
between _________________________, a nationally-chartered bank with its
principal office in Naples, Florida (the "Escrow Agent"), Coastal Bank
Corporation, a Florida corporation (the "Company"), and Coastal Bank, N.A., a
national banking organization, to be located in Naples, Florida (the "Bank").
BACKGROUND
The Company has prepared and filed with the Board of Governors of
the Federal Reserve System an application to become a bank holding company (the
"Holding Company Application"). Incorporators of the Bank, on behalf of the
Bank, have (i) an application to organize a National Bank with the United States
Comptroller of the Currency and (ii) an Application for Federal Deposit
Insurance with the Federal Deposit Insurance Corporation (collectively the "Bank
Approvals" and together with the Holding Company Application the "Regulatory
Approvals"). The Company proposes to sell up to 1,725,000 shares of its common
stock, par value $.01 per share (the "Offering") to Xxxxxx X. Xxxxx & Co.
Incorporated ("Baird") and Xxxxxx Xxxxx & Co., Incorporated, as representatives
of the several underwriters (the "Representatives"), identified on Schedule I to
an underwriting agreement between the Company and the Representatives dated
_________ __, 199_. The parties desire that the Offering proceeds (the
"Proceeds") plus interest and earnings thereon (together with the Proceeds, the
"Escrow Funds") shall be held in an escrow account at a nationally-chartered,
FDIC-insured bank until such time as the Bank and the Company receive the
Regulatory Approvals.
THEREFORE, in consideration of the mutual covenants contained in
this Escrow Agreement, the parties agree as follows:
TERMS
1. If on the closing date of the Offering or the closing date
pertaining to the exercise of the underwriters' over-allotment option in the
Offering, the Company and the Bank have not received the Regulatory Approvals,
the Company and the Bank will deliver the Proceeds to the Escrow Agent to be
held by the Escrow Agent pursuant to the terms of this Escrow Agreement.
2. The Escrow Funds are to be invested by the Escrow Agent in
Permitted Investments. Interest and earnings on the Escrow Funds will be deemed
earned by the Company and the Company's federal tax identification number will
be used to establish any accounts for reporting such interest and earnings. The
term "Permitted Investments" means the following investments so long as they
have maturities of 90 days or less: (a) obligations issued or guaranteed by the
United States or by any person controlled or supervised by or acting as an
instrumentality of the United States or by any person controlled or supervised
by or acting as an instrumentality of the United States pursuant to authority
granted by Congress; (b) obligations issued or guaranteed by any state or
political subdivision thereof rated either Aa or higher, or MIG 1 or higher, by
Xxxxx'x Investors Service, Inc. or AA or higher, or an equivalent, by Standard &
Poor's Corporation, both of New York, New York, or their successors; (c)
commercial or finance paper which is rated either Prime-1 or higher or an
equivalent by Xxxxx'x Investors Service, Inc. or A-1 or higher or an equivalent
by Standard & Poor's Corporation, both of New York, New York, or their
successors; and (d) certificates of deposit or time deposits of banks or trust
companies, organized under the laws of the United States, having a minimum
equity of $500,000,000.
3. The Escrow Funds must be disbursed in accordance with paragraph 4
hereof as a condition precedent to the Company and the Bank having any right,
title, or interest (legal or equitable) in any of the Escrow Funds.
The Company acknowledges and agrees that its rights under this Escrow Agreement
are valid and sufficient consideration for the issuance of the Company's Common
Stock in the Offering.
4. The Company may obtain disbursements of Escrow Funds [for general
operating expenses,] including costs associated with opening the Bank's main
facility and repayment of organizational debt [to the extent] the note holders
of such debt buy stock in the Offering. The Escrow Agent will release Escrow
Funds permitted to be disbursed by it hereunder in the amount specified in
writing by the Company, upon receipt by the Escrow Agent of written
certification from the Company that the Escrow Funds are being disbursed for the
purposes described in the preceding sentence. The Company, as applicable, must
also provide Baird with a copy of such written certification. Upon receipt of
written certification from the Company that each has received all necessary
Regulatory Approvals to conduct its respective business, the Escrow Agent shall
promptly release and pay to the Company the Escrow Funds, net of the Escrow
Agent's fees for services provided by it under this Agreement and any amounts
previously distributed by the Escrow Agent pursuant to this paragraph 4.
5. If the Company and the Bank have not received all of the
Regulatory Approvals by _______________, 199_, the Escrow Agent will disburse
the Escrow Funds to the shareholders of record on such date pro rata based on
the amount that the Company common stock held by each shareholder bears to the
total amount of Company common stock outstanding on such date. The Company will
cause the Company's registrar and transfer agent to cooperate with the Escrow
Agent to identify such shareholders.
