EXHIBIT 1
FIRST KANSAS FINANCIAL CORPORATION
(a Kansas corporation)
Up to 1,351,250 Shares1/
COMMON STOCK
($.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
[_________ __], 1998
Capital Resources, Inc.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Suite 200
Washington, DC 20036
Ladies and Gentlemen:
First Kansas Financial Corporation, a Kansas corporation (the "Company")
and First Kansas Federal Savings Bank, a federally chartered mutual savings
association (the "Association"), with its deposit accounts insured by the
Savings Association Insurance Fund ("SAIF") administered by the Federal Deposit
Insurance Corporation ("FDIC"), hereby confirm their respective obligations in
this agency agreement (the "Agreement") with Capital Resources, Inc. ("Capital
Resources") as follows:
SECTION 1. The Offering. The Association, in accordance with its plan of
conversion adopted by the Board of Directors of the Association (the "Plan"),
intends to be converted from a federally chartered mutual savings association to
a federally chartered stock savings bank and will sell all of its issued and
outstanding common stock to the Company. The Company will offer and sell its
common stock (the "Common Stock") in a subscription offering (the "Subscription
Offering") to (1) depositors of the Association with account balances of at
least $50 as of September 30, 1996 ("Eligible Account Holders"), (2) the
Association's tax-qualified employee benefit plans ("Employee Plans"), (3)
depositors of the Association with account balances of $50 or more as of March
31, 1998 ("Supplemental Eligible Account Holders"), and (4) certain other
depositors with account balance of at least $50 on the voting record date of the
special meeting of the Association who are not Eligible or Supplemental Eligible
Account Holders (the "Voting
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1/ Subject to increase to 1,553,938 shares.
1
Record Date") (all such parties being referred to in the aggregate as "Other
Members"), pursuant to rights to subscribe for up to 1,351,250 shares (subject
to increase to 1,553,938 shares) of Common Stock (the "Shares"). Subject to the
prior subscription rights of the parties listed above, the Association may offer
for sale in a direct community offering (the "Community Offering" and when
referred to together with the Subscription Offering, the "Subscription and
Community Offering"), the Shares not so subscribed for or ordered in the
Subscription Offering to members of the general public, with a preference to
natural persons residing in Miami, Xxxxxxx, Xxxxxxxx and Xxxxxxxx Counties,
Kansas ("Other Subscribers") (all such offerees being referred to in the
aggregate as "Eligible Offerees"). Shares not sold in the Community Offering may
be sold to certain members of the general public on a best-efforts basis by a
selling group of broker-dealers organized and managed by Capital Resources (the
"Syndicated Community Offering," together with the Subscription and Community
Offerings, are referred to as the "Offerings"). It is acknowledged that the
purchase of Shares in the Offerings is subject to maximum and minimum purchase
limitations as described in the Plan and that the Company may reject, in whole
or in part, any subscriptions received in the Community and Syndicated
Offerings. Collectively, these transactions are referred to herein as the
"Conversion".
The Company and the Association desire to retain Capital Resources to
assist the Company with its sale of the Shares in the Offerings. By and through
this Agreement, the Company and the Association confirm the retention of Capital
Resources to assist the Company during the Offerings.
In accordance with Title 12, Part 563b of the Code of Federal Regulations
(the "Conversion Regulations"), the Association has filed with the Office of
Thrift Supervision (the "OTS") an Application for Approval of Conversion on Form
AC (the "Conversion Application"), including the prospectus relating to the
Offerings, and has filed such amendments thereto, if any, as may have been
required by the OTS. The Conversion Application has been approved and the
related prospectus has been authorized for use by the OTS. The prospectus, as
amended, on file with the OTS at the time the OTS approves the Conversion
Application is hereinafter called the "Prospectus" except that if any prospectus
is filed by the Association pursuant to the Conversion Regulations differing
from the prospectus on file at the time the Conversion Application was initially
approved, the term "Prospectus" shall refer to the prospectus filed from and
after the time said prospectus is filed with or mailed to the OTS for filing.
Copies of the Prospectus have been delivered or are being delivered to Capital
Resources concurrently with the execution of this Agreement or promptly
thereafter. The Company has filed an application (the "Holding Company
Application") with the OTS to become a registered savings and loan holding
company under the Home Owners' Loan Act, as amended (12 U.S.C. ss. 1467a)
("HOLA").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-[_____]) (the
"Registration Statement") containing a prospectus (containing the same
information as the Prospectus) relating to the Offerings for the registration of
the Shares under the Securities Act of 1933, as amended, (the "1933 Act"), and
has filed such amendments thereto, if any, and such amended prospectuses as
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may have been required to the date hereof (containing the same information as
the Prospectus and amendments thereto, if any). The prospectus, as amended, on
file with the Commission at the time the Registration Statement initially
becomes effective is hereinafter called the "Prospectus", except that if the
prospectus filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the Commission under the 1933 Act (17 C.F.R. Section 230.100 et.
seq.) (the "1933 Act Regulations") or filed as part of an amendment to the
effective Registration Statement differs 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 filed as part of
an amendment to the effective Registration Statement from and after the time
said prospectus is filed with or mailed to the Commission for filing. If the
Prospectus is not filed pursuant to Rule 424(b) or filed as part of an amendment
to the effective Registration Statement, the term "Prospectus" shall refer to
the Prospectus filed with the OTS pursuant to Section 563b.5(e)(3) of the
Conversion Regulations.
SECTION 2. Retention of Capital Resources; Compensation; Sale and
Delivery of the Shares. Subject to the terms and conditions herein set forth,
the Company and the Association hereby appoint Capital Resources as their agent
to utilize its best efforts in advising and assisting the Company and the
Association with the Company's sale of the Shares in the Offerings.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, Capital
Resources accepts such appointment and agrees to consult with and advise the
Company and the Association as to the matters set forth in Exhibit A attached
hereto. It is acknowledged by the Company and the Association that Capital
Resources 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. If requested by the Company or the
Association, Capital Resources may also 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 obligations of Capital Resources pursuant to this Agreement shall
terminate upon the completion or termination or abandonment of the Plan by the
Company or the Association or upon termination of the Subscription and Community
Offering and the Syndicated Community Offering, if any, or if the terms of the
Conversion are substantially amended so as to materially and adversely change
the role of Capital Resources, but in no event later than December 18, 1998 (the
"End Date"). All fees due to Capital Resources but unpaid will be payable to
Capital Resources in next day funds at the earlier of the Closing Date (as
hereinafter defined) or the End Date. In the event the Subscription and
Community Offering or the Syndicated Community Offering is extended beyond the
End Date, the Company, the Association and Capital Resources may mutually agree
to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 998,750 Shares
within the period herein provided, this Agreement shall terminate, and the
Company shall refund to any persons
3
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 set forth in this Section 2 and in Sections 6, 8
and 9 hereof.
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 Offerings 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 certificates shall be
released for such shares until the conditions specified in Section 7 hereof
shall have been complied with to the reasonable satisfaction of Capital
Resources and its counsel. The release of Shares against payment therefor shall
be made on a date and at a time and place acceptable to the Company, the
Association and Capital Resources. The date upon which the Company shall release
or deliver the Shares sold in the Offerings, in accordance with the terms
hereof, is herein called the "Closing Date."
Capital Resources shall receive the following compensation for its
services hereunder:
(a) (i) a marketing fee payable upon the close of the Conversion in the amount
of (1.25%) of the aggregate dollar amount of all Shares sold in the
Offerings, excluding purchases by the Association's directors, officers,
employees, their immediate family members, employee stock ownership plans
and Association benefit plans, to investors who reside in the State of
Kansas and counties of Missouri contiguous to Kansas; (ii) 1.05% of the
aggregate dollar amount of stock sold in the Subscription and Community
Offering, excluding purchases by directors, officers, employees, their
immediate family members and employee stock ownership and benefit plans, to
investors who reside outside the areas described in (i). The marketing fees
shall not, however, exceed $120,000. Progress payments totaling $[______]
have previously been paid for consulting work performed prior to the
Offering.
(b) Capital Resources shall be reimbursed for all out-of-pocket expenses,
including, but not limited to, legal fees, travel, communications and
postage, incurred by it whether or not the Conversion is successfully
completed. Reimbursement for Capital Resources' legal fees shall not exceed
$25,000, excluding applicable NASD filing fees and expenses related
thereto, and excluding fees and expenses, including legal fees, relating to
state securities or blue sky laws and regulations. Reimbursement for other
reimbursable expenses (exclusive of legal fees) shall not exceed $20,000,
without the prior approval of the Association and the Holding Company.
Capital Resources shall be reimbursed promptly for such expenses upon
receipt by the Company or the Association of a monthly itemized bill
summarizing such expenses since the date of the last bill, if any, to the
date of the current bill. To the extent not previously paid, full payment
of Capital Resources' expenses shall be made in next day funds on the
Closing Date provided that the Company or the Association shall have
received an itemized bill summarizing any unreimbursed expenses at least
two (2) days before the
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Closing Date or on such later date if the Company or the Association shall
have received an itemized bill summarizing any unreimbursed expenses at
least two (2) days before such date or, if the offering is not completed
and is abandoned or terminated for any reason, within five (5) days of
receipt of the Company or the Association of a reasonable accounting from
Capital Resources of its expenses.
