EXHIBIT 10.8
AGENCY AGREEMENT
BY AND AMONG
SJAMSUL NURSALIM AND ITJIH SJAMSUL NURSALIM,
EAST-WEST BANK
AND
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
DATED AS OF JUNE 1, 1998
TABLE OF CONTENTS
Page
---- ARTICLE I. DEFINITIONS
Section 1.1 Definitions................................. 1
ARTICLE II. PURCHASE AND SALE OF SHARES OF COMMON STOCK
Section 2.1 Appointment of Placement Agent.............. 5
Section 2.2 Costs, Expenses and Fees.................... 5
Section 2.3 Closing..................................... 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the
Selling Shareholders....................... 6
Section 3.2 Representations and Warranties of the Bank.. 9
Section 3.3 Representations and Warranties of the
Placement Agent............................ 16
ARTICLE IV. CONDITIONS PRECEDENT TO THE CLOSING
Section 4.1 Conditions to the Obligations of the Parties 17
Section 4.2 Conditions to the Obligations of the
Selling Shareholders....................... 18
Section 4.3 Conditions to the Obligations of the Bank... 18
Section 4.4 Conditions to the Obligations of the
Placement Agent............................ 18
ARTICLE V. COVENANTS
Section 5.1 Information................................. 20
Section 5.2 Blue Sky.................................... 21
Section 5.3 Issuance.................................... 21
Section 5.4 Press Releases.............................. 21
Section 5.5 No Solicitation............................. 21
Section 5.6 Post Offering Engagement.................... 21
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ARTICLE VI. INDEMNIFICATION
Section 6.1 Bank Indemnification........................ 22
Section 6.2 Placement Agent Indemnification............. 24
Section 6.3 Selling Shareholder Indemnification......... 24
Section 6.4 Notice...................................... 25
ARTICLE VII. CONTRIBUTION
Section 7.1 Contribution................................ 26
Section 7.2 Reimbursement............................... 27
ARTICLE VIII. MISCELLANEOUS
Section 8.1 Survival of Provisions...................... 27
Section 8.2 Termination................................. 27
Section 8.3 Waiver; Amendments.......................... 28
Section 8.4 Communications.............................. 29
Section 8.5 Entire Agreement; Amendment................. 29
Section 8.6 Governing Law and Time...................... 29
Section 8.7 Consent to Jurisdiction..................... 30
Section 8.8 Severability................................ 30
Section 8.9 Headings and Gender......................... 30
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AGENCY AGREEMENT
Agreement, dated as of June 1, 1998 (the "Agreement") by and among Mr. Sjamsul Nursalim and Mrs. Itjih Sjamsul Nursalim (collectively, the "Selling Shareholders"), East-West Bank, a California banking corporation (the "Bank"), and Friedman, Billings, Ramsey & Co., Inc. (the "Placement Agent"), with respect to the offering and sale of the shares of Common Stock to each of the purchasers listed on the investor signature pages to the Purchase and Sale Agreement (collectively, the "Transaction").
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement, and unless the
----------- context requires a different meaning, the following terms have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Agency Agreement by and between the Selling Shareholders, the Bank and the Placement Agent with respect to the offering of the shares of Common Stock, as amended, supplemented or modified from time to time.
"Bank" means East-West Bank, a California banking corporation, together with its successors.
"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks and savings institutions in the State of California are authorized or obligated by law to close.
"Capital Securities" of any Person means Capital Stock of the Person and Stock Equivalents of the Person.
"Capital Stock" of any Person means any and all shares or other equity interest of such Person.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended (or any successor statute in effect from time to time), and the rules and regulations promulgated thereunder.
"Commission" means the Securities and Exchange Commission and any successor thereto.
"Common Stock" means the Common Stock, stated value $1.00 per share, of the Bank.
"Custody Agreement" means the Custody Agreement to be entered into among the Selling Shareholders and Manatt Phelps Phillips LLP, as the Custodian.
"Department" means the California Department of Financial Institutions.
"Environmental Claim" means any written notice from any governmental authority or third party alleging potential liability (including without limitation potential liability for investigating costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) arising out of, based on, or resulting from the presence, or release into the environment of any Materials of Environmental Concern.
"Environmental Laws" means any law, statute, rule or regulation of any governmental, judicial, legislative, executive, administrative or regulatory authority of the United States, or of any state, local or foreign government or any subdivision thereof or of any governmental body or other regulatory or administrative agency or commission, domestic or foreign (a "Law"), relating to pollution or protection of the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as amended, and other Laws relating to (i) emissions, discharges or releases of pollutants, contaminants, chemicals, or industrial toxic or hazardous substances or wastes (collectively known as "Polluting Substances") or (ii) the handling, storage, disposal, reclamation, recycling or transportation of Polluting Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended (or any successor statute in effect from time to time).
