EXHIBIT 1.1
FORM OF
UNDERWRITING AGREEMENT
COAST FINANCIAL HOLDINGS, INC.
__________ SHARES COMMON STOCK
_________, 2003
STERNE, AGEE & ▇▇▇▇▇, INC.
As Representative of the several Underwriters
named in Schedule I attached hereto
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, Coast Financial Holdings, Inc., a Florida corporation
(along with its predecessors, the "Company"), hereby confirms its agreement
with Sterne, Agee & ▇▇▇▇▇, Inc. (individually, "Sterne Agee"), as
representative (the "Representative") of the several underwriters named in
Schedule I hereto (the "Underwriters"), as follows:
1. INTRODUCTION.
(a) The Company proposes to issue and sell to the
Underwriters ____________ shares of its common stock, par value $5.00 per share
(the "Common Stock"), as set forth in Schedule I hereto and pursuant to the
Underwriters' agreement to purchase the Common Stock in Section 3(a) hereof.
The Common Stock to be purchased pursuant to Section 3(a) of this Agreement may
be hereinafter referred to as the "Firm Shares".
(b) Solely for the purpose of covering over-allotments,
if any, the Company proposes to grant to the Underwriters a one-time option
(the "Over-allotment Option") to purchase from the Company in the aggregate, up
to an additional ____________ shares of Common Stock (15% of the Firm Shares)
pursuant to the terms and conditions of Section 3(b) herein. Such shares of
Common Stock are hereinafter referred to as the "Option Shares."
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form SB-2 (File No.
333-_____) with respect to the Common Stock, including a prospectus subject to
completion, has been prepared by the
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Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the applicable rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
under the Act and has been filed with the Commission; such amendments to such
registration statement, such amended prospectuses subject to completion and
such abbreviated registration statements pursuant to Rule 462(b) of the Rules
and Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file
such additional amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
as may hereafter be required. Copies of such registration statement and
amendments, of each related prospectus subject to completion (the "Preliminary
Prospectuses") and of any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations have been delivered to Sterne Agee. If the
registration statement relating to the Common Stock has been declared effective
under the Act by the Commission, the Company will prepare and promptly file
with the Commission the information omitted from the registration statement
pursuant to Rule 430A(a) or, if Sterne Agree, on behalf of the Underwriters,
shall agree to the utilization of Rule 434 of the Rules and Regulations, the
information required to be included in any term sheet filed pursuant to Rule
434(b) or (c), as applicable, of the Rules and Regulations pursuant to
subparagraph (1), (4) or (7) of Rule 424(b) of the Rules and Regulations or as
part of a post-effective amendment to the registration statement (including a
final form of prospectus). If the registration statement relating to the Common
Stock has not been declared effective under the Act by the Commission, the
Company will prepare and promptly file an amendment to the registration
statement, including a final form of prospectus, or, if Sterne Agee on behalf
of the Underwriters, shall agree to the utilization of Rule 434 of the Rules
and Regulations, the information required to be included in any term sheet
filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the registration
statement pursuant to Rule 430A(a) or files a term sheet pursuant to Rule 434
of the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
or Rule 434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant to
Rule 462(b) of the Rules and Regulations relating thereto after the effective
date of such registration statement, shall also mean (from and after the
effectiveness of such amendment or the filing of such abbreviated registration
statement) such registration statement as so amended, together with any such
abbreviated registration statement. The term "Prospectus" as used in this
Agreement shall mean the prospectus relating to the Common Stock as included in
such Registration Statement at the time it becomes effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
430A(a) of the Rules and Regulations, the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
430A(b) of the Rules and Regulations); provided, however, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of Sterne Agree,
on behalf of the several Underwriters, the Company shall have provided to the
Underwriters a term sheet pursuant to Rule 434(b) or (c), as applicable, prior
to the time that a
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confirmation is sent or given for purposes of Section 2(10)(a) of the Act, the
term "Prospectus" shall mean the "prospectus subject to completion" (as defined
in Rule 434(g) of the Rules and Regulations) last provided to the Underwriters
by the Company and circulated by the Underwriters to all prospective purchasers
of the Common Stock (including the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule 434(d)
of the Rules and Regulations). Notwithstanding the foregoing, if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Common Stock that differs from the
prospectus referred to in the immediately preceding sentence (whether or not
such revised prospectus is required to be filed with the commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. If in reliance on Rule 434 of the Rules and
Regulations and with the consent of Sterne Agree on behalf of the Underwriters,
the Company shall have provided to the Underwriters a term sheet pursuant to
Rule 434(b) or (c), as applicable, prior to the time that a confirmation is
sent or given for purposes of Section 2(10)(a) of the Act, the Prospectus and
the term sheet, together, will not be materially different from the prospectus
in the Registration Statement.
(b) The Commission has not issued an order (a "Stop
Order") suspending the effectiveness of, or preventing or suspending the use
of, the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, refusing to permit the effectiveness of
the Registration Statement, or suspending the registration or qualification of
the Common Stock nor has any such authorities instituted or threatened to
institute any proceedings with respect to a Stop Order. In the event a Stop
Order is issued by any "blue sky" or securities authority of any jurisdiction,
then either the Company or the Representative may abandon the Registration
Statement or void this Agreement. The Registration Statement, Preliminary
Prospectus and Prospectus and any amendments and supplements thereto have
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 became or
becomes, as the case may be, effective and at all times subsequent thereto up
to and on the Closing Date (hereinafter defined) and on any later date on which
Option Shares are to be purchased, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act and
the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (iii) the Prospectus, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties contained in
this subparagraph (b) shall apply to information contained in or omitted from
the Registration Statement or Prospectus, or any amendment or supplement
thereto, in
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reliance upon, and in conformity with, written information relating to any
Underwriter furnished to the Company by such Underwriter specifically for use
in the preparation thereof.
(c) The Company and each subsidiary of the Company (as
used herein, the terms "subsidiary" includes any corporation, national or state
bank, federal savings bank, joint venture or partnership in which the Company
or any subsidiary of the Company has an ownership interest) is duly organized
and validly existing and in good standing under the laws of the respective
jurisdictions of their organization or incorporation, as the case may be, with
full power and authority (corporate, partnership and other, as the case may be)
to own their properties and conduct their businesses as now conducted and are
duly qualified or authorized to do business and are in good standing in all
jurisdictions wherein the nature of their business or the character of property
owned or leased may require them to be qualified or authorized to do business,
except for jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries taken as a whole.
The Company has been legally constituted and is validly existing in good
standing as a registered bank holding company under the Bank Holding Company
Act of 1956, as amended (the "BHC Act"), and the rules and, to the extent
applicable, regulations thereunder. Each subsidiary bank of the Company has
been duly incorporated and is a validly existing banking corporation under the
laws of the jurisdiction of its incorporation. The Company and its subsidiaries
hold all licenses, consents and approvals, and have satisfied all eligibility
and other similar requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or officials, in
each case as material to the conduct of the respective businesses in which they
are engaged as disclosed in the Prospectus. Each of the Company's subsidiaries
is set forth on Exhibit 21 of the Registration Statement.
(d) The outstanding stock of each of the Company's
corporate subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding stock of each of the Company's corporate
subsidiaries owned beneficially and of record by the Company is owned clear of
any lien, encumbrance, pledge, equity or claim of any kind. Neither the Company
nor any of its subsidiaries is a partner or joint venturer in any partnership
or joint venture.
(e) The Company has all requisite legal right, power and
authority to execute, deliver, and perform this Agreement. All necessary
corporate proceedings of the Company have been duly taken to authorize the
execution, delivery, and performance by the Company of this Agreement. This
Agreement has been duly authorized, executed, and delivered by the Company, is
the legal, valid, and binding obligation of the Company, and is enforceable as
to the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights of
creditors generally, and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law). No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal is
required by the Company for the execution, delivery, or performance by the
Company of this Agreement, except as required by the National Association of
Securities Dealer, Inc. or under the Act or state securities or Blue Sky laws
which have been
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or will be made before the Closing Date. No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which the Company is a party, or to which any of its properties or assets is
subject, is required for the execution, delivery, or performance of this
Agreement, and the execution, delivery, and performance of this Agreement will
not violate, result in a breach of, conflict with, result in the creation or
imposition of any lien, charge, or encumbrance upon any properties or assets of
the Company pursuant to the terms of, or, with or without the giving of notice
or the passage of time or both, entitle any party to terminate or call a
default under, any such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate, result in a breach of, or conflict
with any term of the certificate of incorporation (or other charter document)
or by-laws of the Company or any of its subsidiaries, or violate, result in a
breach of, or conflict with, any law, rule, regulation, order, judgment, or
decree binding on the Company or any of its subsidiaries or to which any of
their operations, businesses, properties, or assets are subject.
