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EXHIBIT 1.1
___________ Shares of Common Stock
(No Par Value Per Share)
WASHINGTON BANKING COMPANY
(a Washington corporation)
UNDERWRITING AGREEMENT
__________ ____, 1998
▇▇▇▇, ▇▇▇▇ & CO., INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Washington Banking Company ("Company"), a Washington corporation and the
holding company for Whidbey Island Bank, a Washington-chartered bank ("Bank"),
whose deposits are insured by the Bank Insurance Fund ("BIF") administered by
the Federal Deposit Insurance Corporation ("FDIC"), and each of the shareholders
of the Company named in Schedule A hereto ("Selling Shareholders"), confirm
their respective agreement with ▇▇▇▇, ▇▇▇▇ & Co., Inc. ("Underwriters") with
respect to (i) the sale by the Company and the purchase by the Underwriter of
_______ shares of common stock, no par value ("Common Stock"), of the Company,
(ii) the sale by the Selling Shareholders and the purchase by the Underwriter of
the respective number of shares of Common Stock set forth in Schedule A, and
(ii) the grant by the Company to the Underwriter of the option described in
Section 2(c) hereof to purchase all or any part of _______ additional shares of
Common Stock to cover over-allotments, in each case except as may otherwise be
provided in the Price Determination Agreement, as hereinafter defined. The
aforesaid _______ aggregate shares of Common Stock to be purchased by the
Underwriter from the Company and the Selling Shareholders (collectively,
"Initial Securities") and all or any part of the ______ shares of Common Stock
subject to the option described in Section 2(c) hereof ("Option Securities") are
collectively hereinafter called the "Securities."
Prior to the purchase and public offering of the Securities by the
Underwriter, the Company, the Bank, the Selling Shareholders and the Underwriter
shall enter in an agreement substantially in the form of Exhibit A hereto
("Price Determination Agreement"). The offering of the Securities will be
governed by this Agreement, as supplemented by the Price Determination
Agreement. From and after the date of the execution and delivery of the Price
Determination Agreement, this Agreement shall be deemed to incorporate the Price
Determination Agreement.
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The Company has filed with the Securities and Exchange Commission
("Commission") a registration statement on Form SB-2 (Commission File No.
333-49925), and related preliminary prospectuses, for the registration of the
Securities under the Securities Act of 1933, as amended ("Securities Act"), has
filed such amendments thereto, if any, and such amended preliminary prospectuses
as may have been required to the date hereof and will file such additional
amendments thereto and such amended prospectuses as may hereafter be required.
Such registration statement, as amended, and the prospectus constituting a part
thereof (including in each case the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the rules and regulations of the Commission
under the Securities Act ("Securities Act Regulations"), as from time to time
amended or supplemented hereafter), are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that if any
revised prospectus shall be provided to the Underwriter by the Company for use
in connection with the offering of the Securities which becomes effective
(whether or not such revised prospectus is required to be filed by the Company
with the Commission pursuant to Rule 424(b) of the Securities Act Regulations),
the term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to the Underwriters for use.
The Company acknowledges that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after the
Commission declares the Registration Statement effective and the Price
Determination Agreement has been executed and delivered. The Securities are to
be offered to the public at the public offering price set forth in the
Prospectus. The Underwriter may from time to time thereafter change the public
offering price and other selling terms. To the extent, if at all, that any of
the Option Securities are to be purchased pursuant to Section 3(c) hereof, the
Underwriter will offer them to the public on the foregoing terms.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE BANK.
(a) The Company and the Bank represent and warrant, jointly and
severally, to the Underwriter as of the date hereof, and as of the date of the
Price Determination Agreement (such latter date being hereinafter referred to as
the "Representation Date"), as of the Closing Time (as defined in Section 3(d)
hereof) and as of each Date of Delivery, if any (as defined in Section 3(c)
hereof), as follows:
(i) At the time the Registration Statement becomes effective and
at the Representation Date, the Registration Statement or any
post-effective amendment thereto will comply in all material respects
with the requirements of the Securities Act and the Securities Act
Regulations, and will not contain an untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus,
at the time the Registration Statement becomes effective, at the
Representation Date and at the Closing Time, complies in all material
respects with the requirements of the Securities Act and the Securities
Act Regulations, including the disclosure requirements of Industry Guide
3 ("Guide 3"), and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made,
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not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Prospectus made in reliance upon and in conformity
with written information with respect to the Underwriter furnished to
the Company and the Bank in writing by the Underwriter expressly for use
in the Prospectus ("Underwriter Information").
(ii) Each of the accountants who certified the consolidated
financial statements and supporting schedules of the Company included in
the Prospectus are independent public accountants as required by the
Securities Act, the Securities Act Regulations and the Code of Ethics of
the American Institute of Certified Public Accountants.
(iii) The consolidated financial statements of the Company and
the related notes thereto included in the Prospectus present fairly the
consolidated financial position of the Company as at the dates indicated
and the consolidated results of operations, stockholders' equity and
cash flows for the periods specified and comply as to form in all
material respects with the applicable regulatory accounting requirements
and the applicable accounting requirements of the Securities Act and the
Securities Act Regulations, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis;
the supporting schedules and tables included in the Prospectus present
fairly the information required to be stated therein; and the pro forma
financial information included in the Prospectus have been prepared, and
the related pro forma adjustments have been applied, in accordance with
the requirements of Regulation S-X promulgated by the Commission.
(iv) Since the respective dates as of which information is given
in the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the financial condition, results of
operations, or business of the Company and the Bank, taken as a whole,
whether or not arising in the ordinary course of business, and (B)
except for transactions specifically referred to or contemplated in the
Prospectus, there have been no transactions entered into by the Company
and the Bank, other than those in the ordinary course of business, which
are material with respect to the Company and the Bank, taken as a whole.
(v) The Company has been duly organized and is validly existing
as a Washington corporation with full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Company has obtained all licenses,
permits and other governmental authorizations currently required for the
conduct of its business, except where the failure to obtain such
licenses, permits or other governmental authorizations would not have a
material adverse effect on the financial condition, results of
operations or business of the Company; all such licenses, permits and
other governmental authorizations are in full force and effect and the
Company is in all material respects in compliance therewith; the Company
has not received notice of any proceeding or action relating to the
revocation or modification of any such license, permit
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or other governmental authorization which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, might have
a material adverse effect on the financial condition, results of
operations or business of the Company; and the Company is in good
standing under the laws of the State of Washington and is qualified to
do business in any jurisdiction in which the failure to so qualify would
have a material adverse effect on the financial condition, results of
operations or business of the Company.
(vi) The Bank has been duly organized and is validly existing as
a Washington- chartered bank with full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Bank has obtained all licenses, permits
and other governmental authorizations currently required for the conduct
of its business, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations or
business of the Bank; all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in all
material respects in compliance therewith; the Bank has not received
notice of any proceeding or action relating to the revocation or
modification of any such license, permit or other governmental
authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse
effect on the financial condition, results of operations or business of
the Bank; and the Bank is in good standing under the laws of the State
of Washington and is qualified to do business in any jurisdiction in
which the failure to so qualify would have a material adverse effect on
the financial condition, results of operations or business of the Bank.
