EXHIBIT 1.1
Form of proposed Agency Agreement among Alaska Pacific Bancshares,
Inc., Alaska Federal Savings Bank and Xxxxxxx Xxxx & Company, a division of
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
ALASKA PACIFIC BANCSHARES, INC.
Up to 1,058,000 Shares
COMMON STOCK
($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
May ___, 1999
Xxxxxxx Xxxx & Company, a Division
of Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Alaska Pacific Bancshares, Inc., an Alaska corporation (the "Company"),
and Alaska Federal Savings Bank, a federally chartered mutual savings bank
(references to the "Bank" include the Bank in the mutual or stock form, as
indicated by the context), with its deposit accounts insured by the Savings
Association Insurance Fund ("SAIF") administered by the Federal Deposit
Insurance Corporation ("FDIC"), hereby confirm their agreement with Xxxxxxx Xxxx
& Company, a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxx") as follows:
Section 1. The Offering. The Bank, in accordance with its plan of
conversion adopted by its Board of Directors (the "Plan"), intends to convert
from a federally chartered mutual savings bank to a federally chartered stock
savings bank, and to issue all of its issued and outstanding capital stock to
the Company. In addition, pursuant to the Plan, the Company will offer and sell
up to 1,058,000 shares of its common stock, par value $0.01 per share (the
"Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Bank with savings accounts of $50 or more as
of December 31, 1997 ("Eligible Account Holders"), (2) the Bank's Employee Stock
Ownership Plan ("ESOP"), (3) depositors of the Bank with savings accounts of $50
or more as of March 31, 1999 ("Supplemental Eligible Account Holders") and (4)
depositors of the Bank as of [March 31], 1999 (other than Eligible Account
Holders and Supplemental Eligible Account Holders) ("Other Members"). Subject to
the prior subscription rights of the above-listed parties, the Company is
offering for sale in a community offering (the "Community Offering" and, when
referred to together with the Subscription Offering, the
"Subscription and Community Offering") conducted concurrently with the
Subscription Offering, the Shares not so subscribed for or ordered in the
Subscription Offering to certain members of the general public to whom a copy of
the Prospectus (as hereinafter defined) is delivered, with a preference given to
natural persons and trusts of natural persons who are permanent residents of the
communities of Juneau, Ketchikan, Sitka and Wrangell, Alaska and then to such
persons who are residents of counties contiguous to those communities (the
"Local Community") ("Other Subscribers") (all such offerees being referred to in
the aggregate as "Eligible Offerees"). It is anticipated that shares not
subscribed for in the Subscription and Community Offering will be offered to
members of the general public on a best efforts basis through a selected dealers
arrangement (the "Syndicated Community Offering") (the Subscription Offering,
Community Offering and Syndicated Community Offering are collectively referred
to as the "Offering"). It is acknowledged that the purchase of Shares in the
Offering is subject to the maximum and minimum purchase limitations as described
in the Plan and that the Company and the Bank may reject, in whole or in part,
any orders received in the Community Offering or Syndicated Community Offering.
Collectively, these transactions are referred to herein as the "Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-_____) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became effective is hereinafter called the "Prospectus," except that
if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the Commission.
In accordance with 12 C.F.R. Part 563b (the "Conversion Regulations"),
the Bank has filed with the Office of Thrift Supervision (the "OTS") an
Application for Conversion (the "Conversion Application"), including the
Prospectus, and has filed such amendments thereto, if any, as may have been
required by the OTS. The Conversion Application has been approved by the OTS and
the related Prospectus has been authorized for use by the OTS. In addition, the
Company has filed with the OTS an Application H-(e)1-S (the "Holding Company
Application") to become a registered savings and loan holding company under
Section 10 of the Home Owners' Loan Act, as amended ("SLHCA").
Section 2. Retention of Xxxx; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint Xxxx (i) as their exclusive financial advisory and
marketing agent to utilize its best efforts to solicit subscriptions for Shares
of the Common Stock and to advise and assist the Company and the Bank
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with respect to the Company's sale of the Shares in the Offering and (ii) to
participate in the Offering in the areas of market making, research coverage and
syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, Xxxx
accepts such appointment and agree to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated January 12, 1999, between the Bank and Xxxx (a copy of which
is attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that Xxxx shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of the Syndicated Community
Offering, Xxxx will assemble and manage a selling group of broker-dealers which
are members of the National Association of Securities Dealers, Inc. (the "NASD")
to participate in the solicitation of purchase orders for shares under a
selected dealers' agreement ("Selected Dealers' Agreement"), the form of which
is set forth as Exhibit B to this Agreement.
The obligations of Xxxx pursuant to this Agreement shall terminate upon
the completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than December 31,1999 (the
"End Date"). All fees or expenses due to Xxxx but unpaid will be payable to Xxxx
in next day funds at the earlier of the Closing Date (as hereinafter defined) or
the End Date. In the event the Offering is extended beyond the End Date, the
Company, the Bank and Xxxx may agree to renew this Agreement under mutually
acceptable terms.
In the event the Company is unable to sell a minimum of 680,000 Shares
(or such lesser amount approved by the OTS) within the period herein provided,
this Agreement shall terminate and the Company shall refund to any persons who
have subscribed for any of the Shares, the full amount which it may have
received from them plus accrued interest as set forth in the Prospectus; and
none of the parties to this Agreement shall have any obligation to the other
parties hereunder, except as otherwise set forth in this Section 2 and in
Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of Xxxx, Xxxx shall be paid the fees and expenses due
to the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan: provided however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of Xxxx and its counsel. The
release of Shares against payment therefor shall be made at [10:00 a.m., Alaska
Time,] on a date and at a place acceptable to the Company, the Bank and Xxxx (it
being understood that such date shall not be more than ten business days after
the
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acceptance of the updated appraisal by the OTS) or such other time or place as
shall be agreed upon by the Company, the Bank and Xxxx. Certificates for shares
shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Company shall release or deliver, or have
released or delivered, the Shares sold in the Offering, in accordance with the
terms herein, is called the "Closing Date."
Xxxx shall receive from the Company the following compensation for their
services hereunder:
(a) A management fee to Xxxx in the amount of $25,000. Such fees
shall be deemed to be earned when due. Should the Conversion be
terminated for any reason not attributable to the action or
inaction of Xxxx, Xxxx shall have earned and be entitled to be
paid fees accruing through the stage at which point the
termination occurred.
(b) A success fee of 1.5% of the dollar amount of Common Stock sold
in the Subscription and Community Offering, excluding Common
Stock purchased by directors, officers and employees (and members
of their immediate families) of the Bank and by the ESOP and any
tax-qualified or stock-based compensation plan (excluding
individual retirement plans ("IRAs")) and any similar plan
created by the Bank for some or all of its directors or
employees, payable on the Closing Date. The management fee
described in subsection (a) shall be applied against such success
fee.
(c) If any shares of the Company's stock remain available after the
Subscription and Community Offering, at the request of the Bank,
Xxxx will seek to form a syndicate of registered broker-dealers
to assist in the sale of such shares of Common Stock on a best
efforts basis, subject to the terms and conditions set forth in
the Selected Dealers' Agreement. Xxxx will endeavor to distribute
the Common Stock among dealers in a fashion which best meets the
distribution objectives of the Bank and the Plan of Conversion.
Xxxx will be paid a fee not to exceed 5.5% of the aggregate
purchase price of the shares of Common Stock sold pursuant to the
Selected Dealers' Agreement and then will pass onto selected
broker-dealers who assist in the syndicated community an amount
competitive with gross underwriting discounts charged at such
time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. Fees with respect to
purchases affected with the assistance of a broker/dealer shall
be transmitted by Xxxx to such broker/dealer. The decision to
utilize selected broker-dealers will be made by the Bank upon
consultation with Xxxx. In the event, with respect to any stock
purchases, fees are paid pursuant to this subparagraph 2(c), such
fees shall be in lieu of, and not in addition to, payment
pursuant to subparagraphs 2(a) and 2(b).