(f) There is not any pending or, to the best of the
Company's knowledge, threatened any action suit, claim or proceeding against
the Company, or any of its officers or any of its properties, assets or rights
before any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or over its officers or
properties or otherwise which (i) might result in any material adverse change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company or might materially and adversely affect its
properties, assets or rights, (ii) might prevent consummation of the
transactions contemplated hereby or (iii) is required to be disclosed in the
Registration Statement or Prospectus and is not so disclosed; and there are no
agreements, contracts, leases or documents of the Company of a character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement by the
Act or the Rules and Regulations which have not been accurately described in
all material respects in the Registration Statement or Prospectus or filed as
exhibits to the Registration Statement.
(g) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and the
authorized and outstanding capital stock of the Company as of June 30, 2003 is
as set forth in the Prospectus under the caption "Capitalization" and conforms
in all material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus under the caption "Description of
Capital Stock" (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); the Firm Shares and
the Option Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued and fully paid and nonassessable,
and will be sold free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest; and no preemptive right, co-sale
right, registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Firm Shares or Option Shares or
the
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issuance and sale thereof other than those that have been expressly waived
prior to the date hereof and those that will automatically expire upon the
consummation of the transactions contemplated on the Closing Date. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale or transfer of the
Common Stock except as may be required under the Act or under state or other
securities or Blue Sky laws. 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, other stock plans or arrangements, and the options
or other rights 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.
(h) Hacker, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A. which has examined
certain of the financial statements of the Company, its subsidiaries, and their
acquireds, together with the related schedules and notes filed with the
Commission as a part of the Registration Statement, which are included in the
Prospectus, are independent accountants within the meaning of the Act and the
Rules and Regulations; the audited financial statements of the Company or
acquireds, together with the related schedules and notes, and the unaudited
financial information, forming part of the Registration Statement and
Prospectus, fairly present the financial position and the results of operations
and changes in financial position and cash flow of the Company and its
subsidiaries at the respective dates and for the respective periods to which
they apply and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
except as may be otherwise stated therein. The other financial statements and
schedules included in or as schedules to the Registration Statement conform to
the material requirements of the Act and the Rules and Regulations and present
fairly the information presented therein for the periods shown. All of the
financial and statistical data set forth in the Prospectus under the captions
"Prospectus Summary," "Use of Proceeds," "Capitalization," "Pro Forma Condensed
Financial Information," "Selected Consolidated Financial Data," "Management's
Discussions and Analysis of Financial Condition and Results of Operations,"
"Business" and "Principal Stockholders" [INSERT OTHER APPLICABLE CAPTIONS]
fairly present the information set forth therein on the basis stated in the
Prospectus. No other financial statements or schedules are required to be
included in the Registration Statement or Prospectus.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, neither the
Company nor any subsidiary has sustained any material loss or interference with
its business or properties from fire, flood, hurricane, earthquake, accident or
other calamity, whether or not covered by insurance or for any labor dispute or
court or governmental action, order or decree, which is not disclosed in the
Prospectus; and subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) neither the Company
nor any of its subsidiaries
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has incurred any material liabilities or obligations, direct or contingent, or
entered into any material transaction not within the ordinary course of
business, and (ii) there has not been any change in the capital stock,
partnership interest, joint venture interest, long-term debt, obligations under
capital leases or short-term borrowings of the Company or its subsidiaries,
taken as a whole, or any issuance of options, warrants or rights to purchase
the capital stock of the Company, or any adverse change, or any development
involving a prospective material adverse change in the management, business,
prospects, financial position, net worth or results of operations of the
Company or its subsidiaries, taken as a whole, except in each case as described
in or contemplated by the Prospectus.
(j) Except as set forth in the Registration Statement
and Prospectus, (i) each of the Company and its subsidiaries has good and
marketable title to all properties and assets described in the Registration
Statement and Prospectus as owned by it, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest, other than such as
would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries, (ii) the agreements to which the Company and its
subsidiaries are a party described in the Registration Statement and Prospectus
are valid agreements, enforceable by the Company and its subsidiaries, except
as the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights, generally or by general equitable principles and, to the
best of the Company's knowledge, the other contracting party or parties thereto
are not in material breach or material default under any of such agreements,
and (iii) the Company and its subsidiaries have valid and enforceable leases
for all properties described in the Registration Statement and Prospectus as
leased by it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and Prospectus,
the Company and its subsidiaries own or lease all such properties as are
necessary to its operations as now conducted or as proposed to be conducted.
(k) The Company and its subsidiaries have timely filed
all necessary federal, state and foreign income and franchise tax returns and
have paid all taxes shown thereon as due, and there is no tax deficiency that
has been or, to the best of the Company's knowledge, might be asserted against
the Company or any of its subsidiaries that might have a material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company or its subsidiaries; and all tax
liabilities are adequately provided for on the books of the Company.
(l) The Company and its subsidiaries maintain insurance
with insurers of recognized financial responsibility of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which
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insurance is in full force and effect; the Company and its subsidiaries have
not been refused any insurance coverage sought or applied for; and the Company
has no reason to believe that it will not be able to renew its or its
subsidiaries existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company.
(m) To the best of the Company's knowledge, no labor
disturbance by the employees of the Company or its subsidiaries exist or is
imminent that might be expected to result in a material adverse change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company. No collective bargaining agreement exists with any of
the Company's or its subsidiaries' employees and, to the best of the Company's
knowledge, no such agreement is imminent.
(n) The Company and its subsidiaries own or possess
adequate rights to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
necessary to conduct its businesses as described in the Registration Statement
and Prospectus; the expiration of any patents, patent rights, trade secrets,
trademarks, service marks, trade names or copyrights would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries; the Company
and its subsidiaries have not received any notice of, and has no knowledge of,
any infringement of or conflict with asserted rights of the Company and it
subsidiaries by others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or copyrights;
and neither the Company nor its subsidiaries have received any notice of, and
have any knowledge of, any infringement of or conflict with asserted rights of
others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company.
(o) There are no contracts or other documents required
by the Act or by the Rules and Regulations to be described in the Registration
Statement, the Prospectus, or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
(p) The Company has been advised concerning the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future to conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(q) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date or the Option Closing
Date, as the case may be, and (ii) completion of the distribution of the Firm
Shares, any offering material in connection with the offering and sale of
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the Firm Shares or the Option Shares, as the case may be, other than any
Preliminary Prospectuses, the Prospectus, the Registration Statement and other
materials, if any, permitted by the Act.
(r) The Company has not at any time since its inception
(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 quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(s) Neither the Company nor any of its subsidiaries, nor
any of the directors, officers, employees or agents of the Company and its
subsidiaries have taken and will not take, directly or indirectly, any action
designed to cause or result in, or that might reasonably be expected to cause
or result in, stabilization or manipulation of the price of the Common Stock.
