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Hanmi Financial Corporation
Up to 100,000,000 Shares of Common Stock, $0.001 par value per share
PLACEMENT AGENCY AGREEMENT
June 16, 2010
Ladies and Gentlemen:
Hanmi Financial Corporation, a Delaware corporation (the “ Company ”), proposes, subject to the terms and conditions stated in this Placement Agency Agreement (this “ Agreement ”) and the Subscription Agreement in the form of Exhibit A attached hereto (the “ Subscription Agreement ”) to be entered into with the investors identified therein (each, an “ Investor ” and collectively, the “ Investors ”), to issue and sell up to an aggregate of 100,000,000 shares (the “ Shares ”) of the Company’s common stock, par value $0.001 per share (the “ Common Stock ”), including 50,000,000 shares of Common Stock initially in the best efforts public offering plus that number of shares of Common Stock not subscribed for in the rights offering to be conducted by the Company concurrently with the best efforts public offering, which could be up to 50,000,000 shares of Common Stock depending on the number of shares subscribed for in the rights offering by the Company’s stockholders (collectively, the “Offering”). The Company hereby confirms its agreement with Cappello Capital Corp. (the “ Placement Agent ”) to act as its exclusive Placement Agent in connection with the offer and sale of the Shares as set forth below. The Shares are more fully described in the Prospectus (as defined below).
1. Agreement to Act as Placement Agent; Delivery and Payment . On the basis of the representations, warranties and agreements of the Company herein contained, and subject to the terms and conditions set forth in this Agreement:
(a) The Company hereby engages the Placement Agent, as the exclusive agent of the Company, to, on commercially reasonable best efforts basis, solicit offers to purchase Shares from the Company on the terms and subject to the conditions set forth in the Subscription Agreement and Prospectus. The Placement Agent shall use commercially reasonable best efforts to assist the Company in obtaining performance by each Investor of the purchase the Shares, but the Placement Agent shall not, except as otherwise provided in this Agreement, have any liability to the Company in the event any such purchase is not consummated for any reason. Under no circumstances will the Placement Agent or any of its affiliates be obligated to underwrite or
purchase any of the Shares for its own account or otherwise provide any financing. The Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall not have any authority to bind the Company with respect to any prospective offer to purchase Shares and the Company shall have the sole right to accept offers to purchase Shares and may reject any such offer, in whole or in part. The Placement Agent shall have the right, in its discretion reasonably exercised, with consent of the Company to reject any offer to purchase the Shares received by it, in whole or in part, and any such rejection shall not be deemed a breach of this Agreement.
(b) As compensation for services rendered by the Placement Agent hereunder, on the Closing Date (as defined below), the Company shall pay or cause to be paid to the Placement Agent by wire transfer of immediately available funds to an account or accounts designated by the Placement Agent, the cash compensation and the issuance of certain warrants (collectively, the “ Compensation ”) agreed upon by and between the Company and the Placement Agent specifically relating to the Placement Agent’s offer and sale of the Shares pursuant to that certain Engagement Letter dated January 15, 2010 and as amended on May 20, 2010 (the “ Engagement Letter ”).
(c) The Shares are being sold to the Investors at a price of $1.20 per share (the “ Purchase Price ”) as set forth on the cover page of the Prospectus. The purchases of Shares by the Investors shall be evidenced by the execution of the Subscription Agreement by each of the parties thereto in the form attached hereto as Exhibit A .
(d) Prior to the earlier of (i) the date on which this Agreement is terminated and (ii) the Closing Date, the Company shall not, without the prior written consent of the Placement Agent, solicit or accept offers to purchase Shares of the Company otherwise than through the Placement Agent in accordance herewith.
(e) No Shares which the Company has agreed to sell pursuant to this Agreement and the Subscription Agreement shall be deemed to have been purchased and paid for, or sold by the Company, until such Shares shall have been delivered to the Investor purchasing such Shares against payment therefor by such Investor. If the Company shall default in its obligations to deliver Shares to an Investor whose offer it has accepted, the Company shall indemnify and hold the Placement Agent harmless against any loss, claim, damage or liability directly or indirectly arising from or as a result of the default by the Company in accordance with the procedures set forth in Section 6(c) hereof.