(c) In the event other broker-dealers are assembled and managed by Capital
Resources under a selling syndicate to participate in the Community
Offering pursuant to the Selected Dealers' Agreement attached as Exhibit B
hereto or assisting brokers participate in the Offerings, the Company and
the Association will be responsible for the payment of selected dealers'
and brokers' commissions to such participating brokers or firms up to a
maximum of four percent (4.0%) of the aggregate dollar amount of Shares
sold by such selected dealers and four percent (4.0%) of the aggregate
dollar amount of stock sold by assisting brokers in the Offerings. Capital
Resources fees are limited to those stated in subparagraph (a) above and
all other brokers will be paid fees based upon the capacity in which they
are acting in the particular stock sale.
SECTION 3. Prospectus; Subscription and Community Offering. The Shares
are to be initially offered in the Subscription Offering and Community Offering
(if any) at the Purchase Price as set forth on the cover page of the Prospectus.
SECTION 4. Representations and Warranties. The Company and the
Association (the term "Association" used in the Agreement shall include the
Association and its subsidiary, first Enterprises, Inc., the "Subsidiary,"
except where the context otherwise implies) jointly and severally represent and
warrant to Capital Resources as follows:
(a) The Registration Statement was declared effective by the Commission on
[______ __], 1998. At the time the Registration Statement, including the
Prospectus contained therein, became effective, the Registration Statement
complied in all material respects with the requirements of the 1933 Act and
the 1933 Act regulations and the Registration Statement, any preliminary or
final Prospectus, any Blue Sky Application or any Sales Information (as
such terms are defined previously herein or in Section 8 hereof) authorized
by the Company or the Association for use in connection with the
Subscription 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)
Prospectus or Prospectus filed as part of an amendment to an effective
Registration Statement was filed with or mailed to the Commission for
filing and at the Closing Date referred to in Section 2, the Registration
Statement, any preliminary or final Prospectus, any Blue Sky Application or
any Sales Information (as such terms are defined previously herein or in
Section 8 hereof) authorized by the Company or the Association for use in
connection with the Subscription Offering will not contain an untrue
statement of a material fact or (except as to the Blue Sky Application)
omit to state a material fact necessary in order to make the statements
therein, in the light
5
of the circumstances under which they were made, not misleading, provided,
however, that the representations and warranties in this Section 4(a) shall
not apply to statements in or omissions from such Registration Statement,
Prospectus or Sales Information made in reliance upon and in conformity
with information furnished in writing to the Company or the Association by
Capital Resources expressly regarding Capital Resources for use in the
Prospectus, including the information under the caption "The Conversion -
Marketing Arrangements" and shall not apply to statements in or omissions
from any Blue Sky Application or Sales Information made in reliance upon
and in conformity with written information furnished to the Company or the
Association by Capital Resources, expressly regarding Capital Resources.
(b) The Conversion Application, including the Prospectus, was approved by the
OTS on [________ __], 1998. At the time of the approval of the Conversion
Application, including the Prospectus (including any amendment or
supplement thereto), by the OTS and at all times subsequent thereto until
the Closing Date, the Conversion Application, including the Prospectus,
complied or will comply in all material respects with the Conversion
Regulations and any other rules and regulations of the OTS. At the time of
OTS approval of the Conversion Application (including any amendment or
supplement thereto and at all times subsequent thereto) until the Closing
Date, the Conversion Application, including the Prospectus (including any
amendment or supplement thereto), did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided,
however, that representations or 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
Association by Capital Resources expressly regarding Capital Resources for
use in the Prospectus contained in the Conversion Application, including
the information under the caption "The Conversion--Marketing Arrangements"
and shall not apply to statements in or omissions from any Blue Sky
Application or Sales Information made in reliance upon and in conformity
with written information furnished to the Company or the Association by
Capital Resources, expressly regarding Capital Resources.
(c) The Company has filed with the OTS the Holding Company Application and will
have received, as of the Closing Date, approval of its acquisition of the
Association from the OTS.
(d) No order has been issued by the OTS, the Commission, the FDIC (hereinafter
any reference to the FDIC shall include the SAIF), or to the best knowledge
of the Company and the Association, any other state or federal regulatory
authority 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 Association, pending or threatened.
6
(e) At the Closing Date referred to in Section 2, the Plan will have been
adopted by the Board of Directors of the Company and the Association, the
Company and the Association will have completed all conditions precedent to
the Conversion and the offer and sale of the Shares will have been
conducted in all material respects in accordance with the Plan, the
Conversion Regulations (except to the extent waived by the OTS) 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 Association by the OTS (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 resolutions or
letters of approval), the Commission or any other regulatory authority and
in the manner described in the Prospectus. At the Closing Date, to the
knowledge of the Company or the Association, no person will have sought to
obtain review of the final action of the OTS in approving the Plan or in
approving the Conversion or the Company's application to acquire all of the
capital stock and control of the Association pursuant to the HOLA or any
other statute or regulation.
(f) The Association is now a duly organized and validly existing federally
chartered savings association in mutual form of organization and upon the
Conversion will become a duly organized and validly existing federally
chartered savings association in the capital stock form of organization, in
both instances duly authorized to conduct its business and own its property
as described in the Registration Statement; the Company and the Association
have obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses except those which individually or in the aggregate would not
materially adversely affect the financial condition of the Company and the
Association, taken as a whole; all such licenses, permits and the
governmental authorizations are in full force and effect, and the Company
and the Association are in all material respects complying with all laws,
rules, regulations and orders applicable to the operation of their
businesses; and the Association is existing and in good standing under the
laws of the United States and 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 properties 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, business, operations or income of the
Association. The Association does not own equity securities or any equity
interest in any other business enterprise except as described in the
Prospectus. Upon the completion of the Conversion pursuant to the Plan, (i)
the Association will be converted to a federally chartered stock savings
association; (ii) all of the authorized and outstanding capital stock of
the Association will be owned by the Company and (iii) the Company will
have no direct subsidiaries other than the Association. 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
resolutions or letters of approval, all terms, conditions, requirements and
provisions with respect to the Conversion imposed by the OTS and the
7
FDIC, if any, will have been complied with by the Company and the
Association 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.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Kansas 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, business
affairs, operations or income of the Company.
(h) The Association is a member in good standing of the Federal Home Loan Bank
of Topeka ("FHLB-Topeka"); and the deposit accounts of the Association are
insured by the FDIC up to the applicable limits. Upon consummation of the
Conversion, the liquidation account for the benefit of Eligible Account
Holders will be duly established in accordance with the requirements of the
Conversion Regulations.
(i) The Company and the Association have good and marketable title to all
assets material to the business of the Company and the Association and to
those 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 materially significant in relation to the
business of the Company and the Association taken as a whole; and all of
the leases and subleases material to the business of the Company and the
Association under which the Company or the Association hold properties,
including those described in the Registration Statement, are in full force
and effect.
(j) The Association has received an opinion of its counsel, Xxxxxxx, Xxxxx,
Xxxxxx & Xxxxx, P.C., with respect to the federal income tax consequences
of the Conversion, and an opinion of Xxxxxxx, Xxx, Xxxxxxxx, Xxxxxxx &
Xxxxxxx with respect to the Kansas income tax consequences of the
Conversion as described in the Registration Statement and the Prospectus;
and the facts and representations upon which such opinions are based are
truthful, accurate and complete, and neither the Company nor the
Association will take any action inconsistent therewith.
(k) The Company and the Association 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 Association to the Company and (ii)
the Shares to be sold by the Company as provided herein and as described in
the Prospectus. 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
8
the Association and this Agreement has been validly executed and delivered
by the Company and the Association and is the valid, legal and binding
agreement of the Company and the Association enforceable in accordance with
its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws relating
to or affecting the enforcement of creditors' rights generally or the
rights of creditors of savings associations or savings and loan holding
companies, the accounts of whose subsidiaries are insured by the FDIC or by
general equity principles regardless of whether such enforceability is
considered in a proceeding in equity or at law, and except to the extent,
if any, that the provisions of Sections 8 and 9 hereof may be limited by
federal or state securities laws or unenforceable as against public
policy).
(l) Neither the Company nor the Association are in violation of any directive
which has been delivered to the Association or of which the management of
the Company or the Association has actual knowledge from the OTS, the FDIC,
the Commission or any other agency to make any 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, the FDIC and the
Commission) and except as set forth in the Registration Statement and the
Prospectus, there is no suit or proceeding or, to the knowledge of the
Company or the Association, charge, investigation or action before or by
any court, regulatory authority or governmental agency or body, pending or,
to the knowledge of the Company or the Association, threatened, which might
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 or which might result in any
material adverse change in the financial condition, earnings, capital,
properties or business affairs of the Company or the Association or which
would materially affect their properties and assets.