(vii) The deposit accounts of the Bank are insured by the Bank
Insurance Fund ("BIF") of the FDIC up to the applicable limits.
(viii) The Company has authorized and issued capital stock as set
forth under the heading "Capitalization" in the Prospectus; the
outstanding shares of Common Stock of the Company are validly issued and
outstanding, fully paid and nonassessable and have been issued in
compliance with all federal and state securities laws; the Securities
have been duly authorized for issuance and sale to the Underwriter
pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth in the Price Determination Agreement, will be validly issued and
fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectus; the issuance of
the Securities is not subject to preemptive or other similar rights; and
no further approval or authority of the shareholders or the Board of
Directors of the Company is required for the sale of the Securities to
be sold by the Company as contemplated herein; other than as set forth
in the Prospectus, there are no outstanding rights, warrants or options
granted by the Company to purchase its capital stock; all of the
outstanding capital stock of the Company is owned as set forth in the
Prospectus.
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(ix) The Company does not own or control or have the power to
vote, directly or indirectly, five percent (5%) or more of the
outstanding shares of any class of voting securities or partnership
interest of any corporation, association or entity, other than the Bank.
(x) The Company and the Bank have taken all corporate action
necessary for them to execute, deliver and perform this Agreement, and
this Agreement has been duly executed and delivered by, and is a valid
and binding agreement of, the Company and the Bank, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization,
receivership, conservatorship or other similar laws relating to or
affecting the enforcement of creditors' rights generally or the rights
of creditors of depository institutions whose accounts are insured by
the FDIC, or general equity principles, regardless or whether such
enforceability is considered in a proceeding in equity or at law, and
except to the extent that the provisions of Sections 7 and 8 hereof may
be unenforceable as against public policy or Section 23A of the Federal
Reserve Act ("Section 23A").
(xi) Subsequent to the respective dates as of which information
is given in the Prospectus and prior to the Closing Time, except as
otherwise may be indicated or contemplated therein, the Company and the
Bank will not have (A) issued any securities or incurred any liability
or obligation, direct or contingent, for borrowed money, except
borrowings in the ordinary course of business from the same or similar
sources indicated in the Prospectus, or (B) entered into any transaction
or series of transactions which is material in light of the business of
the Company and the Bank, taken as a whole, excluding the origination,
purchase and sale of loans or the purchase or sale of investment
securities or mortgage-backed securities in the ordinary course of
business.
(xii) No approval of any regulatory, supervisory or other public
authority is required to be received by the Company and the Bank in
connection with the execution and delivery of this Agreement or the
issuance of the Securities which has not been obtained (a copy of which
has been delivered to the Underwriter), except as may be required under
the securities laws of various jurisdictions.
(xiii) The Company and the Bank are not in violation of their
respective charter or bylaws or other organizational documents; and the
Company and the Bank is not in default (nor has any event occurred
which, with notice or lapse of time or both, would constitute a 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 the Company and the
Bank is a party or by which they may be bound, or to which any of the
property or assets of the Company and the Bank is subject, except for
such defaults that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of
operations or business of the Company and the Bank, taken as a whole.
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(xiv) The execution, delivery and performance of this Agreement
and the Price Determination Agreement and the consummation of the
transactions contemplated herein and therein do not and 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
property or assets of the Company and the Bank pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company and the Bank is a party or by which they
may be bound, or to which any of the property or assets of the Bank is
subject, except for such defaults that would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations or business of the Company and the Bank, taken as
a whole, nor will such action result in any violation of the provisions
of the charter or bylaws or other organizational documents of the Bank,
or any applicable law, regulation or administrative or court decree.
(xv) No labor dispute with the employees of the Bank exists or,
to the knowledge of the Bank, is imminent; and the Bank is not aware of
any existing or imminent labor disturbance by the employees of any of
its principal suppliers or contractors which might be expected to result
in any material adverse change in the financial condition, results of
operations, business or prospects of the Bank.
(xvi) The Company and the Bank have good and marketable title to
all properties and assets for which ownership is material to the
business of the Company and the Bank and to those properties and assets
described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except as such are
described in the Prospectus or are not material in relation to the
business of the Company and the Bank, taken as a whole; and all of the
leases and subleases material to the business of the Company and the
Bank under which the Company and the Bank hold properties, including
those described in the Prospectus, are valid and binding agreements of
the Bank, enforceable in accordance with their terms.
(xvii) The Bank is not in violation of any directive from the
FDIC or the Washington Department of Financial Institutions
("Department") to make any change in the method of conducting its
business; the Bank has conducted and is conducting its business so as to
comply with all applicable statutes, regulations and administrative and
court decrees (including, without limitation, all regulations,
decisions, directives and orders of the FDIC and the Department) except
in such respects as would not have a material adverse effect upon the
Bank.
(xviii) 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 best knowledge of the Company and the Bank, threatened,
against or affecting the Company or the Bank (other than as disclosed in
the Prospectus) which might result in any material adverse change in the
financial condition, results of operations or business of the Company
and the Bank, taken as a whole, or which might materially and adversely
affect the properties or assets thereof or
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which might materially and adversely affect the consummation of the
transactions contemplated hereby; all pending legal or governmental
proceedings to which the Company and the Bank are a party or of which
any of their properties or assets is the subject which are not described
in the Prospectus, including ordinary routine litigation incidental to
its business, are, in the aggregate, not material; all agreements not
entered into in the ordinary course of business, orders, consents to
entry of an order, stipulations, directives, memoranda of understanding
or written commitments currently in effect involving (a) the Company or
the Bank, on the one hand, and (b) any of the Department, the FDIC or
any other regulatory agency with jurisdiction over the Bank, on the
other hand, are described in all material respects in the Prospectus.
(xix) The Company has obtained the opinion of its counsel,
▇▇▇▇▇▇, ▇▇▇▇▇▇, Honeywell, Malanca, ▇▇▇▇▇▇▇▇ & Daheim, P.L.L.C., with
respect to the legality of the Securities issued; all material aspects
of the aforesaid opinion are accurately summarized in the Prospectus;
the facts and representations upon which such opinions are based are
truthful, accurate and complete in all material respects, and the
Company has not taken, nor will take any action inconsistent therewith.
(xx) All of the loans represented as assets on the most recent
consolidated financial statements or selected financial information of
the Bank included in the Prospectus meet or are exempt from all
requirements of federal, state or local law pertaining to lending,
including without limitation truth in lending (including the
requirements of Regulation Z), real estate settlement procedures,
consumer credit protection, equal credit opportunity and all disclosure
laws applicable to such loans, except for violations which, if asserted,
would not result in a material adverse effect on the financial
condition, results of operations or business of the Company and the
Bank, taken as a whole.
