L&W DRAFT 1/3/97
CALIFORNIA FEDERAL PREFERRED CAPITAL CORPORATION
% NONCUMULATIVE PREFERRED STOCK, SERIES A
Underwriting Agreement
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January , 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
California Federal Preferred Capital Corporation, a Maryland corporation
(the "Company"), proposes, subject to the terms and conditions stated herein,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of [8,000,000] shares (the "Firm Shares")
representing the Preferred Stock specified above (the "Preferred Stock") of the
Company and up to an aggregate of [1,200,000] shares (the "Optional Shares") of
Preferred Stock (the Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof being collectively referred to
herein as the "Shares"). Each share of Preferred Stock is exchangeable, on the
terms set forth in the Charter of the Company, as amended or supplemented from
time to time (the "Charter"), into one share of % Noncumulative Preferred
Stock (the "Bank Preferred Stock") of California Federal Bank, A Federal
Savings Bank (the "Bank") on the terms specified in the Charter.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) The Company has filed a registration statement on Form S-11
(File No. 333-_______) in respect of the Shares (the "Initial
Registration Statement") with the Securities and Exchange Commission (the
"Commission") and the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act (all of the rules and regulations of the
Commission under the Act are hereinafter collectively referred to as the
"Act Rules and Regulations"), is hereinafter called a "Preliminary
Prospectus," the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
each as amended at the time such part of the registration statement
became effective, is hereinafter collectively called the "Registration
Statement," and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and at the time of filing
thereof, each Preliminary Prospectus complied in all material respects
with the requirements of the Act and the Act Rules and Regulations, and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein;
(iii) As of their respective dates, as of the date hereof and at all
times subsequent thereto up to the First Time of Delivery (as defined
herein) (and, if any Optional Shares are purchased, at the Second Time of
Delivery (as defined herein)), the Registration Statement and the
Prospectus and any amendment or supplement thereto shall comply, in all
material respects, with the requirements of the Act and the Act Rules and
Regulations, and at such dates, none of such documents contained or shall
contain an untrue statement of a material fact or omitted or shall omit
to state a material fact required to be stated therein or necessary to
make the statements made, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. expressly for use therein;
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(iv) KPMG Peat Marwick LLP, who have certified or shall certify the
financial statements of the Company, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(v) The financial statements and the related notes thereto included
in the Registration Statement and the Prospectus present fairly the
financial position of the Company as of the dates indicated, and the
results of operations of the Company for the periods specified; except as
otherwise stated in the Registration Statement and the Prospectus, said
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and the
supporting schedules (if any) included in the Registration Statement and
the Prospectus present fairly the information required to be stated
therein;
(vi) 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 to the Registration Statement which have not been so
described and filed as required;
(vii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholder's equity or results of operations of the Company (a "Company
Material Adverse Effect"), (B) there have been no transactions entered
into by the Company, other than those in the ordinary course of business,
which are material with respect to the Company and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its stock except as described in the Prospectus;
(viii) The Company (A) has been duly incorporated and is validly
existing under the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland
("SDAT"), (B) has the corporate power and corporate 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 agreements listed in Annex I hereto and (C) is
duly qualified as a foreign corporation to conduct its 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 to so qualify is not
reasonably likely to have a Company Material Adverse Effect;
(ix) The Company has no subsidiaries;
(x) The Company had, at the date indicated, a duly authorized and
outstanding capitalization as set forth in the Prospectus in the section
entitled "Capitalization;" the issued and outstanding shares of common
stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable, are owned as indicated in the Prospectus
and are subject only to such security interests, mortgages, pledges,
liens, encumbrances and claims to the extent set forth in the Prospectus;
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(xi) Except as described in the Prospectus, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into
or exchangeable for, or agreements or understandings with respect to the
sale or issuance of, any shares of stock of or other equity interest in
the Company;
(xii) The Shares have been duly authorized and, when the Shares have
been issued to and paid for by the Underwriters and certificates
representing the Shares have been executed and delivered by the Company
in accordance with this Agreement, will be validly issued, fully paid and
nonassessable; the stockholders of the Company have no preemptive rights
with respect to the Shares; the Shares will conform in all material
respects to the description thereof contained in the Prospectus;
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company;
(xiv) Each of the agreements listed in Annex I hereto has been duly
authorized, executed and delivered by the Company and, when duly executed
and delivered by the Bank, will constitute a valid and binding obligation
of the Company enforceable against it in accordance with its terms,
except as such enforcement may be subject to or limited by (A)
bankruptcy, receivership, conservatorship, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and remedies generally and (B)
general principles of equity (regardless of whether such enforcement may
be sought in a proceeding in equity or at law) and except as rights to
indemnity and contribution hereunder may be limited by state or federal
securities laws or the public policy underlying such laws;
(xv) The representations and warranties of the Company contained in
the Residential Mortgage Loan Purchase and Warranties Agreement between
the Company and the Bank, and the Mortgage Loan Servicing Agreement
between the Company and First Nationwide Mortgage Corporation, each of
even date herewith, are as of the date hereof and will be as of each Time
of Delivery true and correct;
(xvi) The statements set forth in the Prospectus under the caption
(i) "Description of Series A Preferred Shares," insofar as they purport
to constitute a summary of the terms of the Preferred Stock, (ii)
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the stock of the Company, and (iii) " Certain
Transactions Constituting the Formation," "Risk Factors-Dividend and
Other Regulatory Restrictions on Operations of the Company," "Risk
Factors-Tax Risks," "Federal Income Tax Considerations," "ERISA
Considerations," "Business and Strategy--Acquisition of Initial
Portfolio" and "Business and Strategy--Servicing," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(xvii) There are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Act;
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(xviii) (A) The Company is not in violation of its Charter or bylaws
or other similar constituent instrument, (B) the Company is not in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party or
by which it may be bound or to which any of its properties may be
subject, (C) the Company is not in violation of any material law,
administrative regulation or administrative or court decree and (D) the
execution, delivery and performance of this Agreement and each of the
agreements listed in Annex I hereto, including compliance with the terms
and provisions hereof and thereof, and the consummation of the
transactions contemplated herein and therein, including the issuance,
sale and delivery of the Shares by the Company, will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of the Company pursuant to, the Charter, bylaws or other
organizational documents of the Company, and any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, except such violations,
defaults, conflicts, breaches, liens, charges or encumbrances referred to
in clauses (B), (C) or (D) that would not have a Company Material Adverse
Effect;
(xix) Other than as set forth in the Prospectus, there is no action,
suit or proceeding 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 (A) that is required to be
disclosed in the Prospectus and is not disclosed therein, (B) that is
reasonably likely to have a Company Material Adverse Effect or (C) that