(m) The financial statements which are included in the Registration Statement
and which are part of the Prospectus fairly present the financial
condition, results of operations, retained earnings and cash flows of the
Association 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 Title 12 of the Code of Federal
Regulations and generally accepted accounting principles ("GAAP")
(including those requiring the recording of certain assets at their current
market value). Such financial statements have been prepared in accordance
with GAAP consistently applied through the periods involved and present
fairly in all material respects the information required to be stated
therein and are consistent with the most recent financial statements and
other reports filed by the Association with the OTS and the FDIC, except
that accounting principles employed in such filings conform to requirements
of such authorities and not necessarily to GAAP. The other financial,
statistical and pro forma information and related notes included in the
Prospectus present fairly the information shown therein on a basis
consistent with the audited financial statements of the Association
included in the Prospectus, and as to the pro forma
9
adjustments, the adjustments made therein have been properly applied on
the basis described therein.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated therein: (i) there has not been any material adverse change in the
financial condition of the Company or the Association considered as one
enterprise, or in the earnings, capital, properties or business affairs of
the Company or the Association whether or not arising in the ordinary
course of business, (ii) there has not been any material increase in the
long term debt of the Association or 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 Association, nor has the Company or the
Association issued any securities or incurred any liability or obligation
for borrowing other than in the ordinary course of business; (iii) there
have not been any material transactions entered into by the Company or the
Association, except with respect to those transactions entered into in the
ordinary course of business; and (iv) there has been no material legal
proceeding or employee grievance initiated against the Association or the
Company; (v) there has been no material change in management of the
Association or the Company; (vi) the capitalization, liabilities, assets,
properties and business of the Company and the Association conform in all
material respects to the descriptions thereof contained in the Prospectus;
and (vii) neither the Company nor the Association has any material
contingent liabilities, contingent or otherwise, except as set forth in the
Prospectus.
(o) As of the date hereof and as of the Closing Date, neither the Company nor
the Association is in violation of its certificate of incorporation,
charter or bylaws (and the Association will not be in violation of its
charter or bylaws in capital stock form as of the Closing Date) or in
default in the performance or observance of any material obligation,
agreement, covenant, or condition contained in any contract, lease, loan
agreement, indenture or other instrument to which it is a party or by which
it, or any of its property may be bound which would result in a material
adverse effect on the financial condition, earnings, capital, properties or
business affairs of the Company or the Association on a consolidated basis
or which would materially affect their properties or assets. The
consummation of the transactions herein contemplated will not (i) conflict
with or constitute a breach of, or default under, the certificate of
incorporation, charter and bylaws of the Company or the charter or bylaws
of the Association (in either mutual or capital stock form); (ii) conflict
with or constitute a breach of any material contract, lease or other
instrument to which the Company or the Association has a beneficial
interest, or any applicable law, rule, regulation or order which would
result in a material adverse change in the financial condition, and results
of operations, of the Company or the Association on a consolidated basis;
(iii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the Company or the Association
which would result in a material adverse change in the financial condition
and results of operations, of the Company or the Association on a
consolidated basis, or (iv) with the exception of the Liquidation Account
established in the Conversion,
10
result in the creation of any material lien, charge or encumbrance upon
any property of the Company or the Association.
(p) 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
Association, in the due performance and observance of any term, covenant or
condition of any contract, lease, indenture, mortgage, deed of trust, note,
bank loan or credit agreement or any other instrument or agreement to which
the Company or the Association 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 Association 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 or the
Association, threatened any action or proceeding wherein the Company or the
Association would or might be alleged to be in default thereunder, under
circumstances where such action or proceeding, if determined adversely to
the Company or the Association, would have a material adverse effect on the
Company and the Association, taken as a whole.
(q) Subsequent to the date the Registration Statement is declared effective by
the Commission and prior to the Closing Date, except as otherwise may be
indicated or contemplated therein, neither the Company nor the Association
will have: (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except borrowings
from the same or similar sources indicated in the Prospectus in the
ordinary course of its business, or (ii) entered into any transaction which
is material in light of the business and properties of the Company and the
Association, taken as a whole, excluding origination, purchase and sale of
loans in the ordinary course of its business.
(r) Upon consummation of the Conversion, the authorized, issued and outstanding
equity capital of the Company will be as set forth in the Registration
Statement 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
and fully paid and non-assessable; the issuance of the Shares will not
violate any preemptive rights; 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. 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) No approval of any regulatory or supervisory or other public authority is
required in connection with the execution and delivery of this Agreement or
the issuance of the Shares,
11
except for the approval of the OTS, the Commission and any necessary
qualification or registration under the securities or blue sky laws of the
various states in which the Shares are to be offered and as may be required
under the regulations of the NASD and the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").
(t) KPMG Peat Marwick LLP which has issued a report as to the financial
statements of the Association included in the Registration Statement, have
advised the Company and the Association in writing that they are with
respect to the Company and the Association 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, Section 571.2(c)(3) and the 1933 Act and the 1933 Act
Regulations.
(u) The Company and the Association have timely filed all required federal and
state tax returns, have paid all taxes that have become due and payable in
respect of such returns, have made adequate reserves for similar future tax
liabilities and no deficiency has been asserted with respect thereto by any
taxing authority.
(v) The records of account holders, depositors, borrowers and other members of
the Association delivered to Capital Resources by the Association or its
agent for use during the Conversion are reliable and accurate. Capital
Resources shall have no liability to any person for the accuracy,
reliability and completeness of the records of the deposit account holders,
borrowers and other members of the Association or for any denial or
reduction of a subscription to purchase Common Stock as a result of any
allocation pursuant to the Plan or otherwise based upon such records.
(w) Appropriate arrangements have been made for placing the funds received from
subscriptions for Shares in special interest-bearing accounts with the
Association until all Shares are sold and paid for, with provision for
refund to the purchasers in the event that the Conversion is not completed
for whatever reason or for delivery to the Association if all Shares are
sold.
(x) The Company and the Association are in compliance in all material respects
with the applicable financial record keeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended,
and the regulations and rules thereunder.
(y) Neither the Company, the Association nor to the knowledge of the Company
and the Association, employees of the Company or the Association have made
any payment of funds of the Association as a loan to any person for the
purchase of the Shares excluding any loan to any Employee Plan for the
purchase of the Shares or made any other payment of funds prohibited by
law, and no funds have been set aside to be used for any payment prohibited
by law.
(z) Prior to the Conversion, the Association was not authorized to issue shares
of capital stock and neither the Company nor the Association has: (i)
issued any securities within the last
12
18 months (except for notes to evidence other bank loans and reverse
repurchase agreements and with respect to the Company, except for shares
issued in connection with the initial capitalization of the Company); (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
Offerings and routine purchases and sales of U.S. government and agency and
other securities; (iii) entered into a financial or management consulting
agreement except as contemplated hereunder; and (iv) engaged any
intermediary between Capital Resources and the Company and the Association
in connection with the offering of Common Stock, and no person is being
compensated in any manner for such service.
(aa) To the best knowledge of the Company and the Association, both are in
compliance with all laws, rules, regulations relating to environmental
protection, and neither the Company nor the Association has been notified
or is otherwise aware that either of them is potentially liable, or is
considered potentially liable, under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or any
similar state law. To the best knowledge of the Company and the
Association, no action, suits, regulatory investigations or other
proceedings pending, or to the best knowledge of the Company and the
Association, threatened against the Company or the Association relating to
environmental protection, nor does the Company or the Association have any
reason to believe any such proceedings may be brought against either of
them. To the best knowledge of the Company and the Association, no
disposal, release or discharge of hazardous or toxic substances, pollutants
or contaminants, including petroleum and gas products, as any of such terms
may be defined under federal, state or local law, has occurred on, in, at
or about any of the facilities or properties of the Company or the
Association.
(bb) The Company and the Association have not relied upon Capital Resources or
its legal counsel or other advisors for any legal, tax or accounting advice
in connection with the Conversion.
(cc) The representations and warranties made in this Agreement will be true and
correct as of the date hereof and as of the Closing Date.
Any certificates signed by an officer of the Company or the Association
and delivered to Capital Resources or its counsel that refer to this Agreement
shall be deemed to be a representation and warranty by the Company or the
Association to Capital Resources as to the matters covered thereby with the same
effect as if such representation and warranty were set forth herein.
Section 4.1. Capital Resources represents and warrants to the Company and
the Association as follows:
13
(a) Capital Resources is a corporation and is validly existing in good standing
under the laws of the District of Columbia with full power and authority to
provide the services to be furnished to the Company and the Association
hereunder.
(b) 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 Capital Resources, and this Agreement
has been duly and validly executed and delivered by Capital Resources and
is the legal, valid and binding agreement of Capital Resources, enforceable
in accordance with its terms (except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the enforceability of creditors' rights generally, or by
general equity principles, regardless of whether such enforceability is
considered a proceeding in equity or at law, and except to the extent, if
any, that the provisions of Sections 8 and 9 hereof may be unenforceable as
against public policy).
(c) Each of Capital Resources 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 and Capital Resources is a registered selling agent
in the jurisdictions listed in Exhibit C and will remain registered in
those jurisdictions listed in Exhibit C in which the Company is relying on
such registration for the sale of the Shares, until the Conversion is
consummated or terminated.
(d) The execution and delivery of this Agreement by Capital Resources, the
consummation of the transactions contemplated hereby and compliance with
the terms and provisions hereof will not conflict with, or result in a
material breach of, any of the terms, provisions or conditions of, or
constitute a material default (or event which with notice or lapse of time
or both would constitute a default) under, the certificate of incorporation
or bylaws of Capital Resources or any material agreement, indenture or
other instrument to which Capital Resources is a party or by which its
property is bound, or law or regulation by which Capital Resources is
bound.