(f) Payment of the purchase price for, and delivery of the Shares shall be made at a closing (the “ Closing ”) at the offices of Manatt, Phelps & Phillips, LLP, counsel to the Company, at 11355 West Olympic Boulevard, Los Angeles, California 90064, at 10:00 a.m., local time, on the third business day after the Escrow Release Date (as defined below) or at such other time and date as the Placement Agent and the Company shall mutually determine (such date of payment and delivery being herein referred to as the “ Closing Date ”). Escrow Release Date shall mean for purposes of this Agreement, the earlier of (i) when the Company has received total subscriptions in the Offering for at least 87,500,000 of the offered shares, representing $105,000,000 in gross proceeds to the Company, or (ii) the closing of the transaction with Woori Finance Holdings, Ltd., (“ Woori ”) pursuant to that certain Securities
Purchase Agreement by and between the Company and Woori dated May 25, 2010 (the “ Woori SPA ”). Unless otherwise specified in the applicable Subscription Agreement, the Shares will be settled through the facilities of The Depository Trust Company’s DWAC system. Subject to the terms hereof, payment of the purchase price for the Shares shall be made to the Company in the manner set forth below by Federal Funds wire transfer to an account designated by the Company, against delivery of the Shares to such persons and shall be registered in the name or names and shall be in such denominations as the Investors may request at least two business day before the Closing Date. Payment of the purchase price for the Shares to be purchased by Investors shall be made by such Investors directly to the Company. Subject to the terms and conditions hereof, on the Closing Date, the Company shall pay to the Placement Agent the cash portion of the Compensation, issue the warrants that are a part of the Compensation and reimburse the Placement Agent for the amount of expenses for which such Placement Agent is entitled to reimbursement, all in accordance with the Engagement Letter. At least two business days prior to the Closing Date, the Placement Agent shall submit to the Company its bona fide estimate of the amount of expenses for which the Placement Agent is entitled to reimbursement pursuant to the Engagement Letter. As soon as reasonably practicable after the Closing Date, the Placement Agent shall submit to the Company its expense reimbursement invoice and the Company or the Placement Agent, as applicable, shall make any necessary reconciling payment(s) within thirty days of receipt of such invoices.
2.1 Representations and Warranties of the Company . Except as Previously Disclosed, the Company represents and warrants to the Placement Agent as of the date hereof, and as of the Closing Date, the following:
(a) Filing of Registration Statement . The Company has prepared and filed, in conformity with the requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), and the published rules and regulations thereunder (the “ Rules and Regulations ”) adopted by the Securities and Exchange Commission (the “ Commission ”), a registration statement, including a prospectus, on Form S-3 (File No. 333-163206), which became effective as of November 30, 2009, which provide for the offering of Common Stock and other securities of the Company, including the Offering of the Shares, from time to time in accordance with Rule 415(a)(1)(x) of the Rules and Regulations, and such amendments thereof as may have been required to the date of this Agreement. The term “ Registration Statement ” as used in this Agreement means the aforementioned registration statement, as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of the Securities Act, (the “ Effective Time ”), including (i) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein and (ii) any information in the corresponding Base Prospectus (as defined below) or a prospectus supplement filed with the Commission pursuant to Rule 424(b) under the Securities Act, to the extent such information is deemed pursuant to Rule 430A (“ Rule 430A ”), 430B (“ Rule 430B ”) or 430C (“ Rule 430C ”) under the Securities Act to be a part thereof at the Effective Time. For purposes of this Agreement, all references to the Registration Statement, the Base Prospectus, any Preliminary Prospectus (as defined below), the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“ EDGAR ”). All references in this Agreement to amendments or supplements to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include the subsequent filing of any document under the Exchange
Act and which is deemed to be incorporated therein by reference therein or otherwise deemed to be a part thereof.
(b) Effectiveness of Registration Statement; Certain Defined Terms . The Company and the transactions contemplated by this Agreement meet the requirements and comply with the conditions for the use of Form S-3 under the Securities Act. The Company has complied, to the Commission’s satisfaction, with all requests of the Commission for additional or supplemental information. No stop order preventing or suspending use of the Registration Statement, any Preliminary Prospectus or the Prospectus or the effectiveness of the Registration Statement has been issued by the Commission, and no proceedings for such purpose pursuant to Section 8A of the Securities Act against the Company or related to the Offering have been instituted or are pending or, to the Company’s knowledge, are contemplated or threatened by the Commission, and any request received by the Company on the part of the Commission for additional information has been complied with. As used in this Agreement:
(i) “ Base Prospectus ” means the prospectus included in the Registration Statement at the Effective Time.
(ii) “ Disclosure Package ” means (i) the Statutory Prospectus (as defined below) and (ii) the pricing and other information as set forth on Exhibit B hereto, all considered together.
(iii) “ Preliminary Prospectus ” means any preliminary prospectus supplement, subject to completion, relating to the Shares, filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act for use in connection with the offering and sale of the Shares, together with the Base Prospectus attached to or used with such preliminary prospectus supplement.
(iv) “ Prospectus ” means the final prospectus supplement, relating to the Shares, filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act in the form furnished by the Company to the Placement Agents for use in connection with the offering and sale of the Shares that discloses the public offering price and other final terms of the Shares, together with the Base Prospectus attached to or used with such final prospectus supplement.