could materially and adversely affect the consummation of the
transactions contemplated by this Agreement or the agreements listed in
Annex I hereto; all pending legal or governmental proceedings to which
the Company is a party or of which any of its property or assets is
subject which are not described in the Prospectus, including ordinary
routine litigation incidental to the business of the Company are,
considered in the aggregate, not reasonably likely to have a Company
Material Adverse Effect;
(xx) No authorization, approval or consent of, or filing with, any
court or governmental authority or agency is necessary or required in
connection with the issue and sale of the Shares or the consummation of
the transactions contemplated by this Agreement and the agreements listed
in Annex I hereto or the use of the proceeds from the sale of the Shares
as contemplated by the Prospectus, except (A) as set forth in the
Prospectus, (B) as may be required under the Act and the Act Rules and
Regulations, (C) such as have been obtained or made, (D) as required
under state or foreign securities laws and (E) as may be required by the
rules and regulations of the National Association of Securities Dealers,
Inc. (the "NASD");
(xxi) The Company is in material compliance with all applicable
federal, state and local environmental laws and regulations, including,
without limitation, those applicable to emissions to the environment,
waste management, and waste disposal (collectively, the "Environmental
Laws"), except for such noncompliance as is not reasonably likely to have
a Company Material Adverse Effect, or except as disclosed in the
Prospectus, and to the
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knowledge of the Company, there are no circumstances that would prevent,
interfere with or materially increase the cost of such compliance in the
future;
(xxii) Except as disclosed in the Prospectus, there is no claim
under any Environmental Law, including common law, pending or threatened
against the Company (a "Company Environmental Claim"), which would be
reasonably likely to have a Company Material Adverse Effect and, to the
knowledge of the Company, under applicable law, there are no past or
present actions, activities, circumstances, events or incidents,
including, without limitation, releases of any material into the
environment, that are reasonably likely to form the basis of any Company
Environmental Claim against the Company which would be reasonably likely
to have a Company Material Adverse Effect;
(xxiii) The Company is organized and carries on its business so as
to qualify as a "real estate investment trust" (a "REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and no transaction or other event has occurred which would cause
the Company not to enable it to qualify as a REIT for its current taxable
year or for future taxable years; and
(xxiv) The Company is not, and the Company does not own or control,
an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section
8 of the Investment Company Act of 1940 (the "Investment Company Act"),
and the Company does not own or control, a closed-end investment company
required to be registered, but not registered, thereunder.
(b) The Bank represents and warrants to, and agrees with, each of the
Underwriters that:
(i) The Bank has filed a preliminary offering circular under cover
of Form OC (Docket No. ) in respect of the Bank Preferred Stock with the
Office of Thrift Supervision (the "OTS") (also filed with the Commission
as an attachment to the Registration Statement) relating to the
registration of the Bank Preferred Stock under the rules and regulations
of the OTS set forth in 12 C.F.R. ss. 563g (all of the rules and
regulations of the OTS set forth in Chapter V of Title 12 of the Code of
Federal Regulations, including, without limitation, 12 C.F.R. ss. 563g,
and the rules and regulations of the Commission made applicable to the
offering circular by the rules and regulations of the OTS, are
hereinafter collectively referred to as the "OTS Rules and Regulations");
and such offering circular, and any post-effective amendment thereto,
have been declared effective by the OTS in such form; no other document
with respect to such offering circular has heretofore been filed with the
OTS; and no stop order suspending the effectiveness of such offering
circular has been issued and no proceeding for that purpose has been
initiated or threatened by the OTS; the Bank will promptly prepare and
file an offering circular (which includes the information (the "Pricing
Information") excluded from the preliminary offering circular in reliance
upon 12 C.F.R. ss. 563(g).2(c)(2) of the OTS Rules and Regulations and 17
C.F.R. ss. 230-430A of the Act (any preliminary offering circular used
before the time such offering circular is declared effective by the OTS
and any offering circular that omits the Pricing Information that is used
after such effectiveness and prior to the date hereof is hereinafter
called a "Preliminary Offering Circular," such filing under
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cover of Form OC, and the offering circular constituting a part thereof,
as amended at the time the offering circular becomes effective under the
OTS Rules and Regulations (and including the Pricing Information),
including all documents incorporated by reference therein, are
hereinafter collectively called the "Form OC" and the "Offering
Circular," respectively, except that if any amended or supplemented
offering circular shall be prepared by the Bank for use in connection
with the offering of the Bank Preferred Stock which differs from the
Offering Circular at the time it becomes effective (whether or not such
revised offering circular is required to be filed by the Bank pursuant to
the OTS Rules and Regulations (including Rule 424(b)), the term "Offering
Circular" shall refer to such newly amended or supplemented offering
circular from and after the time it is first provided to the Underwriters
for such use);
(ii) As of their respective dates, as of the date hereof and at all
times subsequent thereto up to the First Time of Delivery (and, if any
Optional Shares are purchased, at the Second Time of Delivery), the Form
OC and the Offering Circular and any amendment or supplement thereto
shall comply, in all material respects, with the requirements of the OTS
Rules and Regulations, and, at such dates, none of such documents
contained or shall contain an untrue statement of a material fact or
omitted or shall omit to state a material fact required to be stated
therein or necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading;
(iii) The historical consolidated financial statements of First
Nationwide Bank, A Federal Savings Bank ("First Nationwide"), the FNB
Acquired Business (as defined in the Offering Circular), SFFed Corp. and
California Federal (as defined in the Offering Circular), in each case
together with the related notes, included in the Form OC and the Offering
Circular (other than the financial information set forth under the
captions "Summary--Summary Pro Forma Financial Data," "Summary--Summary
Historical Financial Data," "Consolidated Capitalization," "Pro Forma
Financial Data" and "Selected Historical Financial Data"), present fairly
the financial position of First Nationwide and its consolidated
Subsidiaries (as defined herein), the FNB Acquired Business, SFFed and
its consolidated Subsidiaries and California Federal and its consolidated
Subsidiaries, as the case may be, as of the dates indicated and the
results of their operations for the periods specified; except as
otherwise stated in the Form OC and the Offering Circular, said
consolidated financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
and the supporting schedules (if any) included in the Form OC and the
Offering Circular present fairly the information required to be stated
therein;
(iv) The pro forma financial data included in the Form OC and the
Offering Circular include all material adjustments to the historical data
required to reflect the transactions described therein, and the
assumptions used in the preparation of the pro forma data in the Form OC
and the Offering Circular are reasonable;
(v) KPMG Peat Marwick LLP, who have certified or shall certify the
consolidated financial statements of the Bank and California Federal,
Coopers and ▇▇▇▇▇▇▇ LLP, who have certified the financial statements of
the FNB Acquired Business and Deloitte & Touche
7
LLP, who have certified the financial statements of SFFed Corp., in each
case which are included in the Offering Circular (and any amendment or
supplement thereto) are independent public accountants as required by the
Act and the Act Rules and Regulations;
(vi) There are no contracts or documents which are required to be
described in the Form OC or the Offering Circular or to be filed as
exhibits thereto which have not been so described and filed as required;
(vii) Since the respective dates as of which information is given in
the Form OC and the Offering Circular, except as otherwise stated
therein, (A) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholder's equity or results of operations of the Bank and its
Subsidiaries, considered as one enterprise (a "Bank Material Adverse
Effect"), (B) there have been no transactions entered into by the Bank or
