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EXHIBIT 1.1
___________ Shares
(subject to increase of up to additional ________ shares
in the event of an oversubscription)
PACIFIC UNITED GROUP, INC.
(A DELAWARE CORPORATION)
Common Stock
($____ par value per share)
UNDERWRITING AGREEMENT
_____________, 1996
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
Potomac Tower
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Pacific United Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with you and the other underwriters named in Schedule A
hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided), for whom you are acting as
representative (the "Representative"), whereby the Company proposes to issue
and sell to you and the Underwriters an aggregate of _________ shares (the
"Firm Common Shares") of its authorized but unissued common stock, $____ par
value per share (the "Common Stock"). In addition, the Company agrees to grant
to you and the Underwriters an option to purchase up to an aggregate of
________ additional shares of Common Stock (the "Optional Common Shares") as
provided in Section 1 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the Registration Statement (as hereinafter defined) or as
soon thereafter as in your judgment is advisable (the "Offering").
The Company hereby confirms its agreement with you and the
Underwriters as follows:
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SECTION 1. Purchase, Sale and Delivery of Common Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, (i) the Company agrees to issue
and sell to you and the Underwriters, as the case may be, an aggregate of
________ of the Firm Common Shares and (ii) you and the Underwriters agree,
severally and not jointly, to purchase from the Company such Firm Common Shares.
The purchase price per share to be paid by the Underwriters to the Company shall
be $____ per share.
The closing of the transactions contemplated by this Agreement shall
be held at _____ a.m. at the offices of Jeffer, Mangels, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
Los Angeles, California (or such other place as may be agreed upon by the
Company and the Representative) on the third (or, if the purchase set forth in
the above paragraph is determined after 4:30 p.m., Washington, D.C. time, the
fourth) business day following the first date that any of the Common Shares are
released by you for sale to the public (the "First Closing Date"); provided,
however, that if the Prospectus (as hereinafter defined) is at any time prior
to the First Closing Date recirculated to the public, the First Closing Date
shall occur upon the later of the third (or, if the purchase set forth in the
above paragraph is determined after 4:30 p.m., Washington, D.C. time, the
fourth) business day following the first date that any of the Common Shares are
released by you for sale to the public or the date that is 48 hours after the
date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for your account or for the respective
accounts of the Underwriters, as the case may be, against payment by you for
your account or for the accounts of the several Underwriters, as the case may
be, of the purchase price therefor by wire transfer or certified or official
bank check payable in next day funds to the order of the Company. The
certificates for the Firm Common Shares shall be registered in such names and
denominations as you shall have requested at least two full business days prior
to the First Closing Date, and shall be made available for checking and
packaging on the business day preceding the First Closing Date at any office of
U.S. Stock Transfer Corporation designated by you. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to your obligation or the obligations of the Underwriters, as
the case may be.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, any amount up to an aggregate of ________
Optional Common Shares at the purchase price per share to be paid for the Firm
Common Shares, for use solely in covering any over-allotments made for the
account of any of the Underwriters in the sale and distribution of the Firm
Common Shares. The option granted hereunder may be exercised at any time (but
not more than once) within 30 days after the first date that any of the Common
Shares are released by you for sale to the public, upon notice by you to the
Company setting forth the aggregate number of Optional Common Shares as to
which the Underwriters are exercising the option, the names and denominations
in which the certificates for such shares are to be registered and the time and
place at which such certificates will be delivered. Such time of delivery
(which may not be earlier than the First Closing Date), being herein referred
to as the
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"Second Closing Date," shall be determined by you, but if at any time other
than the First Closing Date shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. The number of
Optional Common Shares to be purchased by each Underwriter shall be determined
by multiplying the number of Optional Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is
the number of Firm Common Shares to be purchased by such Underwriter as set
forth opposite its name in Schedule A and the denominator of which is ________
(subject to such adjustments to eliminate any fractional share purchases as you
in your discretion may make). Certificates for the Optional Common Shares will
be made available for checking and packaging on the business day preceding the
Second Closing Date at any office of U.S. Stock Transfer Corporation designated
by you. The manner of payment for and delivery of the Optional Common Shares
shall be the same as for the Firm Common Shares purchased from the Company as
specified in the two preceding paragraphs. At any time before lapse of the
option, you may cancel such option by giving written notice of such
cancellation to the Company.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Common Shares and to make payment and receipt
therefor. You, individually and not as the Representative of the Underwriters,
may (but shall not be obligated to) make payment for any Common Shares to be
purchased by any Underwriter whose funds shall not have been received by you 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 of its obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters agree to
make a public offering of the Common Shares as soon after the effective date of
the Registration Statement (as hereafter defined) as in your judgment is
advisable and at the public offering price set forth on the cover page of, and
on the terms set forth in, the Prospectus.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters as of the date hereof as
follows:
(a) A registration statement on Form S-1 (File No. 33-_____) with
respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder (the "Rules and Regulations"), and has
been filed with the Commission. The Company has prepared and has filed or
proposes to file prior to the effective date of such registration statement an
amendment or amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared. There has been delivered
to you one signed copy of such registration statement and amendments, together
with two copies of each exhibit filed therewith. Conformed copies of such
registration statement and amendments (but without exhibits) and of the related
Preliminary Prospectus (as defined below) have been delivered to you in such
reasonable quantities as you have requested. The Company will also file with
the Commission one of the following: (i) prior to effectiveness of such
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registration statement, a further amendment thereto, including the form of
final prospectus, or (ii) a final prospectus in accordance with Rules 430A and
424(b) of the Rules and Regulations. As filed, such amendment and form of
final prospectus, or such final prospectus, shall include all Rule 430A
Information (as defined below) and, except to the extent that you shall agree
to a modification, shall be in all substantive respects in the form furnished
to you prior to the date and time that this Agreement was executed and
delivered by the parties hereto or, to the extent not completed at such date
and time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as the
Company shall have previously advised you in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date, shall also mean such registration
statement as so amended; provided, however, that such term shall also include
all Rule 430A Information deemed to be included in such registration statement
at the time such registration statement becomes effective as provided by Rule
430A of the Rules and Regulations. The term "Preliminary Prospectus" shall
mean any preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the Common Shares
in the form in which it is first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no filing pursuant to Rule 424(b) of
the Rules and Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective, pursuant to Rule
430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and the most recent
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time the
Registration Statement becomes effective, and at all times subsequent thereto
up to and including each Closing Date hereinafter mentioned, the Registration
Statement and the Prospectus, and any amendments or supplements thereto, will
contain all material statements and information required to be included therein
by the Act and the Rules and Regulations and will conform to the requirements
of the Act and the Rules and Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
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,
in the light of the circumstances under which they were made, not misleading;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and
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in conformity with written information furnished to the Company by or on behalf
of you or any Underwriter specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in the
State of California and in all other jurisdictions in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, results of operations or
business of the Company, Pacific Thrift (as defined below) and the other
Subsidiaries (as defined below), taken as a whole.