(d) The Bank and the Company hereby agree to reimburse Xxxx, from
time to time upon Xxxx'x request, for its reasonable
out-of-pocket expenses and the reasonable fees and expenses of
its counsel (such fees of counsel will not be incurred without
the prior
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approval of the Bank). Such reimbursement of legal fees shall not
exceed $35,000. The Bank will bear the expenses of the Offering
customarily borne by issuers including, without limitation, OTS,
the Commission, "Blue Sky," and NASD filing and registration
fees; the fees of the Bank's accountants, conversion agent,
attorneys, appraiser, transfer agent and registrar, printing,
mailing and marketing expenses associated with the Conversion.
Full payment of Xxxx'x actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Bank to terminate or abandon the Plan.
Xxxx will provide financial advisory assistance for a period of one year
following completion of the Conversion as set forth in the Letter Agreement.
Following this initial one-year term, if Xxxx and the Company wish to continue
the relationship, a fee will be negotiated and an agreement entered into at that
time. Nothing in this Agreement shall require the Company and the Bank to obtain
such financial advisory services from Xxxx.
Section 3. Prospectus; Offering. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover page
of the Prospectus.
Section 4. Representations and Warranties. The Company and the Bank
jointly and severally represent and warrant to Xxxx on the date hereof as
follows:
(a) The Registration Statement was declared effective by the Commission
on _________, 1999. At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the Registration Statement, including the Prospectus contained therein
(including any amendment or supplement thereto), and any information regarding
the Company or the Bank contained in Sales Information (as such term is defined
in Section 8 hereof) authorized by the Company or the Bank for use in connection
with the Offering, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with the Commission; provided, however, that the representations and
warranties in this Section 4(a) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished to the
Company or the Bank by Xxxx expressly regarding Xxxx (or Xxxxx, Xxxxxxxx &
Xxxxx, Inc.) for use in the Prospectus under the captions "Market for Alaska
Pacific Bancshares's Common Stock" and "Alaska Federal's Conversion" or
statements in or omissions from any Sales Information or information filed
pursuant to state securities or blue sky laws or regulations regarding Xxxx.
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(b) The Conversion Application was approved by the OTS on _______, 1999
and the related Prospectus was authorized for use by the OTS on _________, 1999.
At the time of the approval of the Conversion Application, including the
Prospectus (including any amendment or supplement thereto), by the OTS, the
Conversion Application, including the Prospectus (including any amendment or
supplement thereto), complied as to form in all material respects with the
Conversion Regulations except to the extent waived by the OTS. The Conversion
Application, including the Prospectus (including any amendment or supplement
thereto), does not include any untrue statement of a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this Section 4(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank by Xxxx expressly regarding
Xxxx (or Xxxxx, Xxxxxxxx & Xxxxx, Inc.) for use in the Prospectus contained in
the Conversion Application under the captions "Market for Alaska Pacific
Bancshares's Common Stock" and "Alaska Federal's Conversion" or statements in or
omissions from any sales information or information filed pursuant to state
securities or blue sky laws or regulations regarding Xxxx.
(c) No order has been issued by the OTS or the Commission preventing or
suspending the use of the Prospectus and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Conversion is, to the best knowledge of the Company
or the Bank, pending or threatened.
(d) To the best knowledge of the Company, no person has sought to obtain
review of the final action of the OTS in approving the Plan or in approving the
Conversion or the Holding Company Application pursuant to the Home Owners' Loan
Act, as amended, ("HOLA"), the Conversion Regulations or regulations promulgated
under the SLHCA.
(e) The Bank has been organized and is a validly existing federally
chartered savings bank in mutual form of organization and upon consummation of
the Conversion will become an organized and validly existing federally chartered
savings bank in capital stock form of organization, in both instances duly
authorized to conduct its business and own its property as described in the
Registration Statement and the Prospectus; the Bank has obtained all material
licenses, permits and other governmental authorizations currently required for
the conduct of its business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is in all material
respects complying with all laws, rules, regulations and orders applicable to
the operation of its business; the Bank is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which its ownership of property or leasing of property or the conduct of its
business requires such qualification, unless the failure to be so qualified in
one or more of such jurisdictions would not have a material adverse effect on
the financial condition, or the business, operations or income of the Bank. The
Bank does not own equity securities or any equity interest in any other business
enterprise except as described in the Prospectus.
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(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Alaska with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the financial condition, or the business, operations or income
of the Company. The Company has obtained all material licenses, permits and
other governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are in full
force and effect, and the Company is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its business.
(g) The Bank is a member of the Federal Home Loan Bank of Seattle
("FHLB-Seattle"). The deposit accounts of the Bank are insured by the FDIC up to
the applicable limits; and no proceedings for the termination or revocation of
such insurance are pending or, to the best knowledge of the Bank, threatened.
(h) The Company and the Bank have good and marketable title to all real
property and other assets material to the business of the Company and the Bank
and to those properties and assets described in the Registration Statement and
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration Statement and
Prospectus or are not material 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 or the Bank hold properties,
including those described in the Registration Statement and Prospectus, are in
full force and effect.
(i) The Company and the Bank have received an opinion from Breyer &
Associates, PC, Washington, D.C. with respect to the federal tax consequences of
the Conversion and an opinion from Deloitte & Touche LLP, Anchorage, Alaska,
with respect to the Alaska state tax consequences of the Conversion; all
material aspects of each of those tax opinions are accurately summarized in the
Prospectus; and the facts and representations upon which such opinions are based
are truthful, accurate and complete.
(j) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell (i) the capital stock of the Bank to the Company and (ii) the Shares to be
sold by the Company as provided herein and as described in the Prospectus.
(k) The Company and the Bank are not in violation of any directive
received from the OTS or the FDIC to make any material change in the method of
conducting their businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation, regulations,
decisions, directives and orders of the OTS and the FDIC), and, except as set
forth in the Registration Statement and the Prospectus, there is no suit or
proceeding or
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charge or action before or by any court, regulatory authority or governmental
agency or body, pending or, to the knowledge of the Company and the Bank,
threatened, which would materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement and the
Prospectus or which would result in any material adverse change in the financial
condition, earnings, capital or properties of the Company, or the Bank.
(l) The consolidated financial statements which are included in the
Prospectus fairly present the financial condition, results of operations,
retained earnings and cash flows of the Bank at the respective dates thereof and
for the respective periods covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the Regulations of the
Commission, Title 12 of the Code of Federal Regulations, and generally accepted
accounting principles consistently applied through the periods involved except
as noted therein. Such financial statements are consistent with the most recent
financial statements and other reports filed by the Bank with the OTS, except
that accounting principles employed in such regulatory filings conform to the
requirements of such authorities and not necessarily to generally accepted
accounting principles. The other financial, statistical and pro forma
information and related notes (except the appraisal data) included in the
Prospectus present fairly the information shown therein on a basis consistent
with the audited and unaudited consolidated financial statements of the Bank
included in the Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been properly applied on the basis described therein.
(m) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus: (i) there has not been any material
adverse change, in the financial condition of the Company and the Bank
considered as on enterprise or in the earnings, capital or properties of the
Company or the Bank, whether or not arising in the ordinary course of business;
(ii) there has been no incurrence of any material long-term debt by the Bank or
any material increase in loans past due 90 days or more or real estate acquired
by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in surplus and reserves or total assets of
the Bank nor has the Company or the Bank issued any securities (other than as
contemplated by this Agreement) or incurred any liability or obligation for
borrowing other than in the ordinary course of business and (iii) there have not
been any material transactions entered into by the Company or the Bank, except
with respect to those transactions entered into in the ordinary course of
business.
(n) The capitalization, liabilities, assets, properties and business of
the Company and the Bank conform in all material respects to the descriptions
thereof contained in the Prospectus.
(o) Neither the Company nor the Bank has any material contingent
liabilities, except as set forth in the Prospectus.
