EXHIBIT 1
2,500,000 Shares
LIFE FINANCIAL CORP.
(a Delaware corporation)
Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
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June ___, 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
as Representative of the several Underwriters
c/o Keefe, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Life Financial Corp., a Delaware corporation (the "Company"), and Life
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Savings Bank, Federal Savings Bank, a federally chartered savings bank (the
"Bank") confirm their agreement with ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("KBW") and
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each of the other Underwriters named in Schedule A hereto (collectively, the
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"Underwriters", which term shall also include any underwriter substituted as
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hereinafter provided in Section 10 hereof), for whom KBW is acting as
representative (in such capacity, KBW shall hereinafter be referred to as the
"Representative"), with respect to the sale by the Company and the purchase by
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the Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
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Stock") set forth in said Schedule A, and with respect to the grant by the
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Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 375,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 2,500,000 shares of Common Stock (the "Initial Securities") to be
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purchased by the Underwriters and all or any part of the 375,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
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Securities") are hereinafter called, collectively, the "Securities."
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Prior to the purchase and public offering of the Securities by the several
Underwriters, the Company and the Representative, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take the
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form of an exchange of any standard form of written telecommunication between
the Company and the Representative and shall specify such applicable information
as is indicated in Exhibit A hereto. The offering of the Securities will be
governed by this Agreement, as supplemented by the Pricing Agreement. From and
after the date of the execution and delivery of the Pricing Agreement, this
Agreement shall be deemed to incorporate the Pricing Agreement.
The Company is a savings and loan holding company under the provisions of
the Savings and Loan Holding Company Act, as amended, whose sole subsidiaries
are the Bank and Life Investment Holdings, a Delaware corporation ("Life
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Holdings," and together with the Bank, the "Subsidiaries"). This holding
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company/subsidiary structure is a result of the "Reorganization," which was
consummated on June ___, 1997, pursuant to which each outstanding share of the
Bank's common stock was converted into three shares of the Common Stock of the
Company, the Bank became a wholly-owned subsidiary of the Company and Life
Holdings was established as a wholly-owned subsidiary of the Company.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-______) and a
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related preliminary prospectus for the registration of the Securities under the
Securities Act of 1933 (the "1933 Act"), has filed such amendments thereto, if
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any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement (as
amended, if applicable) and the prospectus constituting a part thereof
(including in each case the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations")), as from time to time amended or
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supplemented pursuant to the 1933 Act or otherwise, are hereinafter referred to
as the "Registration Statement" and the "Prospectus," respectively, except that
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if any revised prospectus shall be provided to the Underwriters by the Company
for use in connection with the offering of the Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Underwriters for such use.
The Company has also filed with the Commission a registration statement on
Form S-4 (No. 333-20497) and a related proxy statement-prospectus for the
registration under the 1933 Act of the Common Stock of the Company which was
exchanged in a 3-to-1 ratio for each share of common stock of the Bank in
connection with the Reorganization. The shares of Common Stock of the Company
so exchanged in the Reorganization are hereinafter referred to as the "Exchange
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Shares," and the Form S-4 Registration Statement and related proxy statement-
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prospectus are hereinafter referred to as the "Exchange Registration Statement"
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and the "Exchange Prospectus," respectively.
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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
the Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
The Company and the Underwriters agree that up to 86,500 shares of the
Securities to be purchased by the Underwriters (the "Reserved Shares") shall be
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reserved for sale by the Underwriters to certain directors of the Company, as
part of the distribution of the Securities by the Underwriters, in accordance
with the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. and all
other applicable laws, rules and regulations. To the extent that such Reserved
Shares are not so purchased by such eligible employees and persons having
business relationships with the Company, such Reserved Shares may be offered to
the public as part of the public offering contemplated hereby.
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SECTION 1. Representations and Warranties.
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(a) The Company and the Bank jointly and severally represent and warrant to
each Underwriter as of the date hereof, as of the date of the Pricing Agreement
(such latter date being hereinafter referred to as the "Representation Date")
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and as of the Closing Time referred to in Section 2(a) hereof, and agree with
each Underwriter, as follows:
(i) At the respective times the Registration Statement, the Exchange
Registration Statement and any post-effective amendments thereto became or
will become effective and at the Representation Date, the Registration
Statement and the Exchange Registration Statement complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and the Exchange Prospectus, at the Representation Date (unless
the term "Prospectus" refers to a prospectus which has been provided to the
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Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at
the time the Registration Statement first becomes effective, in which case
at the time it is first provided to the Underwriters for such use) and at
Closing Time, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
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this subsection shall not apply to statements in or omissions from the
Registration Statement, Prospectus, Exchange Registration Statement or
Exchange Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through
the Representative expressly for use in the Registration Statement,
Prospectus, Exchange Registration Statement or Exchange Prospectus.
(ii) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement and the
Exchange Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iii) The financial statements included in the Registration
Statement, the Prospectus, the Exchange Registration Statement and the
Exchange Prospectus, together with the related schedule and notes, present
fairly the financial position of the Company and the Subsidiaries at the
dates indicated and the statement of income, stockholders' equity and cash
flows of the Company and the Subsidiaries for the periods specified; except
as otherwise stated in the Registration Statement or the Exchange
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
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on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement or the Exchange
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus and the
Exchange Prospectus have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement and
the Exchange Registration Statement.
(iv) Since the respective dates as of which information is given in
the Registration Statement, the Prospectus, the Exchange Registration
Statement and the Exchange Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company and the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company or the Subsidiaries, other than
those in the ordinary course of business, which are material with respect
to the Company and the Subsidiaries considered as one enterprise,
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and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company or the Subsidiaries on any class of their
respective capital stock.
(v) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement and the Pricing
Agreement; the Company is duly qualified as a foreign corporation to
transact business and is in good standing in California and in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business; and the
Company is duly registered as a savings and loan holding company under the
Savings and Loan Holding Company Act, as amended.