(d) The only subsidiaries of the Company are Pacific Thrift and
Loan Company, a California corporation ("Pacific Thrift"); Consolidated
Reconveyance Company, a California limited partnership; Consolidated
Reconveyance Corporation, a Washington corporation; Lenders Posting and
Publishing Company, a California limited partnership; and Pacific Unified
Mortgage, Inc., a Delaware corporation (individually, a "Subsidiary" and
collectively, the "Subsidiaries").
(e) Pacific Thrift has been duly incorporated and is validly
existing as an industrial loan company in good standing under the laws of the
State of California, and each of the other Subsidiaries has been duly
incorporated or organized as a limited partnership, as applicable, and is
validly existing as a corporation or limited partnership, as applicable, in
good standing under the laws of the jurisdiction of its respective
incorporation or organization. All of the issued and outstanding capital stock
or limited partnership interests, as applicable, of each of the Subsidiaries
has been duly authorized and validly issued, is fully paid and nonassessable,
and is owned by the Company in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except for the
security interest therein held by NatWest Bank, N.A.
(f) Each of the Subsidiaries has full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; each of the Subsidiaries is in possession of
and is operating in compliance in all material respects with all
authorizations, licenses, permits, consents, certificates, orders and other
governmental authorizations material to or required for the conduct of its
business, all of which are valid and in full force and effect, and has received
no notice of any proceeding or action relating to the revocation or
modification of any such authorization, license, permit, consent, certificate,
order or other governmental authorization; each of the Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the ownership or leasing of properties or the
conduct of its business requires such qualification, except for jurisdictions
in which the failure to so qualify would not have a material adverse effect on
the financial condition, results of operations or business of the Company and
the Subsidiaries, taken as a whole; and neither the Company nor any of the
Subsidiaries has received notice of any proceeding 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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(g) The deposits of Pacific Thrift are insured by the Federal
Deposit Insurance Corporation ("FDIC") up to legally applicable limits, and no
proceedings for the termination or revocation of such insurance are pending or,
to the best knowledge of the Company, threatened, and no approvals by or
filings with the California Department of Corporations ("DOC"), FDIC or Board
of Governors of the Federal Reserve System ("Federal Reserve Board"), except
such as have already been obtained and are in effect, are necessary to
consummate the Offering.
(h) The Company has, and upon consummation of the Offering will
have, an authorized capitalization as set forth under the heading "Description
of Capital Stock" in the Prospectus. All of the issued and outstanding shares
of capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. Except as described in the Prospectus,
no Common Stock is issued and outstanding and no stockholder of the Company or
other person has any right, option or warrant to acquire any Common Stock.
Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company and the related notes thereto included in the
Prospectus, the Company does not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights to be granted and exercised thereunder set forth in the
Prospectus, accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(i) The Common Shares to be sold by the Company hereunder have
been duly authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be validly issued, fully paid and nonassessable,
and will conform to the description thereof contained in the Prospectus. No
preemptive rights or other rights to subscribe for or purchase exist with
respect to sale of the Common Shares by the Company pursuant to this Agreement.
The certificates used to evidence shares of Common Stock are in due and proper
form.
(j) No approval, consent or authority of the stockholders of the
Company or the Board of Directors of the Company or any governmental agency or
any other third party will be required for the issuance and sale of the Common
Shares to be sold by the Company as contemplated herein or the entering into of
this Agreement, except such as have already been obtained.
(k) The Company has full legal right, power and authority to enter
into this Agreement and to perform the transactions contemplated hereby. This
Agreement has been duly and validly authorized by the Company and upon due
execution and delivery by the Company and the other parties thereto will
constitute the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to limitations imposed by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and subject to any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws, now
or hereafter in effect, relating to or limiting creditors' rights generally.
The making and performance of this Agreement by the Company and the
consummation of the transactions herein
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contemplated will not violate any provisions of the Certificate of
Incorporation or Bylaws, or other organizational document of the Company or any
of the Subsidiaries, and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of
time or both, a default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of the Subsidiaries is a party or by which the Company, any of the
Subsidiaries or any of their respective properties may be bound or affected,
any statute or any authorization, judgment, decree, order, rule or regulation
of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company, any of the Subsidiaries or any of
their respective properties, except where any violation, conflict, breach or
default, whether individually or in the aggregate, would not have a material
adverse effect on the condition (financial or otherwise), business, properties,
result of operations, management or prospects of the Company or the
Subsidiaries, taken as a whole (hereinafter, a "Material Adverse Effect"). No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for compliance with the Act, the Blue Sky laws
applicable to the public offering of the Common Shares by the Underwriters and
the clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD").
(l) The accountants, BDO ▇▇▇▇▇▇▇ LLP and Ernst & Young LLP, each
of whom certified portions of the financial statements and supporting schedules
included in the Registration Statement, are both independent public accountants
within the meaning of the Code of Ethics of the American Institute of Certified
Public Accountants; and such accountants are, with respect to the Company and
each of the Subsidiaries, independent certified public accountants as required
by the Act and the Rules and Regulations.
(m) The financial statements and schedules of the Company, and the
related notes thereto, included in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the Company as
of the respective dates of such financial statements and schedules, and the
consolidated results of operations and changes in financial position of the
Company for the respective periods covered thereby. Such statements, schedules
and related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(l). No other financial
statements or schedules are required to be included in the Registration
Statement. The other financial, statistical and pro forma information and
related notes included in the Registration Statement and the Prospectus (i)
present fairly the information shown therein on a basis consistent (except as
otherwise noted therein) with the audited financial statements of the Company
included therein and (ii) are in compliance in all material respects with the
requirements of the Act.
(n) Neither the Company nor any of the Subsidiaries are (i) in
violation or default of any provision of their respective Certificate of
Incorporation or Articles of Incorporation, as the case may be, or Bylaws or
other organizational documents or (ii) except as disclosed in the Prospectus
and except as to defaults which individually or in the aggregate would not have
a Material Adverse
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Effect, in breach of or default with respect to any provision of any agreement,
judgment, decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it or
any of its properties are bound and, except as to defaults which individually
or in the aggregate would not have a Material Adverse Effect, there does not
exist any state of facts which constitutes an event of default on the part of
the Company as defined in such documents or which, with notice or lapse of time
or both, would constitute such an event of default.
(o) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have
not been described or filed as required. The contracts so described in the
Prospectus are in full force and effect on the date hereof; the descriptions
thereof or references thereto are correct in all material respects; and except
as to defaults that individually or in the aggregate would not be material to
the Company, neither the Company, any of the Subsidiaries, nor, to the
knowledge of the Company, any other party is in material breach of or default
under any of such contracts.