(xxi) To the best knowledge of the Bank, none of the Bank or any
of the employees of the Bank has made any payment of funds of the Bank
as a loan for the purchase of the Securities or made any other payment
of funds prohibited by law, except for such other prohibited payments of
funds which would not result in a material adverse change in the
consolidated financial condition, results of operations or business of
the Company and the Bank, and no funds have been set aside to be used
for any payment prohibited by law.
(xxii) The Bank is in compliance in all material respects with
the applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, and
the rules and regulations thereunder.
(xxiii) To the best knowledge of the Company and the Bank,
neither the Company, the Bank, nor any properties owned or operated by
the Bank, is in violation of or liable under any Environmental Law (as
defined below), except for such violations or liabilities that,
individually or in the aggregate, would not have a material adverse
effect on the financial condition, results of operations, or business of
the Company and the Bank, taken as a whole.
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There are no actions, suits or proceedings, or demands, claims, notices
or investigations (including, without limitation, notices, demand
letters or requests for information from any environmental agency)
instituted or pending, or to the best knowledge of the Company and the
Bank, threatened, relating to the liability of any property owned or
operated by the Company or the Bank under any Environmental Law. For
purposes of this subsection, the term "Environmental Law" means any
federal, state, local or foreign law, statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent,
order, judgment, decree, injunction or agreement with any regulatory
authority relating to (i) the protection, preservation or restoration of
the environment (including, without limitation, air, water, vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of any substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxiv) The Company has filed all federal, state and local tax
returns required to be filed and has made timely payments of all taxes
shown as due and payable in respect of such returns, and no deficiency
has been asserted with respect thereto by any taxing authority.
(xxv) The Company has received approval to have the Securities
quoted on the National Market of The Nasdaq Stock Market, Inc.,
effective upon notice of issuance thereof.
(xxvi) There are no persons with registration or other similar
rights to have any shares of Common Stock authorized for issuance by the
Company under the Securities Act, except as indicated in the Prospectus.
(xxvii) The Company has obtained and delivered to the Underwriter
the agreement of each of the securityholders of the Company listed in
Schedule B hereto, that, except as may be provided in such agreement,
such securityholder will not, for a period of 180 days, without the
Underwriter's prior written consent, directly or indirectly, sell, offer
to sell, grant any option for the purchase of, or otherwise dispose of,
any Common Stock or any security convertible into or exchangeable or
exercisable for Common Stock.
(b) Any certificate signed by any officer of the Company and the Bank
and delivered to the Underwriter or counsel for the Underwriter at the Closing
Time (as hereinafter defined) shall be deemed a representation and warranty by
the Company and the Bank to the Underwriter as to the matters covered thereby.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS.
(a) Each of the Selling Shareholders severally represents and warrants
to, and agrees with, each Underwriter as of the date hereof and as of the
Representation Date and as of the Closing Date, as follows:
(i) The execution and delivery of this Agreement and the Pricing
Agreement and the consummation of the transactions herein and therein
contemplated will not (A) result in the creation or imposition of any lien,
charge or encumbrance upon the Initial Securities to be sold by such Selling
Shareholder or on any other material assets of such Selling Shareholder, (B)
result in a breach by such Selling Shareholder of, or constitute a default by
such Selling Shareholder under, any indenture, deed of trust, contract or other
agreement or instrument or any decree, judgment or order to which such Selling
Shareholder is a party or by which such Selling Shareholder may be bound and (C)
result in any violation of the provisions of the organizational documents, if
any, of such Selling Shareholder.
(ii) Such Selling Shareholder has and will have, at the Closing Time,
good and marketable title to the Initial Securities to be sold by such Selling
Shareholder under this Agreement, free and clear of any pledge, lien, security
interest, encumbrance, claim equity, community property rights, restriction on
transfer and claims whatsoever other than pursuant to this Agreement, such
Selling Shareholder has full right, power and authority and all authorizations
and approvals required by law to sell, transfer and deliver the Initial
Securities to be sold by such Selling Shareholder under this Agreement; and upon
delivery of such Initial Securities and payment of the purchase price therefor
as contemplated in this Agreement, the Underwriter will receive good and
marketable title to the Initial Securities purchased by it from such Selling
Shareholder, free and clear of any pledge, lien, security interest, encumbrance,
claim, equity, community property rights, restriction on transfer and claims
whatsoever.
(iii) Each such Selling Shareholder has executed and delivered, in the
form heretofore furnished to the Underwriter, a power of attorney ("Power of
Attorney") with ________________, or their duly designated substitutes, as
attorneys-in-fact (all of the foregoing attorneys-in-fact are hereinafter
called, collectively, the "Attorneys-in-Fact" and, individually, an
"Attorney-in-Fact"), and a Letter of Transmittal and Custody Agreement ("Custody
Agreement") with ____________________; each Power of Attorney and Custody
Agreement constitutes a valid and binding obligation of such Selling
Shareholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles; this Agreement has been and the Pricing Agreement
will have been duly executed and delivered by such Selling Shareholder, each of
such Selling Shareholder's Attorneys-in-Fact, acting alone, is authorized to
execute and deliver this Agreement, the Pricing Agreement and the certificates
referred to in Section 6(d) hereof on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriter to such Selling
Shareholder as provided in Section 3 of this
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Agreement, to authorize the delivery of the Initial Securities to be sold by
such Selling Shareholder under this Agreement, and to duly endorse (in blank or
otherwise) the certificate or certificates representing such Initial Securities
or a stock power or powers with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Shareholder in connection with this
Agreement and the Pricing Agreement.
(iv) All authorizations, approvals, consents and orders necessary for
the execution and delivery by (A) each Selling Shareholder of the Power of
Attorney and Custody Agreement, and (B) each such Selling Shareholder of this
Agreement and the Pricing Agreement and the sale and delivery of the Initial
Securities to be sold by such Selling Shareholder under this Agreement and the
Pricing Agreement (other than, at the time of execution hereof, the issuance of
the order of Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws), have been obtained and are in full force and effect; each such Selling
Shareholder has full right, power and authority to enter into and perform its
obligations under the Power of Attorney and the Custody Agreement; each such
Selling Shareholder has full right, power and authority to enter into and
perform its obligations under this Agreement and the Pricing Agreement, and to
sell, transfer and deliver the Initial Securities to be sold by such Selling
Shareholder under this Agreement and the Pricing Agreement.
(v) Each Selling Shareholder will not, for a period of 180 days from the
date of the Pricing Agreement, without the Underwriter's prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Common Stock or any security convertible into or
exchangeable or exercisable for Common Stock or exercise any options to purchase
Common Stock, except for (i) the Initial Securities sold to the Underwriters
pursuant to this Agreement and (ii) Initial Securities sold by the Underwriters
in the public offering contemplated by this Agreement and the Pricing Agreement
and thereafter acquired by such Selling Shareholder.
(vi) Such Selling Shareholder has not taken, and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the distribution of
the Initial Securities.
(vii) Certificates in negotiable form for all Initial Securities to be
sold by such Selling Shareholder under this Agreement, together with a stock
power or powers duly endorsed in blank by such Selling Shareholder, have been
placed in custody with the Custodian for the purpose of effecting delivery
hereunder and thereunder.