(e) Capital Resources is registered as a broker-dealer with the SEC and the
NASD.
(f) Except as set forth in Exhibit D hereto, there is not now pending, nor to
Capital Resources' knowledge, threatened against Capital Resources any
action or proceeding before the Commission, the NASD, any state securities
commission or any state or federal court concerning Capital Resources'
activities as a broker-dealer, which would materially adversely affect
Capital Resources' ability to perform its obligations under the Agreement.
14
SECTION 5. Covenants. The Company and the Association hereby jointly
and severally covenant with Capital Resources as follows:
(a) The Company has filed the Registration Statement with the Commission. The
Company will not, at any time before the Registration Statement is declared
effective by the Commission, file any amendment or supplement to such
Registration Statement without providing Capital Resources and its counsel
an opportunity to review such amendment or supplement or file any amendment
or supplement to which amendment or supplement Capital Resources or its
counsel shall reasonably object.
(b) The Association has filed the Conversion Application with the OTS. The
Association 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 Capital Resources and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement Capital Resources or its
counsel shall reasonable 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 Capital Resources and its counsel an
opportunity to review the nonconfidential portions of such amendment or
supplement or file any amendment or supplement to which amendment or
supplement Capital Resources or its counsel shall reasonably object.
(d) The Company and the Association 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 immediately upon
receipt of any information concerning the events listed below notify
Capital Resources and promptly confirm the notice in writing: (i) when the
Registration Statement, as amended has become effective; (ii) when the
Conversion Application, as amended, has been approved by the OTS; (iii) of
the receipt of any comments from the Commission, the OTS, the FDIC or any
other governmental entity with respect to the Conversion or the
transactions contemplated by this Agreement; (iv) of the request by the
Commission, the OTS or the FDIC or any other governmental entity for any
amendment or supplement to the Registration Statement or for additional
information; (v) of the issuance by the Commission, the OTS, the FDIC or
any other governmental entity of any order or other action suspending the
Offerings or the use of the Registration Statement or the Prospectus or any
other filing of the Company and the Association under the Conversion
Regulations or other applicable law, or the threat of any such action; (vi)
the issuance by the Commission, the OTS or the FDIC, or any state authority
of any stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of initiation or threat of any
proceedings for that purpose; or (vii) of the occurrence of any event
mentioned in paragraph (g) below. The Company and the Association will make
every reasonable effort
15
to prevent the issuance by the Commission, the OTS or the FDIC, or any
state authority of any such order and, if any such order shall at any time
be issued, to obtain the lifting thereof at the earliest possible time.
(e) The Company and the Association will deliver to Capital Resources and to
its counsel two conformed copies of each of the following documents, with
all exhibits: the Conversion Application and the Holding Company
Application, as originally filed and of each amendment or supplement
thereto, and the Registration Statement, as originally filed and each
amendment thereto. In addition, the Association will also deliver to
Capital Resources such number of copies of the foregoing documents, as
amended or supplemented, to counsel for Capital Resources as may be
required for any NASD and blue sky filings.
(f) The Company will furnish to Capital Resources, 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 Capital Resources may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act or
the respective applicable rules and regulations of the Commission
thereunder. The Company authorizes Capital Resources to use the Prospectus
(as amended or supplemented, if amended or supplemented) for any lawful
manner in connection with the sale of the Shares by Capital Resources.
(g) The Company and the Association will comply in all material respects with
any and all terms, conditions, requirements and provisions with respect to
the Conversion and the transactions contemplated thereby imposed by the
Commission, by applicable State law, and by the 1933 Act, the 1933 Act
regulations, the 1934 Act and the rules and regulations of the Commission
promulgated under such statutes, to be complied with prior to or subsequent
to the Closing Date and when the Prospectus is required to be delivered;
the Company and the Association will comply in all material respects, at
their own expense, with all requirements imposed upon them by the
Commission, by applicable state law, and by the 1933 Act Regulations, the
1934 Act and the rules and regulations of the Commission promulgated under
such statutes, including, without limitation, Rule 1Ob-6 under the 1934
Act, in each case as from time to time in force, so far as necessary to
permit the continuance of sales or dealing in shares of Common Stock during
such period in accordance with the provisions hereof and the Prospectus.
(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 Association shall occur, as a result of which it is
necessary or appropriate, in the reasonable opinion of counsel for the
Company and the Association or in the reasonable opinion of Capital
Resources' counsel, 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 it is
delivered to a purchaser, the Company and the Association will, at their
16
expense, forthwith prepare, file with the Commission and the OTS and
furnish to Capital Resources a reasonable number of copies of an amendment
or amendments of, or a supplement or supplements to, the Registration
Statement or Prospectus (in form and substance reasonably satisfactory to
Capital Resources and its counsel after a reasonable time for review) which
will amend or supplement the Registration Statement or 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,
not misleading. For the purpose of this Agreement, the Company and the
Association each will timely furnish to Capital Resources such information
with respect to itself as Capital Resources may from time to time request.
(i) The Company and the Association will comply in all material respects with
any and all terms, conditions, requirements and provisions with respect to
the Conversion and the transactions contemplated thereby imposed by the
OTS, the FDIC or the Conversion Regulations, to be complied with prior to
or subsequent to the Closing Date. During the periods prior to the Closing
Date and when the Prospectus is required to be delivered, the Company and
the Association will comply, at their own expense, with all requirements
imposed by the OTS, the FDIC or the Conversion Regulations, in each case as
from time to time in force, in accordance with the provisions hereof and
the Prospectus.
(j) The Company and the Association will take all necessary actions, in
cooperation with Capital Resources, and furnish to whomever Capital
Resources may reasonably direct 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 register the Company as a
broker-dealers or agents or to exempt such persons from such registration
under the applicable securities or blue sky laws of such jurisdictions in
which the Shares are required under the Conversion Regulations to be sold
or as Capital Resources and the Company and the Association 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 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.
(k) 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 who continue to maintain their savings accounts in
the Association 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 Association.
(l) The Company and the Association will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the date hereof,
without Capital Resources prior written
17
consent, any shares of Common Stock other than in connection with any
plan or arrangement described in the Prospectus.
(m) The Company shall register its Common Stock with the Commission under
Section 12(g) of the 1934 Act, concurrent with the stock offering pursuant
to the Plan and shall request that such registration be effective upon
completion of the Conversion. The Company shall maintain the effectiveness
of such registration for not less than three (3) years or such shorter
period as permitted by the OTS.
(n) During the period during which the 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 (including a
consolidated balance sheet and statements of consolidated income,
stockholders' equity and cash flow statement 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).
(o) During the period of three years from the date hereof, the Company will
furnish to Capital Resources upon its request therefore: (i) as soon as
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 Association is listed or
quoted (including, but not limited to, reports on Form 10-K, 10-Q and 8-K
and all proxy statements and annual reports to stockholders), a copy of
each report of the Company mailed to its stockholders or filed with the
Commission or 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 Association as Capital Resources may reasonably request, and (ii)
from time to time, such other publicly available information concerning the
Association as Capital Resources may reasonably request.
(p) The Company and the Association will use the net proceeds from the sale of
the Shares substantially in the manner set forth in the Prospectus under
the caption "Use of Proceeds."
(q) Other than as permitted by the Conversion Regulations, the 1933 Act, the
1933 Act Regulations, the laws of any state in which the Shares are
qualified for sale, neither the Company nor the Association will distribute
any prospectus, prospectus supplement, if any, or other offering material
in connection with the offer and sale of the Shares.
(r) The Company will make generally available to its security holders as soon
as practicable, but not later than 90 days after the close of the period
thereby, an earnings statement (in form consistent with the provisions of
Rule 158 under the 1933 Act) covering a twelve month
18
period beginning not later than the first day of the Company's fiscal
quarter next following the effective date (as defined in said Rule 158)
of the Registration Statement.
(s) The Company will file with the Commission such reports on Form SR as may be
required pursuant to Rule 463 under the 1933 Act.
(t) The Company will use its best efforts to obtain approval for and maintain
quotation of the Shares on the NASDAQ system effective on or prior to the
Closing Date.
(u) The Association will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Subscription 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 Association's obligation to
refund payments received from persons subscribing for or ordering Shares in
the Subscription Offering in accordance with the Plan as described in the
Prospectus or until refunds of such funds have been made to the persons
entitled thereto or withdrawal authorizations canceled in accordance with
the Plan and as described in the Prospectus. The Association 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 Association 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.
(v) The Company will register as a savings and loan holding company under the
HOLA within 90 days of the acquisition of the Association.
(w) The Company and the Association will take such actions and furnish such
information as are reasonably requested by Capital Resources in order for
Capital Resources to ensure compliance with the NASD "Interpretation on
Free Riding and Withholding."
(x) The Company and its subsidiaries will conduct their businesses in
compliance in all material respects with all applicable federal and state
laws, rules, regulations, decisions, directives and orders including, all
decisions, directives and orders of the Commission, the OTS and the FDIC.
(y) The Association will not amend the Plan of Conversion without Capital
Resources' prior written consent in any manner that, in the reasonable
opinion of Capital Resources, would materially and adversely affect the
sale of the Shares or the terms of this Agreement.