(p) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any of the Subsidiaries is or may
be a party or of which property owned or leased by the Company or any of the
Subsidiaries is or may be the subject, which actions, suits or proceedings
might, individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or are likely to result in a
Material Adverse Effect, and no labor disturbance by any employee of the
Company or any of the Subsidiaries exists or is imminent which might be
expected to affect adversely the Company's condition, properties, business,
results of operations or prospects. Except as disclosed in the Prospectus, no
enforcement proceeding, whether formal or informal, has been commenced against
the Company or any of the Subsidiaries by the FDIC, the DOC or, to the
Company's knowledge, any other governmental authority, nor have any such
proceedings been instituted, threatened or recommended. Except as disclosed in
the Prospectus, neither the Company, any of the Subsidiaries, nor any of their
respective officers or directors is a party or subject to the provisions of any
regulatory action, injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental body affecting the
business of the Company or any of the Subsidiaries.
(q) Except as disclosed in the Prospectus, the Company and each of
the Subsidiaries have good and marketable title to all of their respective
properties and assets, free and clear of all liens, charges, encumbrances or
restrictions, except such as would not materially adversely affect the value of
such properties and assets and would not interfere with the use made or
proposed to be made of such properties and assets by the Company or a
Subsidiary; all of the leases and subleases material to the business of the
Company or any of the Subsidiaries or under which the Company or any of the
Subsidiaries holds properties described in the Prospectus are in full force and
effect; and the Company and the Subsidiaries have no notice of any material
claim of any sort which has been asserted by anyone adverse to the rights of
the Company or a Subsidiary as owner or as lessee or sublessee under any of the
leases or subleases mentioned above, or materially affecting or
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questioning the rights of the Company or a Subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease. Except as disclosed in the Prospectus and other than such leases and
properties as are immaterial in the aggregate, the Company and the Subsidiaries
own or lease all properties as are necessary to their respective operations as
now conducted or as proposed to be conducted.
(r) Since the respective dates as of which information is given
in the Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) neither the Company nor any
of the Subsidiaries has incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or written
agreement or other transaction whether or not arising in the ordinary course of
business or which could result in a material reduction in the future earnings
of the Company; (ii) there has not been any material increase in the
consolidated long-term debt of the Company or in the aggregate dollar or
principal amount of the assets held by the Company, Unified or Pacific Thrift
which are classified as substandard, doubtful or loss or loans which are 90
days or more past due or real estate acquired by foreclosure; (iii) there has
not been any material adverse change in the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company or any
of the Subsidiaries, other than changes resulting from changes in the economy
generally; (iv) there has not been any material adverse change in the aggregate
dollar amount of the deposits or consolidated net worth or spread of the
Company or Pacific Thrift; (v) there has been no material adverse change in the
relationship between the Company or any of its Subsidiaries and their
respective insurance carriers, including, without limitation, cancellation or
other termination of a fidelity bond or any other type of insurance coverage;
(vi) there has been no material change in the management of the Company or any
of the Subsidiaries compared to the information disclosed in the Prospectus;
(vii) neither the Company nor any of the Subsidiaries have sustained any
material loss or interference with their respective businesses or properties
from fire, flood, windstorm, earthquake, accident or other calamity, whether or
not covered by insurance; (viii) the Company has not paid or declared any
dividends or other distributions with respect to its capital stock and the
Company is not in default in the payment of principal or interest on any
outstanding debt obligations; and (ix) there has not been any change in the
capital stock of the Company (other than upon the sale of the Common Shares
hereunder and pursuant to the Restructuring and the Rights Offering, as
described in the Prospectus).
(s) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and the Subsidiaries have sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals and governmental
authorizations to conduct their respective businesses as now conducted; the
expiration of any trademarks, trade names, patent rights, copyrights, licenses,
approvals or governmental authorizations would not have a Material Adverse
Effect; and the Company has no knowledge of any material infringement by it of
trademark, trade name rights, patent rights, copyrights, licenses, trade secret
or other similar rights of others, and, to the Company's knowledge, there is no
claim being made against the Company or any of the Subsidiaries regarding
trademark, trade name, patent, copyright, license, trade secret or other
infringement which could have a Material Adverse Effect.
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(t) Neither the Company nor any of the Subsidiaries have been
advised or have any reason to believe that the Company or any of the
Subsidiaries is not conducting business in compliance with all applicable laws,
rules and regulations; except as disclosed in the Prospectus or where failure
to be so in compliance would not have a Material Adverse Effect or where it is
already in the process of complying.
(u) Except as disclosed in the Prospectus, neither the Company nor
any of the Subsidiaries is in violation of any directive from the FDIC, the DOC
or any other governmental authority, including the Cease and Desist Order
issued by the FDIC dated May 18, 1995 (the "Cease and Desist Order"), and the
Company and the Subsidiaries are in compliance with all federal and state laws
and regulations that regulate or relate to its business, including, without
limitation, the Financial Institutions Recovery, Reform and Enforcement Act of
1989 ("FIRREA"), the Federal Deposit Insurance Act (the "FDIA"), the National
Housing Act (the "NHA"), the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"), the California Industrial Loan Law and all other
applicable laws and regulations where the failure to comply would have a
Material Adverse Effect.
(v) The Company and the Subsidiaries have filed or caused to be
filed all material federal, state and foreign income and franchise tax returns
and have paid all taxes shown as due thereon; and the Company has no knowledge
of any tax deficiency which has been asserted or threatened in writing against
the Company or any of the Subsidiaries which would have a Material Adverse
Effect on the Company or any of the Subsidiaries.
(w) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "Investment Company Act").
(x) The Company has not distributed any offering material in
connection with the offering and sale of the Common Shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement and the
other materials permitted by the Act.
(y) The Company and the Subsidiaries maintain insurance of the
types and in the amounts generally deemed adequate for their businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or the Subsidiaries against theft, forgery,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(z) Neither the Company nor any of the Subsidiaries has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasipublic
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof, the effect of which would have a Material
Adverse Effect.
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(aa) All material transactions between the Company or the
Subsidiaries and their respective officers and directors and their affiliates
have been accurately disclosed in the Prospectus; and the terms of such
transactions are fair to the Company or the Subsidiaries, as the case may be.
(bb) Except as disclosed in the Prospectus, the Company has not:
(i) placed any securities within the last 18 months; (ii) had any material
dealings with any member of the NASD or any person related to or associated
with such member, other than discussions and meetings relating to the proposed
Offering and routine purchases and sales of U.S. Government and agency
securities and other assets; (iii) entered into a financial or management
consulting agreement except as contemplated hereunder and except for the
engagement letter with the Representative, dated July 12, 1995; or (iv) engaged
any intermediary between the Representative and the Company in connection with
the Offering, and no person is being compensated in any manner for such
service.
(cc) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which reasonably
might be expected to constitute, the stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Common Stock.