any of its Subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Bank and its
Subsidiaries considered as one enterprise and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Bank
on any class of its capital stock except as described in the Offering
Circular;
(viii) The Bank (A) has been duly incorporated and is validly
existing as a federal savings bank under the laws of the United States of
America, (B) has the corporate power and corporate authority to own,
lease and operate its properties and to conduct its business as described
in the Offering Circular, and to enter into and perform its obligations
under this Agreement and the agreements listed in Annex I hereto and (C)
is duly qualified as a foreign corporation to conduct its 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 to so qualify is not
reasonably likely to have a Bank Material Adverse Effect; the Bank is a
member in good standing of the Federal Home Loan Bank System, and the
Bank's deposit accounts are insured by the Federal Deposit Insurance
Corporation (the "FDIC") to the fullest extent provided under applicable
law and the OTS Rules and Regulations, and no proceeding for the
revocation of such insurance is pending or, to the knowledge of the Bank,
threatened;
(ix) Each subsidiary that is a significant subsidiary (as defined in
Section 1-02 of Regulation S-X of the Commission) of the Bank that has
material assets or is subject to material contracts (each of such
corporations or other legal entities being hereinafter referred to as a
"Subsidiary" and all such corporations or other legal entities being,
collectively, the "Subsidiaries") (A) has been duly incorporated or
organized and is validly existing as a corporation or other legal entity
and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (B) has the corporate (or other) power and
corporate (or other) authority to own, lease and operate its properties
and to conduct its business as currently conducted and (C) is duly
qualified to transact business, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify or be in good standing is not reasonably likely to have a
Bank Material Adverse Effect;
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(x) The Bank had, on a consolidated basis, at the date indicated, a
duly authorized and outstanding capitalization as set forth in the
Offering Circular in the section entitled "Consolidated Capitalization;"
the issued and outstanding shares of common stock of the Bank have been
duly authorized and validly issued, are fully paid and nonassessable, are
owned as indicated in the Offering Circular under the caption "Ownership
of the Common Stock" and are not subject to any security interests,
mortgages, pledges, liens, encumbrances or claims;
(xi) Except as described in the Offering Circular, there are no
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, or agreements or understandings
with respect to the sale or issuance of, any shares of capital stock of
or other equity interest in the Bank or any of its Subsidiaries, other
than pursuant to the Rights Agreement, dated as of February 16, 1996,
between Cal Fed (as defined in the Offering Circular) and Chemical Bank,
as Rights Agent, pursuant to the Stock Option Agreement, dated as of July
27, 1996, between Holdings (as defined in the Offering Circular) and Cal
Fed, or pursuant to the indenture, dated as of February 15, 1986, between
CalFed Inc. and Manufacturers Hanover Trust Company, governing the 6 1/2%
Convertible Subordinated Debentures Due 2001 of CalFed Inc.;
(xii) The Bank Preferred Stock has been duly authorized and, if and
when executed by the Bank and issued, will be validly issued and fully
paid and nonassessable; the stockholders of the Bank have no preemptive
rights with respect to the Bank Preferred Stock. The Bank Preferred Stock
will conform in all material respects to the description thereof
contained in the Offering Circular;
(xiii) This Agreement has been duly authorized, executed and
delivered by the Bank;
(xiv) The representations and warranties of the Bank contained in
the Residential Mortgage Loan Purchase and Warranties Agreement between
the Company and the Bank, of even date herewith, is as of the date hereof
and will be as of each Time of Delivery true and correct;
(xv) Each of the agreements listed in Annex I hereto has been duly
authorized, executed and delivered by the Bank and, when duly executed
and delivered by the Company, will constitute a valid and binding
obligation of the Bank enforceable against it in accordance with its
terms, except as such enforcement may be subject to or limited by (A)
bankruptcy, receivership, conservatorship, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and remedies generally and (B)
general principles of equity (regardless of whether such enforcement may
be sought in a proceeding in equity or at law) and except as rights to
indemnity and contribution hereunder may be limited by state or federal
securities laws or the public policy underlying such laws;
(xvi) There are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Form OC or
otherwise registered by the Bank under the OTS Rules and Regulations or
the Act Rules and Regulations;
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(xvii) (A) Neither the Bank nor any of its Subsidiaries is in
violation of its articles of incorporation, charter or bylaws or other
similar constituent instrument, (B) neither the Bank nor any of its
Subsidiaries is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which any of them is a party or by which any of them may be bound or to
which any of their properties may be subject, (C) neither the Bank nor
any of its Subsidiaries is in violation of any material law,
administrative regulation or administrative or court decree and (D) the
execution, delivery and performance of this Agreement and each of the
agreements listed in Annex I hereto, including compliance with the terms
and provisions hereof and thereof, and the consummation of the
transactions contemplated herein and therein, including the issuance,
sale and delivery of the Shares by the Company or the issuance and
delivery of the Bank Preferred Stock by the Bank, if any, will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of any of them pursuant to, the certificate or
articles of corporation, charter, bylaws or other organizational
documents of the Bank or any of its Subsidiaries, and any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which any of them is a party or by which any of them is bound or to which
any of the property or assets of any of them is subject, except such
violations, defaults, breaches, liens, charges or encumbrances referred
to in clauses (B), (C) or (D) that would not have a Bank Material Adverse
Effect;
(xviii) Other than as set forth in the Offering Circular, there is
no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or to the knowledge of
the Bank, threatened, against or affecting the Bank or any of its
Subsidiaries (A) that is required to be disclosed in the Offering
Circular and is not disclosed therein, (B) that is reasonably likely to
have a Bank Material Adverse Effect or (C) that could materially and
adversely affect the consummation of the transactions contemplated by
this Agreement or the agreements listed in Annex I hereto; all pending
legal or governmental proceedings to which the Bank or any of its
Subsidiaries is a party or of which any of their property or assets is
subject which are not described in the Offering Circular, including
ordinary routine litigation incidental to their respective businesses
are, considered in the aggregate, not reasonably likely to have a Bank
Material Adverse Effect;
(xix) All of the leases and subleases material to the business of
the Bank and its Subsidiaries, considered as one enterprise, and under
which the Bank or any of its Subsidiaries holds properties described in
the Offering Circular, are in full force and effect, and neither the Bank
nor any Subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Bank or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Bank or such Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease;
(xx) No authorization, approval or consent of, or filing with, any
court or governmental authority or agency is necessary or required in
connection with the consummation of the transactions contemplated by this
Agreement and the agreements listed in Annex I hereto or the performance
by the Bank of its obligations hereunder and
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thereunder, except (A) as set forth in the Offering Circular, (B) as may
be required under the OTS Rule and Regulations, (C) such as have been
obtained or made, (D) as may be required under state or foreign
securities laws and (E) as may be required by the rules and regulations
of the NASD;
(xxi) Each of the Bank and its Subsidiaries is in material
compliance with all applicable Environmental Laws, except for such
noncompliance as is not reasonably likely to have a Bank Material Adverse
Effect, or except as disclosed in the Offering Circular, and to the
knowledge of the Bank, there are no circumstances that would prevent,
interfere with or materially increase the cost of such compliance in the
future;
(xxii) Except as disclosed in the Offering Circular, there is no