(t) Each executive officer and director of the Company
has agreed in writing pursuant to a lock-up agreement in the form attached
hereto as Exhibit A that such person will not, from the date of the lock-up
agreement through a period of one hundred eighty (180) days after the effective
date of the Registration Statement (the "Lock-up Period"), offer to sell,
contract to sell, or otherwise sell (including without limitation in a short
sale), dispose of, loan, pledge or grant any rights with respect to any shares
of Common Stock, or any securities convertible into or exchangeable for Common
Stock, any options or warrants to purchase any shares of Common Stock, or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, "Securities") now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the power
of disposition (collectively, a "Disposition"), otherwise than (i) as a bona
fide gift or gifts, provided the donee or donees thereof agree in writing to be
bound by this restriction or (ii) with the prior written consent of Sterne
Agee, provided that the foregoing shall not apply to any shares sold to the
Underwriters pursuant to the Underwriting Agreement. Following the expiration
of the one hundred eighty (180) day period, the undersigned may dispose of such
Common Stock free of any contractual obligation hereunder. Furthermore, such
person will also agree and consent to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the securities held
by such person, except in compliance with this Agreement. The Company has
provided to counsel for the Underwriters a complete and accurate list of all
security-holders of the Company and the number and type of securities held by
each security-holder. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the agreements pursuant to which
its officers, directors and security-holders have agreed to such or similar
restrictions (the "Lock-up Agreements") presently in effect or effected hereby.
The Company hereby represents and warrants that it will not release any of its
officers, directors or security-holders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Sterne
Agee.
(u) Except as set forth in the Registration Statement
and Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment,
9
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Laws") which are applicable to its business, (ii)
the Company has received no notice from any governmental authority or third
party of an asserted claim under Environmental Laws, which claim is required to
be disclosed in the Registration Statement and the Prospectus, (iii) to the
best of the Company's knowledge, the Company will not be required to make
future material capital expenditures to comply with Environmental Laws and (iv)
no property which is owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et
seq.), or otherwise designated as a contaminated site under applicable state or
local law.
(v) The Company's system of internal accounting controls
taken as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be material in
relation to the Company's financial statements; and, except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries nor any employee or
agent of the Company or any subsidiary has made any payment of funds of the
Company or any subsidiary or received or attained any funds in violation of any
law, rule or regulation, the receipt or payment of which could have a material
effect (financial or otherwise), on the Company.
(w) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or its subsidiaries to or for the
benefit of any of the officers or directors of the Company or its subsidiaries
or any of the members of the families of any of them, except as disclosed in
the Registration Statement and the Prospectus.
(x) The Company has taken such action as necessary to
have the Firm Shares and Option Shares authorized for trading on The Nasdaq
National Market, or, if the Company is unable to obtain approval of listing on
The Nasdaq National market, then The Nasdaq SmallCap Market, upon the Closing
Date and Option Closing Date, as applicable.
(y) The Company's Common Stock is registered with the
Commission pursuant to Section 12 of the Securities Exchange Act of 1934
("Exchange Act") and has complied with and will continue to comply with all
registration, filing, and reporting requirements of the Exchange Act, which
have been and will be applicable to the Company.
3. PURCHASE, SALE, AND DELIVERY OF THE FIRM SHARES AND OPTION
SHARES.
(a) On the basis of the representations, warranties,
covenants, and agreements of the Company herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the several Underwriters, and, each of the Underwriters, severally and not
jointly, agree to purchase from the Company at a purchase price of $_______ [7%
DISCOUNT] per share, the number of Firm Shares as set forth opposite the
respective names
10
of the Underwriters in Schedule I hereto.
(b) The Company hereby grants to the Underwriters the
Over-allotment Option to purchase up to __________ shares of Common Stock, as
may be necessary to cover over-allotments, at the same purchase price per
share, to be paid by the several Underwriters to the Company for the Firm
Shares as provided for in this Section 3. The Over-allotment Option may be
exercised only to cover over-allotments in Common Stock by the Underwriters.
The Over-allotment Option may be exercised as to all or any part of the
_________ shares of Common Stock included therein at any time (but only once)
within thirty (30) days after the date the Registration Statement becomes
effective. The Underwriters shall not be under any obligation to purchase any
Option Shares prior to the exercise of such option. The Overallotment Option
may be exercised by the Representative of the several Underwriters, by giving
written notice to the Company setting forth the number of Option Shares to be
purchased from the Company and the date and time for delivery of and payment
for such Option Shares and stating that the Option Shares therein are to be
used for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given prior to the
Closing Date, the date set forth therein for such delivery and payment shall
not be earlier than two (2) full business days thereafter or the Closing Date,
whichever occurs later. If such notice is given on or after the Closing Date,
the date set forth therein for such delivery and payment shall not be earlier
than three (3) full business days thereafter. In either event, the date so set
forth shall not be more than fifteen (15) full business days after the date of
such notice. The date and time set forth in such notice, or such other time not
later than the seventh full business day thereafter as the Representative and
the Company may determine, is herein called the "Option Closing Date". Upon
exercise of the option, the Company shall become obligated to sell to the
Representative for the account of the several Underwriters, and, subject to the
terms and conditions herein set forth, the Representative shall become
obligated to purchase, for the account of each Underwriter, from the Company,
the number of Option Shares specified in such notice. The number of Option
Shares to be purchased for the account of each Underwriter shall bear the same
ratio to the total number of Option Shares to be purchased for the account of
all Underwriters as the total number of Firm Shares to be purchased from the
Company set forth opposite the name of such Underwriter on Schedule I hereto
bears to the total number of Firm Shares to be purchased by all the
Underwriters from the Company, subject in each case to such adjustments as the
Representative in its discretion may make so that allocations may be made to
each Underwriter in round lot amounts to the extent practicable.
(c) Delivery of the definitive certificates for the Firm
Shares to be purchased the Underwriters pursuant to this Section 3 shall be
made against payment of the purchase price therefor by the several Underwriters
in same-day federal funds by wire transfer to the Company at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (or at such other place as
may be agreed upon between the Representative and the Company), at 10:00 A.M.
Tampa time either (a) on the third (3rd) full business day after this Agreement
becomes effective or (b) if this Agreement is executed and delivered after 3:30
P.M., Tampa time, the fourth (4th) full business day following the day that
this Agreement becomes effective (or at such time and date to which payment and
delivery shall have been postponed pursuant to Section 9 hereof), such time and
11
date of payment and delivery being herein called the "Closing Date;" provided,
however, that if the Company has not made available to the Representative
copies of the Prospectus within the time provided in Section 5(d) hereof, the
Representative may, in its sole discretion, postpone the Closing Date until no
later than two (2) full business days following delivery of copies of the
Prospectus to the Representative. Certificates in definitive form for the
Option Shares which each Underwriter shall have agreed to purchase hereunder
shall be similarly delivered on the Option Closing Date. The certificates in
definitive form for the Firm Shares and the Option Shares to be so delivered
will be made available to Sterne Agee for checking and packaging at such office
or such other location including, without limitation, in New York, New York, as
Sterne Agee may reasonably designate at least one (1) full business day prior
to the Closing Date or the Option Closing Date, as the case may be, and will be
in good delivery form and will be in such names and denominations as Sterne
Agee may request, such request to be made at least two (2) full business days
prior to the Closing Date or the Option Closing Date, as the case may be. If
the Representative so elects, delivery of the Firm Shares and Option Shares may
be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representative.
(d) It is understood that the Representative may (but
shall not be obligated to) make any and all payments required pursuant to this
Section 3 on behalf of any Underwriters whose check or checks shall not have
been received by the Representative at the time of delivery of the Firm Shares
or any Option Shares to be purchased by such Underwriter or Underwriters. Any
such payment by the Representative shall relieve any such Underwriter or
Underwriters of any of its or their obligations hereunder.
4. OFFERING BY UNDERWRITER AND UNDERWRITER DISCLOSURE.
(a) After the Registration Statement becomes effective,
the several Underwriters propose to offer for sale to the public the Firm
Shares and any Option Shares which may be sold at the price and upon the terms
set forth in the Prospectus.