(vi) The Bank has been duly incorporated and is validly existing as a
savings bank in good standing under the federal laws of the United States,
and Life Holdings has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware; each
of the Subsidiaries has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in California and in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of the Subsidiaries has been duly authorized and validly issued, is
fully paid and non-assessable and is directly owned by the Company, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of the
Subsidiaries was issued in violation of the preemptive or similar rights of
any stockholder of such corporation arising by operation of law, under the
charter or by-laws of any such subsidiary or under any agreement to which
the Company or any of the Subsidiaries is a party. The only direct or
indirect subsidiaries of the Company are the Bank and Life Holdings. There
are no subsidiaries of the Bank or Life Holdings. Except for the shares of
capital stock of the Subsidiaries owned by the Company, neither the Company
nor any of the Subsidiaries owns any shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity.
(vii) The deposits of the Bank are insured by the Federal Deposit
Insurance Corporation ("FDIC") up to legally applicable limits, and no
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proceedings for the termination or revocation of such insurance are pending
or, to the best knowledge of the Company and the Bank, threatened.
(viii) The authorized, issued and outstanding capital stock of the
Company and the Subsidiaries is as set forth in the Prospectus under the
caption "Capitalization"; the shares of issued and outstanding capital
stock of the Company and the Subsidiaries have been duly authorized and
validly issued and fully paid and non-assessable; none of the outstanding
shares of such stock was issued in violation of the preemptive or other
similar rights of any securityholder of the Company or the Subsidiaries
arising by operation of law, under the charter or by-laws of the Company or
the Subsidiaries or under any agreement to which the Company or any of the
Subsidiaries is a party.
(ix) The Securities have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly issued
and fully paid and non-assessable; the Securities conform to all statements
relating thereto contained in the Prospectus; no holder of the Securities
will be subject to personal liability by reason of being such a holder;
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and the issuance of the Securities is not subject to preemptive or other
similar rights of any securityholder of the Company arising by operation of
law, under the charter and by-laws of the Company or the Subsidiaries or
under any agreement to which the Company or any of the Subsidiaries is a
party.
(x) Neither the Company nor any of the Subsidiaries is in violation of
its charter or in default to an extent which singly or in the aggregate,
would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which or any
of them may be bound, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, including without
limitation: (A) that certain Master Loan and Security Agreement dated April
30, 1997 between the Bank and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital, Inc., and
any other documents governing such line of credit (the Master Loan and
Security Agreement and all such other documents, collectively the "Line of
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Credit Documents"); (B) the Amended Agreement and Plan of Reorganization,
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dated as of January 16, 1997 between the Company and the Bank, and any
other documents governing the Reorganization (all such agreements and other
documents, collectively, the "Reorganization Documents"); and (C) all
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purchase agreements, servicing agreements and any other documents governing
loan sales or securitizations by the Company or the Bank (all such
agreements and other documents, collectively, the "Securitization
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Documents").
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(xi) The execution, delivery and performance of this Agreement and the
Pricing Agreement, the consummation of the transactions contemplated herein
and therein and compliance by the Company with its obligations hereunder
and thereunder (including the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and the consummation of the Reorganization and the transactions
related thereto, have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or the Bank pursuant to, the Line of Credit
Documents, the Reorganization Documents, the Securitization Documents, or
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of the
Subsidiaries is subject and which breach or default singly or in the
aggregate, would materially and adversely affect the condition, financial
or otherwise, or the earnings, business affairs or business prospects of
the Company and the Subsidiaries considered as one enterprise; nor will
such action result in any violation of the provisions of the charter or by-
laws of the Company or any of the Subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or the Subsidiaries or any of their
assets or properties and which violation, singly or in the aggregate, would
materially and adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise. As used herein, a "Repayment
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Event" means any event or condition which gives the holder of any note,
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debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
the Subsidiaries.
(xii) Neither the Company nor any of the Subsidiaries is in violation
of any directive from the FDIC, the Office of Thrift Supervision (the
"OTS"), the Board of Governors of the Federal Reserve System (the "Federal
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Reserve Board") or any other governmental authority, and the Company and
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the
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Subsidiaries are in compliance with all federal and state laws and
regulations that regulate or relate to its business, including, without
limitation, the Financial Institutions Recovery, Reform and Enforcement Act
of 1989 ("FIRREA"), the Federal Deposit Insurance Act (the "FDIA"), the
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National Housing Act (the "NHA"), the Federal Deposit Insurance Corporation
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Improvement Act of 1991 ("FDICIA") and all other applicable laws and
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regulations where the failure to comply would materially and adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise. Neither the Company nor any of the
Subsidiaries is subject to a cease and desist order, a formal or written
agreement or a memorandum of understanding with any federal or state
agency, nor has the Board of Directors of the Company or any Subsidiary
adopted any resolutions at the direction of any such agency.
(xiii) All material transactions between the Company or the
Subsidiaries and their respective officers and directors and their
affiliates have been accurately disclosed in the Prospectus; and the terms
of such transactions are fair to the Company or the Subsidiaries, as the
case may be.
(xiv) Except as disclosed in the Prospectus or Registration
Statement, the Company has not: (i) issued any securities within the last
18 months; (ii) had any material dealings with any member of the NASD or
any person related to or associated with such a member, other than
discussions and meetings relating to the proposed offering and sale of the
Securities and routine purchases and sales of U.S. Government and Agency
securities and other assets; or (iii) entered into a financial or
management consulting agreement, except as contemplated hereunder and
except for Placement Agency Agreements with Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc. dated July 23, 1996 and March 14, 1997.
(xv) The Company has not relied upon you or your legal counsel for any
legal, tax or accounting advice in connection with the Reorganization or
the offering and sale of the Securities (except with respect to the
qualification of the Securities for offering and sale under the securities
laws of certain states).
