EXHIBIT 1.1
_______________ SHARES
REDFED BANCORP INC.
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1996
MONTGOMERY SECURITIES
600 Montgomery Street
San Francisco, California 94111
Dear Sirs:
SECTION 1
Introductory. RedFed Bancorp Inc., a Delaware corporation (the
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"Company"), proposes to issue and sell __________ shares of its authorized but
unissued Common Stock (the "Common Stock") to Montgomery Securities (the
"Underwriter"). Said aggregate of ____ shares are herein called the "Firm
Common Shares." In addition, the Company proposes to grant to the Underwriter
an option to purchase up to __________ additional shares of Common Stock (the
"Optional Common Shares"), as provided in Section 4 hereof. The Firm Common
Shares and, to the extent such option is exercised, the Optional Common Shares
are hereinafter collectively referred to as the "Common Shares."
The Underwriter has advised the Company that the Underwriter proposes
to make a public offering of the Common Shares on the effective date of the
registration statement hereinafter referred to, or as soon thereafter as in the
Underwriter's judgment is advisable.
The Company hereby confirms its agreement with respect to the purchase
of the Common Shares by the Underwriter as follows:
SECTION 2
Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-___) with
respect to the Common Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to file prior to
the effective date of such registration statement an amendment or amendments to
such registration statement, which amendment or amendments have been or will be
similarly prepared. There have been delivered to the Underwriter signed copies
of such registration statement and amendments, together with a copy of each
exhibit filed therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus have
been delivered to the Underwriter in such reasonable quantities as the
Underwriter has requested. The Company will next file with the Commission one
of the following: (i) prior to the effectiveness of such registration
statement, a further amendment thereto, including the form of final prospectus,
or (ii) a final prospectus in accordance with Rules 430A and 424(b) of the Rules
and Regulations. As filed, such amendment and form of final prospectus, or such
final prospectus, shall include all Rule
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430A Information (as hereinafter defined) and, except to the extent that the
Underwriter shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Underwriter prior to the date
and time that this Agreement was executed and delivered by the parties hereto,
or, to the extent not completed at such date and time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus (as hereinafter defined)) as the Company shall
have previously advised the Underwriter in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include (i) all Rule 430A Information deemed to be included in
such registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in the preceding paragraph and
any preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the Common Shares
in the form in which it is first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no filing pursuant to Rule 424(b) of
the Rules and Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule 430A
of the Rules and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the Rules
and Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of the
Act and the Rules and Regulations, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that no representation or warranty contained in this
subsection 2(b) shall be applicable to information contained in or omitted from
any Preliminary Prospectus, the Registration Statement, the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriter
specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or indirectly, any
corporation, partnership, joint venture, association or other entity, other than
the subsidiaries described in the Registration Statement. The Company and each
of its subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation, with full power and authority (corporate and other) to own and
lease their respective properties and conduct their respective businesses as
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described in the Prospectus; the Company owns, directly or indirectly, all of
the outstanding capital stock of its subsidiaries free and clear of all claims,
liens, charges and encumbrances; the Company and each of its subsidiaries are in
possession of and operating in compliance with all authorizations, licenses,
permits, consents, certificates and orders material to the conduct of their
respective businesses, all of which are valid and in full force and effect; the
Company and each of its subsidiaries are duly qualified to do business and in
good standing as foreign corporations in each jurisdiction in which the
ownership or leasing of properties or the conduct of their respective businesses
requires such qualification, except for jurisdictions in which the failure to so
qualify would not have a material adverse impact upon the condition (financial
or otherwise), business, properties, results of operations or prospects of the
Company or the subsidiary; and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
(d) Redlands Federal Bank (the "Bank") is duly chartered as a federal
savings bank and is in good standing under the laws of the United States. The
Bank is a member in good standing of the Federal Home Loan Bank of San Francisco
(the "FHLB"). The deposit accounts of the Bank are duly insured by the Federal
Deposit Insurance Corporation (the "FDIC") to the fullest extent permitted by
law. No charge, investigation or proceeding for the termination or revocation
of such charter, FHLB membership, good standing or FDIC insurance are pending,
or, to the knowledge of the Company, threatened.
(e) The Company and its subsidiaries are not subject to any order of
the Office of Thrift Supervision ("OTS") or the FDIC, except for the Supervisory
Agreement (as defined in the Prospectus). The Company and its subsidiaries are
in substantial compliance with the Supervisory Agreement and have conducted and
are conducting their businesses so as to comply in all material respects with
all applicable federal and state laws, rules, regulations, decisions, directives
and orders (including without limitation the rules, regulations, decisions,
directives and orders of the OTS and the FDIC). No charge, investigation or
proceeding with respect to the Company or its subsidiaries before or by any
regulatory, administrative or governmental agency, body or authority is pending
or, to the best of the Company's knowledge, threatened.
(f) The Company and its subsidiaries are in compliance with all
applicable capital requirements, are "adequately capitalized" as defined in OTS
regulations and are not, to the Company's knowledge, threatened with or being
considered for receivership or any special supervision by the OTS or the FDIC.
The Company is a "savings and loan holding company" within the meaning of the
Home Owners Loan Act, as amended (the "Home Owners Loan Act").