(dd) The Company has not relied upon the Representative or legal
counsel for the Representative for any legal, tax or accounting advice in
connection with the Offering (except with respect to the qualification of the
Shares for offering and sale under the securities laws of certain states).
(ee) To their respective knowledge, none of the Company or any of
the Subsidiaries is in violation of any Federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including, without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products ("Materials of
Environmental Concern"), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation, as now conducted
or proposed to be conducted (as described in the Prospectus), of the business
of the Company or any of the Subsidiaries under applicable Environmental Laws,
or noncompliance with the terms and conditions thereof, and none of the Company
or any of the Subsidiaries has received any communication (written or oral),
whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Company or any of the Subsidiaries is in violation of any
such Environmental Laws, and there are no circumstances known to the Company
that are reasonably likely to lead to such violation in the future. In
addition, except as set forth in the Prospectus, there is no claim, action,
cause of action, investigation or notice (written or oral) by any person or
entity alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages,
personal injuries, attorney's fees or
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penalties arising out of, based on or resulting from (a) the presence or
release into the environment of any Material of Environmental Concern at any
location owned, controlled, leased, subject to an option to lease or purchased
or operated by the Company or any of the Subsidiaries, now or in the past, or
(b) circumstances forming the basis of any violation or alleged violation of
any Environmental Law (collectively, "Environmental Claims"), pending or
threatened against the Company or any of the Subsidiaries or, to the best
knowledge of the Company, against any person or entity whose liability for any
Environmental Claim the Company or any of the Subsidiaries has retained or
assumed either contractually or by operation of law, except as set forth in the
Prospectus or as would not result in a Material Adverse Effect. There are no
actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that could result in a violation of any
Environmental Law or form the basis of any potential Environmental Claim
against the Company or any of the Subsidiaries or against any person or entity
whose liability for any Environmental Claim the Company or any of the
Subsidiaries has retained or assumed either contractually or by operation of
law.
(ff) None of the Company or any of the Subsidiaries has violated
any Federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws, or any
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), or
the rules and regulations promulgated thereunder. There is (i) no significant
unfair labor practice complaint pending against the Company or any of the
Subsidiaries or, to the best knowledge of the Company, threatened against any
of them, before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any of the Subsidiaries and, to the best
knowledge of the Company, threatened against any of them, (ii) no labor dispute
in which the Company or any of the Subsidiaries is involved nor, to the best
knowledge of the Company, is any labor dispute imminent, other than routine
disciplinary and grievance matters; the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal customers
or vendors and (iii) no union representation question existing with respect to
the employees of the Company or any of the Subsidiaries and, to the best
knowledge of the Company, no union organizing activities are taking place,
except (with respect to any matter specified in clause (i), (ii) or (iii)
above, singly or in the aggregate) such as would not have a Material Adverse
Effect.
Any certificate signed by any officer of the Company and delivered to
you or to your counsel shall be deemed a representation and warranty by the
Company to you as to the matters covered thereby. Any certificate delivered by
the Company to its counsel for purposes of enabling such counsel to render the
opinions referred to in Section 6(c) will also be furnished to the Underwriters
and its counsel and shall be deemed to be additional representations and
warranties by the Company to the Underwriters as to the matters covered thereby
and the Underwriters and its counsel are entitled to rely thereon.
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SECTION 3. Representations and Warranties of the Underwriters. You,
for yourselves or on behalf of the Underwriters, as the case may be, represent
and warrant to the Company as of the date hereof that the information set forth
in the Prospectus (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of the Offering, (ii) on the
inside cover page with respect to stabilization and (iii) under the caption
"Underwriting of Public Offering" in the Prospectus was 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 and is complete and correct in
all material respects. The Representative represents and warrants that it has
been authorized by each of the other Underwriters as the Representative to enter
into this Agreement on behalf of the Underwriters and to act for the
Underwriters in the manner herein provided.
SECTION 4. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereto, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing of
the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed, pursuant
to the applicable paragraph of Rule 424(b) of the Rules and Regulations within
the time period prescribed and will provide evidence satisfactory to you of
such timely filing. The Company will promptly advise you in writing (i) of the
receipt of any comments of the Commission, (ii) of any request of the
Commission for amendment of or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus or for additional information, (iii) when the Registration Statement
shall have become effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose. If the Commission shall enter
any such stop order at any time, the Company will use its best efforts to
obtain the lifting or such order at the earliest possible moment. The Company
will not file any amendment or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus of which you have not first been furnished with a copy a reasonable
time prior to such filing or to which you reasonably object or which is not in
compliance with the Act or the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in your reasonable judgment may be necessary
or advisable to enable the Underwriter to continue the distribution of the
Common Shares and will use its best efforts to cause the same to become
effective as promptly as possible. The Company will fully and completely
comply with the provisions of Rule 430A of the Rules and Regulations with
respect to information omitted from the Registration Statement in reliance upon
such Rule.
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(c) The Company will, if requested by the Representative, prepare
a Term Sheet that complies with the requirements of Rule 434 under the Rules
and Regulations, and the Company will provide the Underwriters with copies of
such Term Sheet and the form of Prospectus used in reliance on Rule 434, in
such number as the Representative may reasonably request. The Company will
timely file the Term Sheet, if any, with the Commission pursuant to and in
accordance with subparagraph (7) of Rule 424(b). The Company will advise the
Representative promptly of any such filing pursuant to Rule 424(b) and shall
provide evidence satisfactory to the Representative of such timely filing.
(d) If, at any time during the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the Act, any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an 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, in
light of the circumstances then existing, not misleading, or if it is necessary
at any time to amend the Prospectus, including any amendments or supplements,
to comply with the Act or the Rules and Regulations, the Company will promptly
advise you thereof and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such statement
or omission or an amendment or supplement which will effect such compliance and
will use its best efforts to cause the same to become effective as soon as
possible; and, in case the Underwriters are required to deliver a Prospectus
after such nine-month period, the Company upon request, but at the expense of
the Underwriters, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act.
(e) As soon as practicable, but not later than 45 days after the
end of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive 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.
(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, at
its expense, but only for the nine-month period referred to in Section 10(a)(3)
of the Act, will furnish to you or mail to your order copies of the
Registration Statement, the Prospectus, the Preliminary Prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such reasonable quantities as you may request, for the
purposes contemplated by the Act.
(g) The Company shall cooperate with you and your counsel to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as you designate,
will comply with such laws and will continue such qualifications, registrations
and exemptions in effect so long as reasonably required for the
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distribution of the Common 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 or where
it would be subject to taxation as a foreign corporation. The Company will
advise you promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your cooperation,
will use its best efforts to obtain the withdrawal thereof.
(h) 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 including, without limitation, reports with
respect to the sale of the Common Shares and the application of the proceeds
thereof as may be required in accordance with Rule 463 under the Act.