(xvi) None of the Company or any of the Subsidiaries has violated any
Federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws, or any
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), or the rules and regulations promulgated thereunder. There is
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(i) no significant unfair labor practice complaint pending against the
Company or any of the Subsidiaries or, to the best knowledge of the Company
and the Bank, threatened against any of them, before the National Labor
Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against the
Company or any of the Subsidiaries and, to the best knowledge of the
Company and the Bank, threatened against any of them, (ii) no labor dispute
in which the Company or any of the Subsidiaries is involved nor, to the
best knowledge of the Company and the Bank, is any labor dispute imminent,
other than routine disciplinary and grievance matters; the Company is not
aware of any existing or imminent labor disturbance by the employees of any
of its principal customers or vendors and (iii) no union representation
question existing with respect to the employees of the Company or any of
the Subsidiaries and, to the best knowledge of the Company and the Bank, no
union organizing activities are taking place.
(xvii) No labor dispute with the employees of the Company or any of
the Subsidiaries exists or, to the knowledge of the Company, is imminent.
(xviii) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of the Subsidiaries
which is required to be disclosed
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in the Registration Statement, or which might reasonably be expected to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and the Subsidiaries considered as one enterprise, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of this Agreement or the
performance by the Company of its obligations hereunder and the
consummation of the Reorganization and the transactions related thereto;
the aggregate of all pending legal or governmental proceedings to which the
Company or any of the Subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business could not reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise.
(xix) Neither the Company nor any of the Subsidiaries has directly or
indirectly: (A) taken any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities; or (B) since
the filing of the Registration Statement: (1) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Securities,
or (2) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company or the Bank.
(xx) Neither the Company nor any of the Subsidiaries, or, to the best
knowledge of the Company or the Subsidiaries and the Bank, any of their
respective employees, have at any time during the last five (5) years: (A)
made any unlawful contribution to any candidate for foreign office or
failed to disclose fully any contribution in violation of law; or (B) 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.
(xxi) The description of loan sales and securitizations effected by
the Bank or the Company, contained in the Registration Statement and the
Prospectus is true and complete in all material respects and, to the best
knowledge of the Company and the Bank, no event or series of events has
occurred that would result in any of the securities issued in
securitizations using loans originated by the Bank being downgraded or
placed on a watch list with negative implications by any rating agency or
similar organization, or that would impair the Company's or the
Subsidiaries' ability to consummate future loan sales or to securitize
loans upon economic terms consistent with past loan sales and
securitizations or otherwise cause the Company and the Subsidiaries to
suffer any material loss with respect to any past loan sale or
securitization.
(xxii) The Securities have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(xxiii) The Company and the Subsidiaries are in material compliance
with all rules, laws and regulations relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Laws") which are applicable to their respective
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businesses; the Company and the Subsidiaries have received no notice from
any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the
Registration Statement and the Prospectus; the Company and the Subsidiaries
have no reason to believe that either of them will be required to make
future material capital expenditures to comply with Environmental Laws; and
to the best knowledge of the Company and the Bank, no property which is
owned, leased or occupied by the Company or the Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive
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Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
(S) 9601, et seq.), or otherwise designated as a contaminated site under
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applicable state or local law.
(xxiv) The Representative and their counsel have been provided true
and correct copies of all the final, signed corporate resolutions,
governmental and other third-party consents and approvals, the
Reorganization Documents, and all other documents necessary to effect the
Reorganization.
(xxv) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto by the 1933 Act or by the 1933 Act Regulations which have
not been so described and filed as required.
(xxvi) Each of the Subsidiaries owns or possesses any patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names (collectively, "patent and proprietary rights") presently employed by
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them in connection with the business now operated by them as described in
the Prospectus, except where lack thereof would not result in a material
adverse change in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise, and neither of the Subsidiaries has received
any notice or is not otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any patent or proprietary
rights or of any facts or circumstances which would render any patent and
proprietary rights invalid or inadequate to protect the interest of the
Company or the Subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise.
(xxvii) No filing with, or authorization, approval, consent, license
order, registration, qualification or decree of, any court or governmental
authority or agency, including without limitation the OTS, FDIC and Federal
Reserve Board, is necessary or required for the performance by the Company
or the Bank of their obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the consummation
by them of the transactions contemplated by this Agreement and the Pricing
Agreement and the consummation of the Reorganization and the transactions
related thereto, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(xxviii) The Company and the Bank have filed all necessary
applications with state and federal authorities, including the OTS, to
create the subsidiaries of the Bank and of the Company described in the
Registration Statement and Prospectus that the Company and the Bank intend
to create following the Reorganization and the offering and sale of the
Securities. To the best knowledge of the Company and the Bank, there is no
reason that all necessary governmental approvals to establish and operate
such subsidiaries will not be obtained by ________________, 1997. The
Representative and its counsel have been provided with true and correct
copies of all governmental applications and correspondence with
governmental agencies regarding the approval of such subsidiaries.
(xxix) The Company and the Subsidiaries possess such certificates,
authorities, permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
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appropriate federal, state, local or foreign regulatory agencies or bodies,
including the OTC, FDIC and Federal Reserve Board, necessary to conduct the
business now operated by them and described in the Registration Statement
and Prospectus; the Company and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly
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or in the aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise;
all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not have a
material adverse effect on the condition, financial or otherwise, earnings,
business affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise.
(xxx) This Agreement has been and, at the Representation Date, the
Pricing Agreement will have been, duly authorized, executed and delivered
by the Company and the Bank.
(xxxi) The Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, statutes, ordinances, rules or
regulations, the violation of which, individually or in the aggregate,
would be reasonably expected to have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered as one
enterprise.
(xxxii) The Company and the Subsidiaries have good and marketable
title to all properties (real and personal) owned by the Company and the
Subsidiaries, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or the Subsidiaries; and all properties held under lease by the
Company or the Subsidiaries are held under valid, subsisting and
enforceable leases.
(xxxiii) Except as disclosed in the Prospectus, 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 the Subsidiaries or any security convertible into
or exchangeable for capital stock of the Company or the Subsidiaries.
(xxxiv) Neither the Company nor any of the Subsidiaries is, nor upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds" will be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
--------
(xxxv) The Company and the Subsidiaries have filed all federal,
state, local and foreign tax returns that are required to be filed or have
duly requested extensions thereof and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings; and adequate charges, accruals
and reserves have been provided for in the financial statements referred to
in Section 1(a)(iii) above in respect of all federal, state, local and
foreign taxes for all periods as to which the tax liability of the Company
or the Subsidiaries has not been finally determined or remains open to
examination by applicable taxing authorities.