claim under any Environmental Law, including common law, pending or
threatened against the Bank or its Subsidiaries (a "Bank Environmental
Claim"), which would be reasonably likely to have a Bank Material Adverse
Effect and, to the knowledge of the Bank, under applicable law, there are
no past or present actions, activities, circumstances, events or
incidents, including, without limitation, releases of any material into
the environment, that are reasonably likely to form the basis of any Bank
Environmental Claim against the Bank or its Subsidiaries which would be
reasonably likely to have a Bank Material Adverse Effect; and
(xxiii) The Bank is not, and the Bank does not own or control, an
open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section
8 of the Investment Company Act of 1940 (the "Investment Company Act"),
and the Bank does not own or control, a closed-end investment company
required to be registered, but not registered, thereunder.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $_____________, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the maximum number of Optional Shares
that all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to [1,200,000] Optional Shares, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting
11
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder will be
represented by one or more definitive certificates registered in the name of
Cede & Co. which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Shares to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Company in Federal (same day) funds, by causing DTC to
credit the Shares to the account of ▇▇▇▇▇▇▇, Sachs & Co. at DTC. The Company
will cause the certificates representing the Shares to be made available to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for checking at least twenty-four hours prior to the Time
of Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York time, on January __, 1997 or such other
time and date as ▇▇▇▇▇▇▇, Sachs & Co. and the Company may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on
the date specified by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in the written notice given by
▇▇▇▇▇▇▇, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters or counsel for the Underwriters pursuant to Section 7(p) hereof,
will be delivered at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"), and the Shares will be delivered
at the Designated Office, all at such Time of Delivery. A meeting will be held
at the Closing Location at 4:00 p.m., New York time, on the New York Business
Day next preceding such Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. (a) The Company agrees with each of the Underwriters:
12
(i) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act no later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to advise you
promptly of its intention to amend the Prospectus (including any
post-effective amendment) or amend or supplement the Registration
Statement (including any revised Registration Statement) which the
Company proposes for use by the Underwriters in connection with the sale
of the Shares which differs from the Registration Statement on file with
the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed by the
Company with the Commission, to furnish the Underwriters copies of such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, and not to file such amendment or supplement or
use any such Prospectus without the consent of the Underwriters, which
shall not be unreasonably withheld; the Company will also notify the
Underwriters promptly of (A) the effectiveness of the Registration
Statement (if such time is subsequent to the execution and delivery of
this Agreement) or any amendment thereto, (B) the receipt of any comments
from the Commission in respect of the Registration Statement or any
amendment or supplement to the Prospectus, (C) the request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, or for additional information
in connection therewith, (D) the issuance by the Commission or any other
regulatory or governmental agency of competent jurisdiction of any order
or stop order preventing or suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; the Company shall use
its best efforts to prevent the issuance or any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus or suspending any such qualification, and, if any stop order
or such order is issued, to obtain its lifting at the earliest possible
moment;
(ii) To furnish to each of the Underwriters and counsel for the
Underwriters, without charge, one signed copy of the Registration
Statement as originally filed with the Commission and each amendment
thereto (including all exhibits filed therewith);
(iii) To furnish to the Underwriters, without charge, such number of
copies of the Registration Statement (as amended or supplemented) as the
Underwriters may reasonably request.
(iv) At any time when a prospectus relating to the Shares is
required to be delivered, if any event shall occur as a result of which
it is necessary, in the opinion of counsel for the Underwriters, to amend
or supplement the Prospectus in order to make the Prospectus as then
amended or supplemented not misleading, in light of the circumstances
existing at the time it is delivered to a purchaser, or, if for any other
reason it shall be necessary during such period to amend or supplement
the Prospectus in order to comply with the Act, to forthwith amend or
supplement the Prospectus in form and substance satisfactory to counsel
for the Underwriters so that, as so amended or supplemented, the
Prospectus will not include any untrue statement of material fact or omit
to state a material fact necessary
13
in order to make that statements made, in light of the circumstances
existing at the time it is delivered to a purchaser, not misleading or
will comply with the Act, and to furnish to the Underwriters, without
charge, a reasonable number of copies of such amendment or supplement;
(v) To endeavor, in cooperation with the Underwriters and their
counsel, to qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United
States as the Underwriters may designate; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or take any action that
would subject it to general service of process in suits or taxation in
any jurisdiction where it is not so subject; in each jurisdiction in
which the Shares 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 date of the Registration Statement;
(vi) Not to be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or required
to be registered under the Investment Company Act, or not to be or become
a closed-end investment company required to be registered, but not
registered, thereunder;
(vii) To use its reasonable efforts to effect the listing of the
Shares on The New York Stock Exchange (the "NYSE"); and to file with the
NYSE all documents and notices required by the NYSE of companies that
have securities listed on the NYSE, if applicable;
(viii) During the period of five years from the effective date of
the Registration Statement, to furnish to each of the Underwriters (A) as
soon as available, copies of all reports or other communications
(financial or other) furnished to stockholders, (B) as soon as they are
available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which
any class of securities of the Company is then listed and (C) from time
to time, such additional information concerning the business and
financial condition of the Company as you may reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company are consolidated in reports furnished to its
stockholders generally or to the Commission);
(ix) To use the net proceeds received by it from the sale of the
Shares in the manner specified in the Prospectus under the caption "Use
of Proceeds;"
(x) Prior to such Time of Delivery, to furnish to the Underwriters,
as soon as they have been prepared, copies of unaudited interim
consolidated financial statements of the Company, if any, for any periods
subsequent to the periods covered by the financial statements appearing
in the Prospectus;
(xi) Prior to such Time of Delivery, not to issue any press release
or other communications directly or indirectly or hold any press
conference with respect to the Company, the condition, financial or
otherwise, or the earnings, business affairs or business
14
prospects of it, without the prior written consent of the Underwriters,
unless in the judgment of the Company and its counsel, and after
notification to the Underwriters, such press release or communication is
required by law;
(xii) For a period of 90 days from the date of the Prospectus,
without the prior written consent of ▇▇▇▇▇▇▇, Sachs & Co., the Company
shall not, directly or indirectly, sell, offer to sell, contract to sell
or issue, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant of any option to purchase, or other
disposition), except to an affiliate which agrees to be bound by the
provisions of this Section, any shares of its stock or any security
convertible into or exercisable for shares of its stock, other than (A)
the Shares or (B) shares of its stock issuable pursuant to warrants,
agreements, employee stock option and benefit plans or convertible
securities outstanding on the date hereof;
(xiii) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 11(b) under the Act.