(b) The information set forth in (i) the last paragraph
on the front cover page and (ii) the first, third and twelfth paragraphs under
the caption "Underwriting" in any Preliminary Prospectus and in the final form
of Prospectus filed pursuant to Rule 424(b) [INSERT OTHER APPLICABLE
REFERENCES] constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and Sterne Agee, on behalf of the respective
Underwriters, represents and warrants to the Company that the statements made
therein do not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with
the several Underwriters that:
12
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective as promptly as possible; the Company will use its best
efforts to cause any abbreviated registration statement pursuant to Rule 462(b)
of the Rules and Regulations as may be required subsequent to the date the
Registration Statement is declared effective to become effective as promptly as
possible; the Company will notify Sterne Agee, promptly after it shall receive
notice thereof, of the time when the Registration Statement, any subsequent
amendment to the Registration Statement or any abbreviated registration
statement has become effective or any supplement to the Prospectus has been
filed; if the Company omitted information from the Registration Statement at
the time it was originally declared effective in reliance upon Rule 430A(a) of
the Rules and Regulations, the Company will provide evidence satisfactory to
Sterne Agee that the Prospectus contains such information and has been filed,
within the time period prescribed, with the Commission pursuant to subparagraph
(1) or (4) of Rule 424(b) of the Rules and Regulations or as part of a
post-effective amendment to such Registration Statement as originally declared
effective which is declared effective by the Commission; if the Company files a
term sheet pursuant to Rule 434 of the Rules and Regulations, the Company will
provide evidence satisfactory to Sterne Agee that the Prospectus and term sheet
meeting the requirements of Rule 434(b) or (c), as applicable, of the Rules and
Regulations, have been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules and
Regulations; if for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to Sterne Agee that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify Sterne Agee promptly of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; promptly upon Sterne ▇▇▇▇'▇
request, it will prepare and file with the Commission any amendments or
supplements to the Registration Statement or Prospectus which, in the opinion
of counsel for the several Underwriters ("Underwriters' Counsel"), may be
necessary or advisable in connection with the distribution of the Firm Shares
and any Option Shares by the Underwriters; it will promptly prepare and file
with the Commission, and promptly notify Sterne Agee of the filing of, any
amendments or supplements to the Registration Statement or Prospectus which may
be necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Common Stock is required to be delivered under the
Act, any event shall have occurred as a result of which the Prospectus or any
other prospectus relating to the Common Stock as then in effect would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; in case any Underwriter is required
to deliver a prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Common Stock, it will
prepare promptly upon request, but at the expense of such Underwriter, 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; and it will file no amendment or supplement to the
Registration Statement or Prospectus which shall not previously have been
submitted to Sterne Agee a reasonable time prior to the proposed filing thereof
or to which Sterne Agee shall reasonably
13
object in writing, subject, however, to compliance with the Act and the Rules
and Regulations and the provisions of this Agreement.
(b) The Company will advise Sterne Agee, promptly after
it shall receive notice or obtain knowledge, of the issuance of any stop order
by the Commission suspending the effectiveness of the Registration Statement or
of the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(c) The Company will use its best efforts to qualify the
Common Stock for offering and sale under the securities laws of such
jurisdictions as Sterne Agee may designate and to continue such qualifications
in effect for so long as may be required for purposes of the distribution of
the Common Stock, except that the Company shall not be required in connection
therewith or as a condition thereof to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction in which it
is not otherwise required to be so qualified or to so execute a general consent
to service of process. In each jurisdiction in which the Common Stock shall
have been qualified as above provided, the Company will make and file such
statements and reports in each year as are or may be reasonably required by the
laws of such jurisdiction.
(d) The Company will deliver without charge to each of
the several Underwriters such number of copies of each Preliminary Prospectus
as may reasonably be requested by the Underwriters and, as soon as the
Registration Statement, or any amendment thereto, becomes effective under the
Act or a supplement is filed with the Commission, deliver without charge to the
Representative who signed copies of the Registration Statement, including
exhibits, or such amendment thereto, as the case may be, and two copies of any
supplement thereto, and delivery without charge to each of the several
Underwriters such number of copies of the Prospectus, the Registration
Statement, and amendments and supplements thereto, if any, without exhibits, as
the Representative may reasonably request for the purposes contemplated by the
Act.
(e) The Company will make generally available to its
security-holders as soon as practicable, but in any event not later than the
forty-fifth (45th) day following the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration
Statement, an earnings statements (which will be in reasonable detail but need
not be audited) complying with the provisions of Section 11 (a) of the Act and
covering a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of three (3) years after the date
hereof, the Company will furnish to its stockholders as soon as practicable
after the end of each respective period, annual reports (including financial
statements audited by independent certified public accountants), and will
furnish to Sterne, Agee and the other several Underwriters hereunder, (i)
concurrently with furnishing to its stockholders, a balance sheet of the
Company as of the end of such fiscal year, together with statements of
operations, of stockholders' equity, and of cash flows of the
14
Company or such fiscal year, accompanied by a copy of the certificate or report
thereon of independent certified public accountants, (ii) as soon as they are
available, copies of all reports (financial or other) mailed to stockholders,
(iii) as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, any securities exchange
or the National Association of Securities Dealers, Inc. (the "NASD"), (iv)
every material press release and every material news item or article in respect
of the Company or its affairs which was generally released to stockholders or
prepared by the Company or any of its subsidiaries, and (v) any additional
information of a public nature concerning the Company or its subsidiaries, or
its business which Sterne Agee may reasonably request. During such three (3)
year period, if the Company shall have active subsidiaries, the foregoing
financial statements shall be on a consolidated basis to the extent that the
accounts of the Company and any subsidiaries are consolidated, and shall be
accompanied by similar financial statements for any significant subsidiary
which is not so consolidated.
(g) The Company will apply the net proceeds from the
sale of the Firm Shares and any Option Shares being sold by it in the manner
set forth under the caption "Use of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for the Common Stock.
(i) The Company will comply with all registration,
filing, and reporting requirements of the Exchange Act, which may from time to
time be applicable to the Company.
(j) The Company will comply with all provisions of all
undertakings contained in the Registration Statement.
(k) Prior to the Closing Date or the Option Closing
Date, as the case may be, the Company will issue no press release or other
communication, directly or indirectly, and hold no press conference with
respect to the Company, the financial condition, results of operations,
business, properties, assets, liabilities of the Company, or this offering,
without the prior consent of the Representative, which consent shall not be
unreasonably withheld.
(l) Use its best efforts to list itself in ▇▇▇▇▇'▇ OTC
Industrial Manual within ten (l0) days of the date hereof, and maintain such
listing for a period of at least five years from the date hereof.
(m) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, or if the
Underwriters shall terminate this Agreement pursuant to Section 11b)), the
Company will reimburse Sterne, Agee for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of Underwriters' Counsel) incurred
by Sterne, Agee in investigating or
15
preparing to market or marketing any Common Stock (not to exceed $75,000 in the
aggregate).
(n) If at any time during the twenty-five (25) day
period after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which, in the opinion of Sterne Agee, the market price of the Common
Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus), the Company will, after written notice from Sterne Agee
advising the Company to the effect set forth above, forthwith prepare, consult
with Sterne Agee concerning the substance of, and disseminate, a press release
or other public statement, reasonably satisfactory to Sterne Agee responding to
or commenting on such rumor, publication or event subject to the approval of
the Company's securities counsel which shall not be unreasonably withheld.
(o) The Company will not take, directly or indirectly,
any action designed to cause or result in, or which might constitute or might
be expected to constitute, stabilization or manipulation of the price of the
Common Stock.
(p) Except for options issued to employees of the
Company pursuant to a stock option plan to be implemented by the Company after
the date hereof, which would allow the Company to issue options to purchase up
to 10% of the Company's outstanding Common Stock on a fully diluted basis after
giving effect to the sale of the Firm Shares and the Option Shares, the Company
will not issue warrants or stock options for 180 days following the Closing
Date without the prior written consent of Sterne, Agee.
