Exhibit 1.1
175,000 Shares of 8.00%
Non-Cumulative
Perpetual Convertible Preferred Stock, Series A
EAST WEST BANCORP,
INC.
UNDERWRITING
AGREEMENT
April 23,
2008
LEHMAN BROTHERS
INC.
745 Seventh Avenue
New York, New York 10019
Ladies and
Gentlemen:
East West
Bancorp, Inc., a Delaware corporation (the “
Company ”), proposes to issue and sell to you as the
sole underwriter (the “ Underwriter ”), 175,000
shares (the “ Firm Securities ”) of the
Company’s convertible preferred stock, par value $0.001 per
share (the “ Preferred Stock ”). The terms
of the Preferred Stock will be set forth in a certificate of
designations (the “ Certificate of Designations
”) to be filed by the Company with the Secretary of State of
the State of Delaware. The Securities will be convertible
into shares of common stock, par value $0.001 per share (the
“ Common Stock ”), of the Company (the shares of
Common Stock into which the Securities are convertible, the “
Conversion Shares ”), plus cash in lieu of fractional
shares on the terms set forth in the Certificate of Designations.
In addition, the Company proposes to grant to the Underwriter an
option to purchase up to 25,000 additional shares of the Preferred
Stock on the terms set forth in Section 2 (the “
Option Securities ”). The Firm Securities and
the Option Securities, if purchased, are hereinafter collectively
called the “ Securities .” This is to
confirm the agreement concerning the purchase of the Securities
from the Company by the Underwriter.
1.
Representations, Warranties and Agreements of the Company
. The Company represents, warrants and agrees that:
(a)
An “ automatic shelf registration statement ”
(as defined in Rule 405 (“ Rule 405 ”)
under the Securities Act of 1933, as amended (the “
Securities Act ”)) relating to the Securities (File
No.333-150353) (i) has been prepared by the Company in
conformity with the requirements of the Securities Act and the
rules and regulations (the “ Rules and
Regulations ”) of the Securities and Exchange Commission
(the “ Commission ”) thereunder; (ii) has
been filed with the Commission under the Securities Act not earlier
than the date that is three years prior to the applicable Delivery
Date (as defined in Section 4); and (iii) is effective
under the Securities Act. Copies of such registration
statement and any amendment thereto have been delivered by the
Company to you as the Underwriter. As used in this
Agreement:
(i)
“ Applicable Time ” means 5:45 p.m. (New
York City time) April 23, 2008;
(ii)
“ Base Prospectus ” means the base prospectus
filed as part of the Registration Statement, in the form in which
it has most recently been amended on or prior to the date of this
Agreement, relating to the Securities;
(iii)
“ Effective Date ” means any date as of which
any part of the Registration Statement relating to the Securities
became, or is deemed to have become, effective under the Securities
Act in accordance with the Rules and Regulations (including
pursuant to Rule 430B of the Rules and Regulations);
(iv)
“ Issuer Free Writing Prospectus ” means each
“issuer free writing prospectus” (as defined in
Rule 433 of the Rules and Regulations (“
Rule 433 ”)) prepared by or on behalf of the
Company or used or referred to by the Company in connection with
the offering of the Securities, including the Term Sheet;
(v)
“ Preliminary Prospectus ” means any preliminary
prospectus relating to the Securities, including the Base
Prospectus and any prospectus supplement thereto, as filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations (“ Rule 424(b) ”);
(vi)
“ Pricing Disclosure Package ” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with each Issuer Free Writing Prospectus filed or used by the
Company on or before the Applicable Time, other than a road show
that is an Issuer Free Writing Prospectus under Rule 433;
(vii)
“ Prospectus ” means the final prospectus
relating to the Securities, including the Base Prospectus and any
prospectus supplement thereto, as filed with the Commission
pursuant to Rule 424(b);
(viii)
“ Registration Statement ” means, collectively,
the various parts of the above-referenced registration statement,
each as amended as of the Effective Date for such part, including
any Preliminary Prospectus or Prospectus deemed to be a part
thereof pursuant to Rule 430B of the Rules and
Regulations, and all exhibits to such registration statement;
and
(ix)
“ Term Sheet ” means the term sheet prepared
pursuant to Section 5(a)(i) of the Agreement and
substantially in the form attached hereto in Schedule 3.