(i) During the period of five years after the date of this
Agreement, the Company will furnish to you: (i) at the same time as such are
furnished to its stockholders, copies of the Annual Report of the Company
containing the consolidated balance sheet of the Company and Subsidiaries as of
the close of such fiscal year and consolidated statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other report filed by the Company with the Commission, the NASD or any
securities exchange; (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common Stock;
(iv) as soon as practicable after the filing thereof, of each non-confidential
report or other statement or document filed by the Company with the Commission,
or with any national securities exchange or quotation system on which any
securities of the Company may be listed or quoted; and (v) from time to time,
such other non-confidential information concerning the Company as the
Underwriter may reasonably request.
(j) During the period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, the Company will
not, without your prior written consent (which consent may be withheld at your
sole discretion), issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other securities
convertible into or exchangeable with its Common Stock or other equity
security, other than options or other awards granted under the Company's 1995
Stock Option Plan.
(k) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
(l) To the extent required by law, or applicable rules and
regulations, the Company will promptly take all steps necessary to register its
Common Stock under Section 12(g) of the Exchange Act.
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(m) The Company will use its best efforts to list, subject to
notice of issuance, the Common Shares as a National Market System security on
the Nasdaq Stock Market.
(n) The Company will use its best efforts to ensure that Pacific
Thrift will maintain a system of internal accounting controls as required under
applicable law and the rules and regulations of the FDIC.
(o) The Company will not, directly or indirectly, distribute prior
to the First Closing Date any offering material in connection with the offering
and sale of the Common Shares other than the Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials permitted by the
Act.
(p) The Company will not take, directly or indirectly, any action
designed to cause or result in, or which will or might be expected to
constitute, the stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of the Common Shares.
(q) The Company will not rely upon the Representative or legal
counsel for the Representative for any legal, tax or accounting advice in
connection with the Offering, except with respect to the qualification of the
Common Shares for offering and sale under the securities laws of certain
states.
You may, in your sole discretion, waive in writing the performance by
the Company of any one or more of the foregoing covenants or extend the time
for their performance.
SECTION 5. Payment of Expenses; Financial Advisory Fee.
(a) Whether or not the transactions contemplated hereunder are
consummated or this Agreement remains effective or is terminated, the Company
agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses
of the Company's counsel and the Company's independent accountants, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, (vi) all
filing fees, attorney's fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the Blue Sky laws up to a maximum of
$10,000, (vii) the filing fee of the National Association of Securities
Dealers, Inc., (viii) all the costs and expenses incurred by the Company in
making road show presentations with respect to the Offering, (ix) all costs of
preparing,
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printing and distributing bound volumes of the transaction documents for the
Underwriter and its counsel, and (x) all other fees, costs and expenses
referred to in Item 13 of the Registration Statement. Except as provided in
this Section 5, and Section 8 hereof, the Underwriters shall pay all of their
own expenses, including the fees and disbursements of their own counsel
(excluding those relating to qualification, registration or exemption under the
Blue Sky laws and the Blue Sky memorandum referred to above).
(b) Whether or not the transactions contemplated hereunder are
consummated or this Agreement remains effective or is terminated, in addition
to payment of the expenses set forth in Section 5(a), the Company agrees to
reimburse the Representative for the Underwriters' actual accountable
out-of-pocket expenses incurred in connection with the proposed sale of the
Common Stock (including, without limitation, attorneys' fees, printing expenses
and travel expenses) up to a maximum amount of $85,000. The Representative
shall submit a detailed statement of the Underwriters' actual expenses to the
Company at the First Closing Date or from time-to-time before or within 30 days
after the First Closing Date, and the Company shall reimburse the
Representative therefor in full within 14 days of receipt of such statement or
statements. For purposes of this Section 5, the Underwriters shall be deemed
to have incurred expenses when they are billed, regardless of whether such
expenses have been paid.
(c) At the closing time on the First Closing Date and, if
applicable, the Second Closing Date, the Company shall pay to the
Representative a fee (the "Financial Advisory Fee") in consideration of the
financial advisory services provided to the Company and its affiliates by the
Representative in connection with the transactions contemplated in the
Prospectus and this Agreement. The Financial Advisory Fee shall be equal to
1.0% of the gross proceeds from the sale of the Common Shares hereunder.
Payment of the Financial Advisory Fee with respect to the Firm Common Shares
shall be made on the First Closing Date and payment of the Financial Advisory
Fee with respect to the Optional Common Shares shall be made on the Second
Closing Date, if applicable. Payment of the Financial Advisory Fee shall be
made by immediately available funds in the form of one or more federal funds
checks or a wire transfer to an account designated by the Representative.
SECTION 6. Conditions to the Obligations of You and the Underwriters.
The obligations of you and the Underwriters to purchase and pay for the Firm
Common Shares on the First Closing Date and the Optional Common Shares on the
Second Closing Date shall be subject to the accuracy in all material respects of
the representations and warranties on the part of the Company herein set forth
as of the date hereof and as of the First Closing Date or the Second Closing
Date, as the case may be, to the accuracy in all material respects of the
statements of Company officers made pursuant to the provisions hereof, to the
performance in all material respects by the Company of its obligations hereunder
and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Washington, D.C. Time, on the date of this Agreement, or
at such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant
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to Rule 424(b) of the Rules and Regulations, the Prospectus shall have been
filed in the manner and within the time period required by Rule 424(b) of the
Rules and Regulations; and prior to such closing date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your reasonable satisfaction.
(b) You shall be reasonably satisfied that since the respective
dates as of which information is given in the Registration Statement and
Prospectus, (i) there shall not have been any change in the capital stock of
the Company, except as contemplated in the Prospectus for the Restructuring and
the Rights Offering, or any material change in the consolidated indebtedness
(other than as disclosed in the Prospectus) of the Company, (ii) except as set
forth or contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have been
entered into by the Company, which is not in the ordinary course of business
and which could result in a material reduction in the future earnings of the
Company, (iii) no loss or damage (whether or not insured) to the property of
the Company shall have been sustained which materially and adversely affects
the condition (financial or otherwise), business, results of operations or
prospects of the Company, (iv) no legal or governmental action, suit or
proceeding affecting the Company which is material to the Company or which
affects or may affect the transactions contemplated by this Agreement shall
have been instituted or threatened, (v) no enforcement proceeding, whether
formal or informal, shall have been commenced against the Company or any of the
Subsidiaries by the FDIC, the DOC or any other governmental agency, nor shall
any such proceeding have been instituted, threatened or recommended, except for
the Cease and Desist Order as disclosed in the Prospectus, and (vi) there shall
not have been any material change in the condition (financial or otherwise),
business, management, results of operations or prospects of the Company which
makes it impractical or inadvisable in the judgment of the Underwriter to
proceed with the public offering or purchase the Common Shares as contemplated
hereby.