"Exchange Act" means the Securities Exchange Act of 1934, as amended and in effect from time to time (or any successor statute in effect from time to time), and the rules and regulations of the Commission promulgated thereunder.
"FDIA" means the Federal Deposit Insurance Act, as amended (or any successor statute in effect from time to time).
"FDIC" means the Federal Deposit Insurance Corporation and any successor thereto.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge, encumbrance, charge or security interest of any kind in respect of such asset.
"Management" means the following members of the senior management of the Bank: President, Chief Executive Officer, Chief Financial Officer and any Executive Vice President.
"Material Adverse Effect" means a material adverse effect on the financial condition, business or results of operations of the Bank and the Bank Subsidiaries, taken as a whole; provided, however, that Material Adverse Effect shall not be deemed to include the impact of the transactions contemplated by this Agreement or any Related Agreement, including the fees and expenses to be paid in connection with the consummation of the transactions contemplated by this Agreement and the Related Agreements or any impact or effect on the Bank resulting from actions taken by the Bank after the Closing.
"Materials of Environmental Concern" means pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products and any other materials regulated under Environmental Laws.
"Non-performing Assets" means the following consolidated assets of the Bank: (i) loans, securities or other assets with respect to which the Bank has ceased recognizing interest under generally accepted accounting principles or as to which any payments of principal or interest are past due 90 days or more as of the applicable date and (ii) Real Estate Owned; and references herein to the amounts of Non-performing Assets shall mean and refer to the aggregate carrying value of such assets as stated in the books and financial statements of the Bank under generally accepted accounting principles.
"Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or a political subdivision or an agency or instrumentality thereof.
"Placement Agent" means Friedman, Billings, Ramsey & Co., Inc. in its capacity as private placement agent pursuant to the Agency Agreement with respect to the offering of the shares of Common Stock of the Bank to the Purchasers, as described in the Private Offering Memorandum.
"Previously Disclosed" means disclosed either (i) in a letter dated the date hereof delivered from the Selling Shareholders to the Placement Agent or from the Bank to the Placement Agent, as applicable, specifically referring to the appropriate section of this Agreement and describing in reasonable detail the matters contained therein, or (ii) in the Private Offering Memorandum.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement, by and between the Selling Shareholders, the Bank and each Purchaser, as amended, supplemented or modified from time to time.
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"Private Offering Memorandum" means the Private Offering Memorandum, dated May 26, 1998, as amended or supplemented by the Bank at any time prior to the Closing.
"Purchaser" means each Person (other than the Bank) listed on the investor signature pages to the Purchase and Sale Agreement, and its permitted successors and assigns as provided therein, including any Person who becomes a party thereto by executing and delivering an investor signature page thereto after the date of such agreement.
"Real Estate Owned" means the consolidated properties of the Bank acquired by foreclosure on a loan or deed-in-lieu thereof or otherwise included in the Bank's real estate owned for purposes of reporting asset quality of the Bank in its reports filed with the FDIC and the Department.
"Registration Rights Agreement" means the Registration Rights Agreement to be entered into among the Bank and the Purchasers, as amended, supplemented or otherwise modified from time to time, which provides for the reorganization of the Bank into the holding company form of organization, the registration of the shares of such holding company's common stock with the Commission, and the exchange of the holding company's common stock for the then outstanding Common Stock of the Bank.
"Related Agreements" means the Purchase and Sale Agreement, the Registration Rights Agreement, the Custody Agreement and the Power of Attorney.
"SAIF" means the Savings Association Insurance Fund administered by the FDIC, and any successor thereto.
"Securities Act" means the Securities Act of 1933, as amended (or any successor statute thereto as in effect from time to time), and the rules and regulations of the Commission promulgated thereunder.
"Selling Shareholders" shall mean Sjamsul Nursalim and Itjih Sjamsul Nursalim.
"State" means each of the states of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
"Stock Equivalents" means, with respect to any Person, options, warrants, calls, contracts or other rights entered into or issued by such Person which confer upon the holder thereof the right (whether or not contingent) to acquire any Capital Stock, voting securities or securities convertible into or exchangeable for Capital Stock or voting securities of such Person.
"Subsidiary" of any Person means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are owned directly or indirectly by such Person.
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"Taxes" means all taxes, charges, fees, levies or other governmental assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, estimated, severance, stamp, occupation, property or other taxes, customs, dues, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority (domestic or foreign).
"Tax Returns" means all federal, State and local returns relating to Taxes.