(viii) Such Selling Shareholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be complied
with or satisfied pursuant to this Agreement at or prior to the Closing Time and
will advise the Company and, if applicable, one of its Attorneys-in-Fact prior
to the Closing Time, if any statement to be made on behalf of such Selling
Shareholder in the certificates contemplated by Section 6(d) hereof would be
inaccurate if made as of the Closing Time.
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(ix) Such Selling Shareholder does not have any right of first refusal
or other similar right to purchase any of the Initial Securities that are to be
sold by any of the other Selling Shareholders to the Underwriter pursuant to
this Agreement.
(x) Such Selling Shareholder has reviewed and is familiar with the
Registration Statement as originally filed with the Commission and all
amendments and supplements thereto, if any, filed with the Commission prior to
the date hereof; and with the preliminary prospectus contained therein, as
supplemented, if applicable, to the date hereof; and the information relating to
such Selling Shareholder and such Selling Shareholder's Initial Securities that
is set forth in the Registration Statement, any such amendment or supplement
thereto, such preliminary prospectus, any such supplement thereto, the
Prospectus or any supplement thereto does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(xi) At the Closing Time, all stock transfer or other taxes (other than
income taxes) which are required to be paid in connection with the sale and
transfer of the Initial Securities to be sold by such Selling Shareholder to the
Underwriter hereunder will have been fully paid or provided for by such Selling
Shareholder and all laws imposing such taxes will have been fully complied with.
(B) Any certificate signed by any Selling Shareholder and delivered to
the Underwriter or its counsel at the Closing Time shall be deemed a
representation and warranty by such Selling Shareholder to the Underwriter as to
the matters covered thereby.
SECTION 3. SALE AND DELIVERY TO UNDERWRITER; CLOSING.
(a) On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, the Company and the
Selling Shareholders, agree to sell to the Underwriter, and the Underwriter
agrees to purchase from the Company and the Selling Shareholders, at the
purchase price per share for the Common Stock to be agreed upon by the
Underwriter, the Company and the Selling Shareholders, in accordance with
Section 3(b) and as set forth in the Price Determination Agreement, the
Securities.
(b) The public offering price per share for the Securities and the
purchase price per share for the Securities to be paid by the Underwriter shall
be agreed upon and set forth in the Price Determination Agreement, dated the
date hereof.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Underwriter to purchase up to an
additional ________ shares of Common Stock at the price per share set forth in
the Price Determination Agreement for the purpose of covering over-allotments in
connection with distribution and sale of the Underwritten Shares. The option
hereby granted may be exercised in whole or in part on any date during the
period of 30 days from and after the date on which the Initial Securities are
initially offered to the public by giving written notice to the Bank
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setting forth the number of Option Securities as to which the Underwriter is
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery ("Date of Delivery") shall
be determined by the Underwriter, but shall not be later than five full business
days after the exercise of said option, nor in any event prior to the Closing
Time.
(d) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the offices of the Company, ▇▇▇▇ ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be
agreed upon by the Company, the Selling Shareholders and you, at ___:____ __.m.
on the ______ full business day after execution of the Price Determination
Agreement, or at such other time not more than ____ full business days
thereafter as you and the Company shall determine (such date and time of payment
and delivery being herein called the "Closing Time"). Payment shall be made to
the Company and the Selling Shareholder by certified or official bank check or
checks in next day funds payable to the order of the Company and each of the
Selling Shareholders, against delivery to you for the respective accounts of the
Underwriter of certificates for the Securities to be purchased by them.
(e) Certificates for the Securities to be purchased by the Underwriter
shall be in such denominations and registered in such names as you may request
in writing at least two full business days before the Closing Time. The
certificates for the Securities will be made available in New York City for
examination and packaging by you not later than ___:____ __.m. on the business
day prior to the Closing Time.
SECTION 4. COVENANTS OF THE COMPANY AND THE BANK. The Company and the Bank
covenant, jointly and severally, with the Underwriter as follows:
(a) The Company will advise the Underwriter promptly upon receiving
notice of the issuance by any regulatory authority of any stop order with
respect to the offering of the Securities or of the institution of any
proceeding for that purpose, will use its reasonable best efforts to prevent the
issuance of any stop order and, should a stop order be issued, to obtain as soon
as possible the lifting thereof. The Company will notify the Underwriter
promptly of any request by any regulatory authority for amendment of or
supplement to the Prospectus or for additional information, and will not file
any amendment of or supplement to the Prospectus of which the Underwriter has
not been furnished a copy prior to the filing thereof or file any such amendment
or supplement to which the Underwriter has objected in writing to the Company.
(b) The Company will deliver to the Underwriter one signed copy and two
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein), and from time to time and without charge such number of
copies of the Prospectus as the Underwriter may reasonably request, which
Prospectus the Company authorizes the Underwriter to use in connection with the
sale of the Securities.
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(c) The Company and the Bank will furnish to the Underwriter copies of
all written communications by or on behalf of the Company or the Bank with any
regulatory agency, including, without limitation, the Commission, FDIC or the
Department, relating to the Prospectus and the Securities.
(d) If any event or circumstance shall occur as a result of which it is
necessary, in the opinion of counsel for the Underwriter, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, the
Company will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Underwriter) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company will furnish to the Underwriter
a reasonable number of copies of such amendment or supplement. For the purpose
of this subsection, the Company will furnish such information with respect to
itself as the Underwriter may from time to time reasonably request.
(e) The Company will take all necessary action, in cooperation with the
Underwriter, to qualify the Securities for offering and sale under the
applicable securities laws of such states of the United States and other
jurisdictions and as the Underwriter and the Company have agreed; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to register its directors or officers as brokers, dealers,
salesmen or agents in any jurisdiction. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date of
the Prospectus.
(f) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following the
date of the Prospectus.
(g) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to its stockholders as soon as
practicable after the end of each such fiscal year an annual report (including
consolidated statements of financial condition and statements of income,
stockholders' equity and cash flows of the Company, certified by independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the date of the Prospectus), summary financial information of the
Company for such quarter in reasonable detail. In addition, such annual report
and quarterly consolidated summary financial information shall be made public
through the issuance of appropriate press releases at the same time or prior to
the time of the furnishing thereof to stockholders of the Company.
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(h) During the period ending on the third anniversary of the expiration
of the fiscal year during which the closing of the transactions contemplated
hereby occurs, the Company will furnish to the Underwriter (i) as soon as
available, a copy of each report or other document of the Company furnished
generally to stockholders of the Company or furnished to or filed with any
national securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information concerning
the Company as the Underwriter may reasonably request.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(j) The Company will file with The Nasdaq Stock Market, Inc. all
documents and notices required by the Nasdaq National Market of companies that
have issued securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq National Market.
(k) The Company will take such actions and furnish such information as
are reasonably requested by the Underwriter in order for the Underwriter to
ensure compliance with the National Association of Securities Dealers, Inc.'s
("NASD") "Interpretation Relating to Free-Riding and Withholding."