9
(xxxvi) The Company and the Subsidiaries carry or are entitled to the
benefits of insurance in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the same
or similar business, and all such insurance is in full force and effect.
(xxxvii) The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
and specific authorizations; (ii) transactions are recorded as necessary to
permit preparations of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorizations;
and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxxviii) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company
or the Subsidiaries any brokerage or finder's fee or any other fee,
commission or payment as a result of the transactions contemplated by this
Agreement.
(xxxix) The Company and the Subsidiaries obtained and delivered to
the Representative the executed agreement annexed hereto as Exhibit B of
---------
Life Holdings, all directors and officers of the Company and the
Subsidiaries, and all persons or entities who hold one percent or more of
the capital stock of the Company or the Bank or who have purchased equity
securities of the Company or the Bank in private placements, which
agreement provides, as more specifically stated therein that each such
person or entity will not, for a period of 180 days from the date hereof
and except as otherwise provided therein, without the prior written consent
of the Representative, directly or indirectly, sell, pledge, hypothecate,
offer or enter into a contract to sell, pledge or hypothecate, grant any
option for the sale of, or otherwise dispose of, any shares of Common Stock
or any securities convertible into or exercisable for Common Stock owned by
such person or entity or with respect to which such person or entity has
the power of disposition. Such agreement also provides for a waiver,
during the 180-day period, of any demand registration rights held by any
such person or entity. Schedule B annexed hereto contains a complete list
----------
of all directors and officers of the Company and the Subsidiaries, and all
persons or entities who hold 1% or more of the capital stock of the Company
or the Bank or who have purchased equity securities of the Company or the
Bank in private placements.
(xi) The Company has not distributed and, prior to the later to occur
of (i) the Closing Time and (ii) completion of the distribution of the
Securities, will not distribute any prospectus (as such term is defined in
the 1933 Act and the 1933 Act Regulations) in connection with the offering
and sale of the Securities other than the Registration Statement, any
preliminary prospectus, the Prospectus or other materials, if any,
permitted by the 1933 Act or by the 1933 Act Regulations and approved by
the Representative.
(b) Any certificate signed by any officer of the Company or the Bank and
delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company or the Bank to each
Underwriter as to the matters covered thereby.
10
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price per
share set forth in the Pricing Agreement, the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter (except as otherwise
----------
provided in the Pricing Agreement), plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per share to be paid by the several Underwriters for the Securities
have each been determined and set forth in the Pricing Agreement, dated the
date hereof, and an amendment to the Registration Statement and the
Prospectus will be filed before the Registration Statement becomes
effective.
(2) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the initial public offering price and the purchase price
per share to be paid by the several Underwriters for the Securities shall
be determined by agreement between the Representative and the Company and,
when so determined, shall be set forth in the Pricing Agreement. In the
event that such prices have not been agreed upon and the Pricing Agreement
has not been executed and delivered by all parties thereto by the close of
business on the fourth business day following the date of this Agreement,
this Agreement shall terminate forthwith, without liability of any party to
any other party, unless otherwise agreed to by the Company and the
Representative, except that Sections 6 and 7 shall remain in effect.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 375,000 shares of Common Stock at the price per
share set forth in the Pricing Agreement. The option hereby granted will expire
30 days after (i) the date the Registration Statement becomes effective, if the
Company has elected not to rely on Rule 430A under the 1933 Act Regulations, or
(ii) the Representation Date, if the Company has elected to rely on Rule 430A
under the 1933 Act Regulations, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Representative to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
----------------
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time or prior to
the date two business days after receipt by the Company of notice of the
exercise, as hereinafter defined, unless otherwise agreed by the Representative
and the Company. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities (except as otherwise provided in the Pricing Agreement), subject in
each case to such adjustments as the Representative in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the office of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, Newport Beach, California, or at such other place as shall be
agreed upon by the Representative and the Company, at 10:00 A.M. (unless
postponed in accordance with the provisions of Section 10) on the fourth
business day following the date the Registration Statement becomes effective
(or, if the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the fourth business day after
11
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representative and
the Company (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that any or all of the Option
-------------
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, Newport Beach,
California, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company. Payment shall be made to the Company by
certified or official bank check or checks drawn in New York Clearing House
funds or similar next day funds payable to the order of the Company, against
delivery to the Representative for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. Certificates for
the Initial Securities and the Option Securities, if any, shall be in such
denominations and registered in such names as the Representative may request in
writing at least two business days before the Closing Time or the relevant Date
of Delivery, as the case may be. It is understood that each Underwriter has
authorized the Representative, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. KBW, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose check has not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. on the last
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be. Notwithstanding the foregoing, if the Representative elects that
the delivery to the Underwriters of all or a portion of the Securities be
effected through the "Full Fast" system of the Depository Trust Corporation,
such that all or a portion of the Securities will be denominated in book-entry
form and there will be no certificates therefor, then in lieu of certificates
for the Securities, the Company shall deliver to its transfer agent at least 24
hours prior to Closing Time, instructions in form and substance satisfactory to
the Representative, instructing such transfer agent to register such shares
through the Full Fast system at Closing Time.
SECTION 3. Covenants of the Company. The Company (and where indicated,
------------------------
the Bank) covenants with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective as and when requested by the Representative,
and if the Company elects to rely upon Rule 430A and subject to Section
3(b), will comply with the requirements of Rule 430A and will notify the
Representative immediately, and confirm the notice in writing, (i) when the
Registration Statement, or any post-effective amendment to the Registration
Statement, shall become effective, or any supplement to the Prospectus or
any amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of or the
initiation or threatening of any proceedings for any of such purposes. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest reasonable moment.
(b) The Company will give the Representative notice of its intention
to file or prepare any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for
use by the Underwriters in connection with the offering of the Securities
which differs from the prospectus on
12
file at the Commission at the time the Registration Statement first becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish the
Representative with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Representative or counsel for the Underwriters
shall object.