(z) The Company and the Association will use all reasonable efforts to comply
with, or, to the extent within their control, cause to be complied with,
the conditions precedent to the several obligations of Capital Resources
specified in Section 7 hereof.
19
(aa) In the event of an oversubscription the Company shall provide Capital
Resources with any information necessary to assist Capital Resources in
allocating the Shares in such event and such information shall be accurate
and reliable.
(bb) The Company shall not deliver the Shares until it has satisfied or, to the
extent within its control, caused to be satisfied each and every condition
set forth in Section 7 hereof, unless such condition is waived in writing
by Capital Resources.
(cc) The Company shall advise Capital Resources in writing of all relationships
or facts which would render persons subscribing or ordering Shares during
the conversion "Associates" or "acting in concert" within the meaning of
the Conversion Regulations, and shall further advise Capital Resources on
appropriate limitations on the purchase of Shares by such persons imposed
by the Conversion Regulations, and such information shall be accurate and
reliable in all material respects.
Section 5.1 Capital Resources hereby covenants with the Company and the
Association that:
(a) Funds received by Capital Resources, if any, to purchase the Shares will be
handled in accordance with Rule 15c-2 under the 1934 Act; and
(b) During the period when the Prospectus is used, Capital Resources will
comply, in all material respects and at its own expense, with all
requirements imposed upon it by the OTS and, to the extent applicable, by
the 1933 Act and the 1934 Act and the rules and regulations promulgated
thereunder and state blue sky laws and regulations applicable to Capital
Resources. Capital Resources will distribute any Prospectus or offering
material in connection with the offering and sale of the Shares only in
accordance with the OTS Regulations and the requirements of the 1933 Act
and the rules and regulations promulgated thereunder;
(c) Capital Resources shall use its best efforts to secure for the Company
market-making and on-going research commitments from at least two NASD
firms;
(d) In discharging its obligations under this Agreement, Capital Resources will
comply in all material respects with all laws and regulations applicable to
it.
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 Association jointly and severally agree to pay or reimburse Capital
Resources for (to the extent that such expenses have been reasonably incurred by
Capital Resources) (a) all filing fees and expenses incurred in connection with
the qualification or registration of the Shares for offer and sale by the
Company under the securities or blue sky laws of any jurisdictions Capital
Resources, the Company and the Association may agree upon pursuant to subsection
(i) of Section 5 above, including counsel fees
20
paid or incurred by the Company, the Association or Capital Resources in
connection with such qualification or registration or exemption from
qualification or registration; (b) all filing fees in connection with all
filings with the NASD; (c) any stock issue or transfer taxes which may be
payable with respect to the sale of the Shares; (d) reasonable and necessary
expenses of the Conversion, including but not limited to attorneys' fees (which
fees are not to exceed $25,000), 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
(reimbursement for other expenses shall not exceed $20,000); and, (e) in
addition, if the Company is unable to sell a minimum of 998,750 Shares, or the
Conversion is otherwise abandoned or terminated, the Association shall reimburse
Capital Resources in accordance with Section 2 hereof.
SECTION 7. Conditions to Capital Resources' Obligations, Capital
Resources' obligations hereunder, as to the Shares to be delivered at the
Closing Date, are subject to the condition that all representations and
warranties and other statements of the Company and the Association herein are,
at and as of the commencement of the Subscription Offering and at and as of the
Closing Date, true and correct in all material respects, the condition that the
Company and the Association shall have performed in all material respects 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 Association will have completed
the conditions precedent to, and 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 and the Conversion Application approved by the OTS not later
than 5:30 p.m. on the date of this Agreement, or with Capital Resources'
consent at a later time and date; and at the Closing Date no stop order or
other action 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 threatened by the Commission, the OTS, the FDIC or
any state authority.
(c) At the Closing Date Capital Resources shall have received:
(1) The opinion, dated as of the Closing Date addressed to Capital
Resources and for its benefit, of Xxxxxxx, Spidi, Sloane & Xxxxx,
P.C., special counsel for the Company with respect to federal law,
dated the Closing Date, addressed to Capital Resources and in form
and substance to the effect that:
21
(i) The Company has been incorporated and is validly existing as
a corporation in good standing under the laws of the State
of Kansas.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus;
and the Company is qualified to do business as a foreign
corporation in any 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 business of the Company and the Association
taken as a whole.
(iii)The Association is now organized and a validly existing
federally chartered savings association in the mutual form
of organization and upon the Conversion will become a duly
organized and validly existing federally chartered savings
Association in the 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; and the Association is validly existing
under the laws of the United States and is duly qualified as
a foreign corporation to transact business in each
jurisdiction in which its ownership of property or leasing
of property or the conduct of 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 income of the
Association. The Subsidiary is incorporated and validly
existing corporation in good standing with full corporate
authority to own its property and conduct its business as
described in the Prospectus and the activities of the
Subsidiary insofar as they are material to the operations
and financial condition of the Association are permitted by
the rules and regulations of the OTS and the FDIC, and all
of the outstanding stock of the Subsidiary has been legally
authorized and is validly issued, fully paid and
non-assessable, and such stock is owned directly by the
Association.
(iv) The Association is a member of the FHLB-Topeka, and the
deposit accounts of the Association are insured by the FDIC
up to the maximum amount allowed under law and no
proceedings for the termination or revocation of such
insurance are pending or, to such counsel's knowledge,
threatened; the description of the liquidation account as
set forth in the Registration Statement and the Prospectus
under the caption "The Conversion -- Effects of Conversion
to Stock Form on Depositors and Borrowers of First Kansas
Federal Savings Association" has been reviewed by such
counsel and is accurate in all material respects.
22
(v) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be as set
forth in the Registration Statement and 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 subscribed for pursuant to the
Offerings 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, will be duly and
validly issued and fully paid and non-assessable; and the
issuance of the Shares is not subject to 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 knowledge, upon the
issuance of the Shares, the Shares will be transferred free
and clear of any material lien, claim, security contract or
other encumbrance or other debt in title, 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.
(vi) The issuance and sale of the capital stock of the
Association to the Company have been duly and validly
authorized by all necessary corporate action on the part of
the Company and the Association and, upon payment therefore
in accordance with the terms of the Plan will be duly and
validly issued and fully paid and non-assessable and will be
owned of record by the Company and to such counsel's
knowledge, beneficially owned by the Company.
(vii)The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly validly authorized by all necessary action on the
part of the Company and the Association; and this Agreement
is a valid and binding obligation of the Company and the
Association, enforceable in accordance with its terms
(except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforceability of creditors'
rights generally or the rights of creditors of federally
chartered savings and loan holding companies, the accounts
of whose subsidiaries are insured by the FDIC and subject,
as to the enforcement of remedies, including the remedy of
specific performances and injunctive and other forms of
equitable relief which may be subject to certain equitable
defenses and to the discretion of the court before which any
proceedings may be brought, to general principles of equity
regardless of whether the enforceability is considered in a
proceeding at law or in equity, and except as the
obligations of the Association and the Company under the
indemnification and contribution provisions of Section 8 and
9 of the Agreement may be limited by Federal or State
securities laws, or unenforceable as against public policy.)
23
(viii) The Conversion Application as filed with the OTS has been
approved by the OTS and the Prospectus was authorized for
use by the OTS. The OTS has issued its order of approval of
acquisition of the Association by the Company pursuant to
HOLA, and the purchase by the Company of all of the
outstanding capital stock of the Association has been
authorized by the OTS and no action has been taken, or to
such counsel's knowledge, is pending or threatened to revoke
any such authorization or approval.
(ix) The Registration Statement is effective under the 1933 Act
and to such counsel's knowledge, no stop order suspending
the effectiveness has been issued under the 1933 Act or
proceedings therefor initiated or to such counsel's
knowledge threatened by the Commission.
(x) The Plan has been duly adopted by the required vote of the
Directors of the Company and the Association and members of
the Association.
(xi) Subject to the satisfaction of the conditions to the OTS'
approval of the Conversion and the Company's application to
acquire the Association, no further approval, registration,
authorization, consent or other order of any regulatory
agency, public board or body is required 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 and as may be required under the
regulations of the NASD and the NASDAQ System.
(xii)At the time the Registration Statement became effective,
(i) the Registration Statement (and any amendment or
supplement thereto) (other than the financial statements and
other financial and statistical data and stock valuation
information included therein, as to which no opinion need be
rendered), complied as to form in all materials respects
with the requirements of the 1933 Act and the 1933 Act
Regulations and (ii) the Prospectus (other than the
financial statements and other financial and statistical
data and stock valuation information included therein, as to
which no opinion need be rendered) complied as to form in
all material respects with the requirements of the 1933 Act,
and the 1933 Act Regulations. To such counsel's knowledge,
no order has been issued by the OTS 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 knowledge threatened by the OTS or any state
authority. To such counsel's knowledge, no person has sought
to obtain regulatory or judicial review of the final action
of the OTS approving the Plan, the Conversion Application,
the Holding Company Application or the Prospectus.
24
(xiii) 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 the Prospectus,
and the form of certificate used to evidence the Shares is
in due and proper form and complies with Kansas law
applicable thereto.