(l) The Company will not sell or issue, contract to sell or otherwise
dispose of, for a period of 180 days after the Closing Time, without the
Underwriter's prior written consent, any shares of Common Stock other than the
Securities or other than in connection with any arrangement described in the
Prospectus.
SECTION 5. PAYMENT OF EXPENSES. The Company, and the Selling Shareholders, in
such proportions as they may agree upon among themselves (aggregating 100%),
agree to pay all expenses incident to the performance of its obligations under
this Agreement, including but not limited to (i) the cost of obtaining all
securities and bank regulatory approvals, (ii) the preparation, issuance and
delivery of the certificates for the Securities to the purchasers in the
Offering, (iii) the fees and disbursements of the Company's and Selling
Shareholders' counsel, accountants and other advisors, (iv) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 4(e) hereof, including fees and disbursements of counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey, (v) the
printing and delivery of the Prospectus and any amendments or supplements
thereto to the Underwriter, (vi) the copying and delivery to the Underwriter of
copies of a Blue Sky Survey, and (vii) the fees and expenses incurred in
connection with the listing of the Securities on the Nasdaq National Market. In
the event the Underwriter incurs any such fees and expenses on behalf of the
Company or the Selling Shareholders, the Company and the Selling Shareholders
will reimburse the Underwriter for its accountable out-of-pocket fees and
expenses whether or not the Offering is consummated.
The Company agrees to pay certain expenses incident to the performance
of the Underwriter's obligations under this Agreement, including (i) the filing
fees paid or incurred by the Underwriter
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in connection with all filings with the NASD and (ii) all reasonable
out-of-pocket expenses incurred by the Underwriter relating to the Offerings,
including, without limitation, advertising, promotional, syndication, travel and
delivery and settlement expenses and fees and expenses of the Underwriter's
counsel. All fees and expenses to which the Underwriter is entitled to
reimbursement under this paragraph of this Section 5 shall be due and payable
upon receipt by the Company of a written accounting therefor setting forth in
reasonable detail the expenses incurred by the Underwriter. Such fees and
expenses to which the Underwriter is entitled to reimbursement, other than legal
fees of counsel to the Underwriter, shall not exceed $15,000. The Underwriter
agrees not to incur legal fees (excluding legal fees relating to state
securities laws matters) in excess of $50,000 without the prior consent of the
Company.
Each Selling Shareholder agrees that he or she will pay any stamp duty,
transfer or similar tax payable by or on behalf of such Selling Shareholder or
the Underwriter in connection with (i) the sale to the Underwriter of the
Securities to be sold by such Selling Shareholder, (ii) the purchase by the
Underwriter of Securities from such Selling Shareholder or (iii) the
consummation by such Selling Shareholder of any of his or her obligations under
this Agreement, and further authorizes the payment of any such amount by
deduction from the proceeds of the Securities to be sold by him or her under
this Agreement and from funds from time to time held for hie or her account by
the custodian under the Custody Agreement.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section ____ hereof, the Selling Shareholders shall reimburse
the Underwriter for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
Anything herein to the contrary notwithstanding, the provisions of this
Section 5 shall not affect any agreement which the Company and the Selling
Shareholders have made or may make among themselves for the allocation or
sharing of such expenses and costs.
SECTION 6. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The Company and the
Underwriter agree that the issuance and sale of the Securities and all
obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company and the Bank herein contained as
of the date hereof and the Closing Time, to the accuracy of the statements of
officers and directors of the Company and the Bank made pursuant to the
provisions hereof, to the performance by the Company and the Bank of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have been declared effective by the
Commission not later than 5:30 P.M., Eastern Time, on the date hereof, and no
order suspending the Offering shall have been issued or proceedings therefor
initiated or threatened by the Supervisor and no order suspending the sale of
the Securities in any jurisdiction shall have been issued.
(b) At Closing Time, the Underwriter shall have received:
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(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇, ▇▇▇▇▇▇,
Honeywell, Malanca, ▇▇▇▇▇▇▇▇ & Daheim, P.L.L.C., special counsel for the Company
and the Bank, in form and substance satisfactory to counsel for the Underwriter,
to the effect that:
(i) The Company has been duly organized and is validly existing
under the laws of the State of Washington as a business corporation; 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 would
not have a material adverse effect on the financial condition or results
of operations of the Company.
(ii) The Bank has been duly organized and is validly existing
under the laws of the State of Washington as a state chartered bank; 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 would
not have a material adverse effect on the financial condition or results
of operations of the Bank.
(iii) The Company and the Bank each has full corporate power and
authority to own, lease and operate its respective properties and to
conduct its respective business as described in the Prospectus and to
enter into and perform its respective obligations under this Agreement.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization"; the
issued and outstanding shares of capital stock of the Company have been
duly authorized, are validly issued, fully paid and nonassessable.
(v) The deposit accounts of the Bank are insured by the BIF of
the FDIC up to the applicable legal limits.
(vi) The Securities have been duly and validly authorized for
issuance and sale to the Underwriter pursuant to this Agreement and,
when issued and delivered by the Company against payment of the
consideration set forth in the Price Determination Agreement, will be
duly and validly issued and fully paid and non-assessable.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law or, to
such counsel's Actual Knowledge, under any instrument or Agreement to
which the Company or the Bank is a party or which either may be bound or
otherwise.
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(viii) The Prospectus is effective under the Securities Act and,
to such counsel's Actual Knowledge, no stop order suspending the
effectiveness of the Prospectus has been issued by the Commission or
proceedings therefor initiated or threatened by the Commission.
(ix) At the time the Prospectus became effective and at the Time
of Delivery, the Prospectus (other than the financial statements and
supporting schedules include therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the Securities Act and the Securities Act Regulations.
(x) The execution and delivery of this Agreement and the Price
Determination Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by
all necessary action on the part of the Company and the Bank, and this
Agreement and the Price Determination Agreement each constitutes a
legal, valid and binding Agreement of the Company and the Bank,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization, receivership, conservatorship or other similar laws
relating to or affecting the enforcement of creditors' rights generally
or the rights of creditors of depository institutions whose accounts are
insured by the FDIC, general equity principles, regardless or whether
such enforceability is considered in a proceeding in equity or at law.
(xi) The execution and delivery of this Agreement and the Price
Determination Agreement, the incurrence of the obligations herein and
therein set forth and the consummation of the transactions contemplated
herein and therein will not conflict with or constitute a breach of, or
default under, and no event has occurred which, with notice or lapse of
time or both, would constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance, that,
individually or in the aggregate, would have a material adverse effect
on the financial condition, results of operations or business of the
Company and the Bank upon any property or assets of the Company and the
Bank pursuant to any material contract, indenture, mortgage, loan
Agreement, note, lease or other instrument to which the Company and the
Bank is a party or by which any of them may be bound, or to which any of
the property or assets of the Company and the Bank is subject, nor will
such execution or delivery result in any violation of the provisions of
the certificate of incorporation or bylaws of the Company or the Bank.