(g) The Company has an authorized and outstanding capital stock as set
forth under the heading "Capitalization" in the Prospectus (excluding issuances
of shares of Common Stock by the Company pursuant to the exercise of outstanding
options or similar rights to purchase shares of Common Stock under the stock
compensation plans and arrangements disclosed in the Prospectus between March
31, 1996 and each Closing Date hereinafter mentioned); the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, are duly listed on the Nasdaq National Market,
have been issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and conform to the description thereof
contained in the Prospectus. All issued and outstanding shares of capital stock
of each subsidiary of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. Except as disclosed in or contemplated by
the Prospectus and the financial statements of the Company, and the related
notes thereto, included in the Prospectus, neither the Company nor any
subsidiary has outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for
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or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description of the
Company's stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(h) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights, subscription rights or other rights to
purchase exist with respect to the issuance and sale of the Common Shares by the
Company pursuant to this Agreement. No stockholder of the Company has any right
which has not been waived to require the Company to register the sale of any
shares owned by such stockholder under the Act in the public offering
contemplated by this Agreement. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for the
issuance and sale of the Common Shares to be sold by the Company as contemplated
herein.
(i) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally. The making and performance of
this Agreement by the Company and the consummation of the transactions herein
contemplated will not violate any provisions of the certificate of incorporation
or bylaws, or other organizational documents, of the Company or any of its
subsidiaries, and will not conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of its respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its subsidiaries or any of its respective properties. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Act, the Blue Sky
laws applicable to the public offering of the Common Shares by the Underwriter
and the clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD").
(j) KPMG Peat Marwick, LLP, who have expressed their opinion with
respect to the financial statements and schedules filed with the Commission or
incorporated by reference as a part of the Registration Statement and included
or incorporated by reference in the Prospectus, are independent accountants as
required by the Act and the Rules and Regulations.
(k) The financial statements and schedules of the Company and its
subsidiaries, and the related notes thereto, included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its subsidiaries as of the respective dates of such financial
statements and schedules, and the results of operations and changes in financial
position of the Company and its subsidiaries for the respective periods covered
thereby. Such statements, schedules and related notes have been prepared in
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accordance with generally accepted accounting principles applied on a consistent
basis. No other financial statements or schedules are required to be included in
the Registration Statement. The selected financial data set forth in the
Prospectus under the captions "Capitalization" and "Selected Consolidated
Financial, Operating and Other Data of the Company" fairly present the
information set forth therein on the basis stated in the Registration Statement.
(l) Except as disclosed in the Prospectus, and except as to defaults
which individually or in the aggregate would not be material to the Company,
neither the Company nor any of its subsidiaries is in violation or default of
any provision of its certificate of incorporation or bylaws, or other
organizational documents, or is in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its properties is bound; and there does not
exist any state of facts which constitutes such an event of default on the part
of the Company or any such subsidiary as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of default.
(m) There are no contracts or other documents required to be described
in the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
described or filed as required. Neither the Company nor any of its
subsidiaries, nor, to the best of the Company's knowledge, any other party is in
breach of or default under any of such contracts.
(n) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened to which the Company or any of its subsidiaries
is or may be a party or of which property owned or leased by the Company or any
of its subsidiaries is or may be the subject, which actions, suits or
proceedings might, individually or in the aggregate, prevent or adversely affect
the transactions contemplated by this Agreement or have a material adverse
impact on the condition (financial or otherwise), properties, business, results
of operations or prospects of the Company and its subsidiaries; and no labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent which might be expected to have a material adverse impact on the
condition (financial or otherwise), properties, business, results of operations
or prospects of the Company and its subsidiaries. Excepts as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries is a party or
subject to the provisions of any material injunction, judgment, decree or order
of any court, regulatory body, administrative agency or other governmental body.
(o) The Company or the applicable subsidiary has good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except (i) those, if
any, reflected in such financial statements (or elsewhere in the Prospectus), or
(ii) those which are not material in amount and do not adversely affect the use
made and proposed to be made of such property by the Company and its
subsidiaries. The Company or the applicable subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company and its
subsidiaries. Except as disclosed in the Prospectus, the Company owns or leases
all such properties as are necessary to its operations as now conducted or as
proposed to be conducted.
(p) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) neither the Company nor any of
its subsidiaries has incurred any
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material liabilities or obligations, indirect, direct or contingent, or entered
into any material verbal or written agreement or other transaction which is not
in the ordinary course of business or which could reasonably be expected to
result in a material reduction in the future earnings of the Company and its
subsidiaries; (ii) neither the Company nor any of its subsidiaries has sustained
any material loss or interference with its respective businesses or properties
from fire, flood, windstorm, accident or other calamity, whether or not covered
by insurance; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock and neither the Company nor any
of its subsidiaries is in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital
stock (other than upon the sale of the Common Shares hereunder and upon the
exercise of options and warrants described in the Prospectus) or indebtedness
material to the Company and its subsidiaries (other than in the ordinary course
of business); and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties, results of operations
or prospects of the Company and its subsidiaries.
(q) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks, trade
names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their respective businesses as now
conducted; the expiration of any trademarks, trade names, patent rights, mask
works, copyrights, licenses, approvals or governmental authorizations would not
have a material adverse impact on the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company or any
of its subsidiaries; and the Company has no knowledge of any material
infringement by it or its subsidiaries of trademark, trade name rights, patent
rights, mask works, copyrights, licenses, trade secret or other similar rights
of others, and there is no claim being made against the Company or any of its
subsidiaries regarding trademark, trade name, patent, mask work, copyright,
license, trade secret or other infringement which could have a material adverse
impact on the condition (financial or otherwise), business, properties, results
of operations or prospects of the Company and its subsidiaries.