(v) “ Statutory Prospectus ” means the Preliminary Prospectus, if any, and the Base Prospectus, each as amended and supplemented immediately prior to the date hereof, including any document incorporated by reference therein and any prospectus supplement.
(c) Contents of Registration Statement . The Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at all times during which a prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with any sale of Shares (the “ Prospectus Delivery Period ”), will comply, in all material respects, with the requirements of the Securities Act and the Rules and Regulations; the Registration Statement did not, as of the Effective Time, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, provided , that the Company makes no representation or warranty in this paragraph with respect to statements in or omissions from the Registration Statement in reliance upon, and in conformity with, written information furnished to the Company by the Placement Agent specifically for inclusion therein, which information the parties hereto agree is limited to the Placement Agent’s Information (as defined in Section 7 hereof).
(d) Contents of Prospectus . The Prospectus will comply, as of the date that it is filed with the Commission, the date of its delivery to Investors and at all times during the Prospectus Delivery Period, in all material respects, with the requirements of the Securities Act; at no time during the period that begins on the date the Prospectus is filed with the Commission and ends at the end of the Prospectus Delivery Period will the Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided , that the Company makes no representation or warranty with respect to statements in or omissions from the Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Placement Agent specifically for inclusion therein, which information the parties hereto agree is limited to the Placement Agent’s Information.
(e) Incorporated Documents . Each of the documents incorporated or deemed to be incorporated by reference in the Registration Statement, at the time such document was filed with the Commission or at the time such document became effective, as applicable, complied, in all material respects, with the requirements of the Exchange Act, were filed on a timely basis with the Commission and did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Disclosure Package . The Disclosure Package did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , that the Company makes no representations or warranty in this paragraph with respect to statements in or omissions from the Disclosure Package in reliance upon, and in conformity with, written information furnished to the Company by the Placement Agent specifically for inclusion therein, which information the parties hereto agree is limited to the Placement Agent’s Information.
(g) Distributed Materials; Conflict with Registration Statement . Other than the Base Prospectus, any Preliminary Prospectus and the Prospectus, the Company has not made, used, prepared, authorized, approved or referred to and will not make, use, prepare, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Shares other than any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act.
(h) Not an Ineligible Issuer . At the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 (“ Rule 405 ”) under the Securities Act.
(i) Due Incorporation . Each of the Company and its Subsidiaries (as defined below) is an entity duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in material violation of any of the provisions of its respective certificate or articles of incorporation or bylaws or other similar organizational documents. Each of the Company and its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “ Material Adverse Effect ” means any event, fact, circumstance or occurrence (each, an “ Effect ”) that, individually or in the aggregate with any other event, fact, circumstance or occurrence, results or would reasonably be expected to result in a material adverse change in or a material adverse effect over a commercially reasonable period on the (i) financial condition, results of operations, business, operations, business assets or regulatory status of the Company and its Subsidiaries, taken as a whole; (ii) legality, validity or enforceability of this Agreement, or (iii) ability on the part of the Company or the Placement Agent to consummate the transactions contemplated by this Agreement and to perform in any material respect its obligations under this Agreement within the time frames provided for in this Agreement, except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect: (A) effects resulting from or relating to the announcement or disclosure of the sale of the Shares or other transactions contemplated by this Agreement, (B) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement, (C) changes in the generally accepted accounting principles or regulatory accounting principles generally applicable to banks or their bank holding companies in the United States or Korea, as the case may be, (D) changes in applicable laws, rules and regulations or interpretations thereof by any Governmental Entity (as defined below), except for such changes which would reasonably be expected to have the effect of making illegal the consummation of the transactions contemplated hereby, (E) general changes in global or national economic, monetary or financial conditions, including changes in prevailing interest rates, credit markets, equity markets, commodity prices, currency exchange rates, bank failure rates, sovereign debt defaults, capital market conditions or real estate price appreciation/depreciation trends, or in the industries in which the Company and its subsidiaries operate, other than significant, sustained, reasonably unanticipated and materially adverse changes in economic conditions in the United States or Korea, which changes would reasonably be expected to have the effect of making commercially impractical consummation of the transactions contemplated hereby, (F) changes in global or national political conditions, including the outbreak or escalation of war, acts of terrorism or civil unrest, other than significant, sustained, reasonably unanticipated and materially adverse changes in such conditions in the United States or Korea, which changes would reasonably be expected to have the effect of making commercially impractical consummation of the transactions contemplated hereby, (G) the entering into by the Company or any of its Subsidiaries or the continuation (on substantially the same or similar terms) of any Regulatory Agreement (as defined below) and any future classifications, guidance, directives or other supervisory actions