(xii) No further approval, authorization, consent or other order
of any public board or body is required to be received by the Company
and the Bank in connection with the execution and delivery of this
Agreement, the offering, issuance or sale of the Securities to the
Underwriter, except as may be required under the
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Securities or Blue Sky laws of various jurisdictions as to which no
opinion need be rendered.
(xiii) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies with
all applicable statutory requirements.
(xiv) To such counsel's Actual Knowledge there are no legal or
governmental proceedings pending or threatened against or affecting the
Company or the Bank which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all pending legal or
governmental proceedings to which the Company and the Bank is a party or
to which any of its respective property is subject which are not
described in the Prospectus, including ordinary routine litigation
incidental to its business, are, considered in the aggregate, not
material.
(xv) To such counsel's Actual Knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments to which the Company and the Bank is a party required to be
described or referred to in the Prospectus other than those described or
referred to therein, and the descriptions thereof or references thereto
are correct.
(xvi) The statements in the Prospectus under the captions
"Regulation" and "Description of Capital Stock", to the extent such
statements constitute summaries of matters of law, are, in all material
respects, accurate summaries of the matters set forth therein.
(xvii) To such counsel's Actual Knowledge, the Company and the
Bank have obtained all licenses, permits and other governmental
approvals and authorizations currently required for the conduct of their
businesses as described in the Prospectus, except where the failure to
obtain such licenses, permits, approvals or authorizations would not
result in a material adverse change in the financial condition, results
of operations or the business of the Company and the Bank, taken as a
whole, and all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company and the
Bank are in all material respects complying therewith.
(xviii) To such counsel's Actual Knowledge, the Company and the
Bank are neither in violation of its respective charter nor in default
(nor has any event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company and the Bank is a party or by which the
Company and the Bank or any of its property may be bound (in any respect
that
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would have a material adverse effect upon the financial condition,
results of operations or business of the Company and the Bank, taken as
a whole).
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of
officers or directors of the Company and the Bank and certificates of
public officials. Such counsel's opinion shall be limited to matters
governed by federal laws and by the laws of the State of Washington.
Such opinion may be governed by the Legal Opinion Accord ("Accord") of
the American Bar Association Section of Business Law (1991). The term
"Actual Knowledge" as used therein shall mean the conscious awareness of
facts or other information of the individual lawyers who were actively
involved in the transactions contemplated by this Agreement and in the
preparation of the documents involved and the opinion letter.
(2) The favorable opinion, dated as of the Closing Time, of
______________, counsel for the Selling Shareholders, in form and
substances satisfactory to counsel for the Underwriter, to the effect
that:
(i) This Agreement and the Pricing Agreement have each
been duly executed and delivered by or on behalf of, each of the
Selling Shareholders and constitute the valid and binding
obligations of each such Selling Shareholder, enforceable in
accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
creditors rights generally or by general equitable principles.
(ii) The Power of Attorney and Custody Agreement have
been duly executed and delivered by each of the Selling
Shareholders and constitute the valid and binding obligations of
each such Selling Shareholder, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(iii) To the Actual Knowledge, each of the Selling
Shareholders has good marketable title to the Initial Securities
to be sold by such Selling Shareholder under this Agreement,
free and clear of any pledge, lien, security interest,
encumbrance, claim or equity other than pursuant to this
Agreement, and has full right, power and authority to sell the
Initial Securities to be sold by such Selling Shareholder under
this Agreement; and upon the delivery of and payment for the
Initial Securities as contemplated in this Agreement, the
Underwriter will receive good and marketable title to the
Initial Securities purchased by it from the Selling
Shareholders, free and clear of any pledge,
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lien, security interest, encumbrance, claim or equity. (In
rendering such opinion, counsel may assume that the Underwriter
is without notice of any defect in the title of the Selling
Shareholders to the Initial Securities being purchased from the
Selling Shareholders.)
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of the
Selling Shareholders and public officials. Such counsel's opinion shall
be limited to matters governed by federal laws and by the laws of the
State of Washington. Such opinion may be governed by the Legal Opinion
Accord ("Accord") of the American Bar Association Section of Business
Law (1991). The term "Actual Knowledge" as used therein shall mean the
conscious awareness of facts or other information of the individual
lawyers who were actively involved in the transactions contemplated by
this Agreement and in the preparation of the documents involved and the
opinion letter.
(3) The favorable opinion, dated as of Closing Time, of Breyer &
Aguggia, counsel for the Underwriter, with respect to the matters set
forth in Section 5(b)(1)(i), (v), (vii) (solely as to preemptive rights
arising by operation of law), (ix) and (xii), and such other matters as
the Underwriter may reasonably require. In giving its opinion, Breyer &
Aguggia may also rely as to certain matters on the opinion of ▇▇▇▇▇▇,
▇▇▇▇▇▇, Honeywell, Malanca, ▇▇▇▇▇▇▇▇ & Daheim, P.L.L.C. and
__________________________.
(4) A letter of ▇▇▇▇▇▇, ▇▇▇▇▇▇, Honeywell, Malanca, ▇▇▇▇▇▇▇▇ &
Daheim, P.L.L.C. and Breyer & Aguggia addressed to the Underwriter, in
form and substance reasonably satisfactory to the Underwriter, to the
effect that nothing has come to their attention that would lead them to
believe that the Prospectus (except for the financial statements, notes
to financial statements and schedules and other financial or statistical
data included therein, as to which counsel need make no statement), at
the time it became effective or at the Closing Time, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the financial condition, results of
operations or business of the Company and the Bank, taken as a whole, whether or
not arising in the ordinary course of business, and the Underwriter shall have
received a certificate of the President and Chief Executive Officer of the
Company and the Bank and the chief financial or chief accounting officer of the
Company and the Bank, dated as of the Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) there shall have been no material
transaction entered into by the Company and the Bank from the latest date as of
which the financial condition of the Company is set forth in the Prospectus
other than transactions referred to or contemplated therein and transactions in
the ordinary course of business, (iii) the Bank shall not have received from the
FDIC or the _________ any directive (oral or written) to make any
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change in the method of conducting its business with which it has not complied
(which directive, if any, shall have been disclosed to the Underwriter) or which
materially and adversely would affect the financial condition, results of
operations or business of the Company and the Bank, taken as a whole, (iv) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
(v) the Company and the Bank have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to the Closing
Time, and (vi) no order suspending the offering of the Securities or the
authorization for final use of the Prospectus has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission.
(d) At the Closing Time the Underwriter shall have received a
certificate from an Attorney-in-Fact for each of the Selling Shareholders, dated
as of the Closing Time, to the effect that (i) the representations and
warranties of the Selling Shareholders contained in Section 2 are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, (ii) each of the Selling Shareholders has reviewed the Prospectus,
and to the best of each Selling Shareholder's knowledge, the information
contained therein relating to such Selling Shareholder and such Selling
Shareholder's Securities does not contain any untrue statement or omit to state
any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading and (iii)
the Selling Shareholders have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to the Closing
Time.