6. PAYMENT OF EXPENSES. The Company hereby agrees to pay all
expenses (other than fees of counsel of the Underwriters, in connection with
(a) the preparation, printing, filing, distribution, and mailing of the
Registration Statement and the Prospectus and the printing, filing,
distribution, and mailing of this Agreement and the Master Agreement Among
Underwriters, any Master Selected Dealer Agreement, and related documents,
including the cost of all copies thereof and of the Preliminary Prospectuses
and of the Prospectus and any amendments or supplements thereto supplied to the
Underwriters in quantities as hereinabove stated, (b) the issuance, offer,
sale, transfer, and delivery (as applicable) of the Common Stock, including any
transfer or other taxes payable thereon, (c) the qualification of the Common
Stock under state or foreign "blue sky" or securities laws, including the costs
of printing and mailing the preliminary and final "Blue Sky Survey," and the
disbursements in connection therewith, (d) the filing fees payable to the
Commission, the NASD, and the jurisdictions in which such qualification is
sought, (e) any fees relating to the listing of the Common Stock on either The
Nasdaq National Market System, The Nasdaq SmallCap Market or any other market
upon which the Company lists the Common Stock, (f) the cost of printing
certificates representing the Common Stock, (g) the fees of the transfer agent
for the Common Stock, and (h) the cost of a Company "roadshow" including,
without limitation, Sterne ▇▇▇▇'▇ reasonable out-of-pocket expenses, expenses
associated with presentations of the Company and the preparation of visual
materials associated therewith.
16
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Shares and the Option
Shares, as provided herein, shall be subject, in the discretion of the
Representative, to the continuing accuracy in all material respects, of the
representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered to
the Underwriters, as of the date hereof and as of the Closing Date (or the
Option Closing Date, as the case may be), to the performance by the Company of
its obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become
effective under the Act not later than 6:00 P.M., Tampa local time, on the date
of this Agreement or such later date and time as shall be consented to in
writing by the Representative; on or prior to the Closing Date, or the Option
Closing Date, as the case may be, no Stop Order shall have been issued and no
proceeding shall have been initiated or threatened with respect to a Stop
Order; and any request by the Commission for additional information shall have
been complied with by the Company to the reasonable satisfaction of the
Representative. If required, the Prospectus shall have been filed with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issue, sale and delivery of
the Common Stock, shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have been any change
in the condition (financial or otherwise), earnings, operations, business, or
business prospects of the Company from that set forth in the Registration
Statement or Prospectus, which, in Sterne ▇▇▇▇'▇ sole judgment, is material and
adverse and that makes it, in Sterne ▇▇▇▇'▇ sole judgment, impracticable or
inadvisable to proceed with the public offering of the Common Stock as
contemplated by the Prospectus.
(d) At the Closing Date and the Option Closing Date, as
the case may be, Sterne Agee shall have received the Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
P.A., counsel for the Company, dated the date of delivery, addressed to the
Underwriters, and in form and scope satisfactory to the Representative, with
reproduced copies or signed counterparts thereof for each of the Underwriters,
to the effect set forth on Exhibit B to this Agreement.
(e) On or prior to the Closing Date and the Option
Closing Date, as the case may be, the Underwriters shall have been furnished
such information, documents, certificates, and opinions as they may reasonably
require for the purpose of enabling them to review the matters referred to in
Section 7(d), and in order to evidence the accuracy, completeness, or
satisfaction of any of the representations, warranties, covenants, agreements,
or conditions herein
17
contained, or as the Representative may reasonably request.
(f) At the Closing Date or the Option Closing Date, as
the case may be, (i) the Registration Statement and the Prospectus and any
amendments or supplements thereto shall contain all statements which are
required to be stated therein in accordance with the Act and the Rules and
Regulations, and in all material respects conform to the requirements thereof,
and neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, (ii) there shall have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, no material adverse change, or any development involving a
prospective material adverse change, in the business, properties, or condition
(financial or otherwise), results of operations, capital stock, long-term or
short-term debt, or general affairs of the Company from that set forth in the
Registration Statement and the Prospectus, except changes which the
Registration Statement and Prospectus indicate might occur after the date on
which the Registration Statement becomes effective under the Act, and the
Company shall not have incurred any material liabilities or entered into any
agreements not in the ordinary course of business other than as referred to in
the Registration Statement and Prospectus, and (iii) except as set forth in the
Prospectus, no litigation, arbitration, claim, governmental, or other
proceeding (formal or informal) or investigation shall be pending, or, to our
knowledge threatened or in prospect (or any basis therefor), with respect to
the Company or any of its operations, businesses, properties, or assets which
would be required to be set forth in the Registration Statement, wherein an
unfavorable decision, ruling, or finding would materially adversely affect the
business, property, condition (financial or otherwise), results of operations,
or general affairs of the Company.
(g) At the Closing Date and the Option Closing Date, as
the case may be, Sterne Agee shall have received a certificate of the chief
executive officer and the chief financial officer of the Company, dated the
Closing Date or the Option Closing Date, as the case may be, to the effect,
among other things, that (i) the conditions set forth in Section 7(a) and 7(f)
have been satisfied, (ii) as of the date of this Agreement and as of the
Closing Date or the Option Closing Date, as the case may be, the
representations and warranties of the Company contained herein were and are
accurate and correct in all material respects, and (iii) as of the Closing Date
or the Option Closing Date, as the case may be, the obligations to be performed
by the Company hereunder on or prior to such time have been fully performed in
all material respects.
(h) (1) At the time this Agreement is executed and at
the Closing Date and the Option Closing Date, as the case may be, the
Representative shall have received a letter, addressed to the Underwriters, and
in form and substance reasonably satisfactory to the Representative, from
Hacker, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., independent public accountants for the Company,
dated the date of delivery:
(i) confirming that they are, and during the
period covered by their report(s) included in the Registration Statement and
the Prospectus were, independent certified
18
public accountants with respect to the Company within the meaning of the Act
and the published Rules and Regulations and stating that the disclosure under
the heading entitled "Experts" in the Registration Statement is correct insofar
as it relates to them;
(ii) stating that, in their opinion, the
financial statements and the footnotes thereto of the Company included in the
Registration Statement examined by them comply in form and in all material
respects with the applicable accounting requirements of the Act and the related
published rules and regulations;
(iii) stating that, on the basis of procedures
(but not an examination made in accordance with generally accepted auditing
standards) consisting of a reading of the latest available unaudited interim
consolidated financial statements of the Company (with an indication of the
date of the latest available unaudited interim financial statements), a reading
of the latest available minutes of the shareholders and Boards of Directors of
the Company and committees of such Board of Directors, inquiries to certain
officers and other employees of the Company responsible for financial and
accounting matters, and other specified procedures and inquiries, nothing has
come to their attention that caused them to believe that: (A) any unaudited
financial statements and schedules of the Company included in the Registration
Statement and Prospectus do not comply in form and in all material respects
with the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations under the Act or the Exchange Act
or are not fairly presented in conformity with generally accepted accounting
principles (except to the extent that certain footnote disclosures regarding
any stub period may have been omitted in accordance with the applicable rules
and regulations of the Commission under the Exchange Act) applied on a basis
consistent with that of the audited financial statements appearing therein, (B)
there was any change in the capital stock or long-term debt of the Company or
any decrease in the net current assets or shareholders' equity of the Company
as of the date of the latest available monthly financial statements of the
Company as of a specified date not more than five business days prior to the
date of such letter, each as compared with the amounts shown in the June 30,
2003 balance sheet included in the Registration Statement and Prospectus, other
than as properly described in the Registration Statement and Prospectus or any
change or decrease (which shall be set forth therein) which, in the sole
discretion of the Representative, the Representative shall accept, or (C) there
was a net decrease in consolidated net interest income, consolidated net
interest income after provisions for loan losses or in total or per share
amounts of consolidated net income of the Company during the period from June
30 to the date of the latest available monthly financial statements of the
Company or to a specified date not more than five business days prior to the
date of such letter, each as compared to the corresponding period in 2002,
other than as properly described in the Registration Statement and Prospectus
or any decrease (which shall be set forth therein) which, at the sole
discretion of the Representative, the Representative shall accept; and
(iv) stating that they have compared specific
numerical data and financial information pertaining to the Company set forth in
the Registration Statement (including, but not limited to, the number of
shareholders of the Company and the number of issued and outstanding shares of
the Common Stock of the Company as of June 30, 2003), which
19
have been specified by the Representative prior to the date of this Agreement,
to the extent that such data and information may be derived from the general
accounting records of the Company, and excluding any questions requiring any
interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries, and other appropriate procedures (which
procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found them to be in
agreement.