(r) The Company has not been advised, and has no reason to believe,
that either it or any of its subsidiaries is not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not have a material adverse impact on
the condition (financial or otherwise), business, properties, results of
operations or prospects of the Company and its subsidiaries.
(s) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid all taxes shown
as due thereon; and the Company has no knowledge of any tax deficiency which has
been or might be asserted or threatened against the Company or any of its
subsidiaries which could have a material adverse impact on the condition
(financial or otherwise), business, properties, results of operations or
prospects of the Company and its subsidiaries.
(t) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(u) The Company has not distributed and will not distribute prior to
the First Closing Date any offering material in connection with the offering and
sale of the Common Shares other than the Prospectus, the Registration Statement
and the other materials permitted by the Act.
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(v) Each of the Company and its subsidiaries maintains insurance of
the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or any of its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(w) Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares not in compliance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations of the Commission thereunder.
(y) The Company is not in violation of any of the provisions of
Section 517.075, Florida Statues (Chapter 92-198, Laws of Florida).
(z) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except for loans, advances or guarantees disclosed in the Prospectus or not
required to be disclosed in the Prospectus which meet the standards set forth in
Instruction 3 to paragraph (c) of Item 404 of Regulation S-K.
(aa) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(bb) The Company has complied with all registration, filing and
reporting requirements of the Exchange Act, which have from time to time been
applicable to the Company.
(cc) The Company's consolidated allowance for losses on loans and
letters of credit and consolidated allowance for losses on real estate acquired
through foreclosure and real estate held for investment or for sale are adequate
in relation to the outstanding loans and letters of credit and the outstanding
real estate acquired through foreclosure and real estate held for investment or
for sale, respectively, in accordance with generally accepted accounting
principles and have been established and maintained in accordance with the
standards established by the OTS for savings associations and with the
Supervisory Agreement. All assets of the Bank and its subsidiaries have been
classified in accordance with the standards established by the OTS for savings
associations and with the Supervisory Agreement.
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SECTION 3
Representations and Warranties of the Underwriter. The Underwriter
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represents and warrants to the Company that the information set forth (i) on the
cover page of the Prospectus with respect to price, underwriting discounts and
commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriter for
use in connection with the preparation of the Registration Statement and the
Prospectus and is correct in all material respects. The Underwriter represents
and warrants that it has authority to enter into this Agreement and to act in
the manner herein provided.
SECTION 4
Purchase, Sale and Delivery of Common Shares. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Underwriter the Firm Common Shares. The Underwriter agrees to purchase from
the Company the Firm Common Shares. The purchase price per share to be paid by
the Underwriter to the Company shall be equal to the price to the public per
share less an amount per share equal to the per share underwriting discount.
The price to the public, which shall be a fixed price, and the underwriting
discount will be determined by separate agreement between the Company and the
Underwriter in substantially the form set forth as Schedule A hereto.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriter and payment therefor shall be made at the offices of Montgomery
Securities, 600 Montgomery Street, San Francisco, California (or such other
place as may be agreed upon by the Company and the Underwriter) at such time and
date, not later than the third (or, if the Firm Common Shares are priced, as
contemplated by rule 15c6-1(c) of the Exchange Act, after 4:30 p.m. Washington,
D.C. Time, the fourth) full business day following the first date that any of
the Common Shares are released by the Underwriter for sale to the public, as the
Underwriter shall designate by at least 48 hours prior notice to the Company (or
at such other time and date, not later than one week after such third, or
fourth, as the case may be, full business day as may be agreed upon by the
Company and the Underwriter) (the "First Closing Date"); provided, however, that
if the Prospectus is at any time prior to the First Closing Date recirculated to
the public, the First Closing Date shall occur upon the later of the third full
business day following the first date that any of the Common Shares are released
by the Underwriter for sale to the public or the date that is 48 hours after the
date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to the Underwriter against payment by the
Underwriter of the purchase price therefor by wire transfer of immediately
available funds to the order of the Company. The certificates for the Firm
Common Shares shall be registered in such names and denominations as the
Underwriter shall have requested at least two full business days prior to the
First Closing Date, and shall be made available for checking and packaging on
the business day preceding the First Closing Date at a location in New York, New
York, as may be designated by the Underwriter. Time shall be of the essence,
and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriter.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriter to purchase up to
an aggregate of __________ Optional Common Shares at the purchase price per
share to be paid for the Firm Common Shares, for use solely in covering any
over-allotments made by the Underwriter in the sale and distribution
9
of the Firm Common Shares. The option granted hereunder may be exercised at any
time (but not more than once) within 30 days after the first date that any of
the Common Shares are released by the Underwriter for sale to the public, upon
notice by the Underwriter to the Company setting forth the aggregate number of
Optional Common Shares as to which the Underwriter is exercising the option, the
names and denominations in which the certificates for such shares are to be
registered and the time and place at which such certificates will be delivered.
Such time of delivery (which may not be earlier than the First Closing Date),
being herein referred to as the "Second Closing Date," shall be determined by
the Underwriter, but if at any time other than the First Closing Date shall not
be earlier than three nor later than five full business days after delivery of
such notice of exercise. Certificates for the Optional Common Shares will be
made available for checking and packaging on the business day preceding the
Second Closing Date at a location in New York, New York, as may be designated by
the Underwriter. The manner of payment for and delivery of the Optional Common
Shares shall be the same as for the Firm Common Shares purchased from the
Company as specified in the two preceding paragraphs. At any time before lapse
of the option, the Underwriter may cancel such option by giving written notice
of such cancellation to the Company. If the option is canceled or expires
unexercised in whole or in part, the Company will deregister under the Act the
number of Optional Common Shares as to which the option has not been exercised.