(e) At the time of the execution of this Agreement, the Underwriter
shall have received from KPMG Peat Marwick LLP a letter dated such date, in form
and substance satisfactory to the Underwriter, to the effect that (i) they are
independent certified public accountants with respect to the Company; (ii) it is
their opinion that the consolidated financial statements and supporting
schedules included in the Prospectus and covered by their opinions therein
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Securities Act Regulations; (iii)
based upon procedures as agreed upon by the Underwriter and KPMG Peat Marwick
LLP and set forth in detail in such letter, nothing has come to their attention
which causes them to believe that [(A) the unaudited consolidated financial
statements and supporting schedules of the Company included in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Securities Act Regulations or are not
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited consolidated financial
statements included in the Prospectus,] (B) at a specified date not more than
five days prior to the date of this Agreement, there has been any increase in
the long-term or short-term debt of the Company or any decrease in total assets,
allowance for loan losses, total savings deposits or equity of the Company, in
each case as compared with the amounts shown in the December 31, 1997 balance
sheet included in the Prospectus or, (C) during the period from December 31,
1997 to a specified date not more than five days prior to the date of this
Agreement, there were any decreases, as compared with the corresponding period
in the preceding year, in net interest income, net interest income after
provision for loan losses, or net income of the Company, except in all instances
for increases or decreases
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which the Prospectus disclose have occurred or may occur; and (iv) in addition
to the examination referred to in their opinions and the procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Prospectus and which are
specified by the Underwriter, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting, financial
and other records of the Company identified in such letter.
(f) At the time of the execution of this Agreement, the Underwriter
shall have received from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ CPA and Consultant, PLLC a letter
dated such date, in form and substance satisfactory to the Underwriter, to the
effect that (i) until the date of termination of its engagement as independent
auditors of the Company, they were independent certified public accountants with
respect to the Company; (ii) based upon procedures as agreed upon by the
Underwriter and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ CPA and Consultant, PLLC and set forth in
detail in such letter, nothing has come to their attention which causes them to
believe that the consolidated financial statements and supporting schedules of
the Company at December 31, 1996 and 1995 and for the years ended December 31,
1996 and 1995 included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Securities Act Regulations or are not presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus, (iii) in addition to the examination referred to in their opinions
and the procedures referred to in clause (ii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included in the
Prospectus and which are specified by the Underwriter, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company identified in
such letter.
(g) At the Closing Time, the Underwriter shall have received from KPMG
Peat Marwick LLP a letter, dated as of Closing Time, to the effect that they
reaffirm their statements made in the letter furnished pursuant to subsection
(e) of this Section, except that the specified date referred to shall be a date
not more than five days prior to the Closing Time.
(h) At the date hereof, the Securities shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
(i) At the Closing Time, counsel for the Underwriter shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company, the Bank
and the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Underwriter and counsel for the Underwriter.
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(j) At any time prior to the Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effects of which, in the judgment of the
Underwriter, are so material and adverse as to make it impracticable to market
the Securities or to enforce contracts, including subscriptions or orders, for
the sale of the Securities, and (ii) trading generally on either the American
Stock Exchange or the New York Stock Exchange shall not have been suspended, and
minimum or maximum prices for trading shall not have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Securities and Exchange Commission or any other governmental
authority, and a banking moratorium shall not have been declared by Federal,
Washington or New York authorities.
SECTION 7. INDEMNIFICATION.
(a) The Company, the Bank and each Selling Shareholder agree, jointly
and severally, to indemnify and hold harmless the Underwriter, each person, if
any, who controls the Underwriter, within the meaning of Section 15 of the
Securities Act, and any officer, director, employee and agent as follows:
(i) Against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of or
based on an untrue statement or alleged untrue statement of a material
fact contained in any preliminary offering circular or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or similar
statements or omissions in or from other information furnished by or on
behalf of the Company, the Bank and the Selling Shareholders to the
Underwriter;
(ii) Against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Company,
the Bank and the Selling Shareholders; and
(iii) Subject to paragraph 7(c) below, against any and all
expense whatsoever, as incurred (including fees and disbursements of the
Underwriter's counsel and hourly charges of your directors, officers and
employees at your normal billing rates and the disbursements of the
Underwriter, and such person's reasonable travel and other out-of-pocket
expenses), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above: provided,
however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an
untrue
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statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with the Underwriter Information. The
foregoing indemnification with respect to any preliminary prospectus
shall not inure to the benefit of the Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased
shares (or any person controlling such Underwriter) if a copy of the
Prospectus (as then amended or supplemented if the Company, the Bank and
the Selling Shareholders shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to
the written confirmation of the sale of such Shares to such person and
if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability, provided
that the Company, the Bank and the Selling Shareholders delivered the
Prospectus (as so amended or supplemented) to the Underwriter on a
timely basis to permit such delivery.
(b) The Underwriter agrees to indemnify and hold harmless the Company
and the Bank, and each of its directors, and officers, and each person, if any,
who controls the Company and the Bank within the meaning of Section 15 of the
Securities Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 7(a), as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in any preliminary offering circular or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity the
Underwriter Information.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. If it so elects within a reasonable time after receipt
of such notice, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume the defense of such action with
counsel chosen by it and approved by the indemnified parties defendant in such
action, unless such indemnified parties reasonably object to such assumption on
the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall the indemnifying party or parties be liable for any fees and
expenses of more than one counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. The
indemnifying party shall not be liable for settlement effected without its prior
consent.
SECTION 8. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 7
hereof is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Bank, the
Selling Shareholders and the Underwriter shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said
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indemnity agreement incurred by the Company, the Bank and the Underwriter, as
incurred, in such proportions (i) that the Underwriter are responsible for that
portion represented by the percentage that the aggregate underwriting fees
appearing on the cover page of the Prospectus bears to the aggregate gross
proceeds appearing thereon and the Company, the Bank and the Selling
Shareholders are jointly and severally responsible for the balance or (ii) if,
but only if, the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits to the Company, the Bank and the Selling Shareholders on the
one hand, and the Underwriter, on the other, as reflected in clause (i), but
also the relative fault of the Bank on the one hand and the Underwriter on the
other (relative fault shall be determined by reference to, among other things,
whether the untrue statement of a material fact or omission to state a material
fact relates to information supplied by the Company, the Bank and/or the Selling
Shareholder or the Underwriter and the parties' relative intent, knowledge, and
access to information), as well as any other relevant equitable considerations;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Underwriter, and each director
of the Company and Bank, and each person, if any, who controls the Company, the
Bank and the Selling Shareholders within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Company and the
Bank and the Selling Shareholders. Notwithstanding anything to the contrary set
forth herein, to the extent permitted by applicable law, in no event shall the
Underwriter be required to contribute an aggregate amount in excess of the
aggregate fees to which the Underwriter is entitled and actually paid pursuant
to this Agreement.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
representations, warranties, indemnities, agreements and other statements of the
Company and the Bank or their officers and the Selling Shareholders set forth in
or made pursuant to this Agreement will remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Company, the
Bank, the Selling Shareholders or the Underwriter or controlling person and will
survive delivery of and payment for the Securities.