(i) All proceedings taken in connection with the
issuance, sale, transfer, and delivery of the securities offered by the
Registration Statement and Prospectus shall be reasonably satisfactory in form
and substance to the Representative and to counsel for the Underwriters, and
the Underwriters shall have received from such counsel for the Underwriters the
opinion, dated as of the Closing Date and the Option Closing Date, as the case
may be, with respect to the sufficiency of all such corporate proceedings and
other legal matters relating to this Agreement and the transactions
contemplated hereby as the representative may reasonably require, and the
Company shall have furnished to such counsel such documents as they may have
requested for the purpose of enabling them to pass upon such matters.
(j) The NASD Regulation, Inc., upon review of the terms
of the public offering of the Stock, shall not have objected to the
Underwriters' participation in such offering.
(k) Prior to or on the Closing Date, The Nasdaq Stock
Market, Inc. shall have approved the Firm Shares and Option Shares for listing
on The Nasdaq National Market or, if the Company is unable to obtain approval
for listing on The Nasdaq National Market, then The Nasdaq Stock Market, Inc.
shall have approved the Firm Shares and Option Shares for listing on The Nasdaq
SmallCap Market.
(l) Prior to or on the Closing Date, the Company shall
have provided to the Representative, or its counsel, copies of the Lock-up
Agreements referred to in Section 2(t).
Any certificate or other document signed by any officer of the
Company and delivered to the Representative or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company hereunder to the
Underwriters as to the statements made therein. If any condition to the
Underwriters' obligations hereunder to be fulfilled prior to or at the Closing
Date or the Option Closing Date, as the case may be, is not so fulfilled, the
Representative may, on behalf of the several Underwriters, terminate this
Agreement or, if the Representative so elects, in writing waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages, liabilities or expenses
(including reasonable costs of investigation), joint or several, to which such
Underwriter may become subject under the Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages
20
or liabilities, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any breach of
representation, warranty, agreement or covenant of the Company herein
contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (iii) any untrue statement or alleged untrue statement of any
material fact contained in any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and agrees to reimburse each Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or any such amendment or supplement thereto, in reliance upon, and
in conformity with, written information relating to any Underwriter furnished
to the Company by such Underwriter, directly or through Sterne Agee,
specifically for use in the preparation thereof and, provided further, that the
indemnity agreement provided in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased Common
Stock, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected had not been
sent or given to such person within the time required by the Act and the Rules
and Regulations, unless such failure is the result of noncompliance by the
Company with Section 5(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person,
if any, who controls any Underwriter within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any liabilities
which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees
to indemnify and hold harmless the Company against any losses, claims, damages
or liabilities, or expenses (including reasonable costs of investigation) joint
or several, to which the Company may become subject under the Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any breach of any
representation, warranty, agreement or covenant of such Underwriter herein
contained, (ii) any untrue statement or alleged untrue
21
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (iii) any untrue statement or alleged untrue statement of
any material fact contained in any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in the
case of subparagraphs (ii) and (iii) of this Section 8(b) to the extent, but
only to the extent, that such untrue statements or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter, directly or
through Sterne Agee, specifically for use in the preparation thereof (it being
understood that the only information so provided is the information set forth
in Section 4(b) of this Agreement), and agrees to reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(b) shall extend upon the same terms
and conditions to, and shall inure to the benefit of, each officer of the
Company who signed the Registration Statement and each director of the Company,
and each person, if any, who controls the Company within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it 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 the indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 8(a)
or 8(b) hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time
22
(no more than fifteen (15) days) after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. In no event shall
any indemnifying party be liable in respect of any amounts paid in settlement
of any action unless the indemnifying party shall have approved the terms of
such settlement; provided that such consent shall not be unreasonably withheld.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party or indemnification could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made
pursuant to this Section 8 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 8 provided for indemnification in such case, all the parties
hereto shall contribute to the aggregate losses, claims, damages, liabilities
or expense (including reasonable costs of investigation) to which they may be
subject (after contribution from others) in such proportion so that, except as
set forth in Section 8 hereof, the Underwriters severally and not jointly are
responsible pro rata for the portion represented by the percentage that the
underwriting discount bears to the initial public offering price, and the
Company is responsible for the remaining portion, provided, however, that (i)
no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Common Stock purchased by such
Underwriter in excess of the amount of damages which such Underwriter was
otherwise required to pay and (ii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(d) shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls the Underwriters or the Company within the meaning
of the Act or the Exchange Act and each officer of the Company who signed the
Registration Statement and each director of the Company.
(e) The parties of this Agreement hereby acknowledge
that they are sophisticated business persons who are represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 8, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 8
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is
made in the Registration Statement and Prospectus as required by the Act and
the Exchange Act.
9. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Option Shares hereunder, and
if the number of Firm Shares or Option
23
Shares to which the defaults of all Underwriters in the aggregate relate does
not exceed 10% of the aggregate number of Firm Shares or Option Shares, as the
case may be, which all Underwriters have agreed to purchase hereunder, then
such Firm Shares or Option Shares to which such defaults relate shall be
purchased by the non-defaulting Underwriters in proportion to their respective
commitments hereunder.
(b) If such defaults exceed in the aggregate 10% of the
number of Firm Shares or Option Shares, as the case may be, which all
Underwriters have agreed to purchase hereunder, the Representative may, in its
discretion, arrange to purchase itself or for another party or parties to
purchase such Firm Shares or Option Shares, as the case may be, to which such
default relates on the terms contained herein. If the Representative does not
arrange for the purchase of such Firm Shares or Option Shares, as the case may
be, within one business day after the occurrence of defaults relating to in
excess of 10% of the Firm Shares and Option Shares, as the case may be, then
the Company shall be entitled to a further period of three business days within
which to procure another party or parties reasonably satisfactory to the
Representative to purchase such Firm Shares or the Option Shares, as the case
may be, on the terms contained herein. If the Representative or the Company
does not arrange for the purchase of Firm Shares or the Option Shares, as the
case may be, to which such defaults relate as provided in this Section 9(b),
this Agreement may be terminated by the Representative or by the Company
without liability on the part of the Company (except that the provisions of
Sections 5(a), 6, 8, 10 and 13 shall survive such termination) or the several
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters and to
the Company for any damages occasioned by its default hereunder.
(c) If the Firm Shares or Option Shares to which such
defaults relate are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, the Representative or
the Company shall have the right to postpone the Closing Date or the Option
Closing Date, as the case may be, for a reasonable period but in any event not
more than seven business days in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus or in any
other documents and arrangements with respect to the Firm Shares or the Option
Shares, as the case may be, and the Company agrees to prepare and file promptly
any amendment or supplement to the Registration Statement or the Prospectus
which in the opinion of counsel for the Underwriters may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 as if such party had originally been a
party to this Agreement and had been allocated the number of shares of Firm
Shares and Option Shares actually purchased by it as a result this Section 9.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and the Option Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters and
the Company, including the indemnity and contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of
any investigation
24
made by, or on behalf of, any Underwriter or any indemnified person, or by, or
on behalf of, the Company, or any person or entity which is entitled to be
indemnified under Section 8(b), and shall survive termination of this Agreement
or the delivery of the Firm Shares and the Option Shares, if any, to the
several Underwriters. In addition, the provisions of Sections 5(a), 6, 8, 10,
11 and 13 shall survive termination of this Agreement, whether such termination
occurs before or after the Closing Date or the Option Closing Date.
Notwithstanding anything in Section 6 hereof to the contrary, and in addition
to the obligations assumed by the Company pursuant to Section 6 hereof, if the
offering should be terminated, the Company shall be liable to the Underwriters
only for the reasonable out-of-pocket expenses incurred by the Underwriters in
connection with this Agreement or the proposed offer, sale, and delivery of the
Firm Shares and Option Shares.
11. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
(a) This Agreement shall become effective at the later
to occur of either (i) the execution of this Agreement or (ii) the earlier of
(a) 9:30 A.M., Tampa local time, on the first full business day following the
day on which the Registration Statement becomes effective under the Act or (b)
the time of the initial public offering of any of the Common Stock by the
Underwriters after the Registration Statement becomes effective provided,
however, that the provisions of Sections 6, 8, 10 and 11 hereof shall at all
times be effective. The time of the initial public offering shall mean the time
of the release by Sterne Agee, for publication, of the first newspaper
advertisement relating to the Common Stock, or the time at which shares of the
Common Stock are first generally offered by the Underwriters to the public by
letter, telephone, telegram or telecopy, whichever shall first occur. The
Representative or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except as provided
in Section 5(n), Section 6 and Section 8, by giving the notice indicated in
Section 11(c) before the time this Agreement becomes effective under this
Section 11(a).