(xiv)To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement and
the Prospectus, other than those disclosed therein, provided
that, for this purpose, any litigation or governmental
proceeding is not considered to be "threatened" unless the
potential litigant or governmental authority has manifested
to the management of the Company or the Association, a
present intention to initiate such litigation or proceeding.
(xv) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in
the Conversion Application, the Registration Statement or
the Prospectus or required to be filed as exhibits thereto
other than those described or referred to therein or filed
as exhibits thereto. The description in the Conversion
Application, the Registration Statement and the Prospectus
of such documents and exhibits is accurate and fairly
describes the information required.
(xvi)The Plan complies in all material respects with all
applicable laws, rules, regulations, published OTS bulletins
or legal opinions including, but not limited to, the
Conversion Regulations (except as waived in writing by the
OTS).
(xvii) To such counsel's knowledge, the Company, the Association
and the Subsidiary have obtained all material licenses,
permits and other governmental authorizations currently
required for the conduct of their respective businesses,
except where the failure to have such licenses, permits or
authorizations would not have a material adverse effect on
the business, operations, financial condition or income of
the Company, the Association and the Subsidiary, taken as a
whole and all such material licenses, permits and other
governmental authorizations are in full force and effect,
and each of the Company and the Association is in all
material respects complying therewith, except where failure
to comply would not have a material adverse effect on the
financial condition of the Company and the Association taken
as a whole.
(xviii) Neither the Company, the Association nor the Subsidiary
is in violation of its certificate of incorporation or its
charter, respectively, or in contravention of its bylaws
(and the Association will not be in violation of its federal
stock charter or bylaws upon consummation of the Conversion)
or, to such counsel's knowledge, in default or violation of
any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
25
lease or other instrument 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 Association taken as a
whole. The execution and delivery of this Agreement by the
Company and the Association, the occurrence of the
obligations herein set forth and the consummation of the
transactions contemplated herein have been duly authorized
by all necessary corporate action of the Company and the
Association and, to such counsel's knowledge, will not
materially conflict with or constitute a material breach
of, or default under, or result in the creation or
imposition of any material lien, charge or encumbrance upon
any property or assets of the Company or the Association
pursuant to any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which
the Company or the Association is a party of by which any
of them may be bound, or to which any of the property or
assets of the Company or the Association is subject; and
such action will not result in any violation of the
provisions of the certificate of incorporation or bylaws of
the Company or the charter and bylaws of the Association or
material violation of any application law, act, regulation
or order or court order, writ, injunction or decree.
(xix)The Company's certificate of incorporation and bylaw comply
with the laws of the State of Kansas and the Association's
charter and bylaws in mutual form and, upon the completion
of the Conversion, in stock form, comply in all respects
with the laws of the United States.
(xx) To such counsel's knowledge, the Company and the Association
are not in violation of any directive from the OTS or the
FDIC to make any material change in the method of conducting
their business.
(xxi)The information in the Registration Statement and
Prospectus under the captions "Taxation," "Regulation,"
"Restrictions on Acquisitions of First Kansas Financial
Corporation", to the extent that it constitutes matters of
law, summaries of legal matters, documents or proceedings,
or legal conclusions, have been reviewed by such counsel and
is correct in all material respects (except as to the
financial statements and other financial and statistical
data and stock valuation information included therein as to
which such counsel need express no opinion).
(xxii) At the time the Conversion Application, including the
Prospectus contained therein, was approved, the Conversion
Application (as amended or supplemented, if so amended or
supplemented) and the Prospectus complied as to form in all
material respects with the rules and regulations of the OTS
and federal law (other than the financial statements and
other financial and statistical
26
data and stock valuation information included therein, as
to which no opinion need be rendered); to such counsel's
knowledge, all material documents and exhibits required to
be filed with the Conversion Application (as amended or
supplemented, if so amended or supplemented) have been so
filed. The description in the Conversion Application and
Registration Statement and the Prospectus of such documents
and exhibits is accurate and fairly presents the
information required to be shown.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than
the United States provide the opinion of other counsel of good
standing (providing that Xxxxxxx, Xxxxx, Xxxxxx & Xxxxx, P.C.
states that Capital Resources and their counsel are justified in
relying upon such specified opinion) or shall provide such opinion
separately and (B) as to matters of fact on certificates of
responsible officers of the Company and the Association and public
officials, provided copies of any such opinion(s) or certificates
are delivered pursuant hereto or to Capital Resources together with
the opinion to be rendered hereunder by special counsel to the
Company and the Association. In rendering such opinion, Xxxxxxx,
Xxxxx, Xxxxxx & Xxxxx, P.C. shall state in its opinion that the
phrase "to such counsel's knowledge" used in such opinion refers to
the actual knowledge of the attorneys within such firm who have
given substantive attention to the Company and the Association
during the course of their representation of the Company and the
Association in connection with the transactions contemplated by the
Agreement and does not (a) include constructive notice of matters
or information or (b) except for such counsel's conversations with
certain officers of the Company and the Association and review of
the documents referred to therein, imply that such counsel has
undertaken any independent investigation (i) with any persons
outside of such firm or (ii) as to the accuracy or completeness of
any factual representation, information or other matter made or
furnished in connection with the transactions contemplated by the
Agreement and that such counsel does not know of any fact or
circumstance contradicting the statement that follows "to such
counsel's knowledge" and does not imply that they know the
statement to be correct or have any basis (other than the documents
referred to therein and such conversations) for that statement.
Such counsel may assume that any agreement is the valid and binding
obligation of any parties to such agreement other than the Company
and the Association.
(2) The letter of Xxxxxxx, Xxxxx, Xxxxxx & Xxxxx, P.C., counsel for the
Company and the Association addressed to Capital Resources, dated
the Closing Date, in form and substance to the effect that:
In addition, such counsel shall state that during the
preparation of the Registration Statement and Prospectus, it
participated in conferences with certain officers of and other
representatives of the Association and the
27
Company, counsel to Capital Resources, representatives of the
independent public accountants for the Association and the
Company and representatives of Capital Resources at which the
contents of the Conversion Application, Registration Statement
and the Prospectus and related matters were discussed and,
although we are not passing upon and do not assume the
responsibility for the accuracy, completeness or fairness of
the statements contained in the Conversion Application,
Registration Statement and Prospectus, on the basis of the
foregoing, without independent verification (relying as to
materiality as to factual matters on certificates of officers
and other factual representations by the Association and the
Company), nothing has come to its attention that caused it to
believe that the Registration Statement at the time it was
declared effective by the SEC or the Prospectus as of its date
and as of the Closing Date contained or contains any untrue
statement of a material fact or omitted to state any 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 (it being understood that such
counsel expresses no comment or opinion with respect to the
financial statements, schedules and other financial,
statistical or stock valuation data included, or statistical
methodology employed or information with respect to Capital
Resources contained under the caption "The Conversion --
Marketing Arrangements" in the Registration Statement or
Prospectus).
(3) The favorable opinion, dated as of the Closing Date, of Silver,
Xxxxxxxx & Xxxx, L.L.P., Capital Resources' counsel, with respect
to such matters of federal law as Capital Resources may reasonably
require. Such opinion may rely upon the opinions of counsel to the
Company and the Association, and as to matters of fact, upon
certificates of officers and directors of the Company and the
Association and certificates of public officials delivered pursuant
hereto or as such counsel shall reasonably request.
(d) At the Closing Date, counsel to Capital Resources shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the sale of the Shares as herein
contemplated and related proceedings or in order to evidence the occurrence
or completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained.
(e) At the Closing Date, Capital Resources shall receive a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company and
of the Chief Executive Officer and Chief Financial Officer of the
Association, dated as of such Closing Date, to the effect that: (i) they
have carefully examined the Prospectus and, in their opinion, at the time
the Prospectus became authorized for final use, the Prospectus did 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 under which they were made, not misleading; (ii) since the
date the Prospectus became authorized for final use, no event has
28
occurred which should have been set forth in an amendment or supplement to
the Prospectus which has not been so set forth, including specifically, but
without limitation, any material adverse change in the financial condition,
earnings, capital, properties, or business affairs of the Company or the
Association and, the conditions set forth in this Section 7 have been
satisfied; (iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has been no
material adverse change in the financial condition, earnings, capital,
properties or business affairs of the Company or the Association,
independently, or of the Company and the Association considered as one
enterprise, whether or not arising in the ordinary course of business; (iv)
the representations and warranties in Section 4 are true and correct with
the same force and effect as though expressly made at and as of the Closing
Date; (v) the Company and the Association have complied with all material
agreements and satisfied in all material respects at or prior to the
Closing Date and will in all material respects comply with all obligations
to be satisfied by it after Conversion; (vi) no order suspending the
effectiveness of the Registration Statement has been initiated by the
Commission or, to the knowledge of the Company or Association, or
threatened by the Commission or initiated or threatened by any State
authority; (vii) no order suspending the Offerings, the Conversion, the
acquisition of all of the shares of the Association by the Company or the
effectiveness of the Prospectus has been issued and to the knowledge of the
Company of the Association, no proceedings for that purpose have been
initiated or threatened by the OTS, the Commission, the FDIC, or any state
authority and (viii) to the knowledge of the Company or the Association, no
person has sought to obtain review of the final action of the OTS approving
the Plan.