Any reference to the
“ most recent Preliminary Prospectus ” shall be
deemed to refer to the latest Preliminary Prospectus included in
the Registration Statement or filed pursuant to
Rule 424(b) on or prior to the date hereof. Any
reference to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents incorporated by
reference therein pursuant to Form S-3 under the Securities
Act as of the date of such prospectus. Any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
post-effective
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amendment to the
Registration Statement, any prospectus supplement relating to the
Securities filed with the Commission pursuant to
Rule 424(b) and any document filed under the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), after the date of such prospectus and incorporated by
reference therein; and any reference to any amendment to the
Registration Statement shall be deemed to include any Annual Report
of the Company on Form 10-K filed with the Commission pursuant
to Section 13(a) or 15(d) of the Exchange Act after
the Effective Date that is incorporated by reference in the
Registration Statement.
The
Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding or examination for such
purpose has been instituted or threatened by the Commission.
The Commission has not notified the Company of any objection to the
use of the form of the Registration Statement pursuant to
Rule 401(g)(2) of the Rules and
Regulations.
(b)
The Company has been since the time of initial filing of the
Registration Statement and continues to be a “well-known
seasoned issuer” eligible to use Form S-3 for the
offering of the Securities, including not having been an
“ineligible issuer” (as such terms are defined in
Rule 405) at any such time or date.
(c)
The Registration Statement complied and will comply in all material
respects on the Effective Date and on the applicable Delivery Date,
and any amendment to the Registration Statement filed after the
date hereof will comply in all material respects when filed, to the
requirements of the Securities Act and the Rules and
Regulations. The most recent Preliminary Prospectus
conformed, and the Prospectus will conform, in all material
respects when filed with the Commission pursuant to
Rule 424(b) and on the applicable Delivery Date to the
requirements of the Securities Act and the Rules and
Regulations. The documents incorporated by reference in any
Preliminary Prospectus or the Prospectus conformed, and any further
documents so incorporated will comply, when filed with the
Commission, in all material respects to the requirements of the
Exchange Act or the Securities Act, as applicable, and the
rules and regulations of the Commission thereunder.
(d)
The Registration Statement did not, as of the Effective Date,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Registration Statement in reliance upon and in
conformity with written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information
is specified in Section 8(e).
(e)
The Prospectus will not, as of its date and on the applicable
Delivery Date, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to
information contained in or omitted from the
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Prospectus in reliance upon and in conformity
with written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information
is specified in Section 8(e).
(f)
The documents incorporated by reference into any Preliminary
Prospectus or the Prospectus did not, and any further documents
filed and incorporated by reference therein through the last
Delivery Date (as defined below), will not, when filed with the
Commission, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g)
The Pricing Disclosure Package did not, as of the Applicable Time,
contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Pricing
Disclosure Package in reliance upon and in conformity with written
information furnished to the Company by the Underwriter
specifically for inclusion therein (which information is specified
in Section 8(e) hereof).
(h)
Each Issuer Free Writing Prospectus (including, without limitation,
any road show that is a free writing prospectus under
Rule 433), when considered together with the Pricing
Disclosure Package as of the Applicable Time, did not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(i)
Each Issuer Free Writing Prospectus complied or will comply in all
material respects to the requirements of the Securities Act and the
Rules and Regulations on the date of first use, and the
Company has complied with any filing requirements applicable to
such Issuer Free Writing Prospectus pursuant to the Rules and
Regulations. The Company has not made any offer relating to
the Securities that would constitute an Issuer Free Writing
Prospectus without the prior written consent of the
Underwriter. The Company has retained in accordance with the
Rules and Regulations all Issuer Free Writing Prospectuses
that were not required to be filed pursuant to the Rules and
Regulations.