(c) There shall have been furnished to you, as Representative of
the Underwriters, in form and substance satisfactory to you except as otherwise
expressly provided below:
(i) The favorable opinion of Jeffer, Mangels, ▇▇▇▇▇▇ &
Marmaro LLP, counsel for the Company, addressed to the Underwriters
and dated as of the First Closing Date or the Second Closing Date, as
the case may be, and in form and substance satisfactory to counsel for
the Underwriters, to the effect that:
(1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
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(2) The Company and each of the Subsidiaries have
full corporate power and authority to own their respective
properties and to conduct their businesses as described in the
Registration Statement and Prospectus, and the Company has
full corporate power and authority to enter into and perform
its obligations under this Agreement.
(3) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the State of California and in each jurisdiction in which the
failure to so qualify would have a material adverse effect
upon the financial condition, results of operations or
business of the Company and the Subsidiaries, taken as a
whole.
(4) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus
under "Capitalization."
(5) The Common Shares have been duly and validly
authorized for issuance and sale and, when issued and
delivered by the Company against payment, will be duly and
validly issued, fully paid and nonassessable.
(6) The issuance of the Common Shares is not
subject to preemptive or other similar rights arising by
operation of law or, to the best of such counsel's knowledge,
otherwise.
(7) (A) Pacific Thrift has been duly chartered,
and at all times since the date hereof and at the First
Closing Date or Second Closing Date, as the case may be,
validly existing and in good standing under the laws of the
State of California as a thrift and loan company with full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus; and (B) each of the
other Subsidiaries has been duly incorporated (or organized
with respect to the Subsidiaries that are limited
partnerships) and at all times since the date hereof and at
the First Closing Date or Second Closing Date, as the case may
be, validly existing as a corporation or limited partnership,
as applicable, in good standing under the laws of the
jurisdiction of its incorporation or organization, as
applicable, with full corporate or partnership power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and the Prospectus.
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(8) Each of the Subsidiaries is duly qualified as
a foreign corporation to transact business in each
jurisdiction in which the failure to so qualify would have a
material adverse effect upon its financial condition, results
of operations or business.
(9) The deposit accounts of Pacific Thrift are
insured by the FDIC up to the applicable limits.
(10) The activities of Pacific Thrift are
permissable activities of California thrift and loan companies
under California law and the rules, regulations, resolutions
and practices of the DOC.
(11) All of the issued and outstanding capital
stock or limited partnership interests, as applicable, of each
of the Subsidiaries is duly authorized, validly issued and
fully paid and nonassessable, and upon completion of the
Restructuring, all such capital stock will be owned of record,
and to the best of such counsel's knowledge, beneficially, by
the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, or legal or equitable claim, except
for the security interest of NatWest Bank, N.A.
(12) The execution and delivery of this Agreement,
the issuance of the Common Shares by the Company and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action
of the Company; the consummation of the transactions described
in the Prospectus as constituting the "Restructuring" have
been duly and validly authorized by all necessary actions of
the general and limited partners of Presidential Mortgage
Company, a California limited partnership; this Agreement
constitutes the legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited
under applicable law (it being understood that such counsel
may avail itself of customary exceptions concerning the effect
of bankruptcy, insolvency or similar laws and the availability
of equitable remedies); and, to the best of such counsel's
knowledge, the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
conflict with or constitute a breach of, or default under, and
no event has occurred which, with notice or lapse of time or
both, would constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance
that, individually or in the aggregate, would have a material
adverse effect upon the financial condition, results of
operations or business of the Company pursuant to any
contract, indenture, mortgage, loan
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agreement, note, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which it
may be bound, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, nor will such
execution or delivery result in any violation of the
provisions of the Certificate of Incorporation, Articles of
Incorporation, Bylaws or Agreement of Limited Partnership, as
the case may be, of the Company or any of the Subsidiaries.
(13) The Registration Statement is effective under
the Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration
Statement has been issued under the Act or proceedings
therefor initiated or threatened by the Commission.
(14) No further approval, authorization, consent
or other order of any federal or state board or body is
required in connection with the execution and delivery of this
Agreement or the issuance of the Common Shares, except as may
be required under the securities or Blue Sky laws of various
jurisdictions, as to which no opinion need be rendered.
(15) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements and statistical and financial data
included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(16) The Common Stock conforms to the description
thereof contained in the Prospectus, and the form of
certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable statutory
requirements.
(17) To the best of such counsel's knowledge,
there are no legal or governmental proceedings pending or
threatened against or affecting the Company or any of the
Subsidiaries which are required, individually or in the
aggregate, to be disclosed in the Registration Statement or
Prospectus, other than those disclosed therein.
(18) The information contained in the Prospectus
under "Risk Factors," "Supervision and Regulation,"
"Description of Capital Stock," "1995 Stock Option Plan,"
"Retirement Plan," "Stock Purchase Plan," "Supplemental
Executive Retirement Plan," "Limitation of Liability and
Indemnification of Directors" and "Director and Officer
Indemnification," to the extent that it constitutes matters of
law, summaries of legal matters,
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documents or proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in all material
respects.
(19) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or
Prospectus or to be filed as exhibits thereto, other than
those described or referred to therein or filed as exhibits
thereto, and the descriptions thereof or references thereto
are correct in all material respects.
(20) To the best of such counsel's knowledge, the
Company and each of the Subsidiaries hold all licenses,
permits and other governmental authorizations currently
required for the conduct of their respective businesses as
described in the Registration Statement and Prospectus, except
for such licenses, approvals or authorizations the failure of
which to hold would not result in a material adverse change in
the financial condition, results of operations or the business
of the Company and the Subsidiaries, taken as a whole; all
such licenses, permits and other governmental authorizations
are in full force and effect, and the Company and the
Subsidiaries operate their respective businesses in all
material respects in compliance therewith.
(ii) Such opinion of Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate
proceedings and other legal matters relating to this Agreement, the
validity of the Common Shares, the Registration Statement and the
Prospectus and other related matters as you may reasonably require,
and such counsel shall have received such documents and shall have
exhibited to them such papers and records as they may reasonably
request for the purpose of enabling them to pass upon such matters.
In connection with such opinion, such counsel may also rely as to
certain matters on the opinion of Jeffer, Mangels, ▇▇▇▇▇▇ & Marmaro
LLP and on representations or certificates of officers of the Company
and governmental officials.
(iii) A certificate of the Company executed by the Chairman
of the Board or President and the Chief Financial or Accounting
Officer, dated the First Closing Date or the Second Closing Date, as
the case may be, to the effect that:
(1) The representations and warranties of the
Company set forth in Section 2 of this Agreement are true and
correct in all material respects and the Company has complied
in all material respects with all the agreements and satisfied
all the conditions on its part to be performed or satisfied on
or prior to such Closing Date.
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(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the respective
signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Act.
(3) Neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein, or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(4) Since the initial date on which the
Registration Statement was filed with the Commission, no
agreement, written or oral, transaction or event has occurred
which should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of
any prospectus, which has not been disclosed in such a
supplement or amendment.