(c) The Company has furnished or will deliver to the Representative
and counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
and signed copies of all consents and certificates of experts, and will
also deliver to the Representative a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters.
(d) The Company will deliver to each Underwriter, without charge, from
time to time until the effective date of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A, until such time the Pricing
Agreement is executed and delivered), as many copies of each preliminary
prospectus as such Underwriter may reasonably request, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
from time to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the Securities Exchange Act of 1934 (the
"1934 Act"), such number of copies of the Prospectus (as amended or
---------
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule
430A of the 1933 Act Regulations, then immediately following the execution
of the Pricing Agreement, the Company will prepare, and file or transmit
for filing with the Commission in accordance with such Rule 430A and Rule
424(b) of the 1933 Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted and will use its best efforts to cause such post-effective
amendment to be declared effective as promptly as practicable.
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the Representative may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; provided, however,
13
that the Company shall not be obligated to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement.
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(j) During a period of 180 days from the date of the Pricing Agreement
(the "Lock-Up Period"), neither the Company nor the Bank will, without the
--------------
prior written consent of the Representative (which may be withheld in its
sole discretion), directly or indirectly, sell, pledge, hypothecate, offer
to sell, pledge or hypothecate, grant any option for the sale of, or
otherwise dispose of, including without limitation a disposition or
transfer into nominee or street name (all such forms of disposition or
transfer enumerated in this sentence collectively, a "Disposition"), any
-----------
shares of Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock (except for Common Stock issued pursuant to
this Agreement, pursuant to the exercise of employee stock options, the
number of which are specifically identified in the Prospectus), or file any
registration statement under the 1933 Act with respect to any of the
foregoing. The Company and the Bank consent to the entry by the
Representative of stop-transfer orders with the Company's transfer agent
if, in the Representative's sole discretion, a stop order is necessary to
prevent violation of this subparagraph. The foregoing restrictions are
expressly agreed to preclude the Company and the Bank from engaging in any
hedging, pledge or other transaction which is designed to or reasonably
expected to lead to or result in a Disposition of Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock
during the Lock-Up Period even if such securities would be disposed of by
someone other than the Company or the Bank. Such prohibited hedging,
pledge or other transactions would include without limitation any short
sale (whether or not against the box), any pledge of shares covering an
obligation that matures, or could reasonably mature during the Lock-Up
Period, or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any Common Stock or with
respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
Common Stock.
(k) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the 1933 Act Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Whether or not the transactions contemplated hereunder are
consummated or this Agreement remains effective or is terminated, the
Company and the Bank jointly and severally agree to pay all costs, fees and
expenses incurred in connection with the performance of their 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 Securities (including
all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Securities, (iii) all
14
necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Securities, (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 and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, (vi) where applicable, all filing fees,
attorney's fees and expenses incurred by the Company in connection with
qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Securities for offer and sale
under the Blue Sky laws, (vii) all the costs and expenses incurred by
the Company in making road show presentations with respect to the Offering,
(viii) all costs of preparing, printing and distributing bound volumes of
the transaction documents for the Representative and its counsel, and (ix)
all other fees, costs and expenses referred to in Item 13 of the
Registration Statement. Except as provided in this Section 5, and Section
8 hereof, the Representative shall pay all of its own expenses, including
the fees and disbursements of its own counsel.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the
Representative, at a later time and date, not later, however, than 5:30
P.M. on the first business day following the date hereof, or at such later
time and date as may be approved by a majority in interest of the several
Underwriters; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated threatened or, to the
knowledge of the Company, contemplated by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the
Underwriters. If the Company has elected to rely upon Rule 430A of the
1933 Act Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission
for filing in accordance with Rule 424(b) of the 1933 Act Regulations
within the prescribed time period and prior to Closing Time the Company
shall have provided evidence satisfactory to the Representative of such
timely filing, or a post-effective amendment providing
15
such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At Closing Time the Representative shall have received:
(1) The opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and to enter into and
perform its obligations under this Agreement and the Pricing
Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in corporate good
standing in California and is duly qualified as a foreign
corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to
be in good standing would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise; and the Company is duly registered
as a savings and loan holding company under the Savings and Loan
Holding Company Act, as amended.
(iv) The Bank has been duly incorporated and is validly
existing as a federal savings bank in good standing under the
federal laws of the United States and Life Holdings has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware; each of the
Subsidiaries has corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered
as one enterprise; all of the issued and outstanding capital
stock of the Subsidiaries has been duly authorized and validly
issued, and to the best of their knowledge is fully paid and non-
assessable and is directly owned by the Company, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; to the best of their knowledge, none of the
outstanding shares of capital stock of the Subsidiaries was
issued in violation of the preemptive or similar rights of any
stockholder of such corporation arising by operation of law,
under the charter or by-laws of any subsidiary or under any
agreement to which the Company or any of the Subsidiaries is a
party. The only direct or indirect subsidiaries of the Company
are the Bank and Life Holdings. There are no subsidiaries of the
Bank or Life Holdings. To the best of their knowledge, except
for the shares of capital stock of the Subsidiaries owned by the
Company, the Company does not
16
own any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership,
association or other entity.
(v) Neither the Company nor any of the Subsidiaries is in
violation of its charter or bylaws or, to the best of their
knowledge, in default to an extent which, singly or in the
aggregate, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered
as one enterprise, in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which or
any of them may be bound, or to which any of the property or
assets of the Company or the Subsidiaries is subject, including
without limitation, the Warehouse Document, the Reorganization
Documents or the Securitization Documents.
(vi) The execution, delivery and performance of this
Agreement and the Pricing Agreement, the consummation of the
transactions contemplated herein and therein and compliance by
the Company with its obligations hereunder and thereunder
(including the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use
of Proceeds") and the consummation of the Reorganization and the
transactions related thereto have been duly authorized by all
necessary corporate action and do not and will not, whether with
or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment
Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or the Subsidiaries pursuant to, the Line of Credit Documents,
the Reorganization Documents, the Securitization Documents, or
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or
assets of the Company or the Subsidiaries is subject and which
breach or default singly or in the aggregate, would materially
and adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise; nor
will any such action result in any violation of the provisions of
the charter or by-laws of the Company or the Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or the
Subsidiaries or any of their assets or properties and which
violation, singly or in the aggregate, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company
and the Subsidiaries considered as one enterprise.