(j)
Each of the Company, East West Bank and East West Insurance
Services, Inc. has been duly organized, is validly existing
and in good standing as a corporation under the laws of its
jurisdiction of organization and is duly qualified to do business
and in good standing as a foreign corporation or other business
entity in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such
qualification, except where the failure to be so qualified or in
good standing could not, in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), results of operations, stockholders’ equity,
properties, or business of the Company and its subsidiaries (as
defined in Section 17) taken as a whole (a “ Material
Adverse Effect ”). The Company is duly registered
as a bank holding company under the Bank Holding Company Act of
1956, as amended (“ BHCA ”). Each
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of
the Company, East West Bank and East West Insurance
Services, Inc. has all corporate power and authority necessary
to own or hold its properties and to conduct the businesses in
which it is engaged. The Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Exhibit 21 to the
Company’s Annual Report on Form 10-K for the most recent
fiscal year other than such as it may control or acquire in
connection with the foreclosure of collateral or collection of
loans, as set forth in the most recent Preliminary
Prospectus. None of the subsidiaries of the Company other
than East West Bank (the “ Significant Subsidiary
”) is a “significant subsidiary” (as defined in
Rule 405).
(k)
The Company has an authorized capitalization as set forth in each
of the most recent Preliminary Prospectus and the Prospectus, and
all of the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and
non-assessable, conform to the description thereof contained in the
most recent Preliminary Prospectus and were issued in compliance
with federal and state securities laws and not in violation of any
preemptive right, resale right, right of first refusal or similar
right. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of the
Company’s capital stock have been duly authorized and validly
issued, conform to the description thereof contained in the most
recent Preliminary Prospectus and the Prospectus were issued in
compliance with federal and state securities laws. All of the
issued shares of capital stock of the Significant Subsidiary have
been duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims as could
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l)
The Securities to be issued and sold by the Company to the
Underwriter hereunder have been duly authorized and, upon payment
and delivery in accordance with this Agreement, will be validly
issued, fully paid and non-assessable, will conform to the
description thereof contained in the most recent Preliminary
Prospectus and the Prospectus, will be issued in compliance with
federal and state securities laws and will be free of statutory and
contractual preemptive rights, rights of first refusal and similar
rights.
(m)
The Conversion Shares have been duly and validly authorized and
reserved for issuance upon conversion of the Securities and are
free of preemptive rights, rights of first refusal and similar
rights; and all Conversion Shares, when so issued and delivered
upon such conversion in accordance with the terms of the
Certificate of Designations related thereto, will be duly and
validly issued, fully paid and non-assessable and free and clear of
any liens and will conform, when issued, in all material respects
to the descriptions thereof in the Pricing Disclosure Package and
the Prospectus.
(n)
The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
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(o)
The execution, delivery and performance of this Agreement by the
Company, the issuance of the Securities and the Conversion Shares
initially issuable by the Company upon conversion of the Securities
in accordance with the terms of the Certificate of Designations or
the consummation of the transactions contemplated under this
Agreement and the Certificate of Designations and the application
of the proceeds from the sale of the Securities as described under
“Use of Proceeds” in the most recent Preliminary
Prospectus will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, impose any lien,
charge or encumbrance upon any property or assets of the Company,
the Significant Subsidiary or East West Insurance
Services, Inc., or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, license or other agreement
or instrument to which the Company, the Significant Subsidiary or
East West Insurance Services, Inc. is a party or by which the
Company, the Significant Subsidiary or East West Insurance
Services, Inc. is bound or to which any of the property or
assets of the Company, the Significant Subsidiary or East West
Insurance Services, Inc.is subject; (ii) result in any
violation of the provisions of the charter or by-laws (or similar
organizational documents) of the Company, the Significant
Subsidiary or East West Insurance Services, Inc.; or
(iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, the Significant Subsidiary or
East West Insurance Services, Inc. or any of their properties
or assets, except in the case of clauses (i) and
(iii) above for such conflict or violation that would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(p)
No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets is required for the execution, delivery
and performance of this Agreement by the Company, the issuance of
the Securities by the Company, the issuance of the Conversion
Shares initially issuable by the Company upon conversion of the
Securities in accordance with the terms of the Certificate of
Designations, the consummation of the transactions contemplated
under this Agreement and the Securities and the application of the
proceeds from the sale of the Securities as described under
“Use of Proceeds” in the most recent Preliminary
Prospectus, except for the registration of the Securities under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection
with the purchase and sale of the Securities by the
Underwriter.