ARTICLE II
PURCHASE AND SALE OF SHARES OF COMMON STOCK
SECTION 2.1 APPOINTMENT OF PLACEMENT AGENT. On the basis of the
------------------------------- representations and warranties herein contained and subject to the terms and conditions herein set forth, the Selling Shareholders hereby appoint Friedman, Billings, Ramsey & Co., Inc. as their Placement Agent to consult with and advise the Selling Shareholders, and to assist the Selling Shareholders and the Bank with the solicitation of purchase orders for the shares of Common Stock of the Bank owned by the Selling Shareholders which are to be sold to the Purchasers. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, Friedman, Billings, Ramsey & Co., Inc. hereby accepts such appointment and agrees to use its best efforts to assist the Selling Shareholders and the Bank with the solicitation of purchase orders for the shares of Common Stock of the Bank in accordance with this Agreement; provided, however, that the Placement Agent shall not be obligated to take any action which is inconsistent with any applicable laws, regulations, decisions or orders.
SECTION 2.2 COSTS, EXPENSES AND FEES.
-------------------------
(i) The costs and expenses (calculated as of the Closing) and the fees of the transactions contemplated by this Agreement and the Purchase and Sale Agreement shall be paid at the Closing out of the proceeds from the sale of the shares of Common Stock. The costs and expenses for such transaction includes, without limitation, (i) the reasonable out-of-pocket expenses of the Placement Agent incurred in connection with its engagement hereunder, including, without limitation, the reasonable legal fees and expenses and disbursements of the Placement Agent's legal counsel, and marketing promotional and travel expenses, (ii) the cost of obtaining all securities approvals (if any); (iii) the cost of printing and distributing the offering materials; (iv) the costs of blue sky qualification (including fees and reasonable expenses (including any requisite filing fees) of the Placement Agent's counsel) of the Common Stock in the various states (if any); and (v) all fees and disbursements of the Bank's counsel, accountants, agents and other advisors. In addition, the Selling Shareholders shall be responsible for any federal and state taxes or withholding obligations associated with the sale of the shares of Common Stock pursuant thereto. The provisions of this paragraph are not intended to apply to or in any way impair the indemnification provisions of Article VI.
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(ii) The Placement Agent will be paid a placement fee of 7% of the gross proceeds raised from the sale of the Common Stock in immediately available funds at the Closing Date out of the proceeds raised from the sale of shares of Common Stock pursuant to this Agreement and the Purchase and Sale Agreement. The placement fee to be paid to the Placement Agent hereunder is referred to as the "Fee."
(iii) In connection with the Closing, the Bank shall issue to the Placement Agent a warrant to purchase Common Stock of the Bank in the form attached hereto as Appendix A.
SECTION 2.3 CLOSING. The purchase and sale of the shares of Common
------- Stock will take place at a closing (the "Closing") to be held at the offices of the Placement Agent, Arlington, Virginia, on such date as all of the conditions to the parties' obligations hereunder specified in Article IV of this Agreement (other than the delivery of certificates, opinions and other instruments and documents to be delivered at the Closing) have been satisfied or waived, or at such other location, and on such other Business Day and time as the parties hereto shall mutually agree. The date on which the Closing is to occur is referred to herein as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
----------------------------------------------------------- The Selling Shareholders represent and warrant to, and covenant and agree with, the Placement Agent as follows:
(a) Capital Structure. As of the date hereof, the authorized capital
----------------- stock of the Bank consists of 200,000,000 shares of Common Stock and no shares of Preferred Stock. As of the date hereof, there were 110,000,000 shares of Common Stock issued and outstanding. Immediately prior to the Closing, the Bank shall effect a reverse stock split which will result in 23,775,000 shares of Common Stock being issued and outstanding. Immediately prior to the Closing on the Closing Date, the Bank's outstanding Capital Stock will be as set forth in the preceding sentence. As of the date hereof, all outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable and none of the outstanding shares of Common Stock has been issued in violation of the preemptive rights of any Person. The outstanding shares of Capital Stock of the Bank Subsidiaries are directly or indirectly owned by the Bank free and clear of all Liens resulting from any direct or indirect action on the part of the Selling Shareholders. There are no Stock Equivalents authorized, issued or outstanding with respect to the Capital Stock of the Bank as of the date hereof.
(b) Good Title and Other Matters.
----------------------------
(i) The Selling Shareholders have, and immediately prior
to the Closing such Shareholders will have, good and valid title
to the shares of Common Stock free and clear of all Liens; and,
upon delivery of such shares
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of Common Stock and payment therefor pursuant hereto, good and
valid title to such shares of Common Stock, free and clear of all
Liens, will pass to the Purchasers.