Subject to the terms and conditions hereof, the Underwriter proposes
to make a public offering of the Common Shares as soon after the effective date
of the Registration Statement as in the judgment of the Underwriter is advisable
and at the public offering price set forth on the cover page of and on the terms
set forth in the Prospectus.
SECTION 5
Covenants of the Company. The Company covenants and agrees that:
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(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to the Underwriter of
such timely filing. The Company will promptly advise the Underwriter in writing
(i) of the receipt of any comments of the Commission, (ii) of any request of the
Commission for amendment of or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus or for additional information, (iii) when the Registration Statement
shall have become effective, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose. If the Commission shall enter
any such stop order at any time, the Company will use its best efforts to obtain
the lifting of such order at the earliest possible moment. The Company will not
file any amendment or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus of
which the Underwriter has not been furnished with a copy a reasonable time prior
to such filing or to which the Underwriter reasonably objects or which is not in
compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the Underwriter's request, any amendments or supplements to the
Registration Statement or the Prospectus which in the Underwriter's reasonable
judgment may be necessary or advisable
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to enable the Underwriter to continue the distribution of the Common Shares and
will use its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions of
Rule 430A of the Rules and Regulations with respect to information omitted from
the Registration Statement in reliance upon such Rule.
(c) If at any time during the nine-month period after the effective
date of the Registration Statement in which a prospectus relating to the Common
Shares is required to be delivered under the Act, any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary at any time to amend the Prospectus, including
any amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise the Underwriter thereof and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case the
Underwriter is required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of the Underwriter, will promptly
prepare such amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after the end
of the first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by the Underwriter or a dealer, the Company,
at its expense, but only for the nine-month period referred to in Section
10(a)(3) of the Act, will furnish to the Underwriter or mail to the
Underwriter's order copies of the Registration Statement, the Prospectus, the
Preliminary Prospectus and all amendments and supplements to any such documents
in each case as soon as available and in such quantities as the Underwriter may
request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with the Underwriter and the
Underwriter's counsel in order to qualify or register the Common Shares for sale
under (or obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions in the United States, Canada and elsewhere as the Underwriter
reasonably designates, will comply with such laws and will continue such
qualifications, registrations and exemptions in effect so long as reasonably
required for the distribution of the Common Shares. The Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation. The Company
will advise the Underwriter promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company, with the
Underwriter's cooperation, will use its best efforts to obtain the withdrawal
thereof.
(g) During the period of five years hereafter, the Company will
furnish to the Underwriter: (i) as soon as practicable after the end of each
fiscal year, copies of the
11
Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Report on Form 8-K or other report filed by the Company
with the Commission, the NASD or any securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed generally
to holders of its Common Stock.
(h) During a period of 180 days after the first date that any of the
Common Shares are released by the Underwriter for sale to the public, without
the prior written consent of the Underwriter (which consent may be withheld at
the sole discretion of the Underwriter), the Company will not, directly or
indirectly, offer to sell, sell, contract to sell, issue, grant options to
purchase or otherwise dispose of any shares of Common Stock or other equity
securities of the Company, or any securities convertible into or exchangeable
for any shares of Common Stock or other equity securities of the Company, or
publicly announce any intention to do any of the foregoing, except for issuances
of shares of Common Stock by the Company pursuant to the exercise of outstanding
options or similar rights to purchase shares of Common Stock under the stock
compensation plans and arrangements disclosed in the Prospectus.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to list, subject to notice
of issuance, the Common Shares on the Nasdaq National Market.
(k) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
The Underwriter may, in its sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
SECTION 6
Payment of Expenses. Whether or not the transactions contemplated
-------------------
hereunder are consummated or this Agreement becomes effective or is terminated,
the Company agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriter, (iv) all fees and expenses of
the Company's counsel and the Company's independent accountants, (v) all costs
and expenses incurred in connection with the preparation, printing, filing,
shipping and distribution of the Registration Statement, each Preliminary
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, this Agreement, the
Selected Dealers Agreement (if applicable) and the Blue Sky memoranda, (vi) all
filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriter in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the Blue Sky laws of any state of the
United States, Canada or any other jurisdiction in which the Common Stock is to
be offered or sold,
12
(vii) the filing fee of the NASD and attorneys' fees and expenses incurred by
counsel for the Underwriter in connection with the required filings with the
NASD, and (viii) all other fees, costs and expenses referred to in Item 13 of
the Registration Statement. Except as provided in this Section 6 and Sections 8
and 10 hereof, the Underwriter shall pay all of its own expenses, including the
fees and disbursements of its counsel (excluding those relating to
qualification, registration or exemption under the Blue Sky laws, the Blue Sky
memoranda and the filings with the NASD referred to above).
SECTION 7
Conditions to the Obligations of the Underwriter. The obligations of
------------------------------------------------
the Underwriter to purchase and pay for the Firm Common Shares on the First
Closing Date and the Optional Common Shares on the Second Closing Date shall be
subject to the accuracy of the representations and warranties on the part of the
Company herein set forth as of the date hereof and as of the First Closing Date
or the Second Closing Date, as the case may be, to the accuracy of the
statements of Company officers made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M. (or, in the case of a registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 p.m.), Washington, D.C. Time, on the date of this Agreement,
or at such later time as shall have been consented to by the Underwriter; if the
filing of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b) of the Rules and Regulations, the Prospectus shall have been filed
in the manner and within the time period required by Rule 424(b) of the Rules
and Regulations; and prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company or the Underwriter, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to the Underwriter's satisfaction.