(f) Prior to and at the Closing Date: (i) in the reasonable opinion of Capital
Resources, there shall have been no material adverse change in the
financial condition, earnings or the business affairs of the Company or the
Association independently, or of the Company or the Association considered
as one enterprise, from that as of the latest dates as of which such
condition is set forth in the Prospectus, except as referred to therein;
(ii) there shall have been no material transaction entered into by the
Company or the Association, considered as one enterprise from the latest
date as of which the financial condition of the Company or the Association
is set forth in the Prospectus other than transactions referred to or
contemplated therein or transactions in the ordinary course of business;
(iii) the Company or the Association shall not have received from the OTS
or the FDIC any direction (oral or written) to make any material change in
the method of conducting their businesses with which they have not complied
in all material respects (which direction, if any, shall have been
disclosed to Capital Resources) or which materially and adversely would
affect the business affairs, operations or financial condition or income of
the Company and the Association, taken as a whole; (iv) neither the Company
nor the Association shall have been in default (nor shall an event have
occurred which, with notice or lapse of time or both, would constitute a
default) under any provision of an agreement or instrument relating to any
material 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 Association threatened against the Company or
29
the Association or affecting any of their properties wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a material
and adverse effect on the business, operations, financial condition or
income of the Company or the Association, taken as a whole; and (vi) the
Shares have been qualified or registered for offering and sale under the
securities or blue sky laws of the jurisdictions as Capital Resources shall
have requested and as agreed to by the Company and the Association.
(g) Concurrently with the execution of this Agreement, Capital Resources shall
receive a letter from KPMG Peat Marwick LLP dated the date hereof and
addressed to Capital Resources: (i) confirming that KPMG Peat Marwick LLP
is a firm of independent public accountants within the meaning of the 1933
Act and the 1933 Act Regulations and Title 12 of Code of Federal
Regulations and stating in effect that in its opinion the consolidated
financial statements of the Association for the year ended December 31,
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 of the 1933 Act and the applicable published rules
and regulations thereunder and Part 563c and 563g.7(b) of Title 12 of the
Code of Federal Regulations and generally accepted accounting principles;
(ii) stating 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
consolidated financial statements of the Association prepared by the
Association, a reading of the minutes of the meetings of the Board of
Directors and members of the Association and inquiries with officers of the
Association responsible for financial and accounting matters, nothing came
to their attention which caused them to believe that: (A) the unaudited
consolidated financial statements included in the Prospectus (and any later
unaudited consolidated financial statements, condensed interim financial
statements or capsule information set forth in an amendment or supplement
to the Prospectus or any additional prospectus, if any) fail to comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the related published rules and
regulations of the Commission thereunder and the rules and regulations of
the OTS and FDIC under Title 12 of the Code of Federal Regulations and
generally accepted accounting principles; (B) such unaudited consolidated
financial statements included in the Prospectus (and any later unaudited
financial statements, condensed interim financial statements or capsule
information set forth in an amendment or supplement to the Prospectus or
any additional prospectus, if any) are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements included in the
Prospectus; or (C) during the period from the date of the latest unaudited
consolidated financial statements included in the Prospectus to a specified
date not more than five business days prior to the date hereof, there was
any increase in borrowings by the Company or the Association (except as
disclosed in such letter); or (D) there was any decrease in equity or in
net assets of the Association at a specified date not more than five
business days prior to the date hereof as compared with amounts shown in
the latest unaudited consolidated statement of condition included in the
Prospectus or there was any decrease in net income or net interest income
of the Association for the number of
30
full months commencing immediately after the period covered by the latest
unaudited income statement included in the Prospectus and ended on the
latest month end prior to the date of the Prospectus or in such letter as
compared to the corresponding period in the preceding year (except as
disclosed in such letter); and (iii) stating that, in addition to the audit
referred to in their opinions included in the Prospectus and the
performance of the procedures referred to in clause (ii) of the subsection
(g), they have compared with the general accounting records of the
Association, as applicable, which are subject to the internal controls of
the Association, as applicable, accounting system and other data prepared
by the Association, as applicable, directly from such accounting records,
to the extent specified in such letter, the amounts and percentages set
forth in the Prospectus; and they have found such amounts and percentages
to be in material agreement therewith (subject to rounding).
(h) At the Closing Date, Capital Resources shall receive a letter from KPMG
Peat Marwick LLP dated the Closing Date, addressed to Capital Resources,
confirming the statements made by its letter delivered by them pursuant to
subsection (g) of this Section 7, the "specified date" referred to in
clause (ii)(C) thereof to be a date specified in such letter, which shall
not be more than five business days prior to the Closing Date, the
"specified date" in clause (ii)(D) to be the specified dates in such letter
which shall not be more than five business days prior to the Closing Date,
and the end of the period specified in clause (ii)(D) to be the latest
month end prior to the date of such letter.
(i) At the Closing Date, Capital Resources shall receive a letter from Capital
Resources Group, Inc. ("CRG"), dated the date thereof and addressed to
counsel for Capital Resources, stating that their opinion of the pro forma
market value of the outstanding shares of the capital stock of the
Association expressed in their Appraisal of [_______ __], 1998 and as most
recently updated, remains in effect.
(j) The Company and the Association shall not have sustained since the date of
the latest audited consolidated financial statements included in the
Registration Statement and Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Registration Statement and Prospectus, and since the respective dates as of
which information is given in the Registration Statement and Prospectus,
there shall not have been any change in the consolidated long-term debt of
the Company or the Association other than debt incurred in relation to the
purchase of Shares by the Company's or the Association's Tax-Qualified
Employee Plans or debt incurred in the ordinary course of business or any
change in the management, financial position, retained earnings or results
of operations of the Company or the Association, otherwise than as set
forth or contemplated in the Registration Statement and Prospectus, the
effect of which, in any such case described above, is in Capital Resources'
reasonable judgment sufficiently material and adverse as to make it
impracticable or inadvisable to proceed with the Offerings or the delivery
of the Shares on the terms and in the manner contemplated in the
Prospectus.
31
(k) At or prior to the Closing Date, Capital Resources shall receive (i) a copy
of the letters from the OTS authorizing the use of the Prospectus, the
proxy materials and authorizing the conversion, (ii) a copy of the order
from the Commission declaring the Registration Statement effective, (iii) a
copy of a certificate from the OTS evidencing the existence of the
Association, (iv) a copy of the certificate of the FDIC evidencing
insurance of accounts of the Association, (v) letter from FHLB-Topeka
evidencing the Association's membership in the FHLB, (vi) a certificate of
good standing from the Secretary of State of Kansas a evidencing the good
standing of the Company and the Subsidiary, (vii) a copy of the letter from
the OTS approving the Company's holding company application and (viii) such
other certificates and documents reasonably requested by Capital Resources
or its counsel.
(l) As soon as available after the Closing Date, Capital Resources shall
receive a copy of the Association's stock charter certified by the OTS.
(m) At the date of any amendment or supplement to the Prospectus and the date
of any additional prospectus, Capital Resources shall receive a letter from
KPMG Peat Marwick LLP dated the date of such amendment, supplement or
additional prospectus confirming the statements made by them in the letter
delivered by them pursuant to subsection (g) of this Section 7, the
"specified date" referred to in clause (ii)(C) thereof to be a date
specified in such letter, which shall not be more than five business days
before the date of such letter, the "specified date" in clause (ii)(D) to
be the specified date in such letter which shall not be more than five
business days prior to the date of such letter, and the end of the period
specified in clause (ii)(D) to be the latest month end prior to the date of
such letter. In addition, any such letter shall contain such additional
information comparable to that provided pursuant to clause (iii) of
subsection (g) of this Section 7 to the extent additional financial
information is included in any amendment, supplement or additional
prospectus.
(n) 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 American Stock Exchange or in
the over-the-counter market, or quotations halted generally on the NASDAQ
System, 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 general moratorium on
the withdrawal of deposits from commercial banks, federal savings banks or
savings banks in New York declared by either federal or state 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 hostilities or decline, in Capital
Resources' reasonable judgment, makes it impracticable or inadvisable to
proceed with the Offerings or the delivery of the Shares on the terms and
in the manner contemplated in the Registration Statement and the
Prospectus.
32
All such opinions, certifications, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Capital Resources and its counsel, satisfactory to Capital Resources
and its counsel. Any certificates signed by an officer or director of the
Company or the Association and delivered to Capital Resources or its counsel
shall be deemed a representation and warranty by the Company or the Association
to Capital Resources as to the statements made therein.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement, this Agreement and all of
Capital Resources obligations hereunder may be canceled by Capital Resources by
notifying the Association of such cancellation in writing or by telegram 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. Notwithstanding the above, if this Agreement is
canceled pursuant to this paragraph, the Company and the Association jointly and
severally agree to reimburse Capital Resources for all out-of-pocket expenses
(including without limitation the fees and expenses of Capital Resources'
counsel) reasonably incurred by Capital Resources and Capital Resources counsel
at its normal rates, in connection with the preparation of the Conversion
Application and the Prospectus, and in contemplation of the proposed
Subscription Offering to the extent provided for in Sections 2 and 6 hereof.