(xiv) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act;
(xv) Except as disclosed in the Prospectus and to the extent that a
Tax Event (as defined in the Prospectus) shall have occurred, to make the
elections and take the procedural steps described in the Prospectus under
the heading "Federal Income Tax Considerations" in a timely fashion, to
meet the requirements to qualify, for its taxable years beginning with
its taxable year ending December 31, 1997, as a REIT under the Code as in
effect on the date hereof and to otherwise use every reasonable effort to
do so; and
(xvi) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earning statement of the Company (which need not be
audited) complying with Section 11(a) of the Act and the Act Rules and
Regulations (including, at the option of the Company, Rule 158).
(b) The Bank agrees with each of the Underwriters:
(i) To prepare the Offering Circular in a form approved by you and
to file such Offering Circular pursuant to the OTS Rules and Regulation
no later than the OTS' close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by the OTS Rules and
Regulations; to advise you promptly of its intention to amend the
Offering Circular (including any post-effective amendment) or amend or
supplement the Form OC (including any revised Form OC which the Bank
proposes for use by the Underwriters in connection
15
with the sale of the Shares which differs from the Form OC on file with
the OTS at the time the Form OC becomes effective, whether or not such
revised offering circular is required to be filed by the Bank with the
OTS pursuant to 12 C.F.R. 210.563g.5(b)(3)), to furnish the Underwriters
copies of such amendment or supplement a reasonable amount of time prior
to such proposed filing or use, and not to file such amendment or
supplement or use any such Offering Circular without the consent of the
Underwriters, which shall not be unreasonably withheld; the Bank will
also notify the Underwriters promptly of (A) the effectiveness of the
Form OC (if such time is subsequent to the execution and delivery of this
Agreement) or any amendment thereto, (B) the receipt of any comments from
the OTS in respect of the Form OC or any amendment or supplement to the
Offering Circular, (C) the request by the OTS for any amendment to the
Offering Circular or any amendment or supplement to the Offering
Circular, or for additional information in connection therewith, (D) the
issuance by the OTS or any other regulatory or governmental agency of
competent jurisdiction of any order or stop order preventing or
suspending the effectiveness of the Form OC or of the initiation or
threatening of any proceeding for any such purpose; the Bank shall use
its best efforts to prevent the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Offering
Circular or Offering Circular and, if any stop order or such order is
issued, to obtain its lifting at the earliest possible moment;
(ii) To furnish to each of the Underwriters and counsel for the
Underwriters, without charge, one signed copy of the Form OC as
originally filed with the OTS and each amendment thereto (including all
exhibits filed therewith); and during the period when the Offering
Circular is required to be delivered under Part 563g, such number of
copies of the Offering Circular (as amended or supplemented) as the
Underwriters may reasonably request for the purposes contemplated by Part
563g;
(iii) To furnish to the Underwriters, without charge, such number of
copies of the Form OC (as amended or supplemented) as the Underwriters
may reasonably request;
(iv) At any time when an offering circular relating to the Bank
Preferred Stock is required to be delivered under the delivery
requirements of Part 563g, if any event shall occur as a result of which
it is necessary, in the opinion of counsel for the Underwriters, to amend
or supplement the Offering Circular in order to make the Offering
Circular as then amended or supplemented not misleading in light of the
circumstances existing at the time it is delivered to a purchaser, or, if
it is necessary at any time to amend the Form OC or amend or supplement
the Offering Circular to comply with Part 563g, to forthwith amend or
supplement the Offering Circular in form and substance satisfactory to
counsel for the Underwriters so that, as so amended or supplemented, the
Offering Circular will not include any untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements made, in light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading or to comply with Part 563g, and to furnish to the
Underwriters, without charge, a reasonable number of copies of such
amendment or supplement;
16
(v) Not to be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or required
to be registered under the Investment Company Act, or not to be or become
a closed-end investment company required to be registered, but not
registered, thereunder;
(vi) To use its reasonable efforts to effect the listing, if the
Series A Preferred Shares are exchanged for Bank Preferred Stock, of the
Bank Preferred Stock on the NYSE;
(vii) During the period of five years from the effective date of the
Form OC, to furnish to each of the Underwriters (A) as soon as available,
copies of all reports or other communications (financial or other)
furnished to stockholders, (B) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is then listed and (C) from time to time, such
additional information concerning the business and financial condition of
the Company as you may reasonably request (such financial statements to
be on a consolidated basis to the extent the accounts of the Company are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(viii) Prior to such Time of Delivery, to furnish to the
Underwriters, as soon as they have been prepared, copies of unaudited
interim consolidated financial statements of the Bank and its
Subsidiaries, if any, for any periods subsequent to the periods covered
by the financial statements appearing in the Offering Circular;
(ix) Prior to the First Time of Delivery, not to issue any press
release or other communications directly or indirectly or hold any press
conference with respect to the Bank, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of it,
without the prior written consent of the Underwriters, unless in the
judgment of the Bank and its counsel, and after notification to the
Underwriters, such press release or communication is required by law; and
6. The Company and the Bank, jointly and severally, covenant and agree
with the several Underwriters to pay the following costs and expenses incident
to the performance by them of their obligations hereunder: (a) the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus,
the Prospectus, the Form OC, any Preliminary Offering Circular and the Offering
Circular, and amendments and supplements thereto, and the mailing and
delivering of copies thereof to the Underwriters and dealers; (b) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
blue sky memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and
delivery of the Shares and the Bank Preferred Stock; (c) the preparation,
printing, issuance and delivery of the Shares, and of the Bank Preferred Stock
(if exchanged for the Shares), including any stamp taxes in connection with the
original issuance of the Shares; (d) the listing of the Shares and of the Bank
Preferred Stock (if exchanged for the Shares) on the NYSE; (e) the registration
or qualification of the Shares for offer and sale under the securities or blue
sky laws of the several states as provided in Section 5(a)(v) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the blue sky survey; (f) the filing
fees and the fees and
17
expenses of counsel for the Underwriters in connection with any filing required
to be made with the NASD; (g) the fees and expenses associated with obtaining
ratings for the Shares from nationally recognized statistical rating
organizations; (h) the cost and charges of any transfer agent or registrar for
the Shares or the Bank Preferred Stock; (i) the fees and expenses of the
Company's and the Bank's respective counsel and accountants; and (i) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
stock transfer taxes on the resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters to purchase and pay for the Shares
are subject to the accuracy of the representations and warranties and other
statements of the Company and the Bank herein contained, to the performance of