(b) In addition to the right to terminate this Agreement
pursuant to Sections 7 and 9 hereof, the Representative shall have the right to
terminate this Agreement at any time prior to the Closing Date or the Option
Closing Date, as the case may be, by giving notice to the Company, and, if
exercised, the Over-allotment Option, at any time prior to the Option Closing
Date, by giving notice to the Company in the event of the following: (i) if any
domestic or international event, act, or occurrence has materially and
adversely disrupted, or, in the reasonable opinion of the Representative, will
in the immediate future materially and adversely disrupt, the securities
markets; or (ii) if there shall have been a general suspension of, or a general
limitation on prices for, trading in securities on the New York Stock Exchange
or the American Stock Exchange or in the over-the-counter market; or (iii) if
there shall have been an outbreak or increase in the level of major hostilities
or other national or international calamity; or (iv) if a banking moratorium
has been declared by a state or federal authority; or (v) if a moratorium in
foreign exchange trading by major international banks or persons has been
25
declared; or (vi) if there shall have been a material interruption in the mail
service or other means of communication within the United States; or (vii) if
the Company shall have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage, or other calamity or
malicious act, whether or not such loss shall have been insured, or from any
labor dispute or court or government action, order, or decree, which will, in
the reasonable opinion of the Representative, make it inadvisable to proceed
with the offering, sale, or delivery of the Firm Shares or the Option Shares,
as the case may be; or (viii) if any material governmental restrictions shall
have been imposed on trading in securities in general, which restrictions are
not in effect on the date hereof, or (ix) if there shall be passed by the
Congress of the United States or by any state legislature any act or measure,
or adopted by any governmental body or authoritative accounting institute or
board, or any governmental executive, any orders, rules, or regulations, which
the Representative believes likely to have a material adverse effect on the
business, financial condition, or financial statements of the Company or the
market for the Common Stock; or (x) if there shall have been such material and
adverse change in the market for the Company's securities or securities in
general or in political, financial, or economic conditions as in the judgment
of the Representative makes it inadvisable to proceed with the offering, sale,
and delivery of the Firm Shares or the Option Shares, as the case may be, on
the terms contemplated by the Prospectus.
(c) If the Representative elects to prevent this
Agreement from becoming effective, as provided in this Section 11, or to
terminate this Agreement pursuant to Section 7 of this Agreement or this
Section 11, the Representative shall notify the Company promptly by telephone,
telex, or telegram, confirmed by letter. If, as so provided, the Company elects
to prevent this Agreement from becoming effective or to terminate this
Agreement, the Company shall notify the Representative promptly by telephone,
telex, or telegram, confirmed by letter.
(d) Notwithstanding anything herein to the contrary, if
this Agreement shall not become effective by reason of the election of the
Company pursuant to Section 11(a) or if this Agreement shall terminate or shall
otherwise not be carried out by December 31, 2003 by reason of any failure on
the part of the Company to perform any covenant or agreement of this Agreement
or satisfy any condition of this Agreement by it to be performed or satisfied,
the sole liability of the Company to the several Underwriters, in addition to
the obligations the Company assumed pursuant to Section 6, will be to reimburse
Sterne, Agee for such reasonable out-of-pocket expenses (including the
reasonable fees and disbursements of its counsel) as shall have been incurred
by it in connection with this Agreement or the proposed offer, sale, and
delivery of the Firm Shares and Option Shares, and, upon demand, the Company
agrees to pay promptly the full amount thereof to Sterne, Agee up to a maximum
reimbursement of $75,000. Anything in this Agreement to the contrary
notwithstanding other than Section 11(e), if this Agreement shall not be
carried out within the time specified herein for any reason other than the
failure on the part of the Company to perform any covenant or agreement or
satisfy any condition of this Agreement by it to be performed or satisfied, the
Company shall have no liability to the several Underwriters other than for
obligations assumed by the Company pursuant to Section 6.
(e) Notwithstanding any election hereunder or any
termination of this
26
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 5(a), 6, 8, 10 and 13 shall not be in any way affected
by such election or termination or failure to carry out the terms of this
Agreement or any part hereof.
12. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed by letter, to such Underwriter, c/o Sterne, Agee & ▇▇▇▇▇, Inc., ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, PA, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire, or if
sent to the Company, shall be mailed, delivered, or telexed or telegraphed and
confirmed by letter, to Coast Financial Holdings, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, President and Chief
Executive Officer, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.A., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire. All notices hereunder
shall be effective upon receipt by the party to which it is addressed.
13. PARTIES. Sterne Agee represents that it is authorized to act
as Representative on behalf of the several Underwriters named in Schedule I
hereto, and the Company shall be entitled to act and rely on any request,
notice, consent, waiver, or agreement purportedly given on behalf of the
Underwriters when the same shall have been given by Sterne Agee on such behalf.
This Agreement shall inure solely to the benefit of, and shall be binding upon,
the several Underwriters and the Company and the persons and entities referred
to in Section 8 who are entitled to indemnification or contribution, and their
respective successors, legal representatives, and assigns (which shall not
include any buyer, as such, of the Firm Shares or the Option Shares), and no
other person shall have, or be construed to have, any legal or equitable right,
remedy, or claim under, in respect of, or by virtue of this Agreement or any
provision herein contained. Notwithstanding anything contained in this
Agreement to the contrary, all of the obligations of the Underwriters hereunder
are several and not joint.
14. CONSTRUCTION. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Alabama, without giving
effect to conflict of laws. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
15. SERVICE OF PROCESS. In any such action or proceeding with
respect to this Agreement, the Company waives personal service of any summons,
complaint, or other process and agrees that service thereof may be made in
accordance with Section 12.
16. COUNTERPARTS. This Agreement may be signed in several
counterparts, each of which will constitute an original.
If the foregoing correctly sets forth the understandings between the
Representative and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
27
Very truly yours,
COAST FINANCIAL HOLDINGS, INC.
By:
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
ACCEPTED as of the date
first above written in
Birmingham, Alabama
STERNE, AGEE & ▇▇▇▇▇, INC.*
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
Chairman and Chief Executive Officer
*On behalf of itself and the other several
Underwriters named in Schedule I hereto
28
SCHEDULE I
TOTAL
NUMBER
OF COMMON STOCK
TO BE
Underwriter PURCHASED
Sterne, Agee &
▇▇▇▇▇, Inc
Total:
29
EXHIBIT A
LOCK-UP AGREEMENT
____________, 2003
Sterne, Agee & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
In order to induce you and Coast Financial Holdings, Inc., a Florida
corporation (the "Company"), to enter into an underwriting agreement with
respect to the public offering (the "Offering") of _____________ shares of
Common Stock, par value $5.00 per share ("Common Stock") (plus ________ shares
of Common Stock issuable solely to cover over-allotments, if any) of the
Company, I hereby agree that for the period of time ("Period") commencing on
the date hereof and ending on the date 180 days following the date on which the
Company's registration statement, filed with respect to the Offering, under the
Securities Act of 1933, as amended (the "Act"), becomes effective under the
Act, I will not, without your prior written consent, publicly offer, sell,
contract to sell, pledge, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Common Stock or any security
or other instrument which by its terms is convertible into, or exercisable or
exchangeable for, shares of Common Stock or other securities of the Company,
including, without limitation, any shares of Common Stock issuable pursuant to
the terms of any stock options, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any of these
transactions is to be settled by delivery of the Common Stock or other
securities, in cash or otherwise, or publicly disclose the intention to make
any such offer, sale, pledge or disposition, or to enter into any such
transaction, swap, hedge, or other arrangement. In order to enable you to
enforce the aforesaid restrictions on transfer, I hereby agree that the Company
may impose stop-transfer instructions with respect to the securities of the
Company owned beneficially or of record by me, and affix to the certificates
evidencing such securities a restrictive legend to such effect, in each case
until the end of the Period.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of Alabama, without giving effect to
conflict of law principals.