(p) As of the date hereof, neither the Company nor the Bank is in
violation of its articles of incorporation or bylaws or charter or bylaws, as
applicable (and the Bank will not be in
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violation of its charter or bylaws in capital stock form at the time of
consummation of the Conversion), or in default in the performance or observance
of any material obligation, agreement, covenant, or condition contained in any
material contract, lease, loan agreement, indenture or other instrument to which
it is a party or by which it or any other instrument to which it is a party or
by which it or any of its property may be bound; the consummation of the
Conversion, the execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated have been duly and validly
authorized by all necessary corporate action on the part of the Company and the
Bank and this Agreement has been validly executed and delivered by the Company
and the Bank and, assuming valid execution and delivery by Xxxx, is the valid,
legal and binding Agreement of the Company and the Bank enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of Federal savings associations and their holding companies, (ii)
general equitable principles, (iii) laws relating to the safety and soundness of
insured depository institutions, and (iv) applicable law (including Section 23A
of the Federal Reserve Act, as amended) or public policy with respect to the
indemnification and/or contribution provisions contained herein, and except that
no representation or warranty need be made as to the effect or availability of
equitable remedies or injunctive relief (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
consummation of the transaction herein contemplated will not: (i) conflict with
or constitute a breach of, or default under, the articles of incorporation and
bylaws of the Company or the charter and bylaws of the Bank (in either mutual or
capital stock form), or any material contract, lease or other instrument to
which the Company or the Bank is a party, or any applicable law, rule,
regulation or order to which the Company or the Bank is subject; (ii) violate
any authorization, approval, judgement, decree, order, statute, rule or
regulation applicable to the Company or the Bank, except for such violation
which would not have a material adverse effect on the financial condition and
results of operations of the Company and the Bank on a consolidated basis; or
(iii) with the exception of the liquidation account established in the
Conversion, result in the creation of any material lien, charge or encumbrance
upon any property of the Company or the Bank.
(q) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of the Company or
the Bank, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other instrument of agreement to which the Company or the Bank
is a party or by which any of them or any of their property is bound or affected
except such defaults which would not have a material adverse effect on the
financial condition or results of operations of the Company and the Bank on a
consolidated basis; such agreements are in full force and effect; and no other
party to any such agreements has instituted or, to the best knowledge of the
Company and the Bank, threatened any action or proceeding wherein the Company or
the Bank would be alleged to be in default thereunder under circumstances where
such action or proceeding, if determined adversely to the Company or the Bank
would have a material adverse effect on the Company and the Bank, taken as a
whole.
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(r) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Date referred
to in Section 2; the Shares will have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan and in
the Prospectus, will be duly and validly issued, fully paid and non-assessable;
no preemptive rights exist with respect to the Shares (except for subscription
rights granted under the Plan); and the terms and provisions of the Shares will
conform in all material respects to the description thereof contained in the
Registration Statement and the Prospectus. To the best knowledge of the Company
and the Bank, upon the issuance of the Shares, good title to the Shares will be
transferred from the Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers thereof by
third-party claimants.
(s) The Company or the Bank is not required to obtain any approval of
any regulatory or supervisory or other public authority in connection with the
execution and delivery of this Agreement or the issuance of the Shares, except
for the approval of the Commission, the OTS and any necessary qualification,
notification, registration or exemption under the securities or blue sky laws of
the various states in which the Shares are to be offered, and except as may be
required under the rules and regulations of the NASD and/or the Nasdaq National
Market.
(t) Deloitte & Touche, LLP, which has certified the financial statements
of the Bank included in the Prospectus as of December 31, 1998 and 1997, has
advised the Company and the Bank in writing that they are, with respect to the
Company and the Bank, independent public accountants within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations and Section
571.2(c)(3).
(u) RP Financial, LC, which has prepared the Bank's Conversion Valuation
Appraisal Report as of March 12, 1999 (as amended or supplemented, if so amended
or supplemented) (the "Appraisal"), has advised the Company in writing that it
is independent of the Company and the Bank within the meaning of the Conversion
Regulations.
(v) The Company and the Bank have timely filed all required federal,
state and local tax returns; the Company and the Bank have paid all taxes that
have become due and payable in respect of such returns, except where permitted
to be extended; to the best knowledge of the Bank adequate reserves have been
made for similar future tax liabilities and no deficiency has been asserted with
respect thereto by any taxing authority.
(w) The Company and the Bank are in compliance in all material respects
with the applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
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(x) To the knowledge of the Company and the Bank, neither the Company
(except for the loan to the ESOP), the Bank nor employees of the Company or the
Bank have made any payment of funds of the Company or the Bank as a loan for the
purchase of the Shares.
(y) Prior to the Conversion, the Bank was not authorized to issue shares
of capital stock and neither the Company nor the Bank has: (i) issued any
securities within the last 18 months (except for notes to evidence other bank
loans and reverse repurchase agreements or other liabilities in the ordinary
course of business or as described in the Prospectus); (ii) had any material
dealings within the 12 months prior to the date hereof with any member of the
NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering and routine purchases
and sales of United States government and agency securities; (iii) entered into
a financial or management consulting agreement except as contemplated hereunder
and except for the Letter Agreement set forth in Exhibit A; and (iv) engaged any
intermediary between Xxxx and the Company and the Bank in connection with the
offering of the Shares, and no person is being compensated in any manner for
such service.
(z) The Company and the Bank have not relied upon Xxxx or Xxxx'x counsel
for any legal, tax or accounting advice in connection with the Conversion.
(aa) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
Any certificates signed by an officer of the Company or the Bank
pursuant to the conditions of this Agreement and delivered to Xxxx or its
counsel that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Bank to Xxxx as to the matters covered thereby
with the same effect as if such representation and warranty were set forth
herein.
Section 5. Representations and Warranties of Xxxx.
(a) Xxxx represents and warrants to the Company and the Bank that:
(i) Xxxx is a corporation and is validly existing in good standing
under the laws of the State of Ohio with full power and authority to
provide the services to be furnished to the Bank and the Company hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Xxxx, and this Agreement
has been duly and validly executed and delivered by Xxxx and is the legal,
valid and binding agreement of Xxxx, enforceable in accordance with its
terms.
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(iii) Each of Xxxx and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits necessary to
perform such services.
(iv) The execution and delivery of this Agreement by Xxxx, the
consummation of the transactions contemplated hereby and compliance with
the terms and provisions hereof will not conflict with, or result in a
breach of, any of the terms, provisions or conditions of, or constitute a
default (or event which with notice or lapse of time or both would
constitute a default) under, the articles of incorporation of Xxxx or any
agreement, indenture or other instrument to which Xxxx is a party or by
which it or its property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with Xxxx'x execution and delivery of
this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or, to the
best knowledge of Xxxx, pending or threatened, which might materially
adversely affect Xxxx'x performance under this Agreement.
Section 5.1 Covenants of the Company and the Bank. The Company and the
Bank hereby jointly and severally covenant with Xxxx as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing Xxxx and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to which
amendment or supplement Xxxx or its counsel shall reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the OTS, file any amendment or supplement to such Conversion
Application without providing Xxxx and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which amendment
or supplement Xxxx or its counsel shall reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the OTS, file any amendment or supplement to such
Holding Company Application without providing Xxxx and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement Xxxx or its counsel shall reasonably
object. The Company and the Bank will not consummate the Conversion prior to the
approval of the Holding Company Application by the OTS.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared effective
by the Commission and any post-effective amendment to the Conversion Application
to be approved by the OTS and will
-12-
immediately upon receipt of any information concerning the events listed below
notify Xxxx: (i) when the Registration Statement, as amended, has become
effective; (ii) when the Conversion Application, as amended, has been approved
by the OTS; (iii) when the Holding Company Application, as amended, has been
approved by the OTS; (iv) of any comments from the Commission, the OTS or any
other governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (v) of the request by the Commission, the OTS or
any other governmental entity for any amendment or supplement to the
Registration Statement, the Conversion Application or the Holding Company
Application or for additional information; (vi) of the issuance by the
Commission, the OTS or any other governmental entity of any order or other
action suspending the Offering or the use of the Registration Statement or the
Prospectus or any other filing of the Company or the Bank under the Conversion
Regulations, or other applicable law, or the threat of any such action; (vii)
the issuance by the Commission, the OTS or any state authority of any stop order
suspending the effectiveness of the Registration Statement or the approval of
the Conversion Application or Holding Company Application, or of the initiation
or threat of initiation or threat of any proceedings for any such purpose; or
(viii) of the occurrence of any event mentioned in paragraph (h) below. The
Company and the Bank will make every reasonable effort (i) to prevent the
issuance by the Commission, the OTS or any state authority of any such order
and, if any such order shall at any time be issued, (ii) to obtain the lifting
thereof at the earliest possible time.