(q)
There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require
the Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
(r)
The Company has not sold or issued any securities that would be
integrated with the offering of the Securities contemplated by this
Agreement pursuant to
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the
Securities Act, the Rules and Regulations or the
interpretations thereof by the Commission.
(s)
Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included
or incorporated by reference in the most recent Preliminary
Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, and since such date, there has not been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any adverse change, or any development
involving a prospective adverse change, in or affecting the
condition (financial or otherwise), results of operations,
stockholders’ equity, properties, general affairs,
management, or business of the Company and its subsidiaries taken
as a whole, in each case except as could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(t)
Each of the Company and its subsidiaries is in compliance in all
respects with all laws administered by, and all rules and
regulations of, the Board of Governors of the Federal Reserve
System (“ Fed ”), the Federal Deposit Insurance
Corporation (“ FDIC ”), the California
Department of Financial Institutions, and any other federal or
state bank regulatory authority with jurisdiction over the Company
or the Significant Subsidiary (collectively, “ Bank
Regulatory Authorities ”), other than where the failure
to be in compliance would not reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has
adopted any board of director resolutions at the request of, any
Bank Regulatory Authority which currently restricts the conduct of
its business, or relates to its capital adequacy, its credit
policies or its management, nor have any of them been advised by
any Bank Regulatory Authority that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter
or similar submission, or any such board of director resolutions,
in each case that are applicable to the Company or its subsidiaries
specifically rather than to banks and bank holding companies
generally.
(u)
The Company, the Significant Subsidiary and East West Insurance
Services, Inc. have insurance covering their respective
properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are reasonably adequate to
protect the Company, the Significant Subsidiary and East West
Insurance Services, Inc. and their respective businesses; and
none of the Company, the Significant Subsidiary or East West
Insurance Services, Inc. has (i) received notice from any
insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to
continue such insurance or (ii) any reason to believe that it
will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at
reasonable cost from similar insurers as may be necessary to
continue its business. The deposit accounts of East West Bank
are insured by the FDIC to the
7
fullest extent permitted by law and the
rules and regulations of the FDIC; and no proceedings for the
termination of such insurance are pending or
threatened.
(v)
Since the date as of which information is given in the most recent
Preliminary Prospectus, the Company has not (i) incurred any
liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary
course of business, (ii) entered into any material transaction
not in the ordinary course of business or (iii) declared or
paid any dividend on its capital stock.
(w)
The historical financial statements (including the related notes
and supporting schedules) included or incorporated by reference in
the most recent Preliminary Prospectus comply as to form in all
material respects with the requirements of Regulation S-X under the
Securities Act and present fairly the financial condition, results
of operations and cash flows of the entities purported to be shown
thereby at the dates and for the periods indicated and have been
prepared in conformity with accounting principles generally
accepted in the United States applied on a consistent basis
throughout the periods involved.
(x)
Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated
subsidiaries, whose report appears in the most recent Preliminary
Prospectus or is incorporated by reference therein and who have
delivered the initial letter referred to in
Section 7(f) hereof, are independent public accountants
as required by the Securities Act and the Rules and
Regulations.
(y)
The statistical and market-related data included or incorporated by
reference under the captions “Summary,”
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and
“Business” in the most recent Preliminary Prospectus
and the consolidated financial statements of the Company and its
subsidiaries included or incorporated by reference in the most
recent Preliminary Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate in all
material respects.
(z)
Neither the Company nor any subsidiary is, and as of the applicable
Delivery Date and, after giving effect to the offer and sale of the
Securities and the application of the proceeds therefrom as
described under “Use of Proceeds” in the most recent
Preliminary Prospectus and the Prospectus, none of them will be,
(i) an “investment company” within the meaning of
such term under the Investment Company Act of 1940, as amended (the
“ Investment Company Act ”), and the
rules and regulations of the Commission thereunder or
(ii) a “business development company” (as defined
in Section 2(a)(48) of the Investment Company Act).