(which are reasonably foreseeable based on the current arrangements or agreements) that are related to the Company’s or any of its Subsidiaries’ financial condition as of the date of this Agreement, in and of itself, (H) any failure by the Company to meet any public estimates (disclosed to the public in compliance with applicable laws and consistent with past practice) or expectations or analysts estimates or expectations of the Company’s financial condition, results of operations or other measures of financial performance for any period, or any failure by the Company to meet any internal budgets, plans or forecasts of its financial condition, results of operations, or other measures of financial performance, (I) the results of operations and cash flow for the period ended, and changes in the financial condition and shareholders equity of the Company at June 30, 2010, (J) any legal proceedings (other than a permanent injunction or order that prohibits the consummation of the transactions contemplated hereby) made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company) against the Company arising out of this Agreement or any of the transaction contemplated hereby or (K) failure to consummate the transactions contemplated by the Woori SPA. For purposes of this Agreement, “ Subsidiary ” means those entities identified on Schedule 2(j) . For purposes of this Agreement, “ Governmental Entity ” means any governmental or regulatory authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory organizations
(j) Subsidiaries . The Company has no direct or indirect Subsidiaries other than those subsidiaries listed on Schedule 2(j) and has indicated therein which Subsidiaries would constitute a “significant subsidiary” of such person within the meaning of Rule 1-02 of Regulation S-X of the Commission (“ Company Significant Subsidiary ”). The Company owns, directly or indirectly, all of the capital stock of each Company Significant Subsidiary, free and clear of any and all Liens (other than Permitted Liens), and all the issued and outstanding shares of capital stock of each Company Significant Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding subscriptions, options, warrants, calls, commitments or agreements of any character whatsoever providing for the purchase or issuance of any Company Significant Subsidiary’s capital stock or any securities representing the right to purchase or otherwise receive any shares of such Company Significant Subsidiary’s capital stock. Except in respect of the Subsidiaries, the Company does not own beneficially, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar organization, and is not, directly or indirectly, a partner in any partnership or party to any joint venture. Hanmi Bank, the Company’s principal subsidiary (“ Hanmi Bank ”), is (A) duly organized and validly existing as a banking institution chartered by the State of California, (B) in good standing with the Department of Financial Institutions of the State of California (“ CDFI ”), (C) a member bank of the Federal Reserve System and (D) its deposit accounts are insured by the Federal Deposit Insurance Corporation (“ FDIC ”) to the fullest extent permitted by the Federal Deposit Insurance Act and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due. For purposes of this Agreement, “ Lien ” means any mortgage, pledge, lien (statutory or otherwise), encumbrance, hypothecation, charge, security interest, right of first refusal, right of first offer, preemptive right or other restrictions of any kind. For purposes of this Agreement, “ Permitted Liens ” means (i) Liens for Taxes (as defined below) and other governmental charges and assessments arising in the ordinary course that are not yet due and payable, (ii) Liens of landlords, carriers, warehousemen, mechanics and materialmen and other like Liens arising in the ordinary course of
business for sums not yet due and payable, and (iii) other Liens or imperfections on property that are, individually or in the aggregate, (A) not material in amount or (B) do not materially detract from the value of or materially impair the existing use of the property affected by such Lien or imperfection. For the purposes of this Agreement, the term “ Tax ” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem stamp, transfer, gains or value added; license, registration and documentation fees, and customs’ duties, tariffs, and similar charges.
(k) Due Authorization and Enforceability . The Company has the full corporate power and authority to enter into this Agreement, and the Subscription Agreement, and to perform and discharge its obligations hereunder and thereunder; and each of this Agreement and the Subscription Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity (whether applied in equity or in law).
(l) The Shares . The issuance of the Shares has been duly and validly authorized by the Company and, when issued, delivered and paid for in accordance with the terms of this Agreement and the Subscription Agreement, will have been duly and validly issued and will be fully paid and nonassessable, will not be subject to any statutory or contractual preemptive rights or other rights to subscribe for or purchase or acquire any shares of Common Stock of the Company, which have not been waived or complied with and will conform in all material respects to the description thereof contained in the Disclosure Package and the Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same. On the Closing Date, all stock transfer or other Taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold hereunder will be, or will have been, fully paid or provided for, by the Company, and all laws imposing such taxes will be or will have been fully complied with.
(m) Capitalization . The information set forth under the caption “Capitalization” in the Statutory Prospectus (and any similar sections or information, if any, contained in the Disclosure Package) is fairly presented on a basis consistent with the Company’s financial statements. The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus under the caption “Description of Capital Stock” (and any similar sections or information, if any, contained in the Disclosure Package). The issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and have been issued in compliance with all federal and state securities laws. None of the outstanding shares of Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase or acquire any securities of the Company. Other than those described in the Prospectus and the Disclosure Package or as set forth herein, there are no
(i) outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exer