(e) The Company and the Bank will deliver to Xxxx and to its counsel two
conformed copies of the Registration Statement, the Conversion Application and
the Holding Company Application, as originally filed and of each amendment or
supplement thereto, including all exhibits. Further, the Company and the Bank
will deliver such additional copies of the foregoing documents to counsel to
Xxxx as may be required for any NASD filings.
(f) The Company and the Bank will furnish to Xxxx, from time to time
during the period when the Prospectus (or any later prospectus related to this
offering) is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, (the "1934 Act"), such number of copies of such Prospectus
(as amended or supplemented) as Xxxx may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
rules and regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes Xxxx to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner contemplated by
the Plan in connection with the sale of the Shares by Xxxx.
(g) The Company and the Bank will comply with any and all material
terms, conditions, requirements and provisions with respect to the Conversion
imposed by the Commission, the OTS, the Conversion Regulations or the SLHCA, and
by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations to be complied with prior to or subsequent to the Closing Date.
(h) If, at any time during the period when the Prospectus relating to
the Shares is required to be delivered, any event relating to or affecting the
Company or the Bank shall occur, as a result
-13-
of which it is necessary or appropriate, in the opinion of counsel for the
Company and the Bank to amend or supplement the Registration Statement or
Prospectus in order to make the Registration Statement or Prospectus not
misleading in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, the Company and the Bank will, at their expense,
prepare and file with the Commission and the OTS and furnish to Xxxx a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and Prospectus (in form and substance
satisfactory to Xxxx and its counsel after a reasonable time for review) which
will amend or supplement the Registration Statement and Prospectus so that as
amended or supplemented it will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading. For the purpose of this Agreement, the
Company and the Bank each will timely furnish to Xxxx such information with
respect to itself as Xxxx may from time to time reasonably request.
(i) At the Closing Date referred to in Section 2, the Plan will have
been adopted by the Boards of Directors of both the Company and the Bank and the
offer and sale of the Shares will have been conducted in all material respects
in accordance with the Plan, the Conversion Regulations, and all other
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Conversion imposed upon
the Company or the Bank by the OTS, the Commission or any other regulatory
authority and in the manner described in the Prospectus.
(j) Upon completion of the sale by the Company of the Shares
contemplated by the Prospectus, (i) the Bank will be converted pursuant to the
Plan to a federally chartered stock savings bank, (ii) all of the authorized and
outstanding capital stock of the Bank will be owned by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank. The Conversion
will have been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except with respect
to the filing of certain post-sale, post- Conversion reports, and documents in
compliance with the 1933 Act Regulations or the OTS's letters of approval, all
terms, conditions, requirements and provisions with respect to the Conversion
(except those that are conditions subsequent) imposed by the Commission and the
OTS, if any, will have been complied with by the Company and the Bank in all
material respects or appropriate waivers will have been obtained and all
material notice and waiting periods will have been satisfied, waived or elapsed.
(k) The Company and the Bank will take all necessary actions, in
cooperation with Xxxx, and furnish to whomever Xxxx, the Company and the Bank
may mutually agree, such information as may be required to qualify or register
the Shares for offering and sale by the Company or to exempt such Shares from
registration, or to exempt the Company as a broker-dealer and its officers,
directors and employees as broker-dealers or agents under the applicable
securities or blue sky laws of such jurisdictions in which the Shares are to be
offered and sold as Xxxx and the Company and the Bank may reasonably agree upon;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify to do business in any
-14-
jurisdiction in which it is not so qualified. In each jurisdiction where any of
the Shares shall have been qualified or registered as above provided, the
Company will make and file such statements and reports in each fiscal period as
are or may be required by the laws of such jurisdiction.
(l) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the requirements of the OTS, and such Eligible
Account Holders and Supplemental Eligible Account Holders who continue to
maintain their savings accounts in the Bank will have an inchoate interest in
their pro rata portion of the liquidation account which shall have a priority
superior to that of the holders of shares of Common Stock in the event of a
complete liquidation of the Bank.
(m) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date, without
Xxxx'x prior written consent, any shares of Common Stock other than the Shares
or other than in connection with any plan or arrangement described in the
Prospectus.
(n) The Company has registered its Common Stock under Section 12(g) of
the 1934 Act concurrent with the Offering pursuant to the Plan and such
registration became effective concurrent with the effectiveness of the
Registration Statement. The Company shall maintain the effectiveness of such
registration for not less than three (3) years or such shorter period as may be
required by the OTS.
(o) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three years from the date hereof, whichever
period is greater, the Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report of the Company
(including a consolidated balance sheet and statements of consolidated income,
stockholders' equity and cash flows of the Company and its subsidiaries as at
the end of and for such year, certified by independent public accountants in
accordance with Regulation S-X under the 1933 Act and the 1934 Act).
(p) During the period of three years from the date hereof, the Company
will furnish to Xxxx: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted
(including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all
proxy statements and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its stockholders or filed with
the Commission, the OTS or any other supervisory or regulatory authority or any
national securities exchange or system on which any class of securities of the
Company is listed or quoted, each press release and material news items and
additional documents and information with respect to the Company or the Bank as
Xxxx may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Bank as Xxxx may
reasonably request.
-15-
(q) The Company and the Bank will use the net proceeds from the sale of
the Shares in the manner set forth in the Prospectus under the caption "How
Alaska Pacific Bancshares Intends to Use the Conversion Offering Proceeds."
(r) Other than as permitted by the Conversion Regulations, the SLHCA,
the 1933 Act, the 1933 Act Regulations, and the laws of any state in which the
Shares are registered or qualified for sale or exempt from registration, neither
the Company nor the Bank will distribute any prospectus, offering circular or
other offering material in connection with the offer and sale of the Shares.
(s) The Company will use its best efforts to (i) encourage and assist
three market makers to establish and maintain a market for the Shares and (ii)
list the Shares through the OTC Bulletin Board or the National Daily Quotations
System "Pink Sheets" published by the National Quotation Bureau, Inc. effective
on or prior to the Closing Date.
(t) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Bank's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering in accordance with the Plan
and as described in the Prospectus or until refunds of such funds have been made
to the persons entitled thereto or withdrawal authorizations cancelled in
accordance with the Plan and as described in the Prospectus. The Bank will
maintain such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Bank to make the appropriate refunds of such funds
in the event that such refunds are required to be made in accordance with the
Plan and as described in the Prospectus.
(u) Prior to the Closing Date, the Holding Company Application shall
have been approved by the OTS. The Company will promptly take all necessary
action to register as a savings and loan holding company under the SLHCA within
90 days of the Closing Date.
(v) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Xxxx in order for Xxxx to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(w) The Bank will not amend the Plan without notifying Xxxx prior
thereto.
(x) The Company shall assist Xxxx, if necessary, in connection with the
allocation of the Shares in the event of an oversubscription and shall provide
Xxxx with any information necessary in allocating the Shares in such event.
(y) Prior to the Closing Date, the Company and the Bank will inform Xxxx
of any event or circumstances of which it is aware as a result of which the
Registration Statement, the
-16-
Conversion Application and/or Prospectus, as then amended or supplemented, would
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading.
Section 5.2 Covenants of Xxxx. Xxxx hereby covenants with the Company
and the Bank as follows:
(a) During the period when the Prospectus is used, Xxxx will comply, in
all material respects and at its own expense, with all requirements imposed upon
it by the OTS and the NASD and, to the extent applicable, by the 1933 Act and
the 1934 Act and the rules and regulations promulgated thereunder.
(b) Xxxx shall return unused copies of the Prospectus, if any, to the
Company promptly upon the completion of the Conversion.
(c) Xxxx will distribute copies of the Prospectus and Sales Information
in connection with the sales of the common stock only in accordance with NASD
and OTS regulations, the 1933 Act and the rules and regulations promulgated
thereunder.