SECTION 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless Capital Resources, its
officers, directors, agents, servants and employees and each person, if
any, who controls Capital Resources within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all losses,
liabilities, claims, lawsuits, judgements, damages, costs or expenses
whatsoever (including but not limited to settlement expenses), joint or
several, that Capital Resources or any of them may suffer or to which
Capital Resources and any such persons may become subject under all
applicable federal and state laws or otherwise, and to reimburse promptly
Capital Resources and any such persons upon written demand for any expenses
(including but not limited to reasonable fees and disbursements of counsel)
incurred by Capital Resources 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, liabilities,
claims, lawsuits, judgements, damages, costs or expenses (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) or other instrument or document of the Company or the
Association or based upon written information supplied by the Company or
the Association filed in any state or jurisdiction to register or qualify
any or all of the Shares or the subscription rights applicable thereto or
to claim an exemption therefrom, or provided to any state or jurisdiction
to register the Company as a broker-dealer or certain of its officers,
directors and employees as broker-dealers or agents or to claim an
exemption
33
therefrom, 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 furnished by or on behalf of the Company or the Association
with their consent or based upon any material oral misstatements made by
the Company, the Association or their respective officers, directors and
employees; (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;
(iii) arise from any theory of liability whatsoever (regardless of whether
such theory of liability sounds in equity or law, tort or contract, or
arise under a statute or the common law) 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) or any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Conversion or the
transactions contemplated thereby; or (iv) arise from or relate to the act
or omission, or alleged act or omission of the Company or the Association,
which act or omission would constitute a breach of any representation or
warranty made by the Company or the Association under Section 4 hereof or
would constitute a breach of any covenant made by the Association under
Section 5 hereof; provided, however, that no indemnification is required
under this paragraph (a) to the extent such losses, liabilities, claims,
lawsuits, judgements, damages, costs or expenses arise out of or are based
upon any untrue material statements 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 (or any amendment or supplement thereto), any
Blue Sky Application or Sales Information or other documentation
distributed in connection with the Conversion made in reliance upon and in
conformity with information furnished in writing to the Company or the
Association by Capital Resources regarding Capital Resources for inclusion
in the prospectus under the caption, "The Conversion -- Marketing
Arrangements" or arise out of material oral misstatements made by Capital
Resources, which are not based on information contained in the Registration
Statement or final Prospectus (or any amendment or supplement thereto), the
Conversion Application, any Blue Sky Application or Sales Information
distributed in connection with the Conversion.
(b) Capital Resources agrees to indemnify and hold harmless the Company and the
Association, their directors and officers and each person, if any, who
controls the Company or the Association within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act against any and all losses,
liabilities, claims, lawsuits, judgements, damages, costs or expenses
whatsoever, (including but not limited to settlement expenses) joint or
several which they, or any of them, may suffer or to which they, or any of
them, may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Company, the Association and any
such persons upon written demand for any expenses (including fees and
disbursements of counsel) incurred by them, or any of them, in
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connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, liabilities, claims, lawsuits, judgements, damages, costs or
expenses 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 of supplement thereto), the 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 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 Capital Resources 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), or the 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 in reliance upon and in conformity with
information furnished in writing to the Company or the Association by
Capital Resources regarding Capital Resources, for inclusion in the
prospectus under the caption "The Conversion -- Marketing Arrangements" or
to the extent that Capital Resources is adjudged by a court of competent
jurisdiction to have caused such losses, liabilities, claims, lawsuits,
judgements, damages, costs or expenses through a material oral misstatement
made by Capital Resources, not based on information contained in the
Registration Statement or final Prospectus (or any amendment or supplement
thereto), the Conversion Application, any Blue Sky Application or Sales
Information distributed in connection with the Conversion.
(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 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
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action, 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 Association 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 Capital
Resources or its officers, directors or controlling persons, agents or
employees or by or on behalf of the Company or the Association or any
officers, directors or controlling persons, agents or employees of the
Company or the Association; (ii) delivery of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
(e) To the extent applicable, this Section 8 is subject to and limited by the
provisions of Section 23A of the Federal Reserve Act.
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 and Capital Resources, the Company and
Capital Resources 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 or Capital Resources from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that
Capital Resources is responsible for that portion represented by the percentage
that the fees paid to Capital Resources 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 Offerings and the Company 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 on the one hand and Capital Resources 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 thereof), but also the
relative benefits received by the Company and the Association on the one hand
and Capital Resources on the other from the offering, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Association on the one hand and Capital Resources on the other shall be
deemed to be in the same proportion as the total gross proceeds from the
Offerings (before deducting expenses) received by the Company bear to the total
fees (not including expenses) received by Capital Resources. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company and/or
the Association on the one hand or Capital Resources 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 and
Capital Resources agree that it would
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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 account of 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 action, 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 Capital Resources shall not be liable for any loss,
liability, claim, damage or expense or be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to Capital Resources under this Agreement. It is understood that the
above-stated limitation on Capital Resources' liability is essential to Capital
Resources and that Capital Resources 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 1933 Act) shall be entitled to contribution from any person
who was not found guilty of such fraudulent misrepresentation. The obligations
of the Company under this Section 9 and under Section 8 shall be in addition to
any liability which the Company may otherwise have. For purposes of this Section
9, each of Capital Resources' and the Company's officers and directors and each
person, if any, who controls Capital Resources or the Company within the meaning
of the 1933 Act and the 1934 Act shall have the same respective rights to
contribution as Capital Resources or the Company. 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. To the extent applicable, this Section 9 is subject to and limited by the
provisions of Section 23A of the Federal Reserve Act.
SECTION 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company and Capital Resources and the
representations and warranties and other statements of the Company and the
Association 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 Capital Resources, the
Company, the Association or any indemnified person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any legal
representative, successor or assign of Capital Resources, the Association, and
any such indemnified person shall be entitled to the benefit of the respective
agreements, indemnities, warranties and representations.
SECTION 11. Termination. Capital Resources or the Company and the
Association may terminate this Agreement by giving the notice indicated below in
this Section at any time after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell 998,750 Shares within the period
specified, and in accordance with the provisions of the Plan or as required
by the Conversion Regulations and
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applicable law, this Agreement shall terminate upon refund by the
Association 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 Association and/or the Company as set forth in Sections 2,
6, 8 and 9 hereof.
(b) This Agreement may be terminated by Capital Resources, with respect to
Capital Resources obligations hereunder by notifying the Company at any
time at or prior to the Closing Date, if any of the conditions specified in
Section 7 hereof shall not have been fulfilled when and as required by this
Agreement.
This Agreement may also be terminated by the Company and the Association
in the event of a breach of the representations and warranties provided
by Capital Resources in Section 4.
If either Capital Resources or the Company and the Association elects to
terminate this Agreement as provided in this section, the other party
shall be notified as provided in Section 12 hereof, promptly by
terminating party by telephone or telegram, confirmed by letter.
SECTION 12. Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to
Capital Resources shall be mailed, delivered or telegraphed and confirmed to
Capital Resources, Inc., 0000 Xxxxxxxxxxx Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx,
X.X. 00000, Attention: Xxxxx Xxxxxxxxx (with a copy to Silver, Xxxxxxxx & Xxxx,
L.L.P., Attention: Xxxxxx X. Xxxxxxxxx, P.C.) and, if sent to the Association,
shall be mailed, delivered or telegraphed and confirmed to the Association at
000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx 00000, Attention: Xxxxx X. Xxxxxx,
President, (with a copy to Xxxxxxx, Spidi, Sloane & Xxxxx, P.C., Suite 000 Xxxx,
0000 X Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 Attention: Xxxx X. Xxxxx, Esq.).
SECTION 13. Parties. The Company and the Association shall be entitled to
act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of Capital Resources when the same shall have been given by the
undersigned. Capital Resources shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the Company
and the Association, when the same shall have been given by the undersigned or
any other officer of the Company or the Association. This Agreement shall inure
solely to the benefit of, and shall be binding upon, Capital Resources and the
Company, the Association and the controlling persons referred to in Section 8
hereof, 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.
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SECTION 14. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at the offices of Xxxxxxx, Spidi, Sloane & Xxxxx,
P.C., Suite 000 Xxxx, 0000 X Xxxxxx, XX, Xxxxxxxxxx, XX 00000, or such other
location as mutually agreed upon by Capital Resources, the Company and the
Association. At the closing, the Company or the Association shall deliver to
Capital Resources in next day funds the commissions, fees and expenses due and
owing to Capital Resources as set forth in Sections 2 and 6 hereof and the
opinions and certificates required hereby and other documents deemed reasonably
necessary by Capital Resources 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 circumstances 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 circumstance 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 Kansas.
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.
Time shall be of the essence of this Agreement.
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If the foregoing correctly sets forth the arrangement among the Company
and the Association and Capital Resources, please indicate acceptance thereof in
the space provided below for that purpose, whereupon this letter and Capital
Resources acceptance shall constitute a binding agreement.
Very truly yours,
FIRST KANSAS FEDERAL FIRST KANSAS FINANCIAL
SAVINGS BANK CORPORATION
By: By:
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Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
President, Chief Executive Officer President, Chief Executive Officer
and Chief Financial Officer and Chief Financial Officer
Accepted as of the date first above written.
CAPITAL RESOURCES, INC.
By:
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