(b) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, (i) there shall not have been any change
in the capital stock of the Company (other than issuances of shares of Common
Stock by the Company pursuant to the exercise of outstanding options or similar
rights to purchase shares of Common Stock under the stock compensation plans and
arrangements disclosed in the Prospectus) or any of its subsidiaries or any
material change in the indebtedness (other than in the ordinary course of
business) of the Company or any of its subsidiaries, (ii) except as set forth in
or contemplated by the Registration Statement or the Prospectus, no material
verbal or written agreement or other transaction shall have been entered into by
the Company or any of its subsidiaries, which is not in the ordinary course of
business or which could reasonably be expected to result in a material reduction
in the future earnings of the Company and its subsidiaries, (iii) no loss or
damage (whether or not insured) to the property of the Company or any of its
subsidiaries shall have been sustained which materially and adversely impacts
the condition (financial or otherwise), business, properties, results of
operations or prospects of the Company and its subsidiaries, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of its
subsidiaries which is material to the Company and its subsidiaries or which
affects or may affect the transactions contemplated by this Agreement shall have
been instituted or threatened, and (v) there shall not have been any material
change in the condition (financial or otherwise), business, properties, results
of operations, prospects or management of the Company and its subsidiaries which
makes it impractical or inadvisable
13
in the judgment of the Underwriter to proceed with the public offering or
purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to the Underwriter, on each
Closing Date, in form and substance satisfactory to the Underwriter, except as
otherwise expressly provided below:
(i) An opinion of Mayer, Brown & Platt, counsel for the Company,
addressed to the Underwriter and dated the First Closing Date, or the
Second Closing Date, as the case may be, to the effect that:
(1) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, is
duly qualified to do business as a foreign corporation and is in
good standing in all other jurisdictions where the ownership or
leasing of properties or the conduct of its business requires
such qualification, except for jurisdictions in which the failure
to so qualify would not have a material adverse impact on the
Company and its subsidiaries, and has full corporate power and
authority to own its properties and conduct its business as
described in the Registration Statement;
(2) The authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in
the Prospectus; all outstanding shares of Common Stock (including
the Firm Common Shares and any Optional Common Shares) have been
duly and validly authorized and issued, are fully paid and
nonassessable, have been issued, to the best of such counsel's
knowledge, in compliance with federal and state securities laws,
were not issued in violation of or subject to any statutory
preemptive rights or, to the best of such counsel's knowledge,
other rights to subscribe for or purchase any securities and
conform to the description thereof contained in the Prospectus;
without limiting the foregoing, there are no preemptive or other
rights to subscribe for or purchase any of the Common Shares to
be sold by the Company hereunder;
(3) All of the issued and outstanding shares of the
Company's subsidiaries have been duly and validly authorized and
issued, are fully paid and nonassessable, are owned of record
and, to the best of such counsel's knowledge, are owned
beneficially by the Company (or, in the case of shares of REDFED,
Inc., RedFed Escrow, Inc. and Redlands Financial Services, Inc.,
by the Bank) free and clear of any liens, claims or encumbrances.
To the best of such counsel's knowledge, the Company does not
have any subsidiaries other than the Bank, REDFED, Inc., RedFed
Escrow, Inc. and Redlands Financial Services, Inc.;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Delaware
law, and when duly countersigned by the Company's transfer agent
and registrar, and delivered to the Underwriter or upon the
Underwriter's order against payment of the agreed consideration
therefor in accordance with the provisions of this Agreement, the
Common Shares represented thereby will be duly authorized and
validly issued, fully paid and nonassessable, will not have been
issued in violation of or subject to any statutory
14
preemptive rights or, to the best of such counsel's knowledge,
other rights to subscribe for or purchase securities and will
conform in all respects to the description thereof contained in
the Prospectus;
(5) Except as disclosed in or specifically contemplated by
the Prospectus, to the best of such counsel's knowledge, there
are no outstanding options, warrants or other rights calling for
the issuance of, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the
Company;
(6) (a) The Registration Statement has become effective
under the Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of
the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated
by the Commission; any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of the
Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b);
(b) The Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial
statements and schedules included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations;
(c) To the best of such counsel's knowledge, there are
no franchises, leases, contracts, agreements or documents
of a character required to be disclosed in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or filed, as
required;
(d) To the best of such counsel's knowledge, there are
no legal or governmental actions, suits or proceedings
pending or threatened against the Company which are
required to be described in the Prospectus which are not
described as required;
(7) The Company has full right, power and authority to enter
into this Agreement and to sell and deliver the Common Shares to
be sold by it to the Underwriter; this Agreement has been duly
and validly authorized by all necessary corporate action by the
Company, has been duly and validly executed and delivered by and
on behalf of the Company, and is a valid and binding agreement of
the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those
provisions relating to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be expressed;
and no approval, authorization, order, consent, registration,
filing, qualification, license or permit of or with any court,