(aa)
Except as described in the most recent Preliminary Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject that could, in the aggregate, reasonably be expected to
have a Material Adverse Effect or could, in the aggregate,
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of the
8
transactions contemplated hereby; and to the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others.
(bb)
No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, on the other
hand, that is required to be described in the most recent
Preliminary Prospectus or the Prospectus which is not so
described.
(cc)
No labor disturbance by the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is
imminent that could reasonably be expected to have a Material
Adverse Effect.
(dd)
(i) Each “employee benefit plan” (within the
meaning of Section 3(3) of the Employee Retirement
Security Act of 1974, as amended (“ ERISA ”))
for which the Company or any member of its “Controlled
Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended
(the “ Code ”)) would have any liability (each a
“ Plan ”) has been maintained in compliance with
its terms and with the requirements of all applicable statutes,
rules and regulations including ERISA and the Code;
(ii) with respect to each Plan subject to Title IV of ERISA
(a) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur, (b) no “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA
or Section 412 of the Code), whether or not waived, has
occurred or is reasonably expected to occur, (c) the fair
market value of the assets under each Plan exceeds the present
value of all benefits accrued under such Plan (determined based on
those assumptions used to fund such Plan) and (d) neither the
Company or any member of its Controlled Group has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA
(other than contributions to the Plan or premiums to the PBGC in
the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan”, within the meaning
of Section 4001(c)(3) of ERISA); and (iii) each Plan
that is intended to be qualified under Section 401(a) of
the Code is so qualified and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(ee)
The Company and each of its subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required
to be filed through the date hereof, subject to permitted
extensions, and have paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of
its subsidiaries, nor does the Company have any knowledge of any
tax deficiencies that could, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(ff)
There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale
by the Company of the Securities.
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(gg)
Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws (or similar organizational
documents), (ii) is in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement, license or other agreement or instrument to which
it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation of
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its
property or assets or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct
of its business, except in the case of clauses (ii) and (iii),
to the extent any such conflict, breach, violation or default could
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(hh)
the Company maintains (i) internal controls over financial
reporting as defined in Rule 13a-15 under the Exchange Act
that comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles and that
are adequate and effective and designed to ensure that material
information relating to the Company and its subsidiaries is made
known to its chief executive officer and chief financial officer by
others within those entities, and (ii) a system of internal
accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with the
management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences;
(ii)
(i) the Company and its subsidiaries maintain an effective
system of disclosure controls and procedures as defined in
Rule 13a-15(e) of the Exchange Act that is designed to
ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms;
and (ii) since the date of the latest audited financial
statements included or incorporated by reference in the Pricing
Disclosure Package, the Company has not become aware of any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting;
(jj)
The Company, the Significant Subsidiary and East West Insurance
Services, Inc. have such permits, licenses, patents,
franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities (“
Permits ”) as are necessary under applicable law to
own their properties and conduct their businesses in the manner
described in the most recent Preliminary Prospectus, except for any
of the
10
foregoing that could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; each of
the Company, the Significant Subsidiary and East West Insurance
Services, Inc. has fulfilled and performed all of its
obligations with respect to the Permits, and no event has occurred
that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
impairment of the rights of the holder or any such Permits, except
for any of the foregoing that could not reasonably be expected to
have a Material Adverse Effect.
(kk)
The Company, the Significant Subsidiary and East West Insurance
Services, Inc. each own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights, licenses, know-how, software, systems and technology
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses and have
no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others.