---------------------------------------
Signature
---------------------------------------
Name (please print or type
---------------------------------------
Address (please print or type)
30
---------------------------------------
Print Social Security Number or
Taxpayer
Identification Number
31
EXHIBIT B
The opinion of counsel to the Company to be delivered pursuant to
Section 7(d) of the Underwriting Agreement shall be substantially to the effect
that:
(i) The Company has been duly incorporated and is
validly existing in good standing as a corporation under the laws of the State
of Florida, with corporate power and authority to own its properties and
conduct its business as now conducted, and is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions where the
failure to so qualify would have a material adverse effect upon the Company and
its subsidiaries taken as a whole. The Company holds all licenses,
certificates, permits, franchises and authorizations from governmental
authorities which are material to the conduct of its business in all locations
in which such business is currently being conducted.
(ii) Each of the Company's subsidiaries is validly
existing and in good standing under the laws of the state of its incorporation
or organization, as the case may be, with power and authority to own its
properties and conduct its business as now conducted, and is duly qualified or
authorized to do business and is in good standing in all other jurisdictions
where the failure to so qualify would have a material adverse effect upon the
business of the Company and its subsidiaries taken as a whole. The outstanding
stock of each of the Company's subsidiaries is duly authorized, validly issued
and fully paid. The outstanding stock of each of the Company's subsidiaries is
nonassessable. All of the outstanding stock of each of the corporate
subsidiaries owned beneficially and of record by the Company is owned free and
clear of all liens, encumbrances, equities and claims. No options or warrants
or other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into any shares of capital stock or of
ownership interests in any of the Company's subsidiaries are outstanding. Each
of the Company's subsidiaries holds all licenses, certificates, permits,
franchises and authorizations from governmental authorities which are material
to the conduct of its business in all locations in which such business is
currently being conducted.
(iii) As of the dates specified therein, the Company had
authorized and issued capital stock as set forth under the caption
"Capitalization" in the Prospectus. All of the outstanding shares of the
capital stock of the Company have been duly authorized and are validly issued,
fully paid and nonassessable, and the Firm Shares and Option Shares have been
duly authorized, and upon issuance thereof and payment therefor as provided
herein, will be validly issued, fully paid and nonassessable; none of the
issued shares have been issued in violation of or subject to any preemptive
rights provided for by law or by the Company's Certificate of Incorporation.
There are no preemptive rights or, to the knowledge of such counsel, other
rights to subscribe for or to purchase, or any restriction upon the transfer
of, the Firm Shares or Option Shares pursuant to the Company's Certificate of
Incorporation, bylaws or other governing documents or, to the knowledge of such
counsel, any agreement or other instrument to which the Company is a party or
by which it may be bound except as described in the Prospectus and except for
restrictions on transfer imposed under applicable securities laws. Neither the
filing of the Registration Statement nor the offer or sale of the Firm Shares
or Option Shares as
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contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any
shares of Common Stock or any other securities of the Company. The Underwriters
will receive good and marketable title to the Firm Shares and Option Shares to
be issued and delivered pursuant to this Agreement, free and clear of all
liens, encumbrances, claims, security interests, restrictions, shareholder
agreements and voting trusts whatsoever. The capital stock of the Company and
the Firm Shares and Option Shares conform to the description thereof set forth
under the caption "Description of Capital Stock" in the Prospectus. All offers
and sales of the Company's securities prior to the date hereof were at all
relevant times duly registered or exempt from the registration requirements of
the Act and were duly registered or the subject of an exemption from the
registration requirements of applicable state securities or Blue Sky laws, or
if not registered in compliance with the applicable federal and state
securities laws, any actions arising from such failure to register any such
securities are barred by applicable statute of limitations.
(iv) The Company has full legal right, power and
authority to enter into this Agreement and to issue, sell and deliver the Firm
Shares and Option Shares to be sold by it to the Underwriters as provided
herein, and this Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, fraudulent
conveyance or other laws affecting creditors' rights generally, including,
without limitation, the United States Bankruptcy Code and applicable state
laws.
(v) No consent, approval, authorization or order of any
court or governmental agency or body or third party is required for the
performance of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except such as have been obtained
under the Act and such as may be required by the NASD and under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Firm Shares and any Option Shares by the several Underwriters. The
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not conflict with or
result in a material breach or violation by the Company of any of the terms or
provisions of, or constitute a material default by the Company under, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company is a party or to which
the Company or its properties is subject, or a violation or breach of the
Certificate of Incorporation or bylaws of the Company, any material breach or
violation of any statute, or any judgment, decree, order, rule or regulation
known to such counsel of any court or governmental agency or body applicable to
the Company or any of its subsidiaries or their properties.
(vi) Except as described in the Prospectus, there is not
pending, or to the best knowledge of such counsel threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company or any of its
subsidiaries is a party, or to which the property of the Company or any of its
subsidiaries is subject, before or brought by any court or
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governmental agency or body, which, if determined adversely to the Company or
any of its subsidiaries, could result in any material adverse change in the
business, financial position, net worth or results of operations, or could
materially adversely affect the properties or assets, of the Company or any of
its subsidiaries.
(vii) The statements set forth in the Prospectus under the
captions "Supervision and Regulation" and "Description of Capital Stock,"
insofar as they purport to describe the provisions of the laws referred to
therein, fairly summarize the legal matters described therein.
(viii) To the knowledge of such counsel, no material
default exists, and no event has occurred which with notice or after the lapse
of time to cure or both, would constitute a material default, in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or to which they or
their properties are subject, or of the Certificate of Incorporation or bylaws
of the Company or any of its subsidiaries.
(ix) To the knowledge of such counsel after reasonable
inquiry, neither the Company nor any of its subsidiaries is in material
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company and its subsidiaries and material to the
Company and its subsidiaries taken as a whole or any decree of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries.
(x) The Registration Statement and all post effective
amendments thereto have become effective under the Act, and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are threatened, pending or contemplated by the Commission.
All filings required by Rule 424 and Rule 430A of the Rules and Regulations
have been made; the Registration Statement, the Prospectus and any amendments
or supplements thereto (except for the financial statements and schedules
included therein as to which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and Regulations; the
descriptions in the Registration Statement and the Prospectus of statutes,
regulations, legal and governmental proceedings, and contracts and other
documents are accurate in all material respects and present fairly the
information required to be stated; and such counsel does not know of any
pending or threatened legal or governmental proceedings, statutes or
regulations required to be described in the Prospectus which are not described
as required nor of any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed as
required.
(xi) On the basis of the participation of such counsel in
conferences at which the contents of the Registration Statement and the
Prospectus and related matters were
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discussed, but without independent verification by such counsel of the
accuracy, completeness, or fairness of statements contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, such counsel
has no knowledge that (other than financial statements and other financial
schedules which are or should be contained therein, as to which such counsel
need express no opinion): (A) the Registration Statement, any Rule 430A
prospectus, and the Prospectus, and any amendment or supplement thereto, does
not appear on its face to comply as to form in any material respects with the
requirements of the Act and the Rules and Regulations; (B) the Registration
Statement, any Rule 430A prospectus, and the Prospectus, or any amendment or
supplement thereto, contain 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 light of the circumstances under which they were made,
not misleading; or (C) since the date of effectiveness under the Act of the
Registration Statement, any event has occurred which should have been set forth
in an amendment or supplement to the Registration Statement or the Prospectus
which has not been set forth in such an amendment or supplement.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States, or the corporate laws of the
State of Florida upon opinions of local counsel, and as to questions of fact
upon representations or certificates of the Company and its officers or other
representatives and of governmental officials, in which case their opinion is
to state that they are so relying and that they have no knowledge of any
material misstatement or inaccuracy in any such opinion, representation or
certificate. Copies of any opinion, representation or certificate so relied
upon shall be delivered to Sterne Agee, as representative of the Underwriter,
and to Underwriters' counsel.
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