regulatory, administrative or other governmental body is required
for the execution and delivery of this Agreement by the Company
or the consummation of
15
the transactions contemplated by this Agreement, except such as
have been obtained and are in full force and effect under the Act
and such as may be required under applicable Blue Sky laws in
connection with the purchase and distribution of the Common
Shares by the Underwriter and the clearance of such offering with
the NASD;
(8) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with, result in the breach of, or constitute, either by
itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any
of its or their property may be bound or affected which could
reasonably be expected to have a material adverse impact upon the
condition (financial or otherwise), business, properties, results
of operations or prospects of the Company and its subsidiaries,
or violate any of the provisions of the certificate of
incorporation or bylaws of the Company or any of its subsidiaries
or, so far as is known to such counsel, violate any statute,
judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company or any of
its subsidiaries or any of its or their property;
(9) Neither the Company nor any subsidiary is in violation
of its certificate of incorporation or bylaws. Such counsel is
not aware of any breach of or default with respect to any
provision of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known
to such counsel to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary or any of
their respective properties may be bound or affected, except
where such breach or default could not reasonably be expected to
have a material adverse impact upon the condition (financial or
otherwise), business, properties, results of operations or
prospects of the Company and its subsidiaries; nor is such
counsel aware of any failure of the Company or any such
subsidiary to comply with any laws, rules, regulations,
judgments, decrees, orders and statutes of any court or
jurisdiction to which they are subject, except where such
noncompliance could not reasonably be expected to have a material
adverse impact upon the condition (financial or otherwise),
business, properties, results of operations or prospects of the
Company and its subsidiaries;
(10) To the best of such counsel's knowledge, no holders of
securities of the Company have rights which have not been waived
to the registration of shares of Common Stock or other
securities, because of the filing of the Registration Statement
by the Company or the offering contemplated hereby;
(11) No California or New York transfer taxes are required
to be paid in connection with the sale and delivery of the Common
Shares to the Underwriter hereunder;
(12) The Company and each of its subsidiaries have all
governmental licenses, permits, consents, orders, approvals, and
other
16
authorizations necessary to carry on their respective businesses as
described in the Prospectus and as proposed to be conducted as
described in the Prospectus, except where failure to have such
governmental licenses, permits, consents, orders, approvals and other
authorizations could not reasonably be expected to have a material
adverse impact on the condition (financial or otherwise) business,
properties, results of operations or prospectus of the Company and its
subsidiaries;
(13) The Bank is duly chartered as a federal savings bank and is
in good standing under the laws of the United States. The Bank is a
member in good standing of the FHLB. The deposit accounts and
investment certificates of the Bank are duly insured by the FDIC
to the fullest extent permitted by law;
(14) To the best of such counsel's knowledge, no charge,
investigation or proceeding for the termination or revocation of
such charter, FHLB membership, good standing or FDIC insurance
are pending or threatened;
(15) To the best of such counsel's knowledge, the Company and its
subsidiaries are not subject to any order of the OTS or the FDIC,
except for the Supervisory Agreement. To the best of such counsel's
knowledge, the Company and its subsidiaries are in substantial
compliance with the Supervisory Agreement and such counsel is not
aware of any violation by the Company or its subsidiaries of any
applicable federal or California laws, rules, regulations, decisions,
directives and orders (including without limitation the rules,
regulations, decisions, directives and orders of the OTS and the
FDIC), which violation could reasonably be expected to have a material
adverse impact on the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries;
(16) The Company is a "savings and loan holding company" within
the meaning of the Home Owners Loan Act;
(17) The information in the Prospectus under the captions "Risk
Factors -- Recapitalization of SAIF and Its Impact on SAIF Premiums,
-- Financial Institution Regulation and Possible Legislation:
Supervisory Agreement," "Regulation and Supervision" and "Taxation"
has been reviewed by counsel and, to the extent that such information
constitutes matters of law or legal conclusions relating to regulatory
issues currently in effect, is correct in all material respects, and,
to the extent that such information constitutes matters of law or
legal conclusions relating to proposed regulatory issues, is, to the
best of such counsel's knowledge, correct in all material respects.
In rendering such opinion, such counsel may rely as to matters of
local law, on opinions of local counsel, and, as to matters of fact,
on certificates or other statements of officers of the Company and of
governmental officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to
be attached to the opinion. Such counsel shall also include a
statement to the effect that nothing has come to such counsel's
attention that would lead such counsel to believe that either at the
effective date of the Registration Statement or at the applicable
Closing Date the Registration
17
Statement or the Prospectus, or any amendment or supplement thereto,
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(ii) Such opinion or opinions of Gibson, Dunn & Crutcher LLP,
counsel for the Underwriter, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate
proceedings and other legal matters relating to this Agreement, the
validity of the Common Shares, the Registration Statement and the
Prospectus and other related matters as the Underwriter may reasonably
require, and the Company shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as
they may reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such counsel may
rely on representations or certificates of officers of the Company and
governmental officials.