(ll)
Except as described in the most recent Preliminary Prospectus,
(A) there are no proceedings that are pending, or known to be
contemplated, against the Company or any of its subsidiaries under
any laws, regulations, ordinances, rules, orders, judgments,
decrees, permits or other legal requirements of any governmental
authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating
to the protection of human health or safety, the environment, or
natural resources, or to hazardous or toxic substances or wastes,
pollutants or contaminants (“ Environmental Laws
”) in which a governmental authority is also a party, other
than such proceedings regarding which it is reasonably believed no
monetary sanctions of $100,000 or more will be imposed,
(B) the Company and its subsidiaries are not aware of any
facts or circumstances regarding compliance with Environmental
Laws, or liabilities or other obligations under Environmental Laws
or concerning hazardous or toxic substances or wastes, pollutants
or contaminants, that could reasonably be expected to have a
material effect on the capital expenditures, earnings or
competitive position of the Company and its subsidiaries, and
(C) none of the Company and its subsidiaries anticipates
material capital expenditures relating to Environmental
Laws.
(mm) No
subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock,
from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the most recent
Preliminary Prospectus.
(nn)
Neither the Company nor any of its subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or
any of its subsidiaries, has (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any
11
foreign or domestic government official or
employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(oo)
The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering
Laws ”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened, except, in each case, as
would not reasonably be expected to have a Material Adverse
Effect.
(pp)
Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“ OFAC
”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
(qq)
The Company has not distributed and, prior to the later to occur of
any Delivery Date and completion of the distribution of the
Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus to which the Underwriter has consented in accordance
with Section 1(i) or 5(a)(vii) and any Issuer Free
Writing Prospectus set forth on Schedule 1 hereto.
(rr)
The Company has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that
could reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the
Securities.
2.
Purchase of the Securities by the Underwriter .
On the basis of the representations and warranties
contained in, and subject to the terms and conditions of, this
Agreement, the Company agrees to sell 175,000 shares of the
Firm Securities to the Underwriter, and the Underwriter agrees to
purchase 175,000 shares of the Firm Securities.
In addition, the
Company grants to the Underwriter an option to purchase up to
25,000 additional shares of Option Securities. Such option is
exercisable to the extent that the Underwriter sell more Securities
than the number of Firm Securities in the offering and as
set
12
forth in Section 4
hereof. The Underwriter agrees to purchase the total number
of shares of Option Securities.
The price of both
the Firm Securities and any Option Securities purchased by the
Underwriter shall be $972.50 per share.
The Company shall
not be obligated to deliver any of the Firm Securities or Option
Securities to be delivered on the applicable Delivery Date, except
upon payment for all such Securities to be purchased on such
Delivery Date as provided herein.
3.
Offering of Securities by the Underwriter . Upon
authorization by the Underwriter of the release of the Firm
Securities, the Underwriter proposes to offer the Firm Securities
for sale upon the terms and conditions to be set forth in the
Prospectus.
4.
Delivery of and Payment
for the Securities . Delivery of and payment for the
Firm Securities shall be made at 10:00 A.M., New York City
time, on the third full business day following the date of this
Agreement or at such other date or place as shall be determined by
agreement between the Underwriter and the Company. This date
and time are sometimes referred to as the “ Initial
Delivery Date .” Delivery of the Firm Securities
shall be made to the Underwriter for the account of the Underwriter
against payment by the Underwriter of the purchase price of the
Firm Securities being sold by the Company to, or upon the order of
the Company by wire transfer in immediately available funds to, the
accounts specified by the Company. Time shall be of the essence,
and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the
Underwriter hereunder. The Company shall deliver the Firm
Securities through the facilities of DTC unless the Underwriter
shall otherwise instruct.
The option granted
in Section 2 will expire 30 days after the date of this
Agreement and may be exercised in whole or from time to time in
part by written notice being given to the Company by the
Underwriter; provided that if such date falls on a day that
is not a business day, the option granted in Section 2 will
expire on the next succeeding business day. Such notice shall
set forth the aggregate number of shares of Option Securities as to
which the option is being exercised, the names in which the shares
of Option Securities are to be registered, the denominations in
which the shares of Option Securities are to be issued and the date
and time, as determined by the Underwriter, when the shares of
Option Securities are to be delivered; provided, however ,
that this date and time shall not be earlier than the Initial
Delivery Date nor earlier than the second business day after the
date on which the option shall have been exercised nor later than
the fifth business day after the date on which the option shall
have been exercised. Each date and time the shares of Option
Securities are delivered is sometimes referred to as an “
Option Securities Delivery Date ,” and the Initial
Delivery Date and any Option Securities Delivery Date are sometimes
each referred to as a “ Delivery Date
.”