(d) Xxxx shall assist the Bank in maintaining arrangements for the
deposit of funds and the making of refunds, as appropriate (as described in
Section 5.1(t)), and shall perform the allocation of shares in the event of an
oversubscription, in conformance with the Plan and applicable regulations and
based upon information furnished to Xxxx by the Bank (as described in Section
5.1(x)).
(e) Xxxx shall use its best efforts to assist the Company in obtaining
at least three market makers for the shares of Common Stock.
Section 6. Payment of Expenses. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse Xxxx for: (a) all
filing fees in connection with all filings with the NASD; (b) any stock issue or
transfer taxes which may be payable with respect to the sale of the Shares; (c)
all reasonable expenses of the Conversion, including but not limited to, the
Company's and the Bank's attorneys' fees, transfer agent, registrar and other
agent charges, fees relating to auditing and accounting or other advisors and
costs of printing all documents necessary in connection with the Conversion; and
(d) all reasonable out-of-pocket expenses incurred by Xxxx. Such out-of-pocket
expenses include, but are not limited to, travel, communications and postage and
reasonable fees of counsel (such fees of counsel will not be incurred without
the prior approval of the Bank). However, such out-of-pocket expenses do not
include expenses incurred with respect to the matters set forth in (a) and (b)
above. In the event the Company is unable to sell a minimum of 680,000 Shares or
the Conversion is terminated or otherwise abandoned, the Company and the Bank
shall reimburse Xxxx in accordance with Section 2 hereof.
-17-
Section 7. Conditions to Xxxx'x Obligations. Xxxx'x obligations
hereunder, as to the Shares to be issued at the Closing Date, are subject, to
the extent not waived by Xxxx, to the condition that all representations and
warranties of the Company and the Bank herein are, at and as of the commencement
of the Offering and at and as of the Closing Date, true and correct in all
material respects, the condition that the Company and the Bank shall have
performed all of their obligations hereunder to be performed on or before such
dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted
the Conversion in all material respects in accordance with the Plan, the
Conversion Regulations, and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by the OTS.
(b) The Registration Statement shall have been declared effective by the
Commission, the Conversion Application approved by the OTS, and the Holding
Company Application approved by the OTS not later than 5:30 p.m. on the date of
this Agreement, or with Xxxx'x consent at a later time and date; and at the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefore
initiated or threatened by the Commission, or any state authority and no order
or other action suspending the authorization of the Prospectus or the
consummation of the Conversion shall have been issued or proceedings therefore
initiated or, to the Company's or the Bank's knowledge threatened by the
Commission, the OTS or any state authority.
(c) At the Closing Date, Xxxx shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed
to Xxxx and for its benefit, of Breyer & Associates, PC, special counsel
for the Company and the Bank, in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Alaska and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus.
(ii) The Bank is organized and is validly existing as a federally
chartered savings bank in mutual form of organization and upon the
Conversion will become a duly organized and validly existing federally
chartered savings bank in capital stock form of organization, in both
instances duly authorized to conduct its business and own its property
as described in the Registration Statement and Prospectus. All of the
outstanding capital stock of the Bank will be duly authorized and,
upon payment therefor as set forth in the Plan, will be validly
issued, fully paid and non-assessable and, to such counsel's Actual
Knowledge, will be owned by the Company, free and clear of any liens,
encumbrances, claims or other restrictions.
-18-
(iii) The Bank is a member of the FHLB-Seattle. The Bank is an
insured depository institution under the provisions of Section 4(a) of
the Federal Deposit Insurance Act, as amended, and no proceedings for
the termination or revocation of such insurance are pending or, to
such counsel's Actual Knowledge, threatened; the description of the
liquidation account as set forth in the Prospectus under the caption
"Alaska Federal's Conversion-Effects of Conversion to Stock Form on
Depositors and Borrowers of Alaska Federal-Liquidation Account," to
the extent that such information constitutes matters of law and legal
conclusions, has been reviewed by such counsel and is accurate in all
material respects.
(iv) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within the range
set forth in the Prospectus under the caption "Capitalization," and no
shares of Common Stock have been issued prior to the Closing Date; at
the time of the Conversion, the Shares to be sold in the Offering will
have been duly and validly authorized for issuance, and when issued
and delivered by the Company pursuant to the Plan against payment of
the consideration as set forth in the Plan and the Prospectus, will be
duly and validly issued and fully paid and non-assessable; except for
subscription rights granted pursuant to the Plan, the issuance of the
Shares is not subject to statutory preemptive rights and the terms and
provisions of the Shares conform in all material respects to the
description thereof contained in the Prospectus. To such counsel's
Actual Knowledge, upon the issuance of the Shares, good title to the
Shares will be transferred from the Company to the purchasers thereof
against payment therefor, subject to such claims as may be asserted
against the purchasers thereof by third-party claimants.
(v) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part
of the Company and the Bank; and this Agreement is a valid and binding
obligation of the Company and the Bank, enforceable in accordance with
its terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws now or hereafter in effect relating
to or affecting the enforcement of creditors' rights generally or the
rights of creditors of savings associations and their holding
companies, (ii) general principles of equity, (iii) laws relating to
the safety and soundness of insured depository institutions, and (iv)
applicable law or public policy with respect to the indemnification
and/or contribution provisions contained herein, and except that no
opinion need to be expressed as to the effect or availability of
equitable remedies or injunctive relief (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(vi) The Conversion Application has been approved by the OTS and
the Prospectus has been authorized for use by the OTS. The OTS has
approved the Holding Company Application and issued its letter of
approval under the SLHCA, and no action has been taken, and to such
counsel's Actual Knowledge, none is pending or threatened, to revoke
any such authorization or approval.
-19-
(vii) The Plan has been duly adopted by the required vote of the
directors of the Company and the Bank and, based upon the certificate
of the inspector of election, by the members of the Bank.
(viii) Subject to the satisfaction of the conditions to the OTS
approval of the Conversion, the Company and the Bank are not required
to receive any further approval, authorization, consent or other order
of, register with, or submit a notice to any other federal agency in
connection with the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the Conversion, except
as may be required under the securities or blue sky laws of various
jurisdictions (as to which no opinion need be rendered), except as may
be required under the rules and regulations of the NASD and/or the OTC
Bulletin Board or National Daily Quotations System (as to which no
opinion need be rendered).
(ix) The Registration Statement is effective under the 1933 Act
and no stop order suspending the effectiveness has been issued under
the 1933 Act or proceedings therefor initiated or, to such counsel's
Actual Knowledge, threatened by the Commission.
(x) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the OTS, the Conversion
Application, including the Prospectus contained therein, complied as
to form in all material respects with the requirements of the HOLA and
the Conversion Regulations (other than the financial statements, the
notes thereto, and other tabular, financial, statistical and appraisal
data included therein or omitted therefrom, as to which no opinion
need be rendered).
(xi) At the time that the Registration Statement became
effective, the Registration Statement (as amended or supplemented, if
so amended or supplemented) (other than the financial statements, the
notes thereto and other tabular, financial, statistical and appraisal
data included therein or omitted therefrom, as to which no opinion
need be rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(xii) The terms and provisions of the Shares of the Company
conform, in all material respects, to the description thereof
contained in the Registration Statement and Prospectus, and the form
of certificate used to evidence the Shares complies with Alaska law.
(xiii) The descriptions in the Conversion Application, the
Registration Statement and the Prospectus of the contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments filed as exhibits thereto are accurate in all material
respects and fairly present the information required to be shown.
(xiv) To such counsel's Actual Knowledge, the Company and the
Bank have conducted the Conversion, in all material respects, in
accordance with all applicable requirements of the Plan, the
Conversion Regulations and the HOLA; the Plan complies in all material
respects with, the Conversion Regulations and the HOLA, and all
decisions and orders issued thereunder
-20-
(except where a written waiver has been received); no order has been
issued by the OTS, the Commission or any state authority to suspend
the Offering or the use of the Prospectus, and no action for such
purposes has been instituted or, to such counsel's Actual Knowledge,
threatened by the OTS or the Commission or any state authority and, to
such counsel's Actual Knowledge, no person has sought to obtain
regulatory or judicial review of the final action of the OTS approving
the Plan, the Conversion Application or the Holding Company
Application.