6. The Company and the Bank shall have the right to inspect and
obtain copies of the records of the Escrow Agent and to receive monthly reports
of the status of the Escrow Funds.
7. The Escrow Agent may resign as escrow agent by notice to the
other parties hereto (the "Resignation Notice"). If, prior to the expiration of
60 business days after the delivery of the Resignation Notice, the Escrow Agent
shall not have received written instructions from the Company or the Bank
designating a banking corporation or trust company organized either under the
laws of the United States or of any state meeting the minimum capital and
surplus requirements as successor escrow agent and consented to in writing by
such successor escrow agent, the Escrow Agent may apply to a court of competent
jurisdiction to appoint a successor escrow agent. Alternatively, if the Escrow
Agent shall have received such written instructions, it shall promptly transfer
the Escrow Funds to such successor escrow agent. Upon the appointment of a
successor escrow agent and the transfer of the Escrow Funds thereto, the duties
of the Escrow Agent hereunder shall terminate.
8. In the event of a dispute between the parties as to the proper
disposition of the Escrow Funds which continues for 90 days or more, the Escrow
Agent shall be entitled to submit the dispute to a court of competent
jurisdiction and shall thereupon be relieved of any obligations or liability.
9. The Company shall pay the Escrow Agent reasonable compensation
for its services hereunder and reimburse the Escrow Agent for all disbursements
and advances incurred or made by it in the performance of its duties hereunder
(including, without limitation, the reasonable fees, expenses and disbursements
of its counsel) and to indemnify and hold the Escrow Agent harmless from and
against any and all taxes, expenses (including reasonable counsel fees),
assessments, liabilities, claims, damages, actions, suits or other charges
incurred by or assessed against it for any thing done or omitted by it in the
performance of its duties hereunder, except as a result of its own gross
negligence or willful misconduct. The agreement contained in this paragraph
shall survive any termination of the duties of the Escrow Agent hereunder.
10. The Escrow Agent shall have no duties or responsibilities,
except those expressly set forth herein. The Escrow Agent may consult with
counsel, shall be fully protected with respect to any action taken or omitted in
good faith on advice of counsel and shall have no liability hereunder except for
willful misconduct or negligence. The Escrow Agent shall have no responsibility
as to the validity, collectibility or value of the Escrow Funds or for
investment losses related thereto, provided the Escrow Funds have been invested
in accordance with paragraph 2 above, and it may rely on any notice,
instruction, certificate, statement, request, consent, confirmation, agreement
A-2
or other instrument that it believes to be genuine and to have been signed or
presented by a proper person or persons. If the Escrow Agent shall be uncertain
as to its duties or rights hereunder or shall receive instructions from any of
the undersigned with respect to the Escrow Funds, which, in its opinion, are in
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action until it shall be directed otherwise in writing
by all of the other parties hereto or by order of a court of competent
jurisdiction. Notwithstanding any provision to the contrary contained in any
other agreement between any of the parties hereto, the Escrow Agent shall have
no interest in the Escrow Funds except as provided in this Agreement.
11. This Agreement shall be binding upon and inure to the benefit of
the parties named herein and their respective successors and permitted assigns.
No party may assign either this Agreement or any of its rights, interest, or
obligations hereunder without the prior written approval of the other parties.
12. Each of the parties submits to the jurisdiction of any state or
federal court sitting in Naples, Florida, in any action or proceeding arising
out of or relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court. Each of
the parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other party with respect thereto. Any party may
make service on the other party by sending or delivering a copy of the process
(i) to the party to be served at the address and in the manner provided for the
giving of notices in paragraph 13 below or (ii) to the party to be served in
care of the Process Agent at the address and in the manner provided for the
giving of notices in paragraph 13 below. Nothing in this paragraph 13, however,
shall affect the right of any party to serve legal process in any other manner
permitted by law or in equity. Each party agrees that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or in equity.
13. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
Escrow Agent: Company:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
Bank: Xxxxx:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
With copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Holland & Knight LLP
000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxx, XX 00000
14. This Escrow Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State
A-3
of Florida or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Florida.
15. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
16. This Escrow Agreement shall continue until such time as all
Escrow Funds, including any earnings thereon, have been distributed or refunded
pursuant to the terms of this Escrow Agreement.
Dated this ______ day of November, 1997.
COASTAL BANK CORPORATION
By:
----------------------------
Its:
---------------------------
COASTAL BANK, N.A.
By:
----------------------------
Its:
---------------------------
--------------------
(Escrow Agent)
By:
----------------------------
Its:
---------------------------
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