(iii) A certificate of the Company executed by the Chairman of
the Board or President and the chief financial or accounting officer
of the Company, dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) The representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to such
Closing Date;
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best of
the knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the Act;
(3) Each of the respective signers of the certificate has
carefully examined the Registration Statement and the Prospectus;
in his or her opinion and to the best of his or her knowledge,
the Registration Statement and the Prospectus and any amendments
or supplements thereto contain all statements required to be
stated therein regarding the Company and its subsidiaries; and
neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto includes any untrue statement of
a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, or
transaction has been entered into, and no event has occurred
which should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of any
Prospectus which has not been disclosed in such a supplement or
amendment;
18
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there
has not been any material adverse change or any development
involving a material adverse change in the condition (financial
or otherwise), business, properties, results of operations,
prospects or management of the Company and its subsidiaries; and
no legal or governmental action, suit or proceeding is pending or
threatened against the Company or any of its subsidiaries which
is material to the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, or
which may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither
the Company nor any of its subsidiaries has entered into any
verbal or written agreement or other transaction which is not in
the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings
of the Company or incurred any material liability or obligation,
direct, contingent or indirect, made any change in its capital
stock, made any material change in its short-term debt or funded
debt or repurchased or otherwise acquired any of the Company's
capital stock; and the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding
capital stock payable to stockholders of record on a date prior
to the First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except
as disclosed in or contemplated by the Prospectus, the Company
and its subsidiaries have not sustained a material loss or damage
by strike, fire, flood, windstorm, accident or other calamity
(whether or not insured).
(iv) On the date this Agreement is executed and also on the First
Closing Date and the Second Closing Date, a letter addressed to the
Underwriter, from KPMG Peat Marwick LLP, independent accountants, the
first one to be dated the date of this Agreement, the second one to be
dated the First Closing Date and the third one (in the event of a
second closing) to be dated the Second Closing Date, in form and
substance satisfactory to the Underwriter.
(v) On or before the First Closing Date, a letter from each
director and executive officer of the Company, in form and substance
satisfactory to the Underwriter, confirming that for a period of 180
days after the first date that any of the Common Shares are released
by the Underwriter for sale to the public, such person will not,
directly or indirectly, offer to sell, sell, contract to sell, grant
any option to sell (including, without limitation, any short sale),
pledge, establish an open "put equivalent position" within the meaning
of Rule 16a-1(h) of the Exchange Act, transfer, assign or otherwise
dispose of any shares of Common Stock, or any securities convertible
into or exchangeable for any shares of Common Stock, or any option,
warrant or other right to acquire any shares of Common Stock, or
publicly announce any intention to do any of the foregoing, without
the prior written consent of the Underwriter, which consent may be
withheld at the sole discretion of the Underwriter.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Underwriter and to Gibson,
19
Dunn & Crutcher LLP, counsel for the Underwriter. The Company shall furnish the
Underwriter with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Underwriter may request. Any
certificate signed by any officer of the Company and delivered to the
Underwriter or to counsel for the Underwriter shall be deemed to be a
representation and warranty by the Company to the Underwriter as to the
statements made therein.
If any condition to the Underwriter's obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement, at the Underwriter's election, will terminate upon notification by
the Underwriter to the Company without liability on the part of the Underwriter
or the Company except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof.
SECTION 8
Reimbursement of Underwriter's Expenses. Notwithstanding any other
---------------------------------------
provisions hereof, if this Agreement shall be terminated by the Underwriter
pursuant to Section 7 hereof, or if the sale to the Underwriter of the Common
Shares at the First Closing is not consummated because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Underwriter upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Underwriter in connection with the proposed purchase
and the sale of the Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, telegraph
charges and telephone charges relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section 8 and Sections 6 and
Section 10 shall at all times be effective and shall apply.
SECTION 9
Effectiveness of Registration Statement. Each of the Underwriter and
---------------------------------------
the Company will use its respective best efforts to cause the Registration
Statement to become effective, to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if such stop
order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10
Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of the
Act against any losses, claims, damages, liabilities or expenses, joint or
several, to which the Underwriter or such controlling person may become subject,
under the Act, the Exchange Act, or other federal, state or foreign statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them not misleading, (ii) any
inaccuracy in the representations and warranties of the Company contained herein
or (iii) any failure of
20
the Company to perform its obligations hereunder or under law; and will
reimburse the Underwriter and each such controlling person for any legal and
other expenses as such expenses are reasonably incurred by the Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 3 hereof. In addition to its other obligations under this Section 10(a),
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, or any
inaccuracy in the representations and warranties of the Company herein or
failure to perform its obligations hereunder, all as described in this Section
10(a), it will reimburse the Underwriter on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Underwriter for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to the Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have to the Underwriter.
(b) The Underwriter will indemnify and hold harmless the Company, each
of its directors, each of its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages, liabilities or expenses to which the
Company, or any such director, officer or controlling person may become subject,
under the Act, the Exchange Act, or other federal, state or foreign statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Underwriter), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 3 hereof; and will reimburse the Company, or any such director, officer
or controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. In addition to its other obligations
under this Section 10(b), the Underwriter agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 10(b) which relates to
21
information furnished to the Company pursuant to Section 3 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director or
controlling person thereof) on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriter's obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person thereof) for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director or controlling person)
shall promptly return it to the Underwriter together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement will be in addition to any liability
which the Underwriter may otherwise have to the Company.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under
this Section 10, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 10 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the immediately preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Underwriter in the case of
paragraph (a), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(d) If the indemnification provided for in this Section 10 is required
by its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) in respect of any losses, claims, damages, liabilities or expenses referred
to herein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any
22
losses, claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriter from the offering of the Common Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriter in connection with the statements or omissions or inaccuracies
in the representations and warranties herein which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriter shall be deemed to be in the same proportion, in the
case of the Company, as the total price paid to the Company for the Common
Shares sold by it to the Underwriter (net of underwriting commissions but before
deducting expenses) bears to the total price to the public set forth on the
cover of the Prospectus, and, in the case of the Underwriter, as the
underwriting commissions received by it bears to the total price to the public
set forth on the cover of the Prospectus. The relative fault of the Company and
the Underwriter shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact or the inaccurate or the alleged
inaccurate representation and/or warranty relates to information supplied by the
Company or the Underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in subparagraph (c) of this Section 10, any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth
in subparagraph (c) of this Section 10 with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
subparagraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subparagraph
(c) for purposes of indemnification. The Company and the Underwriter agree that
it would not be just and equitable if contribution pursuant to this Section 10
were determined solely by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of
this Section 10, the Underwriter shall not be required to contribute any amount
in excess of the amount of the total underwriting commissions received by the
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 10(a) and 10(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of Governors of
the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service of a
written demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 10(a) and 10(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 10(a) and 10(b) hereof.