the Company and the Bank of their obligations hereunder, and to the following
further conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
Act Rules and Regulations and in accordance with Section 5(a)(i) hereof; no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 p.m., Washington, D.C. time, on the date of this Agreement;
(b) The Offering Circular shall have been filed with the OTS pursuant to
the OTS Rules and Regulations within the applicable time period prescribed for
such filing by the OTS Rules and Regulation and in accordance with 5(b)(i)
hereof; no stop order or cease-and-desist proceeding suspending the
effectiveness of the Form OC or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the OTS;
and all requests for additional information on the part of the OTS shall have
been complied with to your reasonable satisfaction;
(c) At such Time of Delivery, the Underwriters shall have received:
(i) The favorable opinion, dated as of such Time of Delivery, of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, with respect to such
matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(ii) The favorable opinion, dated as of such Time of Delivery, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel for the Company
and the Bank, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
18
a. The Bank has been duly incorporated and is subsisting as
a federal savings bank in good standing under the laws of the United
States of America and has the corporate (or other) power and
corporate (or other) authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Circular;
b. Each Subsidiary of the Bank which is incorporated under
the laws of the State of Delaware, is duly incorporated and is
subsisting as a corporation in good standing under the laws of the
State of Delaware, and has the corporate (or other) power and
corporate (or other) authority to own, lease and operate its
respective properties and to conduct its respective businesses as
described in the Offering Circular;
c. The authorized, issued and outstanding capital stock of
the Bank is as set forth in the Offering Circular under the caption
entitled "Consolidated Capitalization;" the issued and outstanding
shares of the Bank's common stock, par value $.01 per share, are
duly authorized and validly issued, and are fully paid and
nonassessable;
d. The Bank Preferred Stock has been duly and validly
authorized and, if and when issued and delivered by the Bank, will
be validly issued, fully paid and nonassessable; the Bank Preferred
Stock will conform in all material respects to the description
thereof contained in the Offering Circular under the caption
"Description of the Bank Preferred Stock;" the form of certificate
to be used to evidence the Bank Preferred Stock will be in due and
proper form and will comply with all applicable regulatory
requirements;
e. This Agreement has been duly authorized, executed and
delivered by each of the Company and the Bank;
f. Each of the documents listed in Annex I hereto has been
duly and validly authorized, executed and delivered by the Company
and the Bank, as applicable, and constitutes the valid and legally
binding obligation of the Company and the Bank enforceable in
accordance with its terms, except as such enforcement may be subject
to or limited by (i) bankruptcy, receivership, conservatorship,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general principles of equity
(regardless of whether such enforcement may be sought in a
proceeding in equity or at law) and except as rights to indemnity
and contribution thereunder may be limited by state or federal
securities laws or the public policy underlying such laws;
g. No authorization, approval, consent or order of, or
filing with any court or governmental authority or agency is
required under the laws of the State of New York or the laws of the
United States of America in connection with the consummation of the
transactions contemplated by this Agreement or the agreements listed
in Annex I hereto, except as have been obtained, and the execution
and delivery of this Agreement and each of the agreements attached
as Annex I hereto do not, and the consummation of the transactions
contemplated herein and therein, will not conflict with
19
or result in any violation of (i) the articles of incorporation,
charter or bylaws of the Company or the Bank or (ii) the laws of the
State of New York or the laws of the United States of America; such
counsel need not express any opinion in this clause (i), however, as
to (v) the laws of the State of Maryland, (w) the securities laws of
any jurisdiction, (x) the rules and regulations of the NASD, (y)
laws other than those that, in their experience, are normally
applicable to transactions of the type provided for by this
Agreement or the agreements listed in Annex I hereto and (z) any
consent or authorization which may have become applicable to the
Company or the Bank as a result of the Underwriters' involvement in
this Agreement because of the Underwriters' legal or regulatory
status or because of any other facts specifically pertaining to the
Underwriters;
h. Such counsel has been advised that the Registration
Statement was declared effective under the Act Rules and Regulations
as of the date and time specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the Act Rules and
Regulations on the date specified therein or was included in the
Registration Statement (as the case may be), and, to the knowledge
of such counsel, no stop order suspending the effectiveness has been
issued and, to the best of such counsel's knowledge, no proceedings
for that purpose have been instituted or are pending or contemplated
by the Commission;
i. Such counsel has been advised that the Form OC was
declared effective under Part 563g as of the date and time specified
in such opinion, the Offering Circular either was filed with the OTS
pursuant to Part 563g on the date specified therein or was included
in the Form OC (as the case may be), and, to the knowledge of such
counsel, no stop order suspending the effectiveness has been issued
and, to the best of such counsel's knowledge, no proceedings for
that purpose have been instituted or are pending or contemplated by
the OTS;
j. The Registration Statement and the Form OC, as of the
dates that they become effective, and each of the Prospectus and the
Offering Circular, as of its respective date, comply as to form in
all material respects with the requirements of the Act and the Act
Rules and Regulations, and the OTS Rules and Regulations, except
that such counsel need not express an opinion as to the financial
statements and related schedules included therein or included in any
exhibits to the Registration Statement and the Form OC; and such
counsel need not assume any responsibility for the accuracy,
completeness fairness of the statements contained in the
Registration Statement or the Form OC, except as set forth in
paragraph (l) below;
k. The statements set forth in the Prospectus under the
caption "Risk Factors-Tax Risks," "Federal Income Tax
Considerations," "ERISA Considerations," "Business and
Strategy--Acquisition of Initial Portfolio" and "Business and
Strategy--Servicing," insofar as they purport to describe the
provisions of the laws and documents referred to therein, and the
descriptions set forth in the Offering Circular under the caption
"Regulation," insofar as they purport to describe the provisions of
the statutes and regulations referred to therein, are accurate,
complete and fair;
20
l. Such counsel has no reason to believe that, as of their
respective effective dates, the Registration Statement or the Form
OC, or any further amendment thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) 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, as
of its date, the Prospectus or the Offering Circular, or any further
amendment or supplement thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) 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, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, any of the Registration Statement, the
Form OC, the Prospectus or the Offering Circular, or any further
amendment or supplement thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and
m. Commencing with the Company's taxable year ending
December 31, 1997, the Company has been organized in conformity with
the requirements for qualification as a REIT under the Code, and its
proposed method of operation will enable it to meet the requirements
for qualification and taxation as a REIT under the Code.