(5) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus and except as disclosed in or contemplated by the
Prospectus, the Company has not sustained a material loss or
damage by strike, fire, flood, windstorm, earthquake, accident
or other calamity (whether or not insured).
(iv) At the time of the execution of this Agreement, a
letter dated as of the date hereof from BDO ▇▇▇▇▇▇▇ LLP, independent
accountants, in form and substance satisfactory to you, to the effect
that (1) they are independent certified public accountants with
respect to the Company within the meaning of the Act and the Rules and
Regulations; (2) it is their opinion that the consolidated financial
statements and supporting schedules included in the Registration
Statement and covered by their opinions therein comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Rules and Regulations; (3) based upon limited
procedures as agreed upon by you and BDO ▇▇▇▇▇▇▇ LLP and set forth in
detail in such letter, nothing has come to their attention which
causes them to believe that (A) the unaudited financial statements and
supporting schedules of Presidential Mortgage Company ("Presidential")
and the Subsidiaries included in the Registration Statement, if any,
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration
Statement and the Prospectus, (B) at a specified
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date not more than five days prior to the date of this Agreement,
there has been any increase in the consolidated long-term or
short-term debt, or any decrease in consolidated total assets,
allowance for loan losses, total deposits or net worth of the Company
and the Subsidiaries, in each case as compared with the amounts shown
in the financial statements included in the Registration Statement or,
(C) during the period from December 31, 1995 to a date not more than
five days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding
year, in net interest income, net interest income after provision for
loan losses, or net income of Pacific Thrift, except in all instances
for increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (4) in addition to
the examination referred to in their opinions and the limited
procedures referred to in clause (3) above, they have carried out
certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are
specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and the Subsidiaries
identified in such letter.
(v) On the First Closing Date and the Second Closing Date
(in the event of a second closing), a letter addressed to you, from
BDO ▇▇▇▇▇▇▇ LLP, independent accountants, the first one to be dated
the First Closing Date and the second one (in the event of a second
closing) to be dated the Second Closing Date, to the effect that they
reaffirm their statements made in the letter furnished to you pursuant
to Section 6(c)(iv) of this Agreement.
(vi) On or before the First Closing Date, letters from
each director and executive officer of the Company, in form and
substance satisfactory to you, confirming that for a period of ninety
(90) days after the first date that any of the Common Shares are
released by you for sale to the public, such person will not directly
or indirectly sell, offer to sell, contract to sell or otherwise
dispose of any shares of Common Stock or any right to acquire such
shares without the prior written consent of the Representative, which
consent may be withheld at the sole discretion of the Representative.
(d) As of the First Closing Date and the Second Closing Date, as
the case may be, the Common Stock shall have been approved for quotation on the
Nasdaq National Market upon notice of issuance.
(e) As of the First Closing Date and the Second Closing Date, as
the case may be, (i) there shall not have occurred any material adverse change
in the financial markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effects of
which, in the judgment of the Representative, are so material and adverse as to
make it impracticable to market the Common Shares or to enforce contracts,
including subscriptions or orders, for the sale of the Common Shares, and (ii)
trading generally on either the American Stock
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Exchange or the New York Stock Exchange shall not have been suspended, and
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by either of said
Exchanges or by order of the Commission or any other governmental authority,
and a banking moratorium shall not have been declared by either Federal or New
York State authorities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Representative.
The Company shall furnish you with such manually signed or conformed copies of
such opinions, certificates, letters and documents as you reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon written notification by you as
Representative to the Company without liability on the part of any Underwriter
or the Company, except for the expenses to be paid or reimbursed by the Company
pursuant to Section 5 hereof and except to the extent provided in Section 8
hereof.
SECTION 7. Effectiveness of Registration Statement. Each party to
this Agreement will use its best efforts to cause the Registration Statement to
become effective, to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls an Underwriter, as the case
may be, within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which an Underwriter or such
controlling person may become subject, under the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or other federal or state law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based
upon 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 based upon written
information supplied by the Company filed in any state or jurisdiction to
register or qualify any or all of the Common Shares or to claim an exemption
therefrom, or provided to any state or jurisdiction to exempt the Company as a
broker-dealer or its officers, directors and employees as broker-dealers or
agents under the securities laws thereof (collectively, the "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them not misleading, or arise
from any theory of liability whatsoever relating to or arising from or based
upon the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based in whole or
in part upon any inaccuracy in the
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representations and warranties of the Company contained herein or any failure
of the Company to perform its obligations hereunder or under law; and will
reimburse each Underwriter and each such controlling person for any legal and
other expenses as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with the information furnished to the
Company pursuant to Section 3 hereof; provided, further, that the foregoing
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the Common Shares that are the subject thereof if
such person did not receive a copy of the Prospectus (or the Prospectus as
supplemented) at or prior to the confirmation of the sale to such person in any
case where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as supplemented). In addition
to its other obligations under this Section 8(a), the Company agrees that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, or any inaccuracy in the
representations and warranties of the Company herein or failure to perform its
obligations hereunder, all as described in this Section 8(a), it will reimburse
each Underwriter (and, to the extent applicable, each controlling person) on a
monthly basis for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse
each Underwriter (and, to the extent applicable each controlling person) for
such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have been improper, such
Underwriter (and, to the extent applicable each controlling person) shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank
of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) You or each Underwriter, as the case may be, will severally
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of the Act, against any losses, claims,
damages, liabilities or expenses to which the Company or any such director,
officer, or controlling person may become subject, under the Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in
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settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are 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 arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each such 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, in reliance
upon and in conformity with the information furnished to the Company pursuant
to Section 3 hereof; and will reimburse the Company or any such director,
officer, or controlling person for any legal and other expense reasonably
incurred by the Company or any such director, officer, or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. In addition to the
other obligations under this Section 8(b), you or each Underwriter, as the case
may be, severally agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 8(b) which relates to information furnished to the
Company pursuant to Section 3 hereof, it will reimburse the Company (and, to
the extent applicable, each officer, director, controlling person) on a monthly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of your or the Underwriters' obligation to
reimburse the Company (and, to the extent applicable, each officer, director,
controlling person) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
To the extent that any such interim reimbursement payment is so held to have
been improper, the Company (and, to the extent applicable, each officer,
director or controlling person) shall promptly return it to the Underwriters
together with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are not made to the
Company within 30 days of a request for reimbursement, shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement will be
in addition to any liability which you or such Underwriter, as the case may be,
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, 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 it from any liability which it may have to any indemnified party
for indemnity, contribution or otherwise except to the extent the indemnifying
party is prejudiced as a proximate result of such failure. In case any such
action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified
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party; provided, however, that if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in conducting the
defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying party
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel representing the indemnified
parties who are parties to such action; provided, however, if an indemnified
party in any such action shall have concluded that there may be legal defenses
or rights available to it which are different from, in actual or potential
conflict with, or additional to those available to other indemnified parties,
such party shall have the right to select an additional law firm to act as its
separate counsel).