(xv) To such counsel's Actual Knowledge, the Company and the Bank
have obtained all material federal licenses, permits and other
governmental authorizations currently required under the HOLA and all
applicable rules and regulations promulgated thereunder for the
conduct of their businesses and to such counsel's Actual Knowledge all
such licenses, permits and other governmental authorizations are in
full force and effect.
(xvi) To such counsel's Actual Knowledge, neither the Company nor
the Bank is in violation of its articles of incorporation, or charter,
as applicable; neither the Company nor the Bank is in default or
violation of any obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note, lease or
other instrument described in the Prospectus or filed as an exhibit to
the Registration Statement to which it is a party or by which it or
its property may be bound, except for such defaults or violations
which would not have a material adverse impact on the financial
condition or results of operations of the Company and the Bank on a
consolidated basis; the execution and delivery of this Agreement, the
occurrence of the obligations herein set forth and the consummation of
the transactions contemplated herein 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 or the Bank pursuant to any contract, indenture,
loan agreement, note, lease or other instrument filed as an exhibit to
the Registration Statement to which the Company or the Bank is a party
or by which any of them may be bound, or to which any of the property
or assets of the Company or the Bank is subject (other than the
establishment of a liquidation account), and such action will not
result in any violation of the provisions of the articles of
incorporation, or charter, as applicable, of the Company or the Bank
or any applicable federal law, act, regulation (except that no opinion
need be rendered with respect to the securities or blue sky laws of
various jurisdictions or the rules and regulations of the NASD and/or
the OTC Bulletin Board or National Daily Quotation System) or order or
court order, writ, injunction or decree naming the Company or the
Bank.
(xvii) The Company' articles of incorporation and bylaws comply
in all material respects with the Alaska Corporation Code of the State
of Alaska ("Alaska Law"). The Bank's charter and bylaws in mutual form
and, upon the completion of the Conversion, in stock form, comply in
all material respects with the HOLA and the rules and regulations of
the OTS.
(xviii)To such counsel's Actual Knowledge, neither the Company
nor the Bank is in violation of any written directive from the OTS or
the FDIC to make any material change in the method of conducting its
respective business.
-21-
(xix) The information in the Prospectus under the captions
"Regulation," "Alaska Federal's Conversion," "Restrictions on
Acquisition of Alaska Pacific Bancshares" and "Description of Capital
Stock of Alaska Pacific Bancshares," to the extent that such
information constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been reviewed by
such counsel and is correct in all material respects. The description
of the Conversion process under the caption "Alaska Federal's
Conversion" in the Prospectus has been reviewed by such counsel and is
in all material respects correct. The discussion of federal statutes
and Alaska law or regulations promulgated thereunder described or
referred to in the Prospectus are accurate summaries. The information
regarding the federal tax opinion under the caption "Alaska Federal's
Conversion-Effects of Conversion to Stock Form on Depositors and
Borrowers of Alaska Federal- Tax Effects" has been reviewed by such
counsel and constitutes an accurate summary of the opinion rendered by
such counsel to the Company and the Bank with respect to such matters
subject to the qualifications and limitations noted therein.
In giving such opinion, such counsel may rely as to all matters of fact
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 Alaska Law. The opinion of Breyer &
Associates, PC shall be governed by and subject to the qualifications contained
in the Legal Opinion Accord ("Accord") of the American Bar Bank Section of
Business Law (1991). The term "Actual Knowledge" as used herein shall have the
meaning set forth in the Accord. For purposes of such opinion, no proceedings
shall be deemed to be pending, no order or stop order shall be deemed to be
issued, and no action shall be deemed to be instituted unless, in each case, a
director or executive officer of the Company or the Bank shall have received a
copy of such proceedings, order, stop order or action. In addition, such opinion
may be limited to current statutes, regulations and judicial interpretations and
to facts as they currently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement it should the current laws be
changed by legislative or regulatory action, judicial decision or otherwise; and
such counsel need express no view, opinion or belief with respect to whether any
proposed or pending legislation, if enacted, or any proposed or pending
regulations or policy statements issued by any regulatory agency, whether or not
promulgated pursuant to any such legislation, would affect the validity of the
Conversion or any aspect thereof. Such counsel may assume that any agreement is
the valid and binding obligation of any parties to such agreement other than the
Company or the Bank.
In addition, such counsel shall provide a letter stating that during the
preparation of the Registration Statement and the Prospectus, they participated
in conferences with certain officers of, the independent public accountants for,
and other representatives of the Company and the Bank, and on February __ and
March 3, 1999, Xxxx and its counsel, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, while such counsel has not confirmed the accuracy or completeness of or
otherwise verified the information contained in the Registration Statement or
the Prospectus, and does not assume any responsibility for such information,
based upon such conferences and a review of documents deemed relevant for the
purpose of issuing their letter (relying as to materiality as to factual
-22-
matters on certificates of officers and other factual representations by the
Company and the Bank), nothing has come to their attention that would lead them
to believe that the Registration Statement, or any amendment or supplement
thereto (other than the financial statements, the notes thereto, and other
tabular, financial, statistical and appraisal data included therein or omitted
therefrom as to which no statement need be made), as of the date of
effectiveness, and the Prospectus, as of its date and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Date and addressed to
Xxxx and for its benefit, of ____________________________, the Bank's local
counsel, in form and substance to the effect that, to the best of such counsel's
knowledge, (i) the Company and the Bank have good and marketable title to all
properties and assets which are material to the business of the Company and the
Bank and to those properties and assets described in the Registration Statement
and Prospectus, as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement and Prospectus, or are not material in relation to the business of the
Company and the Bank considered as one enterprise; (ii) 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, as described in the Registration Statement
and Prospectus, are in full force and effect; (iii) the Bank is duly qualified
to transact business in each jurisdiction in which its ownership of property or
leasing of property or the conduct of its business requires such qualification,
unless the failure to be so qualified in one or more of such jurisdictions would
not have a material adverse effect on the financial condition, or the business,
operations or income of the Bank; (iv) the information regarding the Alaska tax
opinion under the caption "Alaska Federal's Conversion-Effects of Conversion to
Stock Form on Deposits and Borrowers of the Alaska Federal- Tax Effects" has
been reviewed by such counsel and constitutes a correct summary of the opinion
rendered by Deloitte & Touche LLP to the Company and the Bank with respect to
such matters; (v) the Company and the Bank are not required to receive any
further approval, authorization, consent or other order of, register with or
submit a notice to any Alaska regulatory agency in connection with the execution
and delivery of this Agreement, the issuance of the Shares and the consummation
of the Conversion, except as may be required under the securities or blue sky
laws of various jurisdictions (as to which a separate opinion will need be
rendered); (vi) to such counsel's Actual Knowledge, the Company and the Bank
have obtained all material Alaska licenses, permits and other governmental
authorizations currently required for the conduct of their businesses and to
such counsel's Actual Knowledge 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, except where the
failure to have such licenses, permits and other governmental authorizations or
the failure to be in compliance therewith would not have a material adverse
affect on the business or operations of the Bank and the Company, taken as a
whole; and (vii) there are no legal or governmental proceedings pending or to
such counsel's Actual Knowledge, threatened which are required to be disclosed
in the Registration Statement and Prospectus, other than those disclosed
therein, and to such counsel's Actual Knowledge, all pending legal and
governmental proceedings to which the Company or the Bank
-23-
is a party or of which any of their property is the subject, which are not
described in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the Company's or the Bank's business, are,
considered in the aggregate, not material.
(3) The favorable opinion, dated as of the Closing Date, of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., Xxxx'x counsel, with respect to such matters as Xxxx
may reasonably require. Such opinion may rely upon the opinions of counsel to
the Company and the Bank, and as to matters of fact, upon certificates of
officers and directors of the Company and the Bank delivered pursuant hereto or
as such counsel shall reasonably request.