(iii) The favorable opinion, dated as of such Time of Delivery, of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, special counsel to the Company, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that:
a. The Company has been duly incorporated and is existing
under the laws of the State of Maryland and is in good standing with
the SDAT, and has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described
in the Prospectus;
b. The number of authorized, issued and outstanding shares
of stock of the Company are as set forth in the Prospectus under the
caption entitled "Capitalization;" the issued and outstanding shares
of the Company's common stock, par value $.01 per share, are duly
authorized and validly issued, and are fully paid and nonassessable;
c. The Shares have been duly and validly authorized and,
when issued and delivered by the Company pursuant to this Agreement,
will be validly issued, fully paid and nonassessable; the Shares
conform in all material respects to the description thereof
contained in the Prospectus under the caption "Description of Series
A Preferred Shares;" the form of certificate to be used to represent
the Shares is in due and proper form and complies in all material
respects with all applicable statutory requirements;
21
d. No authorization, approval, consent or order of, or
filing with any court or governmental authority or agency of the
State of Maryland is required under the laws of the State of
Maryland in connection with the consummation of the transactions
contemplated by this Agreement or the agreements listed in Annex I
hereto, except as have been obtained, and the execution and delivery
of this Agreement and each of the agreements attached as Annex I
hereto do not, and the consummation of the transactions contemplated
herein and therein, will not conflict with or result in any
violation of (i) the charter or bylaws of the Company or (ii) the
laws of the State of Maryland. Such counsel need not express any
opinion in this clause (d), however, as to (v) laws other than those
of the State of Maryland, (w) the securities laws of any
jurisdiction, including federal securities laws, (x) the rules and
regulations of the NASD, (y) laws other than those that, in their
experience, are normally applicable to transactions of the type
provided for by this Agreement and the agreements listed in Annex I
hereto and (z) any consent or authorization which may have become
applicable to the Company as a result of the Underwriters'
involvement in this Agreement because of the Underwriters' legal or
regulatory status or because of any other facts specifically
pertaining to the Underwriters; and
e. The statements set forth in the Prospectus under the
caption (i) "Description of Series A Preferred Shares," insofar as
they purport to constitute a summary of the terms of the Preferred
Stock, (ii) "Description of Capital Stock," insofar as they purport
to constitute a summary of the terms of the stock of the Company,
are accurate, complete and fair.
(iv) The favorable opinion, dated as of such Time of Delivery, of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to the Company and the Bank,
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
a. The Company 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 to so qualify or be in good standing is not
reasonably likely to have a Company Material Adverse Effect;
b. The Bank 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 to so qualify or be in good standing is not
reasonably likely to have a Bank Material Adverse Effect;
c. There are no Subsidiaries of the Bank (other than the
Company) incorporated in a State other than the State of Delaware;
each Subsidiary (other than the Company) 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
22
the failure to so qualify or be in good standing is not reasonably
likely to have a Bank Material Adverse Effect;
d. There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending or, to his knowledge, threatened, against or affecting the
Company or the Bank, that is reasonably likely to have a Material
Adverse Effect, or that is reasonably likely to materially and
adversely affect the consummation of the transactions contemplated
by this Agreement or the agreements listed in Annex I hereto, or the
use of proceeds from the sale of the Shares as contemplated by the
Prospectus, other than those actions, suits and proceedings
described in the Registration Statement and the Offering Circular;
and all pending legal or governmental proceedings to which the
Company or the Bank is a party or of which any of their properties
or assets is the subject that are not described in the Registration
Statement or the Offering Circular, including ordinary routine
litigation incidental to the business of the Company or the Bank,
each considered in the aggregate, are not reasonably likely to have
a Company Material Adverse Effect or a Bank Material Adverse Effect,
as the case may be;
e. The information in the Registration Statement (i) under
the heading "Business and Strategy-Legal Proceedings" and (ii)
describing the Residential Mortgage Loan Purchase and Warranties
Agreement and the Mortgage Loan Servicing Agreement, and the
information in the Offering Circular (x) under the heading
"Business--First Nationwide-Legal Proceedings" and "Business-First
Nationwide-Other Activities-Cal Fed Contingent Litigation Recovery
Participation Interests," to the extent that it relates to the Bank
and constitutes matters of law or legal conclusions, and (y)
describing the Assistance Agreement by and among the Federal Savings
and Loan Insurance Corporation, First Gibraltar Holdings Inc. and
MacAndrews and Forbes Holdings Inc., have each been reviewed by him
and fairly summarize the matters therein in all material respects;
f. Neither the Company, the Bank nor any of the Company's
Subsidiaries is in violation of its respective certificate or
articles of incorporation, charter, bylaws, or other organizational
document, or, to the best knowledge of such counsel, is in default
in the due performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, bond, debenture, note, lease or other
instrument described or referred to in the Prospectus or the
Offering Circular, other than such defaults which are not,
individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or a Bank Material Adverse Effect,
as the case may be;
g. The execution, delivery and performance of this
Agreement and each of the agreements listed in Annex I hereto,
compliance by the Company and the Bank with their respective
obligations hereunder and thereunder, and the use of proceeds from
the sale of the Shares as contemplated by the Prospectus will not
constitute a breach or violation of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon
any material property or assets of the Company or the Bank
23
pursuant to any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or the Bank is a
party or by which any of them may be bound, or to which any of the
property or assets of them is subject, nor will such action result
in any violation of the provisions of the charter or bylaws of the
Company or the Bank or any administrative or court decree known to
him of any court or governmental authority or agency having
jurisdiction over the Company, any of the Company's Subsidiaries or
the Bank or any of its properties, other than such breaches,
defaults, liens, charges or encumbrances or violations that are not,
individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or a Bank Material Adverse Effect,
as the case may be; and
h. Such counsel has no reason to believe that, as of their
respective effective dates, the Registration Statement or the Form
OC, or any further amendment thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) 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, as
of its date, the Prospectus or the Offering Circular, or any further
amendment or supplement thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) 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, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, any of the Registration Statement, the
Form OC, the Prospectus or the Offering Circular, or any further
amendment or supplement thereto made by the Company or the Bank
prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and such counsel does
not know of any amendment to the Registration Statement or the Form
OC required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or the Form OC or required to be described in the
Registration Statement, the Form OC, the Prospectus or the Offering
Circular which are not filed or described as required.