(vii) The deposit accounts of the Bank are insured by the
FDIC up to legally applicable limits, and, to their best
knowledge, no proceedings for the termination or revocation of
such insurance are pending or threatened.
(viii) The activities of the Company and each of the
Subsidiaries are permissible activities for each such entity
under federal law and the rules, regulations, resolutions and
practices of the OTS, FDIC and Federal Reserve Board.
17
(ix) The authorized, issued and outstanding capital stock of
the Company and the Subsidiaries is as set forth in the
Prospectus under the caption "Capitalization"; the shares of
issued and outstanding capital stock of the Company and the
Subsidiaries have been duly authorized and validly issued and
fully paid and non-assessable; none of the outstanding shares of
such stock was issued in violation of the preemptive or other
similar rights of any securityholder of the Company or the
Subsidiaries arising by operation of law, under the charter or
by-laws of the Company or the Subsidiaries or under any agreement
to which the Company or any of the Subsidiaries is a party.
(x) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth in the Pricing
Agreement, will be validly issued and fully paid and non-
assessable, and not subject to preemptive or other similar rights
arising by operation of law, under the charter or by-laws of the
Company or, to the best of their knowledge, otherwise.
(xi) 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, obligations, plans or
arrangements to issue, any shares of capital stock of the Company
or the Subsidiaries or any security convertible into or
exchangeable for capital stock of the Company or the
Subsidiaries. The outstanding stock options relating to the
Company's Common Stock have been duly authorized and validly
issued and the description thereof contained in the Prospectus is
accurate in all material requests.
(xii) This Agreement and the Pricing Agreement have been
duly authorized, executed and delivered by the Company and the
Bank.
(xiii) The Registration Statement has been declared
effective under the 1933 Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); and, to the
best of their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by
the Commission.
(xiv) The Registration Statement, the Prospectus, the
Exchange Registration Statement and the Exchange Prospectus, and
each amendment or supplement thereto, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein, as to which no opinion
need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xv) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
charter and by-laws of the Company and the requirements of
Nasdaq.
(xvi) To the best of their knowledge, neither the Company
nor any of the Subsidiaries is in violation of any directive from
the FDIC, the OTS, the Federal Reserve Board or any other
governmental authority, and the Company and the Subsidiaries are
in compliance with all federal and state laws and regulations
that regulate or relate to its
18
business, including, without limitation, FIRREA, the FDIA, the
NHA, FDICIA and all other applicable laws and regulations where
the failure to comply would materially and adversely affect the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise.
(xvii) To the best of their knowledge, there is not pending
or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any of the Subsidiaries is
a party, or to which the property of the Company or any of the
Subsidiaries is subject, before or brought by any court or
governmental agency or body, which might reasonably be expected
to result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered
as one enterprise, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof
or the consummation of this Agreement and the Pricing Agreement
or the performance by the Company of its obligations hereunder or
thereunder or any of the other transactions contemplated by the
Registration Statement, including the consummation of the
Reorganization and the transactions related thereto; and all
pending legal or governmental proceedings to which the Company or
the any of the Subsidiaries is a party or that affect any of
their respective properties that are not described in the
Prospectus, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise.
(xviii) The information in the Prospectus under "Risk
Factors," "Description of Capital Stock of the Company,"
"Description of Capital Stock of the Bank" and "Regulation," and
in the Registration Statement under items 14 and 15, to the
extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been
reviewed by them and complies in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations; to the
best of such counsel's knowledge, there are no statutes or
regulations, and no legal or governmental actions, suits or
proceedings pending or threatened against the Company or either
the Subsidiaries that are required to be described in the
Prospectus that are not described as required.
(xix) All descriptions in the Prospectus of contracts and
other documents to which the Company or any of the Subsidiaries
are a party are accurate in all material respects; to the best of
their knowledge and information, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto and the descriptions thereof or references
thereto comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(xx) No authorization, approval, consent or order of any
court or governmental authority or agency (other than under the
1933 Act and the 1933 Act Regulations and those which are
described in the Prospectus as required in connection with the
consummation of the Reorganization and transactions related
thereto, all of which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as
to which such counsel need express no opinion) is required in
19
connection with the due authorization, execution and delivery by
the Company of this Agreement and the Pricing Agreement or for
the offering, issuance or sale of the Securities to the
Underwriters or for the consummation of the Reorganization and
the transactions related thereto.
(xxi) All action necessary to consummate the Reorganization
was taken in accordance with all applicable federal and state
laws, including without limitation the following: (A) the
Exchange Prospectus was timely sent to all shareholders of the
Bank; (B) the meeting of such shareholders to approve the
Reorganization was duly conducted on June __, 1997; and (C) the
requisite number of shareholders approved the Reorganization. No
shareholders of the Bank exercised dissenters' rights in
connection with the Reorganization.
(xxii) The Company and the Bank have filed all necessary
applications with federal and state authorities, including the
OTS, to establish and operate the subsidiaries of the Bank and
the Company described in the Registration Statement and
Prospectus which are intended to be established and in operation
after the Reorganization and the offering and sale of the
Securities. Federal law will preempt state law with respect to
the Bank's subsidiaries to the same extent federal law preempts
state law with respect to the Bank.
(xxiii) To the best of their knowledge, there are no
persons with registration or other similar rights pursuant to
written contracts with the Company or the Bank to have any
securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxiv) Neither the Company nor any of the Subsidiaries is,
nor (assuming application by the Company of the net proceeds of
the sale of the Securities in the manner described in the
Prospectus) will become, as a result of the consummation of the
transactions contemplated by the Agreement, required to register
as an investment company under the Investment Company Act of
1940, as amended.