(d) At the Closing Date, Xxxx shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Bank, both dated as of such Closing Date, to the effect that: (i) they have
reviewed the Prospectus and, in their opinion, at the time the Prospectus became
authorized for final use, the Prospectus did not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) since the respective dates as of which information is given
in the Registration Statement and Prospectus, there has been no material adverse
change in the financial condition, or in the earnings, capital properties or
business of the Company or the Bank independently, or of the Company and the
Bank considered as one enterprise, whether or not arising in the ordinary course
of business; and, to their knowledge, no other event has occurred, which should
have been set forth in an amendment or supplement to the Prospectus which has
not been so set forth, and the conditions set forth in this Section 7 have been
satisfied; (iii) the representations and warranties in Section 4 are true and
correct with the same force and effect a though expressly made at and as of the
Closing Date; (iv) the Company and the Bank have complied in all material
respects with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Date and will comply in all
material respects with all obligations to be satisfied by them after Conversion;
(v) no stop order suspending the effectiveness of the Registration Statement has
been initiated or, to the best knowledge of the Company or the Bank, threatened
by the Commission; (vi) no order suspending the Offering, the Conversion, the
acquisition of all of the shares of the Bank by the Company or the effectiveness
of the Prospectus has been issued and no proceedings for that purpose are
pending or, to the best knowledge of the Company or the Bank, threatened by the
OTS, the Commission or any state authority; and (viii) to the best knowledge of
the Company or the Bank, no person has sought to obtain review of the final
action of the OTS approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of
Xxxx, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Bank independently, or of the
Company and the Bank considered as one enterprise, from that as of the latest
dates as of which such condition is set forth in the Prospectus other than
transactions referred to or contemplated therein; (iii) the Company or the Bank
shall not have received from the OTS any direction (oral or written) to make any
material change in the method of conducting their business with which it has not
complied (which direction, if any, shall have
-24-
been disclosed to Xxxx) or which materially and adversely would affect the
business, operations or financial condition or income of the Company and the
Bank considered as one enterprise; (iv) the Company and the Bank shall not have
been in material default (nor shall an event have occurred which, with notice or
lapse of time or both, would constitute a default) under any material provision
of any agreement or instrument relating to any outstanding indebtedness; (v) no
action, suit or proceedings, at law or in equity or before or by any federal or
state commission, board or other administrative agency, shall be pending or, to
the knowledge of the Company or the Bank, threatened against the Company or the
Bank or affecting any of their properties wherein an unfavorable decision,
ruling or finding would materially and adversely affect the business operations,
financially condition or income of the Company and the Bank considered as one
enterprise; and (vi) the Shares have been qualified or registered for offering
and sale or exempted therefore under the securities or blue sky laws of the
jurisdictions as Xxxx shall have requested and as agreed to by the Company and
the Bank.
(f) Concurrently with the execution of this Agreement, Xxxx shall
receive a letter from Deloitte & Touche LLP, dated as of the date of the
Prospectus and addressed to Xxxx: (i) confirming that Deloitte & Touche LLP is a
firm of independent public accountants within the meaning of Rule 101 of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the OTS and stating in effect that in
Deloitte & Touche LLP's opinion the financial statements of the Bank as of
December 31, 1998 and 1997, as are included in the Prospectus and covered by its
opinion included therein, comply as to form in all material respects with the
applicable accounting requirements and related published rules and regulations
of the OTS and the 1933 Act; (ii) a statement from Deloitte & Touche LLP in
effect that, on the basis of certain agreed upon procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim financial statements of the Bank
prepared by the Bank, a reading of the minutes of the meetings of the Board of
Directors and members of the Bank and consultations with officers of the Bank
responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) the unaudited financial
statements included in the Prospectus, are not in conformity with the 1933 Act,
applicable accounting requirements of the OTS and generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
financial statements included in the Prospectus; or (B) during the period from
the date of the latest unaudited financial statements included in the Prospectus
to a specified date not more than three business days prior to the date of the
Prospectus, except as has been described in the Prospectus, there was any
material increase in borrowings, other than normal deposit fluctuations, by the
Bank; or (C) there was any decrease in net assets of the Bank at the date of
such letter as compared with amounts shown in the latest unaudited statement of
condition included in the Prospectus; and (iii) a statement from Deloitte &
Touche LLP that, in addition to the audit referred to in their opinion included
in the Prospectus and the performance of the procedures referred to in clause
(ii) of this subsection (f), they have compared with the general accounting
records of the Bank, which are subject to the internal controls of the Bank, the
accounting system and other data prepared by the Bank, directly from such
accounting records, to the extent specified in such letter, such
-25-
amounts and/or percentages set forth in the Prospectus as Xxxx may reasonably
request; and they have reported on the results of such comparisons.
(g) At the Closing Date, Xxxx shall receive a letter from Deloitte &
Touche LLP, dated the Closing Date, addressed to Xxxx, confirming the statements
made by them in the letter delivered by it pursuant to subsection (f)(i) of this
Section 7, the "specified date" referred to in clause (ii) of subsection (f)
thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(h) At the Closing Date, Xxxx shall receive a letter from RP Financial,
LC, dated the date thereof and addressed to counsel for Xxxx, (i) confirming
that said firm is independent of the Company and the Bank and is experienced and
expert in the area of corporate appraisals within the meaning of Title 12 of the
Code of Federal Regulations, Part 563b, (ii) stating in effect that the
Appraisal prepared by such firm complies in all material respects with the
applicable requirements of Title 12 of the Code of Federal Regulations, and
(iii) further stating that its opinion of the aggregate pro forma market value
of the Company and the Bank expressed in its Appraisal dated as of March 12,
1999, and most recently updated, remains in effect.
(i) The Company and the Bank shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, Xxxx shall receive: (i) a copy of
the letter from the OTS approving the Conversion Application and authorizing the
use of the Prospectus; (ii) a copy of the order from the Commission declaring
the Registration Statement effective; (iii) a certificate from the OTS
evidencing the existence of the Bank; (iv) certificates of good standing from
the State of Alaska evidencing the good standing of the Company; (v) a
certificate from the FDIC evidencing the Bank's insurance of accounts; and (vi)
a letter of the FHLB-Seattle evidencing the Bank's membership thereof; and (vii)
a copy of the letter from the OTS approving the Company's Holding Company
Application.
(k) As soon as available after the Closing Date, Xxxx shall receive,
upon request, a copy of the Bank's federal stock charter.
(l) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or in the over-the-counter market, or quotations
halted generally on the Nasdaq National Market, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the Commission
or any other governmental authority; (ii) a general moratorium on the operations
of commercial banks or federal savings associations or a general moratorium on
the withdrawal of
-26-
deposits from commercial banks or federal savings associations declared by
federal or Alaska authorities; (iii) the engagement by the United States in
hostilities which have resulted in the declaration, on or after the date hereof,
of a national emergency or war; or (iv) a material decline in the price of
equity or debt securities if the effect of such a decline, in Xxxx'x reasonable
judgment, makes it impracticable or inadvisable to proceed with the Offering or
the delivery of the shares on the terms and in the manner contemplated in the
Registration Statement and Prospectus.
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Xxxx, its officers, directors, agents, servants and employees
and each person, if any, who controls Xxxx within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
reasonable and documented settlement expenses), joint or several, that Xxxx or
any of them may suffer or to which Xxxx and any such persons may become subject
under all applicable federal or state laws or otherwise, and to promptly
reimburse Xxxx and any such persons upon written demand for any expense
(including reasonable and documented fees and disbursements of counsel) incurred
by Xxxx or any of them in connection with investigating, preparing or defending
any actions, proceedings or claims (whether commenced or threatened) to the
extent such losses, claims, damages, liabilities or actions: (i) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement thereto),
the Holding Company Application or any blue sky application or other instrument
or document executed by the Company or the Bank or based upon written
information supplied by the Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom, or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or its officers, directors and employees as
broker-dealers or agents, under the securities laws thereof (collectively, the
"Blue Sky Application"), or any application or other document, advertisement,
oral statement or communication ("Sales Information") prepared, made or executed
by or on behalf of the Company or the Bank with their consent or based upon
written or oral information furnished by or on behalf of the Company or the
Bank, whether or not filed in any jurisdiction, in order to qualify or register
the Shares or to claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or based upon the omission or alleged omission to state in any
of the foregoing documents or information, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii) arise from
any theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information or other documentation distributed in connection with the
Conversion; provided, however, that no indemnification is required under this
paragraph (a) to the extent such losses,
-27-
claims, damages, liabilities or actions arise out of or are based upon Xxxx'x
xxxxx negligence, bad faith or willful misconduct (as determined in a final
judgment by a court of competent jurisdiction) or upon any untrue material
statement or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application, any Blue Sky Application or
Sales Information made in reliance upon and in conformity with information
furnished in writing to the Company or the Bank by Xxxx regarding Xxxx or
statistical information regarding national averages provided by Xxxx for the
Sales Information and provided further that such indemnification shall be to the
extent permitted by the OTS.