(d) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG Peat Marwick
LLP, independent public accountants for the Company, the Bank and California
Federal, shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you;
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the
24
Registration Statement filed subsequent to the date of this Agreement and also
at each Time of Delivery, Deloitte & Touche LLP, independent public accountants
for SFFed Corp., shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you;
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Coopers & ▇▇▇▇▇▇▇
LLP, independent public accountants for Old FNB, shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you;
(g) The Company and the Bank shall have entered into a tax sharing
agreement, the form and substance of which shall have been approved by the
Underwriters, pursuant to which the Bank shall have agreed to indemnify the
Company for income tax liability arising from the Company's failure to qualify
as a REIT under the Code in any taxable year;
(h) (i) Neither the Company, the Bank nor any of the Bank's Subsidiaries
shall have sustained since the date of the latest audited financial statements
included in the Prospectus and the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus or the Offering Circular, and (ii) since the respective dates as of
which information is given in the Prospectus and the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company, the Bank or any of the Bank's Subsidiaries or any Company Material
Adverse Effect or Bank Material Adverse Effect, otherwise than as set forth or
contemplated in the Prospectus or the Offering Circular, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) On or after the date hereof the Shares shall be rated by ▇▇▇▇▇'▇
Investors Service, Inc. and by Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., and the Company shall have delivered to the Underwriters a
letter dated such Time of Delivery from each such rating agency, or other
evidence satisfactory to the Underwriters, confirming that the Shares have such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Shares or any of the Company's or the
Bank's securities by any "nationally recognized statistical rating agency," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and no such organization shall have publicly announced that is has under
surveillance or review its rating of the Shares or any of the Company's or the
Bank's securities as to any negative implications;
(j) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the NYSE, American Stock Exchange or NASDAQ National Market (each
an "Exchange"); (ii) a suspension or material
25
limitation in trading in the Company's, the Bank's or Holdings' securities on
any Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(k) Prior to the First Time of Delivery, the Company shall have filed
with the appropriate office or agency Articles of Amendment and Restatement
providing for the issuance of the Shares in its Charter;
(l) Prior to the First Time of Delivery, the Bank shall have filed with
the appropriate office or agency a supplementary section to its Charter
providing for the issuance of the Bank Preferred Stock;
(m) The Shares to be sold at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the NYSE;
(n) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements;
(o) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company and the Bank,
signed by the President or a Vice President and the chief financial or chief
accounting officer of each of the Company and the Bank, dated as of such Time
of Delivery, satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Bank herein at and as of such Time of
Delivery, as to the performance by the Company and the Bank of all of their
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a), (b) and (g) of this Section and as
to such other matters as you may reasonably request; and
(p) At such Time of Delivery, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Shares 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 and the Bank in connection with the issuance and sale of the Shares
herein contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
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
Underwriters by notice to the Company and the Bank at any time, and such
termination shall be without liability of any party to any other party except
as provided in Section 6. Notwithstanding any such termination, the provisions
of Sections 8 and 10 shall remain in effect.
26
8. (a) The Company and the Bank, jointly and severally, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Prospectus, the Registration Statement, any
Preliminary Offering Circular, the Offering Circular or the Form OC, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that neither
the Company nor the Bank shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Prospectus, the Registration Statement,
any Preliminary Offering Circular, the Offering Circular or the Form OC or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. expressly for use therein; and provided, further, that neither the
Company nor the Bank shall be liable with respect to any Preliminary Prospectus
to any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the Shares
which are the subject thereof if it is established that such person did not
receive a copy of the Prospectus (or the Prospectus as supplemented) at or
prior to the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and (i) the defect in such
Preliminary Prospectus was cured in the Prospectus (or the Prospectus as
supplemented) and (ii) such Underwriter had previously been furnished by or on
behalf of the Company (prior to the date of mailing by such Underwriter of the
applicable confirmation) with a sufficient number of copies of the Prospectus
as so amended or supplemented.
(b) Each Underwriter will indemnify and hold harmless the Company
and the Bank against any losses, claims, damages or liabilities to which the
Company or the Bank may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Prospectus, the
Registration Statement, any Preliminary Offering Circular, the Offering
Circular or the Form OC, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Prospectus, the
Registration Statement, any Preliminary Offering Circular, the Offering
Circular or the Form OC, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company or the Bank
by such Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein; and
will reimburse the Company or the Bank for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
27
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify an indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
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 the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Bank on the one hand and
the Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Bank on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Bank on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 and the Bank on the one hand or the Underwriters on the
28
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Bank and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) 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 subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the underwriting
discounts and commissions received in respect of the Shares underwritten by it
and distributed 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Bank under this Section 8
shall be in addition to any liability which the Company and the Bank may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition
to any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that
it has so arranged for the purchase of such Shares, you or the Company shall
have the right to postpone such Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
29
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
number of shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or the Bank, except for the
expenses to be borne by the Company and the Bank and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company or the Bank and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company or the Bank, or any officer or director or controlling person of the
Company or the Bank, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Bank shall then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason, any Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company or the Bank shall then be under no further liability
to any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement
30
on behalf of any Underwriter made or given by you jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. on behalf of you as the representatives of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of ▇▇▇▇▇▇▇,
Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq., ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; notices to the Company and the Bank shall be
delivered or sent by mail to the address of the Company or the Bank,
respectively set forth in the Registration Statement, Attention: Secretary,
with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Bank and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
[signature page follows]
31
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters, the Bank
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
California Federal Preferred Capital
Corporation
By:
. . . . . . . . . . . . . . . . . . . .
Name:
Title:
California Federal Bank, A Federal Savings
Bank
By:
. . . . . . . . . . . . . . . . . . . .
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By: ... . . . . . . . . . . . . . . .
(▇▇▇▇▇▇▇, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Number of Optional Shares
Total Number of Firm to be Purchased if
Underwriter Shares to be Purchased Maximum Option Exercised
----------- ---------------------- ------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
------------- ----------------
Total [8,000,000] [1,200,000]
ANNEX I
Residential Mortgage Loan Purchase and Warranties Agreement
Mortgage Loan Servicing Agreement