(d) If the indemnification provided for in this Section 8 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under subsections
(a), (b) or (c) of this Section 8 in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and you or the Underwriters, as the case may
be, from the offering of the Common 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 you or the
Underwriters, as the case may be, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same respective proportions as the total proceeds (net of
underwriting commissions, but before deducting expenses) from the offering of
the Common Stock received by the Company and the total underwriting commissions
received by the Underwriters bear to the aggregate public offering price of the
Common Stock. 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
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or the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation and/or warranty 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
untrue statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
subsection (c) of this Section 8, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in subsection (c) of this
Section 8 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this subsection (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subsection (c) for purposes of
indemnification. The Company and you or the Underwriters, as the case may be,
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined solely by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
8, no Underwriter shall be required to contribute any amount in excess of the
amount of the total underwriting discounts and commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. 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 fraudulent
misrepresentation.
(e) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 8(a) and 8(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for arbitration or
written notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration does not make such
designation of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in Sections 8(a) and 8(b) hereof and would not resolve the
ultimate propriety or enforceability of the obligation to reimburse expenses
which is created by the provisions of such Sections 8(a) and 8(b) hereof.
SECTION 9. Default of Underwriters. It shall be a condition to this
Agreement and the obligation of the Company to sell and deliver the Common
Shares hereunder, and a condition of your obligations or the obligation of each
Underwriter, as the case may be, to purchase the Common Shares in the manner as
described herein, that, except as hereinafter in this paragraph provided, each
of you or the Underwriters, as the case may be, shall purchase and pay for all
the Common Shares agreed to be purchased by you or such Underwriter hereunder
upon tender to you individually or as the Representative of the Underwriters, of
all such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in your or their obligations to purchase Common Shares
hereunder on either the First Closing Date or Second Closing Date and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase
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on such Closing Date does not exceed 10% of the total number of Common Shares
which the Underwriters are obligated to purchase on such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common 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 Common Shares with respect to which such default occurs is more than the
above percentage and arrangements satisfactory to the Representative and the
Company for the purchase of such Common Shares by other persons are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company except
for the expenses to be paid by the Company pursuant to Section 5 hereof and
except to the extent provided in Section 8 hereof.
If applicable, in the event that Common Shares to which a default
relates are to be purchased by the nondefaulting entities or by another party
or parties, you or the Company shall have the right to postpone the First
Closing Date or Second Closing Date, as the case may be, for not more than five
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 you or a defaulting Underwriter from
liability for its default.
SECTION 10. Effective Date. This Agreement shall become effective
immediately as to Sections 5, 8, 11 and 12 and, as to all other provisions, (i)
if at the time of execution of this Agreement the Registration Statement has
not become effective, at 4:30 p.m., California Time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at
the time of execution of this Agreement the Registration Statement has been
declared effective, at 4:30 p.m., California Time, on the first full business
day following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine as indicated by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 10, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising the Underwriters that the Common Shares are released for public
offering or (ii) offering the Common Shares for sale to securities dealers,
whichever may occur first.
SECTION 11. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you, or by you by notice to the Company, at any time prior to the time this
Agreement shall become effective as to all of its provisions, and any such
termination shall be without liability on the part of the Company to you or any
Underwriter (except for the expenses to be paid or reimbursed by the Company
pursuant to Section 5 hereof and except to the extent provided in Section 8
hereof) or of you or any Underwriter to the Company (except to the extent
provided in Section 8 hereof).
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(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if trading in the Company's
Common Stock or other securities shall have been suspended by the Commission or
any securities exchange or market or additional material 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 on the
American Stock Exchange or in the over-the-counter market by the NASD, or
trading in securities generally shall have been suspended on either such
exchange or market, or a general banking moratorium shall have been established
by federal, New York or California authorities, (ii) if an outbreak of major
hostilities or other national or international calamity or any substantial
change in political, financial or economic conditions shall have occurred or
shall have accelerated or escalated to such an extent, as, in your judgment, to
affect materially and adversely the marketability of the Common Shares, (iii)
if any adverse event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information contained in the
Registration Statement or Prospectus or which is not reflected in the
Registration Statement or Prospectus but should be reflected therein in order
to make the statements or information contained therein in light of the
circumstances under which they were made, not misleading in any material
respect, or (iv) if there shall be any action, suit or proceeding pending or
threatened, or there shall have been any development or prospective development
involving particularly the business or properties or securities of the Company
or the transactions contemplated therein which, in your reasonable judgment, is
reasonably likely to materially and adversely affect the Company's business or
earnings and makes it impracticable or inadvisable to offer or sell the Common
Shares. Any termination pursuant to this subsection (b) shall be without
liability on your part or the part of any Underwriter to the Company or on the
part of the Company to you or any Underwriter, except for expenses to be paid
or reimbursed by the Company pursuant to Section 5 hereof (which shall not be
required to be paid upon termination pursuant to clause (i) or (ii) above) and
except to the extent provided in Section 8 hereof.
SECTION 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the parties hereto and of their respective officers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters, the
Company or any of their respective partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and
payment for the Common Shares sold hereunder and any termination of this
Agreement.
SECTION 13. Notices. All communications hereunder shall be in writing
and, if sent to the Representative shall be mailed, delivered or telegraphed and
confirmed to you at Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, with a
copy to Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.; and if sent to the
Company shall be mailed, delivered or telegraphed and confirmed to the Company
at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, President, with a copy to Jeffer, Mangels, ▇▇▇▇▇▇ & Marmaro, LLP, 2121
Avenue of the Stars, 10th Floor, Los Angeles, California
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90067, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Esq. The Company or you may change
the address for receipt of communications hereunder by giving notice to the
other.
SECTION 14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, and to the benefit of the officers and
directors and controlling persons referred to in Section 8, and in each case
their respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. Notwithstanding the
foregoing, this Agreement shall not be assignable by the parties. The term
"successors" shall not include any purchaser of the Common Shares from the
Underwriters as such, merely by reason of such purchase.
SECTION 15. Partial Unenforceability. The invalidity or
unenforceability of any section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other section, paragraph or
provision hereof. If any section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make the remainder of this Agreement valid and enforceable.
SECTION 16. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of California.
SECTION 17. General. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and you.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement between the Company and the Underwriters,
all in accordance with its terms.
Very truly yours,
PACIFIC UNITED GROUP, INC.
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted by us
in Los Angeles, California as of the date
first above written.
▇▇▇▇▇▇▇▇, BILLING, ▇▇▇▇▇▇ & CO., INC.
(if applicable, acting as Representative
of the several Underwriters in the
attached Schedule A)
By:_________________________
Name:
Title:
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