23
SECTION 11
Effective Date. This Agreement shall become effective immediately as
--------------
to Sections 6, 8, 10, 11, 12 and 14 and, as to all other provisions, (i) if at
the time of execution of this Agreement the Registration Statement has not
become effective, at 2:00 P.M., California Time, on the first full business day
following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California Time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as the Underwriter may determine on and by notice to
the Company or by release of any of the Common Shares for sale to the public.
For the purposes of this Section 11, the Common Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by the Underwriter of
telegrams offering the Common Shares for sale to securities dealers.
SECTION 12
Termination. Without limiting the right to terminate this Agreement
-----------
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to the
Underwriter or by the Underwriter by notice to the Company at any time prior to
the time this Agreement shall become effective as to all its provisions, and any
such termination shall be without liability on the part of the Company to the
Underwriter (except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof) or of the Underwriter to the Company (except to the extent provided
in Section 10 hereof).
(b) This Agreement may also be terminated by the Underwriter prior to
the First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriter, to affect adversely
the marketability of the Common Shares, (iii) if any adverse event shall have
occurred or shall exist which makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or which is not reflected in the Registration Statement or Prospectus
but should be reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iv) if there shall
be any action, suit or proceeding pending or threatened, or there shall have
been any development or prospective development involving particularly the
business or properties or securities of the Company or any of its subsidiaries
or the transactions contemplated by this Agreement, which, in the reasonable
judgment of the Underwriter, may materially and adversely affect the Company's
business or earnings and makes it impracticable or inadvisable to offer or sell
the Common Shares. Any termination pursuant to this subsection (b) shall be
without liability on the part of any Underwriter to the Company or on the part
of the Company to any Underwriter (except for expenses to be paid or reimbursed
by the Company pursuant to Sections 6 and 8 hereof and except to the extent
provided in Section 10 hereof).
24
(c) This Agreement shall also terminate at 5:00 P.M., California Time,
on the tenth full business day after the Registration Statement shall have
become effective if the public offering price of the Common Shares shall not
then as yet have been determined as provided in Section 4 hereof. Any
termination pursuant to this subsection (c) shall be without liability on the
part of any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in Section
10 hereof).
SECTION 13
Representations and Indemnities to Survive Delivery. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers, and of the Underwriter set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or the Company or any of
its or their partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Common Shares sold
hereunder and any termination of this Agreement.
SECTION 14
Notices. All communications hereunder shall be in writing and, if
-------
sent to the Underwriter shall be mailed, delivered or telegraphed and confirmed
to the Underwriter at 600 Montgomery Street, San Francisco, California 94111,
Attention: Kathleen Smythe, with a copy to Gibson, Dunn & Crutcher LLP, One
Montgomery Street, San Francisco, California 94104, Attention: Todd H. Baker,
Esq.; and if sent to the Company shall be mailed, delivered or telegraphed and
confirmed to the Company at 300 E. State Street, Redlands, California 92373,
Attention: D. Brian Reider, with a copy to Mayer, Brown & Platt, 350 South
Grand Avenue, 25th Floor, Los Angeles, California 90071, Attention: James R.
Walther, Esq. The Company or the Underwriter may change the address for receipt
of communications hereunder by giving notice to the others.
SECTION 15
Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto, and to the benefit of the officers and
directors and controlling persons referred to in Section 10, and in each case
their respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from the Underwriter merely
by reason of such purchase.
SECTION 16
Partial Unenforceability. The invalidity or unenforceability of any
------------------------
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
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SECTION 17
Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the internal laws (and not the laws pertaining to conflicts of
laws) of the State of California.
SECTION 18
General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Underwriter.
26
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement between the Company and the Underwriter, all in
accordance with its terms.
Very truly yours,
REDFED BANCORP INC.
By:
---------------------------------
Anne Bacon, President and
Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
MONTGOMERY SECURITIES
By:
---------------------------------
, Managing Director
27
SCHEDULE A
__________, 1996
PRICE DETERMINATION AGREEMENT
Referring to Section 4 of the Underwriting Agreement dated
__________, 1996, between the Company and the Underwriter as therein defined
with respect to the purchase and sale of the Common Shares referred to therein,
we hereby confirm our agreement that the public offering price of the Common
Shares shall be $_____ per share; that the underwriting discount shall be
$_____ per share; and that the purchase price to be paid by the Underwriter for
the Common Shares to be purchased from the Company shall be $_____ per share.
This Agreement may be executed in various counterparts which together
shall constitute one and the same Agreement.
MONTGOMERY SECURITIES
By
----------------------------------
, Managing Director
REDFED BANCORP INC.
By:
----------------------------------
Anne Bacon, President and
Chief Executive Officer
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