(ii) Certificates in negotiable form representing all of
the shares of Common Stock have been placed in custody under the
Custody Agreement, duly executed and delivered by such Selling
Shareholder to Manatt Phelps Phillips LLP, as custodian (the
"Custodian"), and such Selling Shareholders have duly executed
and delivered the Power of Attorney, appointing the Selling
Shareholders' attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement and the Related
Agreements to which the Selling Shareholders are or will become a
party on behalf of such Selling Shareholders, to authorize the
delivery of the shares of Common Stock to be sold by such Selling
Shareholders hereunder and otherwise to act on behalf of such
Selling Shareholders in connection with the transactions
contemplated by this Agreement and the Related Agreements to
which the Selling Shareholders are or will become a party.
(iii) The shares of Common Stock represented by the
certificates held in custody for such Selling Shareholders under
the Custody Agreement are subject to the interests of the
Purchasers hereunder; the obligations of the Selling Shareholders
hereunder are not intended to be terminated by operation of law,
whether by the death or incapacity of any individual Selling
Shareholder or by the occurrence of any other event; if any
individual Selling Shareholder should die or become
incapacitated, or if any other such event should occur, before
the delivery of the shares of Common Stock hereunder, it is the
intention of the Selling Shareholders that certificates
representing the shares of Common Stock shall be delivered by or
on behalf of the Selling Shareholders in accordance with the
terms and conditions of this Agreement and of the Related
Agreements to which the Selling Shareholders are or will become a
party; and it is the intention of the Selling Shareholders that
actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity or other
event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have
received notice of such death, incapacity or other event.
(c) Authority. The Selling Shareholders have full power and authority to
--------- perform their obligations under this Agreement and the Related Agreements to which the Selling Shareholders are or will become a party.
(d) Due Execution. This Agreement and the Related Agreements to which the
------------- Selling Shareholders are or will become a party constitute valid and binding obligations of the Selling Shareholders enforceable against the Selling Shareholders in accordance with their respective terms,
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except as (A) enforceability may be limited by bankruptcy, insolvency, moratorium and similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.
(e) No Conflict. The execution, delivery and performance of this Agreement
----------- and the Related Agreements to which the Selling Shareholders are or will become a party by the Selling Shareholders will not conflict with or constitute a breach of, or a default under (i) any obligation, agreement, indenture, bond, debenture, note, instrument or any other evidence of indebtedness to which the Selling Shareholders are a party or as to which any of their respective assets are subject, or (ii) any law, ordinance, order, license, rule or other regulation or demand of any court or governmental agency, arbitration panel or authority applicable to the Selling Shareholders except, in the case of clauses (i) and (ii) above, for such conflicts, breaches or defaults which would not, individually or in the aggregate, have a Material Adverse Effect.
(f) Material Adverse Change. To the knowledge of the Selling Shareholders,
----------------------- since March 31, 1998, no events or developments involving the Bank or the Bank Subsidiaries have occurred which, individually or in the aggregate, materially impair the ability of the Selling Shareholders to perform their obligations under this Agreement or the Related Agreements to which the Selling Shareholders are or will become a party.
(g) Litigation. There are no actions, suits, investigations or legal
---------- proceedings pending against, or to the knowledge of the Selling Shareholders, threatened against, or affecting the Selling Shareholders before any court or governmental body or agency which would reasonably be expected to in any manner challenge the legality, validity or enforceability of this Agreement, any of the Related Agreements to which the Selling Shareholders are or will become a party or the Common Stock to be sold to the Purchasers, or which would reasonably be expected to materially impair the ability or obligation of the Selling Shareholders to perform fully on a timely basis their obligations under this Agreement or any Related Agreement to which the Selling Shareholders are or will become a party.
(h) Certain Fees. Except for fees and expenses payable by the Selling
------------ Shareholders to Chase Securities, Inc. and except for the fees, commissions and expenses payable to the Placement Agent pursuant to this Agreement, no fees or commissions will be payable to brokers, finders, investment bankers or banks pursuant to any agreement entered into by the Selling Shareholders with respect to the sale of the Common Stock by the Selling Shareholders or the purchase of such shares of Common Stock by the Purchasers or any of the other transactions contemplated by this Agreement or the Related Agreements to which the Selling Shareholders are or will become a party. The Selling Shareholders represent, warrant and agree that to the extent any fees or commissions shall be payable by the Selling Shareholders to brokers, finders, investment bankers or banks pursuant to any other agreement entered into by the Selling Shareholders with respect to the transactions contemplated by this Agreement or the Related Agreements to w ...