In rendering their opinion, such counsel shall additionally state
that nothing has come to their attention that would lead them to
believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data
included therein, as to which such counsel need make no statement), at
the time it became effective or at the Representation Date, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical data
included therein, as to which such counsel need make no statement), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the date of
such prospectus) or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering their opinion, such counsel may rely as to matters
of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the
20
Company, the Subsidiaries and public officials. Such opinion shall
not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
(2) The opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for
the Underwriters, with respect to the issuance and sale of the
Securities, the Registration Statement and Prospectus, and such other
related matters as the Representative may reasonably require, and the
Company shall have furnished to such counsel such documents as they
may reasonably request for the purpose of enabling them to pass upon
such matters.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and the Representative
shall have received a certificate of the President and the chief financial
or chief accounting officer of the Company and the Bank, each dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof
are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company and the Bank have
complied with all agreements and satisfied all conditions on their part to
be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement or the
Exchange Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission. As used in
this Section 5(c) the term "Prospectus" means the Prospectus in the form
first used by the Underwriters to confirm sales of the Securities.
(d) At the time of the execution of this Agreement, the Representative
shall have received from Deloitte & Touche LLP a letter dated such date, in
form and substance satisfactory to the Representative, to the effect that
(i) they are independent public accountants with respect to the Company and
the Bank within the meaning of the 1933 Act and the applicable published
rules and regulations thereunder; (ii) in their opinion, the consolidated
financial statements and financial statement schedules audited by them and
included in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the related published rules and regulations; (iii) based upon limited
procedures set forth in detail in such letter (which shall include, without
limitation, the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as
described in SAS No. 71, Interim Financial Information, with respect to the
unaudited condensed consolidated financial statement of the Company and the
Bank included in the Registration Statement), nothing has come to their
attention which causes them to believe that (A) any material modifications
should be made to the unaudited condensed consolidated financial statements
included in the Registration Statement for them to be in conformity with
generally accepted accounting principles or (B) the unaudited condensed
consolidated financial statements included in the Registration Statement do
not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the related published rules and
regulations or (C) at a specified date not more than four days prior to
the date of this Agreement, there has been any change in the consolidated
capital stock of the Company or any increase in the consolidated long-term
debt or any decrease in the consolidated total assets or consolidated
stockholders' equity of the Company as compared with the amounts shown in
the March 31, 1997 balance sheet included in the Registration Statement
or, during the period from April 1, 1997 to a specified date not more than
four days prior to the date of this Agreement, there were any decreases as
compared with the corresponding period in the preceding year, in
consolidated net interest income, non-interest income, net operating
revenues, net income or net income per share of the Company
21
and the Bank, except in all instances for changes, increases or decreases
which the Registration Statement and the Prospectus disclose have occurred
or may occur; (iv) in addition to the examination referred to in their
opinions and the limited procedures referred to in clause (iii) above, they
have carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information
which are included in the Registration Statement and Prospectus and which
are specified by the Representative, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and the Bank
identified in such letter; and (v) they have compared the information in
the Prospectus under selected captions with the disclosure requirements of
Regulation S-K and on the basis of limited procedures specified in such
letter nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of Items
301, 302, 402 and 503(d), respectively, of Regulation S-K.
(e) At Closing Time the Representative shall have received from
Deloitte & Touche LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the specified date referred to
shall be a date not more than four days prior to Closing Time and, if the
Company has elected to rely on Rule 430A of the 1933 Act Regulations, to
the further effect that they have carried out procedures as specified in
clause (iv) of subsection (d) of this Section with respect to certain
amounts, percentages and financial information specified by the
Representative and deemed to be a part of the Registration Statement
pursuant to Rule 430(A)(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (iv).
(f) At the Closing Time the Securities shall have been approved for
inclusion in the Nasdaq National Market System, subject only to official
notice of issuance, and the NASD shall have approved in writing the
Underwriters' participation in the distribution of the Securities and such
approval shall not have been withdrawn or limited.
(g) At the date of this Agreement, the Representative shall have
received an agreement substantially in the form of Exhibit B hereto signed
---------
by each of the persons or entities who are required to sign them under
Section 1(a) (xxxix) of this Agreement, which persons or entities are all
named in Schedule B hereto.
----------
(h) At Closing Time and at each Date of Delivery counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated and related proceedings,
or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance
and sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Representative and counsel for the Underwriters.
(i) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained
herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representative shall have received:
(1) A certificate, dated such Date of Delivery, of the President of
the Company and of the chief financial or chief accounting officer of
the Company confirming that the certificate delivered
22
at the Closing Time pursuant to Section 5(c) hereof remains true and
correct as of such Date of Delivery.
(2) The opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The opinion of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b)(2) hereof.
(4) A letter from Deloitte & Touche LLP, in form and substance
satisfactory to the Representative and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Representative pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than four days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Company at any time at or prior to Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 6 and 7 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any untrue statement or alleged untrue statement made by
the Company in Section 2(a) of this Agreement.
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or prospectus, including the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(iii) against any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in connection
with the marketing of the Securities, including without limitation, slides,
videos, films, tape recordings.
(iv) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon
23
any such untrue statement or omission, or any such alleged untrue statement
or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company.
(v) against any and all expense whatsoever, as incurred (including,
subject to the third sentence of Section 6(c) hereof, the fees and
disbursements of counsel chosen by KBW), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above.
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
The foregoing indemnification with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if such is required by law, at or prior to the written
confirmation of the sale of such shares to such person and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation,
24
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus, bear to the aggregate
initial public offering price of the Securities as set forth on such cover. The
relative fault of the Company on the one hand and the Underwriters on the other
hand 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 relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute
25
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the time of execution of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock has been suspended or limited by the Commission or Nasdaq, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or California authorities. As used in this Section
9(a), the term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 6 and 7 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
and the Pricing Agreement (the "Defaulted Securities"), the Representative shall
--------------------
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the Representative
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
26
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or the Company shall have the right to
postpone Closing Time or a Date of Delivery for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative c/o Keefe, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President; notices to the Company shall be directed
to it at Life Financial Corp., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇ ▇. Perl, President and Chief Executive Officer.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall each
-------
inure to the benefit of and be binding upon the Underwriters and the Company and
their respective successors. Nothing expressed or mentioned in this Agreement
or the Pricing Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Company and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representative, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or the Pricing Agreement or any provision herein or therein contained. This
Agreement and the Pricing Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representative, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
----------------------
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
LIFE FINANCIAL CORP.