(b) Xxxx agrees to indemnify and hold harmless the Company and the Bank,
their directors and officers and each person, if any, who controls the Company
or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to reasonable and documented settlement
expenses), joint or several, which it, or any of them, may suffer or to which
it, or any of them may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Company, the Bank, and any such
persons upon written demand for any expenses (including reasonable and
documented fees and disbursements of counsel) incurred by it, or any of them, in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto) or the preliminary or final
Prospectus (or any amendment or supplement thereto), or are based upon the
omission or alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that Xxxx'x obligations under this Section 8(b)
shall exist only if and only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any amendment or supplement
thereto) or the Conversion Application (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information in reliance upon and in conformity
with information furnished in writing to the Company or the Bank by Xxxx
regarding Xxxx or statistical information regarding national averages provided
by Xxxx for the Sales Information.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted 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 on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an
-28-
indemnifying party, jointly with any other indemnifying parties receiving such
notice, may assume defense of such action with counsel chosen by it and approved
by the indemnified parties that are defendants in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that 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, proceeding or claim, other than
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one separate firm of attorneys
(and any special counsel that said firm may retain) for each indemnified party
in connection with any one action, proceeding or claim or separate but similar
or related actions, proceeding or claim or separate but similar or related
actions, proceedings or claims in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof
and the representations and warranties of the Company and the Bank set forth in
this Agreement shall remain operative and in full force and effect regardless
of: (i) any investigation made by or on behalf of Xxxx or its officers,
directors or controlling persons, agents or employees or by or on behalf of the
Company or the Bank or any officers, directors or controlling persons, agents or
employees of the Company or the Bank; (ii) delivery of and payment hereunder for
the Shares; or (iii) any termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or Xxxx, the Company, the
Bank and Xxxx shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or Xxxx from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that
Xxxx is responsible for that portion represented by the percentage that the fees
paid to Xxxx pursuant to Section 2 of this Agreement (not including expenses)
bears to the gross proceeds received by the Company from the sale of the Shares
in the Offering and the Company and the Bank shall be responsible for the
balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the Bank
on the one hand and Xxxx on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereto), but also the relative
benefits received by the Company and the Bank on the one hand and Xxxx on the
other from the Offering (before deducting expenses). The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
-29-
state a material fact relates to information supplied by the Company and/or the
Bank on the one hand or Xxxx on the other and the parties' relative intent, good
faith, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Bank and Xxxx agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro-rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this Section 9. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions, proceedings or claims
in respect thereof) referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, proceeding
or claim. It is expressly agreed that Xxxx shall not be required to contribute
any amount which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to Xxxx under this Agreement. It is understood that the
above stated limitation on Xxxx'x liability for contribution is essential to
Xxxx and that Xxxx would not have entered into this Agreement if such limitation
had not been agreed to by the parties to this Agreement. No person found guilty
of any fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The obligations of the Company and
the Bank under this Section 9 and under Section 8 shall be in addition to any
liability which the Company and the Bank may otherwise have. For purposes of
this Section 9, each of Xxxx'x, the Company's or the Bank's officers and
directors and each person, if any, who controls Xxxx or the Company or the Bank
within the meaning of the 1933 Act and the 1934 Act shall have the same rights
to contribution as Xxxx, the Company or the Bank. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action,
suit, claim or proceeding against such party in respect of which a claim for
contribution may be made against another party under this Section 9, will notify
such party from whom contribution may be sought, but the omission to so notify
such party shall not relieve the party from whom contribution may be sought from
any other obligation it may have hereunder or otherwise than under this Section
9.
Section 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the Bank and Xxxx and the representations
and warranties and other statements of the Company, the Bank and Xxxx set forth
in or made pursuant to this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Xxxx, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of
Xxxx, the Company, the Bank, and any such controlling person shall be entitled
to the benefit of the respective agreements, indemnities, warranties and
representations.
Section 11. Termination. Xxxx may terminate its obligations under this
Agreement by giving the notice indicated below in this Section 11 at any time
after this Agreement becomes effective as follows:
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(a) In the event the Company fails to sell all of the Shares by December
31, 1999, and in accordance with the provisions of the Plan or as required by
the Conversion Regulations, and applicable law, this Agreement shall terminate
upon refund by the Bank to each person who has subscribed for or ordered any of
the Shares the full amount which it may have received from such person, together
with interest as provided in the Prospectus, and no party to this Agreement
shall have any obligation to the other hereunder, except for payment by the
Company and/or the Bank as set forth in Sections 2(a) and (d), 6, 8 and 9
hereof.
(b) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement, unless waived in writing, by
the Closing Date, this Agreement and all of Xxxx'x obligations hereunder may be
cancelled by Xxxx by notifying the Company and the Bank of such cancellation in
writing at any time at or prior to the Closing Date, and any such cancellation
shall be without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
(c) If Xxxx elects to terminate this Agreement with respect to it as
provided in this Section, the Company and the Bank shall be notified promptly by
such Agent by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement with respect to
Xxxx in the event Xxxx is in material breach of the representations and
warranties or covenants contained in Section 5.2 and such breach has not been
cured after the Company and the Bank have provided Xxxx with notice of such
breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
Section 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to Xxxx
shall be mailed, delivered or telegraphed and confirmed to Xxxxxxx Xxxx &
Company, 000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxxxxxx X. XxXxxxx
(with a copy to Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X.,
00xx Xxxxx, Xxxxxxxxxx, X.X. 00000 Attention: Xxxx X. Xxxxxxxx, Esq.) and, if
sent to the Company and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company and the Bank at Alaska Pacific Bancshares, Inc., Nugget
Mall Branch, 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000-0000, Attention: Xxxxx X.
Xxxx, President and Chief Executive Officer (with a copy to Breyer & Associates
PC, 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxx X. Xxxxxx, Xx., Esq.).
Section 13. Parties. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of Xxxx when the same shall have been given by the undersigned. Xxxx
shall be entitled to act and rely on any request, notice, consent, waiver or
agreement purportedly given on behalf of the Company or the Bank, when the same
shall have been given by the undersigned or any other officer of the Company or
the Bank. This Agreement shall inure solely to the benefit of, and shall be
binding upon, Xxxx,
-31-
the Company, the Bank, and their respective successors, legal representatives
and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. It is understood and agreed that
this Agreement, including Exhibit A thereto, is the exclusive agreement among
the parties hereto, and supersedes any prior agreement among the parties and may
not be varied except in writing signed by all the parties.
Section 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by Xxxx and
the Company and the Bank. At the closing, the Company and the Bank shall deliver
to Xxxx in next day funds the commissions, fees and expenses due and owing to
Xxxx as set forth in Sections 2 and 6 hereof and the opinions and certificates
required hereby and other documents deemed reasonably necessary by Xxxx shall be
executed and delivered to effect the sale of the Shares as contemplated hereby
and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision or
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
Section 17. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the Company,
the Bank and Xxxx, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and Xxxx'x acceptance shall
constitute a binding agreement.
Very truly yours,
ALASKA PACIFIC BANCSHARES, INC. ALASKA FEDERAL SAVINGS BANK
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------- -----------------------
Xxxxx X. Xxxx Xxxxx X. Xxxx
President and Chief President and Chief
Executive Officer Executive Officer
Accepted as of the date first above written
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By: /s/ Xxxxxxxx X. XxXxxxx
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Xxxxxxxx X. XxXxxxx
Executive Vice President