Delivery of the
Option Securities by the Company and payment for the Option
Securities by the Underwriter shall be made at 10:00 A.M., New
York City time, on the date specified in the corresponding notice
described in the preceding paragraph or at such other date or place
as shall be determined by agreement between the Underwriter and the
Company. On the Option Securities Delivery Date, the Company
shall deliver or cause to be delivered the Option
13
Securities to the
Underwriter for the account of the Underwriter against payment by
the Underwriter of the purchase price of the Option Securities
being sold by the Company to, or upon the order of the Company by
wire transfer in immediately available funds to, the accounts
specified by the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of the Underwriter
hereunder. The Company shall deliver the Option Securities
through the facilities of DTC unless the Underwriter shall
otherwise instruct.
5.
Further Agreements of the Company and the Underwriter
. (a) The Company agrees:
(i)
To prepare the Prospectus in a form approved by the Underwriter and
to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of
business on the second business day following the execution and
delivery of this Agreement; to prepare the final term sheet
substantially in the form set forth on Schedule 3 hereto and
approved by the Underwriter and file such term sheet pursuant to
Rule 433(d) of the Rules and Regulations (“
Rule 433(d) ”) as required thereby; to make no
further amendment or any supplement to the Registration Statement
or the Prospectus prior to the last Delivery Date except as
provided herein; to advise the Underwriter, promptly after it
receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been
filed prior to the last Delivery Date and to furnish the
Underwriter with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the
Securities; to advise the Underwriter, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of the Prospectus
or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding or
examination for any such purpose, of any notice from the Commission
objecting to the use of the form of the Registration Statement or
any post-effective amendment thereto or of any request by the
Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or
for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
the Prospectus or any Issuer Free Writing Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(ii)
To pay the applicable Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) of
the Rules and Regulations without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and
457(r) of the Rules and Regulations;
14
(iii)
To furnish promptly to the Underwriter and to counsel for the
Underwriter a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits
filed therewith;
(iv)
To deliver promptly to the Underwriter such number of the following
documents as the Underwriter shall reasonably request:
(A) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings), (B) each Preliminary
Prospectus, the Prospectus and any amended or supplemented
Prospectus, (C) each Issuer Free Writing Prospectus and
(D) any document incorporated by reference in any Preliminary
Prospectus or the Prospectus; and, if the delivery of a prospectus
is required at any time after the date hereof in connection with
the offering or sale of the Securities or any other securities
relating thereto and if at such time any events shall have occurred
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, to notify the Underwriter
and, upon its request, to file such document and to prepare and
furnish without charge to the Underwriter and to any dealer in
securities as many copies as the Underwriter may from time to time
reasonably request of an amended or supplemented Prospectus that
will correct such statement or omission or effect such
compliance;
(v)
To file promptly with the Commission any amendment or supplement to
the Registration Statement or the Prospectus that may, in the
judgment of the Company or the Underwriter, be required by the
Securities Act or requested by the Commission;
(vi)
Prior to filing with the Commission any amendment or supplement to
the Registration Statement prior to the last Delivery Date, or the
Prospectus, any document incorporated by reference in the
Prospectus or any amendment to any document incorporated by
reference in the Prospectus, to furnish a copy thereof to the
Underwriter and counsel for the Underwriter and obtain the consent
of the Underwriter to the filing;
(vii)
Not to make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus without the prior
written consent of the Underwriter;
(viii)
To comply with all applicable requirements of Rule 433 with
respect to any Issuer Free Writing Prospectus; and if at any time
after the date hereof any events shall have occurred as a result of
which any Issuer Free Writing
15
Prospectus, as then amended or supplemented,
would conflict with the information in the Registration Statement,
the most recent Preliminary Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or, if for any other reason it shall be necessary to
amend or supplement any Issuer Free Writing Prospectus, to notify
the Underwriter and, upon its
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