By:___________________________________
▇▇▇▇▇▇ ▇. Perl, President and
Chief Executive Officer
LIFE SAVINGS BANK, FEDERAL SAVINGS BANK
By:___________________________________
▇▇▇▇▇▇ ▇. Perl, President and
Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: ___________________________________
Name: _______________________________
Title: ______________________________
For themselves and as representative of
the several Underwriters named in
Schedule A hereto.
28
SCHEDULE A
Name of Underwriter Number of
------------------- Initial Securities
------------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
---------
Total 2,500,000
=========
Sch A-1
SCHEDULE B
LIST OF PERSONS SUBJECT TO SECTION 1(a)(xxvi) OF THE UNDERWRITING AGREEMENT WHO
ARE REQUIRED TO DELIVER A LETTER SUBSTANTIALLY IN
THE FORM OF EXHIBIT B TO THE UNDERWRITING AGREEMENT
[all officers, directors, holders of more than 1% of the capital stock of the
Company and private placement providers are to be listed here]
Sch B-1
Exhibit A
2,500,000 Shares
LIFE FINANCIAL CORP.
(a Delaware corporation)
Common Stock
(Par Value $.01 Per Share)
PRICING AGREEMENT
-----------------
June __, 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
as Representative of the several Underwriters
c/o Keefe, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Reference is made to the Underwriting Agreement dated June __, 1997 (the
"Underwriting Agreement") relating to the purchase by the several Underwriters
-----------------------
named in Schedule A thereto, for whom ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. is acting as
representative (the "Representative"), of the above-described shares of Common
--------------
Stock (the "Securities"), of Life Financial Corp., a Delaware corporation (the
----------
"Company").
--------
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with each Underwriter as follows:
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per share.
1
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
LIFE FINANCIAL CORP.
By:________________________________________
▇▇▇▇▇▇ ▇. Perl, President and
Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: ___________________________________
Name: _______________________________
Title: ______________________________
For themselves and as representative of
the several Underwriters named in
Schedule A hereto.
2
Exhibit B
________, 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
as Representative of the several Underwriters
c/o Keefe, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Lock-Up Agreement in Connection with Public Offering by Life Financial
----------------------------------------------------------------------
Corp.
-----
Dear Sirs and Mesdames:
The undersigned is a record or beneficial owner of stock and/or of options,
warrants, conversion or similar rights to acquire stock of Life Financial Corp.,
a Delaware corporation (the "Company"), including without limitation rights
-------
which each stockholder of Life Savings Bank, Federal Savings Bank (the "Bank"),
----
will receive, to acquire stock of the Company in connection with the effection
of the Bank's Plan of Reorganization which is intended to be consummated in June
1997. The undersigned understands that ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., acting as
representative (the "Representative") of the underwriters, proposes to enter
--------------
into an Underwriting Agreement (the "Underwriting Agreement") with the Company
----------------------
providing for the public offering of shares of the Company's common stock, par
value $.01 per share (the "Common Stock"), and a related Pricing Agreement which
------------
will set forth, among other things, the initial public offering price of the
Common Stock.
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder or holder of options, warrants, conversion or
similar rights to acquire stock of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Underwriting
Agreement that, during a period of 180 days from the date of the Pricing
Agreement (the "Lock-Up Period"), the undersigned will not, without the prior
--------------
written consent of the Representative (which consent may be withheld in its sole
discretion), directly or indirectly, sell, pledge, hypothecate, offer or enter
into a contract to sell, pledge or hypothecate, grant any option for the sale
of, or otherwise dispose of or transfer, including without limitation a
disposition or transfer into nominee or street name (all such forms of
disposition or transfer enumerated in this sentence collectively, a
"Disposition"), any shares of the Company's Common Stock or any options or other
-----------
securities convertible into or exchangeable or exercisable for Common Stock
(collectively, "Securities"), whether now beneficially owned (as defined in Rule
----------
13d-3 under the Securities Exchange Act of 1934, as amended), owned of record or
hereafter acquired by the undersigned, including without limitation, Securities
with respect to which the undersigned has or hereafter acquires the power of
disposition.
The foregoing restrictions are expressly agreed to preclude the holder of
Securities from engaging in any hedging, pledge or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of the
securities during the Lock-Up Period even if such Securities would be disposed
of by someone other than the undersigned. Such prohibited hedging, pledge or
other transactions would include without limitation any short sale (whether or
not against the box), any pledge of shares covering an obligation that matures,
or could reasonably mature during the Lock-Up Period, or any purchase, sale or
grant of any right (including without limitation any put or call option) with
respect to any Securities or with respect to any security (other than a broad-
based market basket or index) that includes, relates to or derives any
significant part of its value from Securities.
The undersigned agrees and consents to the entry by the Representative of
stop-transfer orders with the Company's transfer agent against the transfer of
Securities held by the undersigned if, in the Representative's sole discretion,
a stop-transfer order is necessary in order to enforce compliance with this
Lock-Up Agreement.
Notwithstanding the foregoing, the undersigned may (i) make bona fide gifts
---- ----
or transfers by will or intestacy upon death of Securities to persons or
entities who have agreed in writing to be bound by the restrictions set forth
herein, (ii) transfer Securities as a distribution to limited partners or
shareholders of the undersigned if any such distributee agrees in writing to be
bound by the restrictions set forth herein, or (iii) exercise options, warrants,
conversion or similar rights outstanding on the date hereof to acquire Common
Stock (it being understood, however, that the Common Stock received in such
exercise shall be restricted by the terms of this Lock-Up Agreement).
Very truly yours,
Exact name of owner:
Signature:
Printed Name:
Title:
2