SECTION 10. TERMINATION OF AGREEMENT.
(a) You may terminate this Agreement, by notice to the Company and the
Bank and the Selling Shareholders, at any time at or prior to the Closing Time
(i) if there has been, since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the Company
or the Bank, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any outbreak or escalation of existing hostilities or
other national or international calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable to market the Securities or enforce contracts for the
sale of the Securities, or (iii) if trading generally on the New York Stock
Exchange or in the
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over-the-counter market has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by such exchange or by order of the Commission, the NASD or any other
governmental authority with appropriate jurisdiction over such matters, or (iv)
if a banking moratorium has been declared by either Federal or Washington
authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 7, 8 and 9 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of
Section 6, with the effect stated in such Section.
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS. If one or more
of the Selling Shareholders shall fail at the Closing Time to sell and deliver
the number of Initial Securities which such Selling Shareholder or Selling
Shareholders are obligated to sell hereunder on such date, and the
non-defaulting Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number of Securities to be sold by all Selling
Shareholders as set forth in Schedule A, then the Underwriter may at its option,
by notice from it to the Company, the Bank and the non-defaulting Selling
Shareholders, either (a) terminate this Agreement without any liability on the
part of any non-defaulting party or (b) elect to purchase the Initial Securities
which the non-defaulting Selling Shareholders have agreed to sell hereunder.
In the event of a default by any Selling Shareholder as referred to in
this Section 11 each of the Underwriter, the Company, the Bank and the
non-defaulting Selling Shareholders shall have the right to postpone the Closing
Time for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents of
arrangements.
No action taken pursuant to this Section 11 shall relieve any Selling
Shareholder so defaulting from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered,
mailed or transmitted by any standard form of telecommunication.
If to the Underwriter: ▇▇▇▇, ▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, President
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
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Breyer & Aguggia
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
27
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If to the Company: Washington Banking Company
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, President
with a copy to: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇, ▇▇▇▇▇▇, Honeywell, Malanca,
▇▇▇▇▇▇▇▇ & Daheim, P.L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Bank: Whidbey Island Bank
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, President
with a copy to: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇, ▇▇▇▇▇▇, Honeywell, Malanca,
▇▇▇▇▇▇▇▇ & Daheim, P.L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Selling
Shareholders: ____________________________
____________________________
Attention: _________________
with a copy to: ____________________________
____________________________
____________________________
____________________________
____________________________
SECTION 13. PARTIES. This Agreement herein set forth is made solely for the
benefit of the Underwriter, the Company, the Bank and the Selling Shareholder
and, to the extent expressed, any person controlling the Company or the Bank or
of the Selling Shareholders or of the Underwriter, and the directors of the
Company and the Bank, their respective officers, and their respective executors,
administrators, successors and assigns and, subject to the provisions of Section
14, no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser, as
such purchaser, from the Underwriter of the Securities.
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SECTION 14. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. No waiver, amendment or other modification of this Agreement
shall be effective unless in writing and signed by the parties hereto.
SECTION 15. ARBITRATION. Any claims, controversies, demands, disputes or
differences between or among the parties hereto or any persons bound hereby
arising out of, or by virtue of, or in connection with, or otherwise relating to
this Agreement shall be submitted to and settled by arbitration conducted in
Livingston, New Jersey before one or three arbitrators, each of whom shall be
knowledgeable in the field of securities law and investment banking. Such
arbitration shall otherwise be conducted in accordance with the rules then
obtaining of the American Arbitration Association. The parties hereto agree to
share equally the responsibility for all fees of the arbitrators, abide by any
decision rendered as final and binding, and waive the right to appeal the
decision or otherwise submit the dispute to a court of law for a jury or
non-jury trial. The parties hereto specifically agree that neither party may
appeal or subject to the award or decision of any such arbitrator to appeal or
review in any court of law or in equity or in any other tribunal, arbitration
system or otherwise. Judgment upon any award granted by such arbitrator may be
enforced in any court having jurisdiction thereof.
SECTION 16. GOVERNING LAW AND TIME. This Agreement shall be governed by the
laws of the State of New Jersey. Specified times of the day refer to Eastern
Time, unless otherwise indicated.
SECTION 17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
* * *
[Signature page follows]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
each of the Underwriter, the Company, the Bank and the Selling Shareholders in
accordance with its terms.
Very truly yours,
WASHINGTON BANKING COMPANY
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
WHIDBEY ISLAND BANK
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
THE SELLING SHAREHOLDERS
Name:
---------------------------------------
Name:
---------------------------------------
Name:
---------------------------------------
Name:
---------------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇, ▇▇▇▇ AND CO., INC.
By:
---------------------------------
Name:
Title:
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SCHEDULE A
Number of
Name of Selling Shareholder Initial Securities
31
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SCHEDULE B
Name of Securityholder
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EXHIBIT A
WASHINGTON BANKING COMPANY
(a Washington corporation)
________ SHARES OF COMMON STOCK
(No Par Value Per Share)
PRICE DETERMINATION AGREEMENT
_________ ____, 1998
▇▇▇▇, ▇▇▇▇ & CO., INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the Underwriting Agreement dated _________ ___,
1998 ("Underwriting Agreement") relating to the purchase by the Underwriter of
the above stated number of shares of common stock, no par value per share
("Securities"), of Washington Banking Company, a Washington corporation
("Company"). This Agreement is the Price Determination Agreement referred to in
the Underwriting Agreement.
Pursuant to Section 3 of the Underwriting Agreement, the Company, the
Bank and each of the Company's shareholders named in Schedule A to the
Underwriting Agreement ("Selling Shareholders"), severally and not jointly,
agree with each Underwriter as follows:
1. The public offering price per share for the Securities, determined as
provided in said Section 3, shall be $_____.
2. The purchase price per share for the Securities to be paid by the
Underwriter shall be $_______, representing an amount equal to the initial
public offering price set forth above less $_____ per share.
The Company and the Bank represent and warrant, jointly and severally,
to the Underwriter that the representations and warranties of the Company and
the Bank set forth in Section l of the Underwriting Agreement, and each of the
Selling Shareholders represents and warrants, jointly and severally, to the
Underwriter that the representations and warranties of the Selling Shareholders
set forth in Section 2 of the Underwriting Agreement, are, in each case,
accurate as though expressly made at and as of the date hereof.
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This Agreement shall be governed by the laws of the State of New Jersey.
If the foregoing is in accordance with your understanding of the
agreement among the Company, the Bank, the Selling Shareholders and the
Underwriter, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts and together with the
Underwriting Agreement, shall be a binding agreement among the Underwriters, the
Company, the Bank and the Selling Shareholders in accordance with its terms and
the terms of the Underwriting Agreement.
Very truly yours,
WASHINGTON BANKING COMPANY
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
WHIDBEY ISLAND BANK
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
THE SELLING SHAREHOLDERS
A-2
35
Confirmed and accepted as of
the date first above written:
▇▇▇▇, ▇▇▇▇ & CO., INC.
By:
-----------------------------------------
Name:
Title:
A-3
